WITH an overwhelming 209 votes, the House of Representatives on Wednesday, approved the proposed “Corporate Social Responsibility Act”, which seeks to foster sustainable economic development and environmental protection by encouraging corporations to inculcate the value of social responsibility in community development in their organization’s operations and activities.
Principal author, House Deputy Majority Leader and Pampanga Rep. Juan Miguel “Mikey” Arroyo, said House Bill (HB) No. 6137 defines corporate social responsibility (CSR) as the commitment of a business corporation to contribute on a voluntary basis to sustainable economic development by working with relevant stakeholders to improve their lives in ways that are good for business and society at large.
The bill provides that CSR-related activities include: (a) charitable programs and projects; (b) scientific research; (c) youth and sports development; (d) cultural or education promotion; (e) services to veterans and senior citizens; (f) social welfare; (g) environmental sustainability; (h) health development; (i) disaster relief and assistance; and (j) employee and worker welfare CSR-related activities, among others.
In Arroyo’s explanatory note on the measure, he raised that many corporations and business organizations have shown very little care for the welfare of society, the community where they operate, and the natural environment around them. "Their sole purpose is to maximize their respective returns on investment, totally disregarding the impact of their activities on customers, employees, shareholders, communities and the environment,” he said.
To encourage companies to engage in CSR activities, the bill seeks to amend Section 42 of Republic Act No. 11232 or the “Revised Corporation Code of the Philippines,” by allowing stock corporations to retain profits in excess of the 100 percent of their paid-in capital stock so that it can now be used not only for definite corporate expansion but also for CSR projects and programs.
Moreover, the Department of Trade and Industry (DTI) shall be mandated to recognize and reward all business organizations for outstanding, innovative, and world-class CSR-related services, projects, and programs. All local government units, where the CSR-related activities are conducted, shall also be directed to provide the necessary assistance to the business organizations to help accomplish these CSR initiatives.
Business organizations shall then submit the list of their CSR activities as part of their periodic report to DTI, Securities and Exchange Commission (SEC), and Department of Finance (DoF).