Corporate social responsibility: a legal framework for socioeconomic development in Tibet.

• Author: Fletcher, Chris
• Position: Abstract through II. CSR Defined, p. 120-151

Despite China's extraordinary economic prosperity, not all are benefiting: Tibet is a case in point. The Tibetan areas of China exhibit massive socioeconomic inequality. When comparing jobs, wealth, and education statistics, significant disparities between Tibetans and Chinese surface, with Tibetans faring poorly. This results in a Tibetan sense of dispossession and marginalization that was, in part, a cause of the social unrest exhibited by the 2008 protests, and, more recently, the wave of self-immolations and protests over the practices of certain companies. With Tibet's further economic opening through new infrastructure networks to China--and thus the world--private sector involvement in Tibet's markets will increase, not only for Chinese companies (State-owned and private) but also in the form of foreign direct investment. These business opportunities hold the potential for great value, so long as they are pursued in a way that does not continue to exclude Tibetans from the fruits of economic growth. Unless a new development strategy is created that allows for the needs and views of Tibetans to be addressed and integrated, feelings of dispossession and marginalization will only worsen with more Tibetan protests, uprisings and self-immolations to follow, thus undermining China's highly desired social stability and companies' ability to operate free from protests. Corporate Social Responsibility (CSR)-the business practice of integrating respect for international human rights and environmental sustainability laws and norms into company decisions and core operations--offers a potential solution in which Tibetans can take advantage of much-needed and wanted socioeconomic development and business can flourish amid new markets and opportunities. The end result is the possibility of a win-win solution in which the interests of Tibetans, the business community, and, by extension, the Chinese government can all be served.

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As companies seek to be guided by more socially and environmentally responsible values, we need to ask what corporate responsibility means. This is an especially challenging question for the increasing number of foreign companies working in or looking at working in Chinese-ruled Tibet. This commercial and corporate interest comes at a time in Tibet's history when ordinary Tibetans have no real say in their country's development. Tibetans should be participating, directing and benefiting from this development especially when it concerns the exploitation of Tibet's non-renewable resources such as gold. Therefore, (1) appeal to all foreign mining companies, and their shareholders, who are thinking about working in Tibet to consider carefully about the ethical values when embarking on such a venture.

--The Fourteenth Dalai Lama, 2003

"Over the past years Tibet has made significant progress in economic and social development. But we also recognize that Tibet is still behind the central and eastern parts of China in terms of economic and social progress. The Chinese government has taken strong measures to accelerate the economic and social development in Tibet including the formulation of a new plan for that purpose, in the hope that we will be able to further promote the living standards of the farmers and herdsman in Tibet. Tibet needs to develop its economy on a sustained basis; at the same time we must pay close attention to environment conservation and the preservation of Tibet's cultural heritage. We respect the freedom of religious belief of Tibetan compatriots, and their religious belief is protected by the law. We must treat all our Tibetan compatriots as equals and with respect and make continuous improvement in our work in this area."

--Former Chinese Premier Wen Jiabao, 2012

INTRODUCTION

In the past few decades, China has lifted hundreds of millions of people out of poverty. (2) The economic conditions that created China's economic ascendancy, and thus allowed it to reduce poverty, continue to awe the international community. The reason is simple: at present, no other country has been able to produce and maintain similarly high levels of growth. For example, over the thirty-year period ending in 2007, China's growth rate was more than 8% a year, and from 2005-2010, this accelerated to an estimated 10%, notwithstanding recessions in the wealthy countries with which China trades. (3) As Harvard University economist Ricardo Hausmann notes, "[i]n the history of humankind, no country has ever grown for 30 years at the rate China has grown." (4) By comparison, the best thirty-year timeframe for the US economy was from 1960 to 1990, during which it had an average growth rate of 2.3%. (5) Such sustained economic growth has resulted in China becoming the world's factory floor and an extractor of significant mineral deposits. (6) The massive exports from this production allowed China to surpass Germany in 2009 to become the number one exporter of goods, (7) and in 2010 to triumph over Japan to become the second largest economy. (8)

Despite China's economic rise and prosperity, however, not all of its population is benefiting. In 2012, a study (9) from China's Southwestern University of Finance and Economics revealed an increasing wealth gap, suggesting China may be among the world's most unequal countries. (10) This inequality has long been most acute in Tibet, as Chinese government subsidies and investments have not adequately addressed socioeconomic disparities in this region. In fact, the policies appear to promoting inequality, especially in the areas of wealth, jobs, and education. In addition, there is increasing evidence that Tibetans are unhappy with the lack of proper labor, environmental, and stakeholder engagement practices of many companies operating in Tibet.

Corporate Social Responsibility (CSR)--the business practice of integrating respect for international human rights and environmental sustainability laws and norms into company decisions and core operations--can and should be used to address Tibetan socioeconomic development. The use of CSR can help promote social harmony and stability, create and enhance business opportunities for domestic and foreign companies, and allow Tibetans to participate actively in determining their own development needs.

This article describes a framework for investment in Tibet that utilizes CSR as the driving force. Part I discusses Tibetan socioeconomic disparities, with a focus on economic and educational inequality. Part II defines CSR principles and tools and puts forth the business case for CSR. Part III applies these CSR tools to the Tibetan context, with specific reference to Chinese regulations and international laws and norms, and to the CSR concepts of stakeholder engagement and community investment.

1. UNDERSTANDING THE TIBETAN CONTEXT--A LANDSCAPE OF DISPOSSESSION AND EXCLUSION

   In this article, "Tibet" refers to all Tibetan administrative areas of China, and "Tibetans" refers to the ethnic, indigenous population that lives in these areas. From the Tibetan perspective, Tibet has always consisted of three main regions: Amdo (northeastern Tibet), Kham (eastern Tibet) and U-Tsang (central and western Tibet). In 1965, fifteen years after entering Tibet, the Chinese government redrew these boundaries. Currently, this area exists as the Tibet Autonomous Region (TAR), an area of 1.2 million square kilometers that is west of the Yangtse River, includes part of Kham, and is often referred to as "Central Tibet" in English. Amdo and the rest of Kham exist as Tibetan autonomous prefectures (TAPs) and Tibetan autonomous counties (TACs) and have been incorporated into the provinces of Gansu, Qinghai, Sichuan, and Yunnan. Collectively, these Tibetan areas are often referred to as "Tibet" or "the Tibetan plateau" and are about the size of Western Europe (2.5 million square kilometers) or one quarter of China's landmass.

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   As will be discussed in further detail below, focusing on Tibet from a CSR standpoint is helpful for three chief reasons. First, addressing Tibetan socioeconomic inequalities can further the Chinese government's sought-after goal of social stability and harmony. Second, as Tibetan areas continue to become more open through the development of new train networks and other infrastructure, the potential for new business opportunities awaits. For those companies presently in Tibet, CSR offers the ability to enhance business operations. Third, these opportunities can help promote greatly needed and wanted socioeconomic development for Tibetans.

   Any discussion of the Tibetan socioeconomic context first requires an understanding of the political backdrop. The relationship between Tibetans and Chinese is complex and contested. This article does not aim to rehash this debate; however, it is necessary to briefly flag the importance of understanding the Tibetan political perspective. Since 1950, when the Chinese People's Liberation Army entered Tibet, there has been ongoing tension between Tibetans and Chinese. The general disposition among Tibetans is a feeling of being ruled by outsiders. When this sentiment is combined with exclusionary socioeconomic forces, discussed below, feelings of dispossession deepen, resulting in mistrust between Tibetans and Chinese. Understanding this political background and its attendant economic and social context is a vital prerequisite to maximizing successful business operations in Tibet. (15)

   Additionally, there are challenges that come with analyzing Tibetan socioeconomic data for the non-Chinese or non-Tibetan who is dependent upon readily available English sources. The vast majority of the socioeconomic data discussed here has been provided by the Chinese government in its statistical yearbooks and then analyzed by the economic development scholar Andrew Fischer. Fischer is an Associate Professor in Population and Social Policy at the Institute of Social Studies (The...