„Corporate Social Responsibility in Ethiopia: the Legal and Practical Aspects‟
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Date
2022-05
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Addis Ababa Unversity
Abstract
The understanding that businesses are created and operate for the sole economic profit of their
investors and undertaking social responsibilities is state duty has been challenged so long. As a
sovereign, states’ role to design the role corporations should play in society is usually
recognized. The strength of legal intervention of states depends on the theoretical understanding,
political ideology and political-economic policy in the pertinent state. The states’ primary
instrument to shape CSR is the law. Legal regulation envisages the way the state needs to
channel the social behavior of businesses. States’ regulation objective may be achieved in direct
mandating, facilitating, incentive or simple recognition modalities to promote and enforce CSR.
There are some common standard contents and considerations on how rigorous legal regulation
of CSR should be. Also there are some International Guiding Principles on possible legally
provided CSR contents like UNGC, OECD principles, ILO Declaration on Fundamental
Principles and Rights at Work, International Human Rights and Environmental Laws, ISO
standards etc. Simple regulation may not bring the desired conduct by businesses and
institutions to bind, administer, monitor, promote and give effect the laws are necessary. Based
on this background, the paper critically analyzes the Ethiopian policy, legal, institutional
landscape and their practice. To achieve the objectives of the paper, an extensive and critical
examination of Ethiopian laws, policies, binding court decisions and relevant literature review is
made. Purposively sampled interviews and personal observation are also employed. Based on
the analysis of the data so collected and predetermined hypothesis, it is found out that Ethiopian
CSR regulation is getting more and more rigorous from time to time and currently, compared to
International Guiding Principles, basically almost all the possible contents are covered under
Ethiopian laws mixed in different modes. However, while the constitution resembles state-centric
in aligning social responsibilities, CSR contents are scattered in different pieces of legislations,
policies depending on the theme of regulation. Some laws contain the same CSR ideas
redundantly. The trend in the laws and practical assessment data revealed that there are
implementing institutions. However, the institutions are bestowed with duplicated mandate and
chaotic miscommunications are observed in enforcing the laws. Also the enforcement is suffered
from other limitations like inaccessibility, financial and man power incapacity, corruption etc.
Besides, to back the regulatory enforcement, general public interest litigation against
irresponsible business behavior doesn’t exist despite the existence of the legal ground in
Ethiopia. So, the paper concluded for the adequacy of pro-CSR legal framework in line with
International Legal Framework and Guiding Principles with implementing institutional setups
though the implementation of these laws is found poor due to various reasons.