One of the issues that brands entering China are coming to more fully apprecaite is the fact that as they transition from a export led model to one meant to capture the local Chinese market, the costs and risks of their supply chain are going to increase.  That unlike before, where a firm could compartmentalize and seperate the secrets of their supply chain, skeletons are being exposed at a far higher rate, and the costs of exposure are far higher.

It is the core message of my recent article for Supply Chain Asia, and I encourage you to download the full 5 page article when you have the time.

When the news of another mining incedent occuring last week in China, it would come as no surprise to anyone the bakground of the mine, or the fact that mine managers had ignored clear signs of danger.  It was an event that sadly happens with enough frequency in China that there would be little question that news of corruption, greed, and failure to head safety guidelines would be at the top of the list.  That, in their greed, another illegal mine had once again put the profits of the mine before the miners themselves, and it cost lives. 

But when a nearly identical incident occured in West Virginia that very same week, it became clear that the problems China faces in cleaning up industry are not problems they face alone. Especially as news that the mine had been cited for hundreds of violations, and told to shut down on numerous occasions.

Yet it didn't

That in their short term interests to keep a mine open, and pay the relevant parties their relevant fines, the greater picture of the environmental and social costs were neither fully respected, nor planned for. Another sign to me of not only how difficult to enforce regulations and fines are, but how difficult it is to create systmes that cannot be exploited.

Working with the issues of CSR and sustainability, this is perhaps the goal that we should be achieving.  That, regardless of whether we would wish it to be true, the only way we are going to be able to solve problem is to focus not on how to convince human nature to be just, but to create systems that are able to remove the flexibility of human nature to exploit systems for greed.

That, knowing full well that mine owners are operating as a result of an economic system that we have created, that it is also dependent on the very economic of that system in order to survive. 

It is simply a matter of leadership.

Why shouldn't one expect to see more companies follow google's lead? simple.. The people who runs the worlds largest firms are by and large not invested in their firms beyond their pay package.  Executives are commodities whose decisions are made by the short term equation that with profits comes opportunity (for them), and is not about building companies.  On the whole.

That, for all the arguments about whether or not the decision was made to comply with a firm's motto, or what influence the founders upbringing had in complying with chinese law, the fact remains that the founders of google are still the largest shareholders of the company.. And more importantly have built and retained a culture whereby they can make choices that do against the commonly accepted business rules that they are often measure by.

Which sadly leaves me to believe that few firms will ultimately put the firm's codes and values out in front of their profit motive. that, when they entered China they made peace with any moral objections that may have existed ( we should not assume that everyone has a moral objections to china, its policies, or those in power).

So, before looking to others to make such morally uprightous decisions, keep in mind that some organizations are better structured for such decisions.

Next month, I will be speaking at the Martin Link conference Best Practices for Sustainable Corporate Social Responsibility 2009.  With a number of long term Shanghai based CSR "experts", the 2 days are guaranteed to be filled with friendly discussions on CSR, and how companies are dealing with a number of new dynamic  - recessions and social media in particular.

Speakers include:

• Mr. Yingchu Qian - General Manager - Environmental Marketing Solutions, Inc., Shanghai

One topic that has always interested me, especially in China, has to do with how low-income citizens seek redress through China's legal system. There is, of course, the much publicized petitioning system, which if far from effective. However, what about legal aid work; i.e. public interest law or pro bono work?

We've already discussed the public interest work of the Center for Legal Assistance to Pollution Victims and the issues they face as an organization seeking to redres grievances caused by environmental destruction, but what about the everyday, more mundane legal cases?

A couple of months ago, I contacted Shanghai's Grassroots Community, which was originally founded as a legal aid center in 2000. Since then, the group has expanded and provides not only legal aid, but also educational resources, technical training and environmental protection programs to underprivileged groups in Shanghai's urban communities. With a staff of five managing over 1,000 volunteers annually, the group has its work cut-out for them.

What was amazing about my visit to their office, however, was the sheer number of people flooding their office seeking legal advice. Since  we were interviewing one of the volunteer lawyers, we had to film at two separate times due to the busy day. We hope that you watch the videos and learn about this extraordinary group and get involved! Following the videos we have a transcribed portion of the interview that asks our Sunflower project interviewee the following questions: How have migrant families changed over the course of 5 years?; How have their needs changed and how has this affected your programs?; In your opinion, what is the biggest migrant worker issue?; How has the financial crisis affected Shanghai's migrant workers?; What role do you think citizens, companies, the government and NGOs should play concerning helping migrant workers?

Part I: Gives us an introduction to the organization's programs and sheds light on the problems facing the organization. The programs they have are as follows: legal aid, tech learning, Sunflower reading program for migrant children, the community environmental protections program and the Sichuan Earthquake Activity Room.

[youtube]http://www.youtube.com/watch?v=_rYyQ0ipW_s[/youtube]

Part II: Gives a more detailed explanation of the organization's Legal Aid and Sunflower Reading programs. The organization's legal aid program offers free advice and representation to low-income families, which are often migrant workers. Common legal cases include: real estate, marriage, inheritance and work-related injuries. Grassroots Community's Sunflower program seeks to help the children of migrant workers obtain more educational resources. Our interviewees talk about their experiences working on these programs and the issues they face.

[youtube]http://www.youtube.com/watch?v=vIy5VD6jWfM[/youtube]

Transcript below:

For many firms, large and small - good CSR program and bad CSR program, writing the all imprtant CSR/ sustainabilty report is an important step.

On January 14th:

The World Bank said it had barred seven firms -- four from China and three from the Philippines -- from bidding on its projects due to alleged corruption. The firms were involved in a road project in the Philippines financed by the Washington-based bank.

China Road and Bridge Corp. was debarred for eight years, China State Construction Corp. and China Wu Yi Co. Ltd. for six years, and China Geo-Engineering Corp. for five years.

For those firms who are US based, and looking to gain some insights into managing their China based suppliers, perhaps attending INFACT Global Partners New China Social Compliance Leadership Seminar Series may be an option for you:

At the "Contesting Citizenship and Civil Society in a Divided World" international conference held in Toronto a while back, author Ding Yuanzhu submitted a paper titled How Do People in China Look at 'Governance' of [the] Third Sector? In his paper, Ding looks at how different actors in Chinese society interpret the word "governance" and how this interpretation reflects the way different sectors in society view the role of NGOs in society.