By Charissa Luci-Atienza
The House of Representatives has approved on second reading a bill seeking to institutionalize corporate social responsibility in corporations, whether domestic or foreign, partnership and other establishment performing business in the country.
House Bill 9061, principally authored by former President and now Speaker Gloria Macapagal-Arroyo, got the nod of the Lower Chamber before Congress adjourned last week to pave way for the election campaign.
The proposed “Corporate Social Responsibility Act” seeks to encourage all business organizations established and operating under Philippine laws, whether domestic or foreign, to observe corporate social responsibility in the operation of their businesses in the country.
Arroyo said Congress should step in and amend Batas Pambansa Blg.68, otherwise known as the Corporation Code of the Philippines, as many corporations and other business corporations have shown very little care for the welfare of society and the community.
“Their sole purpose is to maximize their respective returns on investment, totally disregarding the impact of their activities on customers, employees, shareholders, communities, and environment,” she said.
She noted that the bill seeks to encourage the private sector’s active participation in fostering economic development and environment protection in the country.
Under the bill, government agencies and non-government and people’s organizations will work together for the integration, promotion and strengthening of CSR in all business organizations.
The bill defines Corporate social responsibility (CSR) as the commitment of business 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, sustainable development agenda and society at large.
CSR-related activities shall include charitable programs and projects, scientific research, youth and sports development, cultural or educational promotion, services to veterans and senior citizens, social welfare, environmental sustainability, health development, disaster relief and assistance, socialized and low-cost housing, and employee and worker welfare- related CSR activities.
House Bill 9061 specifically amends Section 43 of Batas Pambansa Blg.68 to encourage companies to engage in CSR.
The amendment provides that stock corporations are prohibited from retaining surplus profits in excess of 100 percent of their paid-in capital stock, except: “when justified by definite corporate expansion or for corporate social responsibility projects and programs approved by the board of directors; or when the corporation is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its/his consent, and such consent has not yet been secured; or when it can clearly show that such retention is necessary under circumstances obtaining in the corporation, such as when there is need for special reserve for probable contingencies.”
House Bill 9061 mandates the Department of Trade and Industry (DTI) to recognize and reward all business organizations for outstanding, innovative and world-class CSR-related services