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PSPD    People's Solidarity for Participatory Democracy

  • Socio-Economic
  • 2010.09.01
  • 2133


Top 100 Companies Received Fail Grades in Labor-Related CSR Implementation, Scoring 39.82 Points on Average

-Kia Motors scored highest in labor-related CSR implementation among 97 companies examined
-Despite a variety of benefits, top 30 companies' labor-related CSR including job creation remains significantly low
-Going beyond benevolent contribution, companies are urged to strengthen their CSR implementation keeping abreast the global trends


PSPD has released a report on the 'Assessment of the actual conditions of labor-related CSR implementation'.

1. The Committee for Fair Labor Society in the People's Solidarity for Participatory Democracy (PSPD), and the Economic Research Institute for Sustainable Society (ERISS) jointly released an issue report on the assessment of the actual conditions of local enterprises' labor-related CSR (Corporate Social Responsibility) including recruitment, personnel affairs and labor-management relations today (May 2).

2. In the report, the PSPD points out that 'even though the call for CSR has been recently widespread throughout the country and globally, local companies remain passive and defensive in their responses to CSR, only recognizing it as a charity.' In addition, the PSPD argues 'amid global financial crisis, enterprises have shifted overall corporate costs to workers through restructuring and expanding of irregular workers, and strengthening of wage flexibility. This way, the companies tend to ignore social responsibility they are supposed to undertake, and only pursue their own economic interests. The purpose of the report publication was to socially impose responsibility on Korean corporations by carrying out a comprehensive assessment of CSR implementation.'

3. The assessment is composed of individual assessments (20 points each) for the five categories of ①social performance,  ②labor market performance, ③equality index, ④ income distribution performance and  ⑤labor-management relations, and a comprehensive assessment (100 points) which combines all the points of these five categories, on a total of top 97  companies in terms of market capitalization as of 2008. The detailed indicators for the five categories are as follows:
▪ Social performance: sales, contribution to tax revenues (corporate tax/profits before corporate tax deduction), donations, membership in the UN Global Compact, publication of sustainability report, and assessment on sustainability report;
▪ Labor market performance: number of entire employees, fluctuation in the number of employees, and contribution to employment (Δnumber of employees/Δsales)
▪ Equality index: ratio of male to female employees, ratio of male to female management staff, and percentage of female management staff
▪ Income distribution: average annual wage per employee, increase in labor costs per employee, ratio of labor to income distribution, and increase in labor costs compared to sales
▪ Labor-management relations: existence of labor unions or not, and percentage of labor union organization

4. According to the overall assessment results, Kia Motors has the highest level of labor-related CSR implementation among the 97 companies examined; it scored the highest points, 64.7. Kia Motors took the first place in the social performance and remained in top ten for the entire sectors except gender equality index. The second place was taken by the KT, Inc., which scored high points in the sectors of social performance, labor-union relations and labor market, and Daewoo Securities was placed at the third. Other companies ranked within the top ten include Korea Airlines, SK Telecom, LG Electronics, Lotte Shopping, Hyundai Motors, and Hynix Semiconductor. Samsung Electronics, which could not gain any points in labor-union relations, as well as all other affiliated companies of Samsung Group, dropped out of top 20 for the overall assessment.

5. Looking into the assessment results by category, first of all, in the area of social achievement, Kia Motors topped the list, obtaining 17.876 out of 20 points. Kia Motors was analyzed as having a high level of social contribution; it abides by international standards for social responsibility by joining the UN Global Compact, publishing sustainability reports, and releasing information according to the GRI Guidelines. Also, it scored high points in the areas of sales, tax contributions and donations. In contrast, Samsung Electronics remained in a twelfth place in social achievement due to its non-membership in the UN Global Compact, even though it achieved a high level of social contribution in the areas of sales and donations. Moreover, according to the report, none of the Samsung affiliates have joined the UN Global Compact which has been initiated to urge enterprises to support and implement CSR; a proof that they take a passive stance on international activities for social responsibility.

6. In the category of labor market achievement, Hyosung took the first place (17.457 points), which evidences its contribution to job creation, obtaining high marks evenly in all of the sub-categories including employment contribution, number of employees, and increase in the number of employees. However, the top 30 companies scored relatively low in the contribution to labor market achievement: Samsung Electronics 11.065 points, Hyundai Motors 8.522, Korea Electric Corporation 12.990 and Posco 8.866. The state-run Korea Gas Corporation, ranked 6th in labor market capitalization, was reported significantly low in its contribution to the labor market. Such results show that the nation's large conglomerates are negligent of social responsibility for employment even though they enjoy deregulation benefits including tax cuts and abolition of equity investment limit.

7. Amorepacific, having a high proportion of female employees and female executives, took a dominant win in the workplace equality index, obtaining high marks (10.757) compared to other companies. It was revealed in this survey that those companies under the category of female-friendly industries have a higher chance of implementing the equal opportunity policy. However, if the average scores are compared of the five categories for the assessment, - social achievement 6.95 points, labor market 10.10 points, labor-management relations 9.65 points, gender equality 3.02 points and income distribution 10.10 points - the average of the equality index is the lowest, confirming that equal employment opportunity is least recognized by companies in terms of labor-related CSR.

8. In the area of income distribution, the Doosan-affiliated Doosan Infracore and Doosan Construction took the first and second place respectively. According to the results, Doosan Infracore obtained comparatively high marks (16.392) in the areas of labor costs increase and income distribution ratio. In the category of income distribution, securities companies were high in the sub-category of average wage per employee and insurance companies in the labor-income distribution ratio. In the area of labor-management relations which is related primarily to the existence of labor unions and union membership rate, KT&G took the first place (19.211) with a 92.1% union membership rate, followed by LG Dacom with a 88.1% rate.

9. The report revealed that the level of labor-related CSR is low among Korean companies in general. Even, the score of Kia Motors which topped the companies list for the assessment stands at 64.700 out of 100 points, with the average score of the 97 companies examined remaining at as low as 39.82. In particular, ten of the top 30 companies were placed below the average score of the comprehensive assessment: Samsung Electronics, the largest company in Korea in terms of sales as of 2008, received only 34.073 points. “The investigation confirmed that domestic companies' awareness and implementation level of labor-related CSR are poor” said the PSPD. The organization added, stressing that “in order to accommodate changes in the international society and remain competitive, it is necessary for companies to protect human rights and environment, and enhance the implementation level of labor-related CSR including creation of quality jobs and observation of labor standards, as well as creation of economic values.”

 

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