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Why Parastatals should be Socially Responsible: the Case of NRA PDF Print E-mail
Business
Written by Ann Marie Dumbuya   
Friday, 10 February 2017 14:30

In Sierra Leone, the notion of corporate social responsibility has always been associated with the private sector. No wonder some people see the active involvement of the National Revenue Authority (NRA) in corporate social activities as strange, and many have opined that a tax collecting body should not be engaged in corporate social responsibility activities.

However, the impact of corporate social responsibility (CSR) on corporate image is immense, even for tax collecting bodies. The perception that tax collectors are monsters vigorously bent on collecting people's earnings with no care for the environment or the vulnerable in the community they operate is evolving. Indeed, many revenue authorities in Africa are today socially responsible.

The Zimbabwe Revenue Authority (ZIMRA) in an article in its website argues that "the nature of Revenue Collectors' mandate makes them the hill of the nation such that whatever they do is mirrored and echoed by many".

Therefore, the article continued, the Zimbabwe Revenue Authority's corporate social responsibility programme is driven by the realisation that there are less fortunate members of society who cannot afford a decent meal or roof over their heads. It was further noted that since society has always given to ZIMRA through revenue collection, the institution should likewise support the social needs of society's less fortunate.

Other revenue authorities like the Ghana Revenue Authority, Rwanda Revenue Authority and Uganda Revenue Authority to name a few are adopting similar policies because it has been realised that a positive corporate image is vital in inculcating a positive taxpaying culture. Just explore their websites for proof.


Corporate social responsibility (CSR) according to the World Business Council for Sustainable Development (WBCSD) is the "continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large". This in essence translates to what a company has to do to win and enjoy the goodwill and confidence of the community in which it operates. In short, demonstrating its human face.

The WBCSD considers CSR as vital to the long-term prosperity of any company and has identified several core values that it believes should be central to any CRS policy. They include employee and stakeholder relationship management, environmental protection, and community development.


It is now widely recognized that sustainable development cannot be achieved by government action alone. Around the world, big corporations are being looked upon to aid national development strides through corporate responsibility. In fact, the notion of corporate social responsibility has gone way beyond the private sector. Modern corporate governance models expect institution, both public and private to consider the interests and expectations of stakeholders in particular the society from which it operates.

This is why globally, many governments now stipulate that institutions, including state-owned enterprises must have corporate social responsibility programmes and make annual reports on corporate social contributions.

The question of whether CSR should be legislated or be left to the conscience and moral values of corporations has been the subject of cotemporary debate. Universally, many countries view CSR as an ethical and social obligation and not a legal commitment, or at least not entirely.  As such, most do not have specific CRS laws, although some have taken active steps to introduce policies or guidelines to promote better corporate behavior.

For instance, the European Union Green Paper for Corporate Social Responsibility noted that though the concept of corporate social responsibility is mainly driven by large corporations, socially responsible practices are vital for public and private enterprises as well as SMEs and co-operatives. It also stated that socially responsible companies will voluntarily make decisions to contribute to a better society by embedding corporate social responsibility values in their strategies and operations and endeavour to respect this commitment. Responsible companies, it also noted, do more than promote CSR.

They also support public policies that encourage sustainable development. In 2007, the Swedish Government which is seen as leading policy on CSR adopted some guidelines for external reporting by state-owned companies which included reports on corporate governance and corporate social responsibility. In India, the Companies Act, 2013, mandates companies to spend at least 2% of their net profits on CSR activities.

In West Africa, Ghana has a National Corporate Social Responsibility Policy with the creation of a Centre for Corporate Responsibility charged with mainstreaming corporate responsibility in the private, public and non-governmental sectors. Also, there exists a West African Centre for Corporate Social Responsibility which develops CSR strategy for large and small corporations in the West African sub-region. Additionally, some African countries like Ghana and Uganda annually organise CSR Excellence Awards to acknowledge CSR responsive companies and organizations.


In Sierra Leone, the implementation of a new model of assessing management practices in government ministries, departments and agencies (MDAs) called Performance Contracting now guides the discharge of social responsibility in the public sector. Performance Contracting was introduced by the government to encourage a more performance-oriented culture in the public sector.

The performance contracts signed between the President and CEOs of relevant MDAs serve as an evaluation tool through which the Government assesses the performance of MDAs on key outcomes mainly using the Performance Tracking Table (PTT). The PTT assesses key policies implemented annually such as improved innovations for service delivery, institutional reforms and capacity building, corporate governance and financial management, corporate social responsibility and social/climate issues, and effective contribution to the implementation of the Agenda for Prosperity.

This model has since been used to assess and rank MDAs state of affairs on crucial matters such as innovation and productivity, HR management, service delivery and customer satisfaction, and above all CSR contribution. Performance Excellence Awards are subsequently given to best performing institutions at the end of each year's review. It is clear that Government through the PTT is encouraging MDAs to align their CSR initiatives to the national development agenda. In fact, by recently grouping MDAs into sectors, Government is aiming for an integrated performance on CSR and desires MDAs to harness their CSR activities to prevent multiplicity of interventions targeting the same beneficiaries.

The NRA is among the few public enterprises in the country that has not only embedded corporate social responsibility values in its strategies and operations, but has also endeavoured to respect this commitment.

The NRA, according to the Director of Finance Abdulai Conteh has a corporate responsibility policy approved by the board of directors. He said this policy sets the tone at the top regarding transparency and anti-corruption measures, environmental protection and employee and stakeholder relationship management. Mr. Conteh stated that the Code of Corporate Social Responsibility formulate goals for CSR programmess covering education, environment and healthcare. He said CSR is integrated in NRA's business operations to maximise the Authority's overall impact on society and its taxpayers.

Mr. Conteh explains that since NRA collects revenue on behalf of the State, all taxes collected are directly deposited into the country's Consolidated Revenue Fund through transit banks. He said the NRA however is entitled to a 3 percent commission of total collection from Government through the Ministry of Finance according to the NRA Act, 2002. It is this money that NRA uses to meet operational costs.  He said due to the unwavering commitment to its corporate social responsibility, the Authority annually set aside a portion of its budget to support charity causes and fund community development initiatives for the benefit of vulnerable communities.

"Our CRS Policy is pro-poor and goes way beyond charity and philanthropy. Our aim is to contribute to the Government Agenda for Prosperity by taking prosperity to people. Most times we do not use our resources to fund CRS initiatives; we instead lobby well-meaning individuals and organizations to support the communities we have identified. For instance, the seed money for the Trust Fund was raised from staff contributions and that of the Board.

We were able to provide solar energy supply in our adopted village, Gbomsamba from charitable donations by private individuals and the Ministry of Energy through the brilliant lobbying skills of the Commissioner-General. Also, we are constructing a water well with some support from SALWACO while engaging the Ministry of Agriculture on food security and livelihood support programmes for the village".

The case of the NRA as a socially responsible corporate entity is exceptional and worth emulating. Under the leadership of Madam Haja Kallah-Kamara, the NRA is revolutionalising the concept of Corporate Social Responsibility (CSR) in Sierra Leone.  CSR has always been associated with the private sector, but under her watch, the NRA has adopted a grassroots and community-based approach to corporate social responsibility that goes beyond philanthropy to sustainable community development.

NRA supported the fight against Ebola and in September 2014 established the Ebola Health Workers Victim Family Trust Fund to provide financial support to the immediate families of health workers that lost their lives whilst fighting against the Ebola outbreak in the country. On December 20, 2016, NRA disbursed Le525 million to beneficiaries of the Ebola Trust Fund; the sum of Le5million each was given to 105 beneficiaries.

In 2013, it adopted Gbomsamba, a village about 120kms from Freetown in the Port Loko district to implement a development plan covering education, healthcare, agriculture, and women and youth empowerment. NRA has refurbished the primary and junior secondary schools in the village and provided basic school supplies to pupils. It has also refurbished crumbing houses and has almost completed the construction of a 5-classroom secondary school which has provisions for a library and computer school.

NRA supports Girl Child Education through scholarships, and tertiary education through the provision of transportation. The two main universities in the country: Fourah Bay College and Njala University have all benefited from this policy.

According to the Director of Finance, NRA has recently launched a 'Catch Them Young Campaign' which seeks to capture the interest of young people, it future taxpayers. This initiate is indeed commendable, and the educational sector would welcome such charitable deeds.

Like Dr Benias Mapepeta argues in an article on the impact of corporate social responsibility on corporate image "the basic idea of sustainability is to be cognitive of future generations and their benefits in the operational environment of today".

 

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