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The Journal of Commerce, Vol. 2, No. 1ISSN: 2218-8118Hailey College of Commerce, University of the Punjab, PAKISTAN

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Corporate Social Disclosure in Pakistan: A Case Study of FertilizersIndustry

Mian Sajid Nazir

Abstract: The performance of the firms incorporate sector is heavily dependant upon thecorporate governance practices (Nazir et al.2009) as well as consideration of socialresponsibility into the general managerialpractices of firms, the dimensions of socio-cultural environment into business procedures,and compliance with other ethical andregulatory issues. The researchers have focusedon the incorporation of corporateenvironmental governance issues into businesspractices in order to gain a competitiveadvantage for the firms (Wise and Ali, 2008;Mitra et al. 2008). However, a little has beenfound on the corporate environmentalgovernance issues and practices of Pakistanifirms since the concept of corporategovernance and corporate social responsibilityis newer for the emerging economies likePakistan. This study tells about the threecompanies and their corporate responsibilitytowards the Pakistani society, namely, EngroChemicals, Fauji Fertilizers, and DawoodHerculees Chemicals. These companies are in

the business of fertilizers which is riskier tohealth and environment, however; they areconsidering Corporate Social Responsibilityand environment safety for generatinggoodwill in the minds of customers andstakeholders.

Key words:corporate governance, corporatesocial responsibility, health and safety,environmental issues, communityinvolvement, case study, Pakistan.

INTRODUCTION

The performance of the modern corporations isheavily dependent on business activities aswell as its role for sustaining long termreputation and good will, which in general iscalled Corporate Social Responsibility (CSR) offirms. CSR is the subset of firms overallcorporate governance practices regardingbusiness procedures, legal and ethical practices

Assistant Professor, Department of ManagementSciences, COMSATS Institute of InformationTechnology, Lahore, Pakistan. : +92 322 4569868: [email protected]

with the focus on investors rights protectionand social stakeholders of the firm. During the

past few decades, this role of the firms in thesociety has been an issue of growing publicawareness. Many firms contributing towardseconomic growth have been blamed forcreating social problems in the society. Some ofthe issues researched most frequently includelong corporation power, employer safety andhealth, environmental proactiveness, wastemanagement, resource depletion and productquality (Mitra et al. 2008). The corporations areinduced to be accountable to a wider set ofaudience than share holders only. Friedmans

(1962) doctrine, that the only socialresponsibility of the manager is to maximizethe profit of shareholders, is not universallyacceptable; rather the role of the corporategovernance is to maximize the share holderswealth along with sustaining appropriatereturns for all other societal stakeholders.Studies have proved that awareness isgrowing on the part of firms putting anobligation to help society even if it earns lossor profit (Wise and Ali, 2008).

During the mid 1970s, various accounting

institutions began to consider socialdisclosures in companys reports due to thecriticism of using profit as the final mean toevaluate corporate performance. Moreover theresearcher also began to articulate the differenttheories in this regard i.e. agency theory,legitimacy theory, stakeholder theory andpolitical economy of accounting theory(Belkaoui and Karpik, 1989; Gray et al., 1988;Guthrie and Parker, 1990; Patten, 1991, 1992;Roberts, 1992; and Gray et al., 1995a).

However, there is still no consensus on thegenerally accepted framework of Accountingfor corporate social responsibility (Mitra et al.,2008). Despite of this lack of consensus aboutwhy firms report social responsibilityinformation, an increasing number of local andmultinational firms started disclosing theiractivities of social responsibility in their annualreports voluntarily. In this regard, CorporateSocial Disclosures (CSD) are defined byGuthrie and Mathews (1985) as the provisionof financial and non financial information

stated in its annual report or separate social

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Corporate Social Responsiblity Disclosure in Pakistan: A Case study of Fertilize Industry

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reports relating to interaction with its physicaland social environment.

The present study aims at analyzing thecorporate governance practices of threePakistani firms from fertilizers sector relatingto corporate social responsibility with a view

to examine and link corporate governancepractices with ethical business processes aswell as providing some domestic evidence oncorporate social disclosures of firms inPakistan using case study method. Theremainder of the paper has been organized asfollows; the second section of the paperdevelops the theoretical background andmodel for the paper, the third discusses andanalyzes the three case studies selected forstudy and final section concludes the papersuggesting some implications for the

companies and management.THEORTICAL BACKGROUND

Majority of the studies in CSR have focused onthe developed economies of the world and alittle work has been done in emerging marketslike subcontinent. UNCTAD (2004) definedCSR as imparting the social responsibilityactions into the business policies andprocedures including economic, social andenvironmental concerns. The minimumstandard observed by the organization is to

ensure the compliance with law regardingCSR. The scope of CSR includes the direct aswell as spill over impact of organizationsactions that may affect society. However theextent of organization social liability is still adebatable issue.

Kendall and Kendall (1998) proposed thatgood corporate governance encompasses anethical approach, culture, society,organizational paradigms and the balancebetween the objectives of all interacted partiesof organization. There should be a decisionmaking model giving weight to all abovestakeholders and there must be accountabilityand transparency in the actions and decisions.However, Talakdar and Bakhtear (2007)reported that top performing sectors of DhakaStock Exchange in December 2007, i.e. bankingsector, indicated a low incidence of corporatesocial responsibility reporting which is anegative implication of corporate governancein banking sector of Bangladesh.

Chowdhury (2006) also considered the

environmental perspectives and urged thatthere is strong need for firms to incorporate

environmental responsibility into theircorporate governance practices and policiesand future strategies should avoidmanipulation and misrepresentation of theinformation. Because, in the long run, thechoice of being not green may has seriousconsequences financially and environmentally.

Same is also observed by Kabir (2007) forLever Brothers Bangladesh Limited to allocatemore resources and time to become a model ofgreen business in its sector and achieve longterm benefits.

Environment Reporting" is a concept that isrelatively new in Pakistan. It provides anopportunity for companies to informstakeholders of their corporate efforts inensuring that operations and businesses haveminimum impact on the environment.

Companies should not view environmentalreporting as an impediment to theirbusinesses. Instead, they should embrace it asan opportunity to enhance their business. Thisis a real challenge in a country like Pakistan,where the command and control systemspermeate the governance of our economy. Thetendency for pervasive regulatory frameworksoften tends to prove self defeating in that theyonly tend to focus on disciplinary actions,rather than providing the corporate sector withan enabling environment for greater

compliance on social and ecological standards.In this regard, Institute of CharteredAccountants of Pakistan (ICAP) hasintroduced IAS 19 that deals with employeesbenefits for short term, long term, postemployment and termination benefits. Benefitsregarding wages, salaries, securitiescontributions, short term leaves, sick leaves,medical leaves for family, and differentretirement benefits are given to employeesaccording to their job status. Disclosures aboutemployees safety and job security policies

ensure public about ethical and moral valuesof a corporation and attract foreigninvestments; hence a positive effect is shownon firms performance. ICAP has launchedreporting requirements regarding internalcontrol and disclosure of different riskmanagement systems, yet no particularstandard has been developed regarding theexternal environmental control standards.

Moreover, government has introducedPakistan Environment Protection Act (PEPA)

and introduced National EnvironmentalQuality Standards (NEQS) in 1997. According

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to which companies are required to followenvironmental regulations controllingpopulation, agricultural wastage, socialhazards, or any damage to human life. TheACCA-WWF Pakistan EnvironmentalReporting Awards were launched in

collaboration with the Ministry ofEnvironment and IUCN Pakistan in 2002 torecognize and reward companies that reportcorporate environmental, social andsustainability performance to a broad range ofstakeholders. In addition to it, the work of theGlobal Compact is to be organized throughsoon-to-be functional Global CompactFoundation, a not-for-profit company thatseeks to work closely with the corporate sectoron Corporate Social Responsibility issues andin developing effective incentive systems for

rewarding and sustaining good corporateperformance in Pakistan.

In the light of above discussion, the presentstudy provides a link between theoreticalperspectives of corporate social governanceand practices of Pakistani companiesregarding CSR reporting. Three companiesfrom the fertilizers industry of Pakistan areselected as case studies to analyze thecorporate social disclosure. The fertilizerssector of Pakistan consists just of four public

limited companies listed on Karachi StockExchange including Dawood HerculesChemicals, Fauji Fertilizers, FFC-Bin Qasim,and Engro Chemicals. We were unable to findany data regarding the corporate socialresponsibility and environmental reportingabout FFC-Bin Qasim Limited so this companywas skipped out. The major indicator ofcorporate governance in any country mayinclude establishment of rights of stakeholders,enforcement of regulation and law and order,protection of creditors and customers. Mostly,

researchers categorize the reporting of thesesocial actions for the purpose of study. In thisregard, current study utilizes the six categoriesof CSD proposed by Hackson and Milne(1996).i.e. (1) environmental; (2) energy; (3)employees; (4) product; (5) communityinvolvement; and (6) others. The CSRreporting of the three selected companies hasbeen analyzed using the above six categories.

Case Study 1 -- ENGRO CHEMICALSLIMITED

Background

Engro Chemicals Pakistan Limited (Engro) isbased in Pakistan and primarily focuses on themanufacturing and marketing of fertilizer. Itsurea fertilizer manufacturing site is situated inDaharki in the province of Sindh. Engro wasestablished when Exxon (Esso until 1978)

divested its business in 1991. The employees ofExxon Chemicals Pakistan Limited decided tobuy out Exxons share and renamed it Engro,which stands for Energy for Growth. At thetime of writing, Engro is expanding itsproduction capacity of urea through thecreation of a new plant in Daharki which willbe the worlds biggest single train ammonia-urea complex upon completion. The companyexpects to reach a capacity of around 2.3MMET Urea per annum by mid-2010. Engrohas 130 management employees and 350 non

management staff at the plant in Daharki.These numbers are expected to increase to 195management and 555 non-management beforenew projects commissioning at the enlargedplant. In addition, Engro employs 72contractors and around 5000 contractemployees on a daily basis. The latter numberwill decrease to around 1000 1200 as theplant extension nears completion. Thecommitment to health and safety is an explicitpart of the core values stated in Engroscorporate responsibility report. A corporate

health, safety and environment (HSE)committee has been in place since 2004. Thiscommittee has been headed by the companypresident, Asad Umar, as the DuPontassessment suggested that a commitment tosafety, health and environment would have tocome from the very top of the company. Thereis also a section dedicated to the safety of themanufacturing site, headed by a safety unitmanager and staffed with a senior safetyengineer, a process safety engineer, a safetysupervisor and a safety technician. These five

people are exclusively employed to improveEngros safety, and report to the health, safetyand environment manager. Safe OperatingCommittees at the divisional level entrenchcommitment to these values throughout thehierarchy of Engro. Since 2004, Engro has wonawards by the National Forum forEnvironment and Health on an annual basis.

Engro has been a participant of the GlobalCompact since June 2006 and thus committeditself under Principle 1 to support and respect

the protection of internationally proclaimedhuman rights. The rights to health and the

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enjoyment of just and favorable conditions ofwork are part of these rights as they arerecognized in a number of internationalhuman rights treaties. The right to workexplicitly includes, among other things, theright to safe and healthy working conditions,and so Engros efforts to improve the health

and safety standards at their plant are fully inline with a commitment to support and respectinternationally proclaimed human rights.

Safety, Health, and Environment

ENGRO manages and utilizes resources andoperations in such a way that the safety andhealth of their people, neighbors, customersand visitors is ensured. They believe theirsafety, health and environmentalresponsibilities extend beyond protection andenhancement of their own facilities, and they

are concerned about the distribution, use andafter use disposal of their products.

Ethics and Integrity

They do care how results are achieved and willdemonstrate honest and ethical behavior in alltheir activities. Choosing the course of highestintegrity is their intent and they will establishand maintain the highest professional andpersonal standards. A well-founded reputationfor scrupulous dealing is itself a priceless asset.

Quality and Continuous ImprovementThey believe that quality and a relentlesscommitment to continuous improvement areessential to their ongoing success. To this end,they define quality as understanding thecustomer's expectations, agreeing onperformance and value, and providingproducts and services that meet expectations100 percent of the time. Their motto is, "Qualityin all we do."

External and Community InvolvementThey believe that society must have industrialorganizations that it can trust. Trust andConfidence are earned by their performance,by open and direct communication, and byactive involvement in the communities inwhich they live and conduct their business.

Candid and Open CommunicationsThey value communications that arecourteous, candid and open and that enableeach of them to do their jobs more effectivelyby providing information that contributes tothe quality of their judgment and decision

making. Effective communication should alsoprovide the means for gaining understanding

of the company's overall objectives and plansand of thinking behind them.

Engro Safety Standards

In an endeavor to keep abreast with theWorld-Class Safety Standards, Engro adopted

DuPonts Safety Management Systems underan agreement, with the world-renownedDuPont Safety Resources, in 2003. EngrosSafety Management system is now twopronged, Process Safety & Risk Management(PSRM) and Behavioral (Personnel) SafetyManagement (PSM). PSRM provides aframework to manage a hazardous fertilizersprocess plant by managing the risk. Thesystem has fourteen best practices categorizedin three-part: technology; facilities; andpersonnel. Similarly Personnel (Behavioral)

Safety Management system has fourteen bestpractices which demand more activeinvolvement of different levels of organizationin day-to-day safety improvement. DuPontSafety Resources Consultant did an evaluationin September 2006 which substantiates Engroseffort in meeting all the system requirements.PSRM is now fully implemented and isproviding a framework to manage the plantoperations with minimum risk. SimilarlyPersonnel (Behavioral) Safety ManagementSystems fourteen best practices were also

evaluated by DuPont Safety ResourcesConsultants with the recommendation that theimprovement in this system is alsoappreciable.

Engro Environmental Standards

Engro believes environmental performance iscritical to upholding responsible businessoperations, and has worked hard atmonitoring, controlling and reducing wasteswhile conforming to relevant environmentalstandards. Broadly, Engro has displayed

consistent progress in all its key environmentalperformance indicators, namely, effluents,greenhouse emitting gases, ozone-depletinggases, hazardous and non-hazardous wastes,and natural resource management with respectto waste reduction, energy conservation, andcompliance. 100% compliance of NationalEnvironmental Quality Standards (NEQS) wasachieved for effluents & emissions andtransparent reporting to governmental bodiescontinued during 2007.

A major breakthrough was environmentallyfriendly disposal of hazardous waste that was

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achieved by recycling / reusing the entire on-site inventory of spent catalysts & resins andmercury lights for metal extraction andmanufacturing of salts / micro nutrients.Similarly, environmentally friendly disposal ofchromate sludge was started. After

discontinuation of Ozone depletingChlorofluorocarbons (CFCs), replacement ofHydro CFCs is underway in a phased manner(normal replacement cycle of air conditioners).Engro has also won consecutively fourNational Forums of Environment & Healthannual environment excellence awards. Thecompany has gone one step forward towardscarbon trading (Clean DevelopmentMechanism) by signing a contract withconsultants on Project Development Document(PDD) for development of possible Clean

Development Mechanism projects.

Major Social Interventions by EngroAffiliates in 2008-2009

ECPL affiliates spent Rs. 32 million on socialinvestments in 2008 alone. The major thrust ofEngros social investments has been in fiveareas: education, health, skill development,environment, and emergency relief efforts, asdetailed below:

Education Initiatives

Health Initiatives Skills Initiatives

Social Investments

As part of its enduring commitment toimprove the quality of life for its stakeholders,especially neighboring communities, ECPLcontributed over Rs. 40 million under its socialinvestments portfolio in 2008. This sectiondescribes Engros major initiatives in 2008.

Sahara Welfare Society Projects

Sahara Community School

Dar ul Shifa Clinic

Sahara Arts & Crafts Center

Teaching and Resource Center (TARC)

Katcha Schools Program

Government Schools AdoptionProgram

Snakebite Treatment Facility

Indus River Dolphin ConservationProject

Clinic in partnership with MarieStopes Society

Engro Thalassemia Center Earthquake Relief in Balochistan

Eye Camp in Sahiwal

Malaria Control Program

Polio Immunization Campaign

Kidney Dialysis Centers

With respect to CSR phenomena and relating

activities, Engro Chemicals Pakistan Limited(Engro) is playing a vital role in health andsafety, environment community involvementand corporate socialization. We can put thesein i.e. environment, employee, communityinvolvement and others categories identifiedby Hackston and Milne (1996). Almost severalinitiatives practically CSR are muchquantitative in nature but all these playtremendous role in development ofcommunity.

Case Study 2 -- FAUJI FERTILIZERCOMPANY LIMITED

Background

With a vision to acquire self-sufficiency infertilizer production in the country, FFC wasincorporated in 1978 as a private limitedcompany. This was a joint venture betweenFauji Foundation (a leading charitable trust inPakistan) and Haldor Topsoe A/S of Denmark.

The initial authorized capital of the companywas 813.9 Million Rupees. The present sharecapital of the company stands at Rs. 3.0 Billion.Additionally, FFC has Rs. 1.0 Billion stakes inthe subsidiary Fauji Fertilizer Bin QasimLimited (formerly FFC-Jordan FertilizerCompany Limited). FFC commencedcommercial production of urea in 1982 withannual capacity of 570,000 metric tons.

Through De-Bottle Necking (DBN)program, the production capacity of

the existing plant increased to 695,000metric tons per year.

Production capacity was enhanced byestablishing a second plant in 1993with annual capacity of 635,000 metrictons of urea.

FFC participated as a majorshareholder in a new DAP/Ureamanufacturing complex withparticipation of majorinternational/national institutions.The new company Fauji Fertilizer Bin

Qasim Limited (formerly FFC-JordanFertilizer Company Limited)

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commenced commercial productionwith effect from January 01, 2000. Thefacility is designed to produce 551,000metric tons of urea and 445,500 metrictons of DAP.

This excellent performance was due tohard work and dedication of all

employees and the progressiveapproach and support from the topmanagement.

In the year 2002, FFC acquired PakSaudi Fertilizers Limited (PSFL) UreaPlant situated at Mirpur Mathelo,District Ghotki from NationalFertilizer Corporation (NFC) throughprivatization process of theGovernment of Pakistan. Thisacquisition at Rs. 8,151 millionrepresents one of the largest industrial

sector transactions in Pakistan.

Human Resources

The FFC Management, acknowledging theimportance of human resources has alwaysplaced personnel management at the top of itspriority list. The Human ResourcesDepartment, therefore, right from theinception of the Company has played a vitalrole in steering the Company through all itsphases, operations and progress. The functions

of Human Resources Department vis-a-vispersonnel management and human resourcesdevelopment are going side by side and it isdue to the progressive approach and dynamicphilosophy of the management that PersonnelManagement remains abreast with the lateststyle of management ensuring high level ofmotivation and satisfaction of the work forceunder varied situations.

Personnel policies are kept updated and areperiodically modified to respond to the latestsocio-economic changes and market trends ofthe country. Hiring quality manpower,keeping them happy, satisfied and motivatedare the pillars of the Human ResourcesDepartment; justice, fair play and meritoriented treatment are some of the ingredientsof processing cases by the Human ResourcesDepartment. For Human Resourcedevelopment, another aspect which receives itsdue share is training. The employees areexposed to various kinds of cross training,technical courses, management courses,workshops and seminars both at home andabroad. At Plant site, the Company has a

Technical Training Centre, which is unique,and the only centre in Asia having a truereplica of the Plant for providing realistictraining as far as possible, to the employees.

Employees' welfare has all along received dueconsideration by the Management. A number

of agreements have been signed with CBAWorkers Union, resulting in handsomeremuneration packages to employees. Thecompany, since its inception, has undertakenfive salary revisions for Managementemployees, to remain amongst the top payingorganizations of the country. It is due to thesheer sincerity, welfare oriented policies andconcern for every single employee that therehas never been any strike, lock out or go slowin FFC.

Technical and Training Services

The technology division of the Companyorganized 2nd FFC International Seminar forthe Fertilizer industry on Ammonia and UreaTechnology cosponsored by Haldor TopsoeA/S, Denmark and Snamprogetti, Italy topromote Company image and demonstrate itscommitment toward contribution to thesociety and the economy at large. TechnicalTraining Center continued to extendcustomized training services to other

companies including OMV Pakistan Ltd andBosicor Pak Ltd. Two new courses on"Networking Concepts and Use" were alsointroduced and conducted for the first time forclients. In addition, services to othercompanies including Pak Arab Fertilizers wereprovided as part of their professionalcommitment.

Employee Relationship, Training andWelfare

The values which drive their business are

based on an environment that embracesdignity, change, ideas, respect for theindividual, and equal opportunity to succeed.Their commitment to their values and ethicshas enabled them to attract and retain talent.Human capital plays a vital role in making orbreaking the organization. Their employeespossess skills, technical expertise, businessknowledge and personality traits which haveimmensely strengthened their knowledge base.Human capital management is the job of everyindividual in the Company and they have a

structured culture to ensure an environment ofcompatibility and team spirit. Their policies

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focus on optimizing the lifetime value of theirhuman asset by acquiring, developing,motivating, rewarding and more importantly,retaining the employee and they arecommitted to nurturing their welfare, healthand safety, fostering a sense of belonging in

each employee.

The Company pursues a policy of adequatelytrained, skilled and updated staff and conductsvarious in-house seminars/training courses atits Plantsites and Marketing Division inaddition to nominating managementemployees on merit, for several local andinternational courses to enhance professionalcompetence, awareness and perspectives. Thishelps employees and managers at operationalsites to assume more control over new

developments and challenging issues. Theeffectiveness of training, education andcommunication programs is reviewedregularly. Adherence to the spirit and intent ofthe Companies Code of Ethics and Conduct isa pre-condition of continued employment andgrowth in the Company. The code has beentranslated into Urdu to ensure understandingat all levels of employment. Developmentalwork of Mirpur Mathelo township is inprogress including construction of new BOQs,C-type bungalows and renovation of various

types of old residential facilities.Safety, Health and Environment

They work efficiently, without compromisingthe health and safety of their employees forproduction or profit, in a manner that protectsand promotes their well-being and maintains asafe workplace and environment. Theiremployees are trained for their own safety,well being of their fellow workers and theirenvironment and they endorse the CompanysHealth, Safety and Environment Policies and

procedures to be followed. The policies areprominently displayed at all of their offices,plants and work sites and employees arerequired to promptly report any safetyconcerns, violations or incidents.

The Company has developed green strips andgrassy plots at the Mirpur Mathelo plant siteand township to provide pollution free lushgreen surroundings despite arid and hostileclimatic conditions and saline soil. Engineeringof major environmental projects is underwayat Mirpur Mathelo for commissioning in year

2007 related to ammonia process condensaterecovery, rain water handling system, lime

sludge disposal facilities and township wastewater disposal system. In addition, PlantsiteGoth Machhi attained qualification for thelatest revision of Environmental ManagementSystem ISO- 14001:2004 certification, whichexhibits their concerns for the environment.

Promotion of safety culture is carried outthrough training sessions on safe equipmenthandling & emergency plan/dry run. PlantsiteMirpur Mathelo observed a safety week whichincluded Spot the hazard competition, firefighting competition and exhibition of safetyitems. Plantsite Goth Machhi successfullyaccomplished surveillance audit of theirQuality and Occupational Health & SafetyManagement Systems certifications [ISO-9001:2000 & OHSAS-18001:1999] by Bureau Veritas

Certifications (BVC) during the year. The plantalso conducts regular safety audits based onDuPont approach and OSHA standards andthe Company has secured various securityawards over the years. Goth Machhi Complexaccumulated 5.44 million man-hours of safeoperations while the Mirpur Mathelo complexhas operated for 2 million man-hours ofcontinuous safe operations till the end of 2006.

Regarding CSR and corporate environmentalpractices, Fauji Fertilizer Companys behavioris quite serious. They really have deep

community involvement and specially theirCorporate governance polices and procedure,including corporate social responsibility,provide a strong support to stay deeplyinvolved in community in which they areoperating.

Case Study 3 -- DAWOODHERCULES CHEMICALS LIMITED

Background

Dawood Hercules Chemicals Limited wasincorporated as a public limited company on17th April 1968, as a joint venture betweenDawood Group of Industries and Hercules Inc.USA. It was the first private sector venture inPakistan to receive a loan from the World Bankand was the largest ammonia/urea plant incountry at that time. Initially the plant'scapacity was 345,000 metric tons of urea perannum. The plant was revamped in 1989 /1991 to enhance the capacity to 445,500 metrictons of urea per annum. Also, it made themanufacturing facilities more energy efficient

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and environment friendly. In recent years,Dawood Hercules has made a colossalinvestment to incorporate the latesttechnology, the most significant are theconstruction of new Prilling tower in a recordtime; the tallest industrial structure inPakistan, replacement of Primary Waste Heat

Exchanger. Primary Reformer HarpsAssemblies and conventional instrumentation(with Distributed Control System).

Human ResourceDawood Hercules provides high performingorganizational environment to its employeeswhere ideas are generated and nurtured. Itprovides career grooming opportunities to thetalented professionals. Dawood Hercules hasgenerated employment for more than 510people and gives support to the local industry,

especially transport and the packagingindustry. In addition to the direct employment,the Company through its marketing networkprovides job opportunities to over 2500 people,indirectly.

EnvironmentDawood Hercules has always defined progressin human terms: its not just about producingmore, but producing in a way that limit theenvironmental impact. They have a longtradition of taking care of environmentalissues. Environmental care is one of their core

values and guiding principles. DawoodHercules has implemented a system whichfosters continuous improvement in safety,health and environmental performance,engagement with stakeholders, working withthe authorities and enhancing better productmanagement along the supply chain.

HealthDawood Hercules takes pride in encouraging,measuring and appreciating its people on theircommunity activities and actively supportingparticipation in the community activities, such

as sports events, farewell to the seniorcolleagues and contributing to disaster reliefefforts. Apart from work, employees at alllevel interact frequently in office gymnasium,during various sports events, recreationaltours etc.

Social ResponsibilityDawood Hercules CSR is closely linked withthe principles of Sustainable Development inproposing that Company is obliged to makedecisions based not only on the financial /economic factors but also on the social and

environmental consequences of its activities.Their challenge is to proactively work towards

benefiting their country and its people. For us,community service is a responsibility of everymember of their organization. The Companyas a whole is geared to provide support in fourmain areas:

Health

Education

Environment Preserving their heritage

For them, the biggest asset is their culture inwhich they have inculcated a sense of virtueinto their daily lives and they are proud ofpreserving it. Their efforts include theestablishment of schools, blood donationcamps, relief works, environment conservationcampaigns, earthquake rehabilitation effortsetc.

CSR Projects Blood Drive 2007

Dawood Hercules Free Eye Camp

The DH Plant Drive 2006

TCF School -Dawood HerculesCampus

Blood Donation Camp 2006

Roshani Foundation

Flood Relief

Dawood Hercules Chemicals Limited has apositive vision about CSR. They dont thinkthat corporate social responsibility is a socialactivity in these days. They include CSR incore business procedures and policies thatwould help them to make long termsustainable image in society, customers,investors, and other stakeholders. Table 1summarizes the in-place and pending forfuture corporate social disclosures of theselected companies for analysis in order tomake it easy the comparative efforts of CSRinitiatives.

INSERT TABLE-1

CONCLUSION &RECOMMENDATIONS

The present study sheds some light on thecorporate environmental practices of threeleading companies of Pakistan in fertilizersindustry. After the analysis of these casesdiscussed, it can be concluded that thebehavior of firm is heavily dependent on thesocial work and community involvement in

the society in which it is operating. Althoughthe traditional finance theory argues that profit

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maximization is main objective of the mangers;however, business norms have been changednow. The organizations are participating in thewelfare of the society and its employees byincurring heavy expenditures for thesustainable and long term development just

like the companies discussed in this case.These organizations are trying to build trustand confidence of the society in the businessoperations and procedures. Despite of the factthat, there is no strict law and regulationregarding these CSR initiatives of thecompany, they are making it possible on thevolunteer basis. The other facet of theseinitiatives may be seen as stakeholders of theindustry are getting more aware and consciousof business processes that are having impacton the environment and society. According to

these cases discussed above, it is clear that allthree companies although dealing in productswhich is not environment friendly likefertilizers, however; they are doing a lot for thewelfare of the country like building hospitalsand also people are getting aware of diseases.All the companies are also developing andimplementing their own environment andsafety polices for the employees.

Finally, the study discussion regarding the

corporate social responsibility and initiativestaken by these firms suggest some implicationsfor the other firms in Pakistani market.Corporate social responsibility is not a socialactivity these days rather it has become as oneof the core business procedures and policies.The firms following these practices are verysuccessful; not only in terms of financialmatters, but also sustaining their long termpositive image in the minds of customers,investors and other societal members. Thechoice is in the hands of the management of

business concerns whether they are incurringsome expenditures and getting green todayor ready to facade pressure and consequencesfrom the stakeholders tomorrow. Companiesare now trying to get a positive imageregardless of what products or services theyare providing to the customers.

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Table 1: Summary of Corporate SocialDisclosures of Selected Companies

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