Introduction 4. Chapter I - CSR and business context in Mozambique 7. Chapter II - Descriptive analysis of the data of the companies surveyed 15

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3 iii Table of Contents Acronyms... v List of graphs... vi List of tables... vii Preface... 1 Executive summary... 2 Introduction 4 Research Methodology... 4 Data Collection... 4 Structure of the Questionnaire... 4 Chapter I - CSR and business context in Mozambique Context of CSR CSR in Mozambique The key actors in CSR in Mozambique Business context in Mozambique From 1975 to Period of centralised market economy From 1990 to Market Economy and ERP - Economic Rehabilitation Program Institutions for the management of Mozambican companies Potential growth poles in Mozambique Chapter II - Descriptive analysis of the data of the companies surveyed Type of business and its geographic location Motivations of Mozambican companies for corporate social responsibility Barriers to greater involvement of companies in social responsibility Current organization of social responsibility in the company Profile of CSR Manager Influence of the parent company (foreign or Mozambican) Adherence to national and international CSR Policies... 22

4 iv 2.8. Stakeholders involved The areas of donation policies CSR activities...26 A. Governance of CSR...26 B. CSR Reports...28 C. Dialogue with stakeholders...29 D. Relationship with the community E..International certifications...32 F. Human Resources...33 G. Provision...34 H. Operational activities and actions regarding environmental protection I. Marketing and Sales...37 Chapter III A comparative statistical analysis A comparison the CSR policies and activities of companies in Mozambique according to size and nationality A comparison of activities and CSR policies of companies in Mozambique by Industry UA comparison of activities and CSR policies of companies in Mozambique by the presence of the CSR manager Findings and Recommendations 45 Findings...45 Recommendations...47 APPENDIX 1: Description of the activities of the companies surveyed...50 APPENDIX 2: Tables...51

5 v Acronyms ALTIS-UCSC ARC ASTRA BIM BVM CEPKA DNT HCB IGEPE INE MSMEs NGOs ILO CBD SME PMM CBD PARP(A) ERP CSR UCM SEZ Graduate School Business & Society - Università Cattolica del Sacro Cuore Autoridade Reguladora das Concorrências (Competition Regulatory Authority) Associação dos Transportadores (Transporters Association) Banco Internacional de Moçambique (International Bank of Mozambique Bolsa de Valores de Moçambique (Mozambique Stock Exchange) Centro de Pesquisa Konrad Adenauer (Konrad Adenauer Research Center) Direcção Nacional do Tesouro (National Directorate of the Treasury) Hidroeléctrica de Cahora Bassa (Cahora Bassa Hydro-electric) Instituto de Gestão das Participações do Estado (Institute for the Management of State Holdings) Instituto Nacional de Estatística (National Institute of Statistics) Micro, Small and Medium Enterprises Non-governmental organizations International Labour Organization Chairman of the Board of Directors Small and Medium Enterprises ProgettoMondo Mlal Chairman of the Board of Directors Action Plan for the Reduction of (Absolute) Poverty Economic Rehabilitation Program Corporate Social Responsibility Universidade Católica de Moçambique (Catholic University of Mozambique) Special Economic Zones

6 vi List of Graphs Graph 1: Companies involved by number of employees...15 Graph 2: Distribution of enterprises by number of businesses Graph 3: Customers of the companies involved Graph 4: Source of raw material of companies Graph 5: Destination of products Graph 6: Level of motivation of companies to promote CSR Graph 7: Level of barriers to the promotion of CSR in companies Graph 8: Relative work time of CSR managers Graph 9: Managers dedicated to the functions of CSR Graph 10: Distribution of managers by gender...22 Graph 11: Distribution of CSR managers by academic level Graph 12: Adherence and/or compliance with international standards...23 Graph 13: Frequency of dialogue with stakeholders Graph 14: Most frequent subjects in dialogue with stakeholders...25 Graph 15: Relevance of dialogue with stakeholders Graph 16: Donation policies Graph 17: Activities implemented Graph 18: Activities implemented (Who runs the activity) Graph 19: Activities implemented (Budget) Graph 20: CSR activities (Report - Implementation) Graph 21: CSR activities (Report - Who manages the activity) Graph 22: CSR activities (Report - Budgeting)...29 Graph 23: Dialogue with stakeholders (Implementation) Graph 24: Dialogue with stakeholders (Who manages the activity) Graph 25: Dialogue with stakeholders (Budgeting) Graph 26: Relationship with the community (Implementation)...31 Graph 27: Relationship with the community (Who manages the activity)...31 Graph 28: Relationship with the community (Budgeting) Graph 29: International certifications (Implementation)...32 Graph 30: International certifications (Who manages the activity) Graph 31: International certifications (Budgeting) Graph 32: CSR activities - Human Resources (Implementation) Graph 33: CSR activities - Human Resources (Who manages the activity) Graph 34: CSR activities - Human Resources (Budgeting)... 34

7 vii Graph 35: CSR activities - Provision (Implementation) Graph 36: CSR activities - Provision (Who manages the activity) Graph 37: CSR activities - Provision (Budgeting) Graph 38: Actions regarding environmental protection (Implementation) Graph 39: Actions under the environmental protection (Who manages the activity)...36 Graph 40: Actions regarding the environmental protection (Budgeting)...36 Graph 41: Marketing and Sales (Implementation) Graph 42: Marketing and Sales (Who manages and activity) Graph 43: Marketing and Sales (Budgeting) List of Tables Table 1: Classification of companies Table 2: Sample by size and nationality Table 3: Differences in form and size of company Table 4: Differences in form and size of companies (activities) Table 5: Differences by industry...51 Table 6: Differences by industry (activities)...52 Table 7: Differences due to presence of CSR manager Table 8: Differences due to presence of CSR manager...53

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9 Foreword 1 Foreword This report is the result of the research that forms part of the project Responsible Companies Analysis of Social Dialogue and Social Responsibility of Local and Foreign Companies in Mozambique, which originates from the recognition that very few studies about this topic have been conducted and there is a gap in the understanding of the commitment of companies regarding CSR. Given the important role that the private sector plays in social progress, it seems crucial to explore its performance in social and environmental issues in order to identify strengths and weaknesses and define possible areas of interest and future improvements. The project aims to contribute to the promotion of culture within the context of Corporate Social Responsibility (CSR), encouraging commitment to sustainable development on the part of Companies operating in Mozambique. In line with the objectives of the National Plan to Combat Poverty and the Millennium Development Goals (MDGs), the study attempts to facilitate the creation or reinforcement of valuable knowledge and skills for local organizations, which are crucial for improving social and environmental conditions. The project began in February 2013 with a duration of 30 months and is composed of the following activities: design and implementation of this research to reveal and analyse existing CSR practices and the legal and economic context of implementation; performance of professional training courses; activation of an Inter-sectoral Platform; identification of a group of companies with which it is intended to test CSR pilot projects; dissemination and sharing of the best practices that emerge from the implementation of the pilot projects. The project aims to facilitate the growth of a culture of CSR among the socio-economic players operating in Mozambique through a combined process of sensitization, training and empowerment, achieved through the implementation of the activities described above. This includes research on CSR, which is the starting point for the realization of the project. 235 companies including micro, small, medium and large companies were surveyed in the three regions of the country, namely the south, centre and north, particularly in the capital cities of Maputo, Beira and Nampula, including prominent industrial zones such as Marromeu, Mafambisse in Sofala and Moma in Nampula. We would like to thank the surveyed companies and participants of the provincial seminars and the national conference for their warm welcome and their contributions to the enhancement of the report of this research project. We would like to thank the team of researchers and the entire organisation for coordinating this survey and our partners at ALTIS who provided advice throughout the process of the study. We would like to thank the European Union for its financial support, ProgettoMondo Mlal and ALTIS for their fruitful cooperation. Our thanks also go out to Barbosa Morais (Scientific Coordinator of the Project), Marco Fucili (Project Director), Laura Ferri and Marco Minciullo (ALTIS Researchers), who supported in good faith the performance of the project activities concerning this research and its publication. We encourage a thorough read Prof. Fr. Alberto Ferreira (Rector of the Catholic University of Mozambique)

10 2 Executive Summary Executive Summary The survey Corporate Social Responsibility Management in Mozambique is part of the Responsible Companies Project Analysis of social dialogue and social responsibility of local and foreign companies in Mozambique, co-funded by the European Union and led by Konrad Adenauer Research Center (CEPKA) in partnership with Alta Scuola Impresa and Società (ALTIS) of the Università Cattolica del Sacro Cuore (UCSC) and the NGO ProgettoMondo Mlal. This arises within the measures for poverty reduction in the context of development of/within private enterprises operating in Mozambique, with particular reference to the objectives set out in the Action Plan for the Reduction of Poverty (PARP) and within the logic of sustainable development, to promote ever greater collaboration between the public and private sectors, also in accordance with the provisions of the Eighth Millennium Development Goal. It aims to strengthen the knowledge of local actors: private entrepreneurial sector and associations in the same category, the governing bodies responsible for economic and industrial policies, municipalities and civil society organizations in the process of capacity building and empowerment in combination with other project activities. This nationwide research-action has the scope of informing the economic actors in the country with regard to the business context taking into account the lack of information and awareness in relation to a form of doing business that is attentive to the social and environmental impact and able to contribute to the objectives of development and social cohesion within a perspective of shared responsibility with other institutional actors of the territory. In this context, the research has the following specific objectives: to see how Mozambican and foreign companies operate in the sphere of Corporate Social Responsibility (CSR); to facilitate the creation of a valuable reinforcement of the knowledge and capabilities of the organizations; to encourage the involvement of companies in the practice of CSR for sustainable development through seminars and conferences. 235 companies, between micro, small, medium and large companies were surveyed in the three regions of the country, namely the south, centre and north, particularly in the capital cities of Maputo, Beira and Nampula, including prominent industrial zones such as Marromeu, Mafambisse in Sofala and Moma in Nampula in the following proportions: 28.94% micro-enterprises with fewer than 10 employees; 39.15% small businesses with more than 10 and less than 50 employees; 17.02% medium-sized enterprises with more than 50 and fewer than 250 employees; 9.79% large companies with more than 250 and less than 1000 employees; 5.11% large companies with over 1000 employees. The results indicate that about 68.09% of these companies do not have a parent company, whether domestic or foreign, which gives them the right to be considered Mozambican. These are in addition to the 14.47% of companies that are subsidiaries of Mozambican companies, in contrast to the 17.45% that are subsidiaries of foreign companies.

11 Executive Summary 3 The primary source of raw materials of these companies is Mozambique (86.81%), followed by South Africa (44.68%), Portugal (17%) and the destination of the products is 98.72% for the domestic market. The motivations for companies to promote CSR are Contributing to effectively solving social problems (42.98%), Maintaining competitiveness (40.85%) and Concern for the future of society 39.15%. Barriers to the promotion of CSR are the lack of financial resources (39.19%), lack of clear laws and regulations (22.55%) and lack of skilled human resources (19.15%). It was also found that in approximately 54.47% of companies there are no sectors or persons who are managers for social responsibility within the company, and among those who have this sector, it is the Company Director, Chairman of the Board of Directors (CBD) and the Head of Human Resources that takes on this function. One of the practices of CSR is dialogue with stakeholders, i.e. parties that have an interest in the company s business. The frequency of dialogue is highest with collaborators (10.64%) customers (7.23%), trade unions (6.38%) and local communities (5.11%). This dialogue is intended primarily to avoid reputational risk (23.40%), to obtain direct information about the company image (22.98%) and to define future strategies (21.28%). also indicate that CSR activities related to reporting, governance, community relations, stakeholder dialogue, provision of human resources, marketing and operations in the context of environmental protection are usually implemented by large domestic and foreign companies. By and large the survey found the following: we note an approach that is more philanthropic than strategic in the actions undertaken by companies; there is greater motivation to promote CSR in foreign companies than domestic ones, since they tend to be more aware of the advantages of CSR; there is a lack of financial resources, qualified human resources at companies and, laws and regulations on CSR in the country, which is a barrier to its promotion. Given this, it is recommended as follows: awareness and education on this subject must be promoted at companies and educational institutions; the Government must regulate CSR activities in general, not only those in the mining sector and others, as is currently intended; companies with extensive experience in CSR must share their knowledge and skills with others. The areas of activities most relevant for the performance of CSR are considered to be education (26.38%), university and post university reaching (17.45%). The results

12 4 Introduction Introduction The rapid economic growth of the country, coupled with the recognition of the role of companies as actors in the development process, the priorities of the European Union and the existence of few studies to explain the workings of the phenomenon of corporate social responsibility (CSR) operating within Mozambique, are the assumptions that led UCM, through CEPKA in partnership with ProgettoMondo Mlal, ALTIS of UCSC, with European Union funding, to develop the Responsible Business Project Analysis of social dialogue and social responsibility of local and foreign companies in Mozambique. The research was conducted to investigate the CSR policies and practices already implemented by companies with the objectives of: understand the main environmental and social issues considered in the strategy and management of business activities; identify the interested parties affected and the mechanisms to create dialogue and involvement with them; explore the organizational structure dedicated to CSR management; consider the factors that drive or hinder the efforts of companies in terms of CSR implementation. Research Methodology The research was supported by a training program for researchers involved in the project. This activity contributed to achieving the overall objective of the project, i.e. to build research capacity and empower young local students in the area of research. The program included a one-week course on CSR theory and research methodologies in order to provide researchers with knowledge, skills and tools. Data Collection The process of data collection within the research included a review of the literature on CSR and Business Analysis in Mozambique and the Context of CSR in Mozambique. This allowed to adapt the research and subsequent analysis to the local context and avoid potential distortions. Then, the investigation was applied in the field, with managers surveyed at 235 local and foreign companies, following a structured questionnaire with closed questions, most of which had to be scored on a 5-point Likert scale. To fill out the questionnaire interviews were conducted that facilitated the collection of data, allowing an understanding of the activities and cultures of the companies, thus limiting the distortion derived from the so-called phenomenon of social desirability related to the respondents tendencies to answer in a way that may be criticized by others. Although the sample is not strictly representative of the Mozambican context, the number of companies involved in the study allows for interesting perspectives to emerge regarding the development of CSR in the national context considered. Furthermore, the study is the first to conduct a research project on the topic in question at the national level, although the companies were located in the vicinity of the three major cities of Maputo, Beira and Nampula. Structure of the Questionnaire As noted earlier, the research was carried out using a questionnaire structured with closed questions. The questionnaire consisted of 7 sections, as follows: characteristics of companies and respondents; motivations and barriers to CSR commitment; CSR Profile Manager; influence of parent company in the implementation of CSR; CSR policies and stakeholder involvement; CSR practices implemented by the business activity.

13 Introduction 5 Motivations and barriers to CSR commitment: the questions were aimed at understanding which factors facilitate or limit the commitment of companies to CSR and the ability to implement policies and activities to improve the environmental and social management. The questions were assessed by the investigator on a scale from 1 to 5 with 1 being not relevant and 5 very relevant. Organizational structure of CSR: this section was intended to understand whether the company had a function assigned to CSR management in the organizational structure and, if so, what characteristics it has. CSR manager profile: the questions included in this part sought to understand whether the company has a person responsible for managing CSR policies and activities and the characteristics of this person. Relative influence of the parent company in the implementation of CSR: this section allowed us to investigate the role of the parent company in defining CSR policies and activities in the local context. CSR policies and stakeholder involvement: the questions allowed us to explore which stakeholders are considered the most important for the survival of the company and its success, and how the company engages in dialogue to better understand their needs and expectations. Structure of the Report This report is structured as follows: In Chapter I, reference is made to the theoretical framework of CSR, focusing on the aspect of some theories and the main authors who have studied the subject and the context of CSR in Mozambique. It also discusses the historical and developmental aspects of Mozambican business since the time of independence to the present day, highlighting the potential poles of development. In Chapter II the context of CSR in Mozambique is discussed, emphasizing certain aspects of the CSR research that is known, the classification of companies by number of employees and turnover volume, as well as the main actors in the Mozambican CSR experience and the description of the level of motivation of companies in promoting CSR and the corresponding barriers to its implementation, the activities and the persons responsible. In Chapter III the statistical analysis of the data is presented. It analyses the factors highlighted, as well comparing the CSR policies and activities of companies in Mozambique according to size and nationality. The final part describes the findings and the recommendations given by the researchers and the participants of the seminars presenting the results in Nampula, Beira and Maputo. CSR practices implemented by business activities: This part investigated companies practices to integrate environmental and social considerations into daily business activities with the questions divided according to Porter s value chain model.

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15 I. CSR and business context in Mozambique 7 Chapter I: CSR and business context in Mozambique 1.1. Context of CSR The growing importance of environmental and social issues characterizing the global context in recent decades has led to the emergence of new global challenges for all issues that directly or indirectly impact society and nature. Consequently, there is a new emphasis on the role that business must play in promoting more responsible activities and development. Particularly reference should be made to The expectations that companies strengthen their engagement with stakeholders (Clarkson 1995), if they assess and manage their economic, environmental and social impacts (socalled triple bottom line in Elkington, 1997), and channelling some of its capabilities for value creation and innovation in relation to development objectives, then these efforts will be crucial contributions towards a better society (Hamann 2006). In such a context, the development of the concept of Corporate Social Responsibility (CSR) has represented a crucial passage for the field of business management, such as the ability to manage environmental and social aspects in daily operations and processes, becoming a source of corporate competitive advantage in relation to the stakeholders. Moreover, given the extent of corporate boundaries determined by globalization, suppliers are increasingly involved in operations and processes and the supply chain has assumed a key role in business management. Thus corporate social responsibility has also been extended to business partners and companies that are considered responsible for the consequences of their activities. During the second half of the twentieth century there was a shift in the idea of the role of business, its objectives and conditions for success. In particular two streams of thought, proposing opposing views, were developed: the first, whose main supporter was Milton Friedman, was consistent with classical economic theory which saw the profit maximization as the only responsibility of business; the second, more recent, however, extended the responsibility of the company beyond mere profits. This debate has its origin in the development of different approaches on the issue of corporate responsibility and nowadays it is still difficult if not impossible to find a widely accepted definition (Waddock 2004). The first organic contribution is always identified in the work of Bowen (Bowen 1953) where the author attempts to describe the relationship between business and society. In particular, it is described as the obligations of an entrepreneur to follow those policies, make those decisions, or follow those lines of action that are desirable in terms of the objectives and values of our society. In this sense, corporate responsibility is determined by extending the responsibilities of the entrepreneurs to include the social good and the satisfaction of social needs in their decision-making process. A new rationale for CSR was proposed by Wallich and McGowan (1970) affirming that it is consistent with the long-term interests of stakeholders for companies to be socially responsible. This position is based on the recognition that the interest of stakeholders was altered by the fact that most of them have shares in more than one company and are thus interested in achieving the maximization of joint profit, meaning that each company must not affect the others or the context in which they operate (Wallich and McGowan 1970). The focus thus shifted to the study of the correlation between CSR and the financial performance of companies and the discussion focused mainly on considering the justification of CSR implementation in those cases in which it had no positive or negative

16 8 I. CSR and business context in Mozambique effects on efficiency and performance. The business case was recently discussed quantitatively based on several considerations taking into account the impact on performance in the medium and long term, correlation with the company s reputation, access to financing, employee motivation, better risk assessment, greater competitiveness, improved operating efficiency and license to operate (Baumol 1970; Clarke & Gibson-Sweet 1990, Davis 1973; Dyllic 1999; Hockerts 2006; Vermiglio 1987). In this paper, the concept is considered according to the European Commission definition as the responsibility of companies for their impact on society (EU, 2013). In this sense, it includes the responsibilities that arise as a consequence of the impacts on stakeholders caused by the decisions of companies and operations (Waddock 2004). The European Commission suggests that CSR should aim to: maximize the creation of shared value for owners, shareholders, stakeholders and society in general; identify, prevent and mitigate adverse impacts. The pursuit of these two objectives requires companies to integrate the environmental, social and economic outcomes in their management and strategic processes (Elkington 1997), in order to encourage new and innovative opportunities for business development and to reduce potential risk events. Each category of results can be useful towards achieving others and their joint implementation allows to integrate stakeholder interests in the development of the company (Molteni 2004). In this sense, CSR strengthens the ability to pay attention to the whole range of different and evolving issues, which may take on a lever effect for the success of the business. It is essential to assess potential benefits that may result from CSR initiatives and can be expressed as a better corporate reputation (Brown 1998; De Man 2005; Dowling 2001; Fombrun 2005; Schnietz & Epstein 2005), reduced risk(gibb & Schwartz 1999; Godfrey 2005; Orlitzky & Benjamim 2001; Rayner 2003), new business opportunities (Fombrun & Gardberg 2000), reduced costs (Greening & Turban 2000), increased revenue (Porter & Van der Linde 1995b; Russo & Fouts 1997) and adding all these elements together, the maximization of the market total value of the company over the long term (Jensen 2002). When CSR is conceived as a possible source of benefits, greater involvement of social and environmental issues in defining strategy is required (Freeman 1984; Husted & Salazar 2006). Therefore, the managers must take into account the effects that the operational process has or could have in the future on persons directly or indirectly involved in the organization, effects that consist in the that they must consider the sustainability of the business CSR in Mozambique Corporate social responsibility in Mozambique is characterized by the implementation of actions, within the context of philanthropy and social responsibility as such, based on partnerships with the community and with the Government. There is a lack of strategies, policies and specific regulations on the part of the Government, i.e., there is little legislation regulating the activity of social responsibility. Some of the activities carried out so far are based on the Patronage Law (Law 4/94 of 13th September) which also needs updating since there has been great social and economic evolution since then. Others are the result of the great experience brought by large multinational companies familiar with corporate social responsibility, as we can see by the results of the United Nations Global Compact Report on the survey conducted between February and March 2007 in Mozambique presented by KPMG 2. 2) KPMG Auditores e Consultores (KPMG Accountants and Consultants), SA is the oldest auditing and consulting company operating in Mozambique. It is part of a global network of professional companies providing audit, tax and consultancy services.

17 I. CSR and business context in Mozambique 9 The philanthropic actions undertaken by companies were based on compliance with Law No. 4/94 of 13th September, the objectives of which advocate the establishment of basic principles that allow the extension of action of legal persons, whether natural or legal persons, public or private, to develop activities, or the financial and material support in the field of arts, literature, culture and social action (paragraph 1 of Article 1 of the same Law). Paragraph 2 of the same precept better explains that the aim is financial or material support that covers the form of donation meant for: associations constituted under the law no. 8/91 (Law on Associations) and other associations or public or private entities, which without religious or partisan proselytizing, develops non-profit actions under this law; private individuals or legal entities that carry out or support actions under this law, without profit for its members or owners. The spirit of this law is to benefit entities engaged in the activities foreseen herein and the exemption from taxes on the transfer of goods or donated values, as specified paragraph 1 of Article 6 of the same law. This law provides more support for philanthropic actions than for CSR. As you can see, the communities, in their dispersed sense, are set aside, and only the associated communities are considered, the workers of the donating bodies themselves are not mentioned, nor is environmental protection taken into consideration, among other aspects falling within the scope of CSR. According to Global Compact in Mozambique, CSR is a new concept that draws attention to many businessmen, government agencies, academics and other actors. However, there is a disparity between the various different actors in relation to the perception and the definition of the concept and the true practices on CSR. With regard to the concept of corporate social responsibility, Global Pact concluded that some companies feel that it is associated with the actions to support the Government in providing several basic services to the community and protection of the environment; some think the concept is linked to the commitment of companies to provide subsidies for their staff and their immediate families in the context of training, medical care, human rights and adherence to the most effective labour standards, and finally, others associate the concept to the set of attitudes and practices of the organization which aim to improve the profitability of their businesses and gain better market position. It turns out that currently the level of perception of CSR is becoming increasingly high among businessmen in Mozambique. Evidence was provided by the survey results of the Global Compact in which 92.0% of companies are revealed to carry out CSR actions and 68.0% of their plans indicated the existence of activities for the extension of social responsibility. Other evidence showed that employees are the most important stakeholders in the companies regarding CSR actions, since 58.8% believe that employees are the greatest beneficiaries of the companies social responsibility activities, followed by shareholders at 43.9% as they are the origin of the resources allocated to CSR activities. There is evidence however indicating that 71.1% of the companies studied in the Global Compact do not see additional incentives to engage in CSR activities The key actors in CSR in Mozambique In Mozambique, CSR is often associated with the medium-sized and large companies and particularly multinationals. The international orientation of these companies is seen as the biggest reason for the interest in social responsibility because these companies not only carried out social development policies, but also sponsored the specific social investment projects. Some of the major foreign investors in social investments include the companies:

18 10 I. CSR and business context in Mozambique Mozal (Allumium Smelter Company); Coca- Cola Sabco; Cervejas de Mozambique (Beers of Mozambique); Colgate Palmolive; Cahora Bassa; British Petroleum Mozambique; Sasol; Millennium BIM; Banco Comercial e de Investimentos SARL (Commercial and Investment bank) (BCI). These companies are typically involved in the provision of funds (funds) for the construction of community schools, clinics and health centres, such as technical assistance for the promotion of skills development related to small business management. Moreover, these companies channel their donations to national relief operations for the victims of natural disasters. It is very important to distinguish between the two dimensions of CSR when we try to measure the degree of commitment of Mozambican companies. There is an internal dimension of CSR (within the company) that is linked to socially responsible activities related to the core activities with employees. This implies the improvement of their social conditions through investment in strengthening the internal human capital, health, safety, welfare and management mechanisms. The external dimension of CSR goes beyond the realm of core activities of the company and extends to the communities and to environmental protection. Public companies have also been very important actors in CSR in Mozambique for the last two decades, although since the government s adoption of the system of privatization in 1990, the number of such companies has decreased. Many of them maintained their monopoly and expanded their activities. The notion of social responsibility in these companies has been guided generally by the sense of prestige and they feel compelled to give their monetary contribution, especially in times of natural disasters, but also provide support for early childhood education and school facilities for workers and children themselves and fundraising through arts and sports events. Social investments in these companies are not linked to strategy or national policy, they are made according to the individual commitment of the corporate managers. Although there is a set of marketing and image protection activities carried out at public companies, these are not part of the sustainable strategy of CSR. The companies below are examples in this regard: EDM Electricidade de Moçambique (Electricity of Mozambique); TDM Telecomunicações de Moçambique (Telecommunications of Mozambique); CFM Caminhos de Ferro de Moçambique (Railways of Mozambique); LAM Linhas Aéreas de Moçambique (Mozambique Airlines); AM Aguas de Moçambique (Mozambique Water). In addition to the (public and private) companies, NGOs play a part in CSR, carrying out actions to assist poverty alleviation as well as social investment or social development missions. These NGOs launch their activities starting from community based organizations in an attempt to gain national coverage and work in the following areas: community development; assistance to victims of natural disasters; resettlement of refugees and other displaced persons; assistance to victims of war and violence; assistance to traumatized women and children; strengthening the social participation of women; re-establishment of self-confidence and self-esteem among people with disabilities. A few of these NGOs are the FDC (Fundação para o Desenvolvimento Comunitário: Foundation for Community Development), Progress ( o Progresso ), Ethics Mozambique ( Ética Moçambique ), among others. At the academic level, there are still many limitations in the field of CSR. There is little evidence of efforts to introduce CSR in the Mozambican education curricula, with the exception of the Polytechnic University, which is a pioneering academic institution in Mozambique in this regard.

19 I. CSR and business context in Mozambique 11 With regard to local CSR initiatives the following examples can be cited: A Look of Hope ( Um Olhar de Esperança ) a national project which covers public elementary and secondary schools. The project is by the Ministry of Education to improve the quality of education with the participation of civil society; The Commercial and Industrial Association of Sofala (ACIS) is a non-profit association created in order to promote investment and development in Sofala Province. It is a member of the CTA covering private sector organizations; Business Forum for the Environment (FEMA) a business association established in 1996 which represents the private sector on issues of the environment of concern to them; Mozal Community Development constituted to offer social contributions to local communities, to develop small businesses, education and training, health and the environment, culture and sport and community infrastructure; KENMARE 3, a mining company located in the Moma District, Nampula Province, develops its social responsibility activity through partnerships with communitybased organizations (CBOs). This company has created an association called KMAD (Kenmare Moma Development Association) for this purpose. These and other examples demonstrate how companies and NGOs contribute to the social development of communities. 1.3 Business context in Mozambique From 1975 to 1990 Period of centralised market economy Mozambique became independent of Portuguese colonial rule in 1975 and since then the main economic concern of the Government was the nationalization of companies and private units in Education and Health. Many of the Education and Health units belonged to Christian churches, especially the Catholic Church. The nationalizations caused a wave of abandonment of the country by many individuals who were owners of factories, boats and other means of production. In the 1st phase a process of self-management was organized in which the committees of workers, usually organized by cells of FRELIMO (Facilitating Groups) assumed the management of smaller units. Later and faced with a lack of management capacity and the prevailing economic difficulties, the government began to bring together small businesses in the same industry, first in production units and then in state enterprises. The large state companies existing at the time were PESCOM - E.E., ECMEP E.E., AGRICOM E.E., EMOCHÁ E.E., COGROPA E.E. among others From 1990 to 2013 Market Economy and ERP - Economic Rehabilitation Program The failure of the nationalization of farms, the strategy of accelerated industrial development, coupled with persistent and unsustainable macroeconomic imbalances resulting from the domestic and international economic and social crisis of the late 70s and early 80s, brought about the appearance of the Economic Rehabilitation Program (ERP). Pursuant to Law 2/97 ERP aimed at reversing the declining 3) Kenmare, an Irish mining multinational, located in the region of Topuito, Moma District (Mozambique) in 2007.

20 12 I. CSR and business context in Mozambique production through its reactivation. The ERP represented the basis for the construction of a market economy, combining several factors such as new technologies, deregulation and market liberalization, which culminated in the privatization of state enterprises. The process of privatization of companies that started in 1989 (INE 2007:50), after the program of restructuring and modernization of enterprises based on privatization and opening up of foreign direct investment in Mozambique s economy, by 2007 there were 27,933 companies including: 240 joint stock limited liability companies; 3750 limited companies; 47 cooperatives; businesses in their own name; 46 state-owned enterprises. Currently, the Mozambican business context consists of private and public enterprises. Within the context of private relations and under the new Mozambican law (Decree no. 44/2011 of 21st September) approving the General Statute of Micro, Small and Medium Enterprises (MSMEs) the classification of companies is described in Table 1. There are several sources that report the issue of the number of SMEs and large enterprises, for example, the National Statistics Institute (INE) points out that in 2010, 98% of existing companies were SMEs, with large companies representing 2%. According to the ILO 4 in Mozambique there are 27,000 micro, small and medium enterprises and Salin Cripton Valá (2009) in a paper prepared for presentation at the IESE conference 5 says that the Mozambican business sector is largely constituted by SMEs totalling about 78% of the total business population. In the industrial sector alone, SMEs total about 97.4% of all enterprises, employing approximately 67% of the workforce. Therefore while INE refers to 98% and Valá speaks of 78% of SMEs existing companies in the periods 2009 and 2010, it means that the percentage of such companies is between 78% to 98%, with large companies being between 2% and 22%. All those companies that exceed the requirements of medium-sized companies, both in number of employees and annual turnover, are large companies. Included in these are the subsidiaries of multinationals which, due to the openness to foreign investment, appear within the range of its business. A few examples of private companies are mcel, Beers of Mozambique ( a Cervejas de Moçambique ), Pescamar Lda., Millennium BIM, Vodacom, Movitel, etc. Public enterprises were created under Law 17/91 under the economic restructuring program. These are public companies (EP) and some limited companies SA, Electricity of Mozambique (EDM), Telecommunications of Mozambique (TDM), Mozambique Television (TVM), Mozambique Postal Service, Mozambique Airlines (LAM), Mozambican Insurance Company (Emose), among other TABLE 1 Classification of companies Dimension No. of employees Annual Turnover Micro enterprise 1 4 1,000,000 MT to 1,200,000 MT Small company ,200,000 MT to 14,000,000 MT Medium-sized company ,000,000 MT to 29,900,000 MT Source: Decree no. 44/2011 of 21st September 4) Importance of social dialogue in the development of Mozambique, document presented by the United Nations in Mozambique - International Labour Organization on 28th November ) Institute of Social and Economic Studies.

21 I. CSR and business context in Mozambique 13 companies partially owned by the State, for example, Mozambique Mobile (mcel Moçambique Celular). There are two main entities that manage State enterprises in Mozambique: the Institute for the Management of State Holdings (IGEPE) and the National Treasury Directorate (DNT) of the Ministry of Finance as described in Decree No. 28/2005 of 23rd August Institutions for the management of Mozambican companies In Mozambique, there is a legal framework establishing mechanisms for managing institutions that accompany the challenges in the path towards economic development. There is for example the Mozambique Stock Exchange (BVM), established by Decree No. 49/2003 whose function is the divestment of companies, the Competition Regulatory Authority (ARC) 6 created by Law No. 10/2013 and the Special Economic Zones (SEZ) as well as the Industrial Free Zones, established by Ministerial Decree No. 202/2010 of 24th November. the Institute of Directors of Mozambique was also created, which is committed to the organization s Code of Corporate Governance, a document that aims to regulate the rights of members and the protection of minority interests, the composition and operation of the Board of Directors, the Supervisory Board, the Risk Management Policy that companies should adopt, the Internal and External Auditing, the company Communication Plan, Sustainability and its respective report, as well as compliance with laws and regulations. Mozambique has been facing the transformation of the world economy as a challenge and an opportunity to improve its participation in the global economy and to shape the future basis for sustainable growth, with it being vital to take advantage of certain existing poles of growth in the country Potential growth poles in Mozambique Mozambique is a country with increasingly high levels of growth, as shown by the evolution of the growth rate of GDP: 2012 (7.2%), 2013 (8.4%), Forecast for 2014 (8%) 7 therefore, there is every need to not only invest in sectors whose development is essential for the growth of the business, it is necessary at the same time to enhance the growth poles. The growth poles in Mozambique that could come to form the backbone of CSR are the poles of development along the Corridors of Beira, Maputo and Nacala, based on the size of private investments being made, authorized and as existing growth engines. According to the World Bank Report on the study of the Prospects for Growth Poles in Mozambique of August 2010, the following are considered centres of development: a) Tete Growth pole: there are investments in action in Moatize for coal mining. The Government of Mozambique signed a concession agreement for 35 years with the Brazilian mining company Vale S.A., the company since December 2009 has invested USD 450 million and employed 3,600 construction workers and is expected to employ about 1,000 workers after the construction works. Another company in Tete is Riversdale Mining Ltd of Australia, working since 2006 to develop the Benga Coal Project in a joint venture with Tata Steel Ltd. In the mining sector there are also the concessions made to African Queen Mines, Baobab Resources Plc and Coal India Ltd to prospect for gold, iron, vanadium, titanium and coking coal. In the Electricity sector, in addition to HCB, there are plans to build a hydro-electric station adjacent to HCB, the construction of a hydro-electric dam at Mpanda Nkuwa development of the Benga energy project. b) Province of Nampula Growth Pole: in this province the major investments are: 6) ARC is an independent authority with administrative and financial autonomy with broad-ranging powers of supervision, regulation, investigation and sanctioning. 7) Ministry of Planning and Development, 2013.

22 14 I. CSR and business context in Mozambique extraction of titanium by Kenmare Resources (Ireland) in Moma; Oil Refinery project in Nacala-a-Velha by Ayr Petro; eucalyptus plantation in Mecuburi, Ribaue and Nampula-Rapale by Lúrio Green Resources; Nacala Special Economic Zone. c) Sofala Growth Pole: the Beira corridor is one of the most productive agricultural areas of Mozambique. It has a very high potential for the production of maize, sorghum, wheat, rice, seeds and oil, vegetables, fruits, nuts, and livestock. Organizations such as the European Investment Bank, Danida and the governments of Denmark and the Netherlands are engaged in developing sustainable and equitable growth in the agricultural sector, alongside conservation of natural resources. d) Maputo Growth Pole: this region contains the industrial parks of Matola and Beleluane (the largest) which hosts Mozal and the major food and beverage processors, cement producers, the Maragra Sugar Refinery and the banana producer (Bananalandia). Moreover, Maputo has a number of universities and technical schools and the greatest abundance of human capital than elsewhere in the country. In conclusion, there is a huge challenge for the country, as stated by Ibraimo Ibraimo 8, that the biggest challenge to the growth and expansion of Mozambican companies is a change in the way of doing business, investing in skills management, training of human resources, thus increasing the level of productivity, quality and efficiency, raising its services and products to the global quality level. 8) BCI Chairman of the Executive Committee: Online Newsletter of 23/03/2012

23 II. Descriptive analysis of the data of the companies surveyed 15 Chapter II: Descriptive analysis of the data of the companies surveyed 2.1. Type of business and its geographic location The companies involved in research on CSR practices in Mozambique are located in the major capital cities, particularly Maputo, Beira and Nampula, nevertheless, some companies considered large, and some at other national points, have been involved. The project was able to interview 235 companies, which constitutes the survey sample. The companies are grouped in micro, small, medium and large companies, according to their number of employees, according to the international classification of SMEs of the European Union 9. The research considered solely the number of workers as a criterion to be adopted because according to the country s cultural mores it is taboo to speak of the turnover volume or annual income of a company, and there is a greater likelihood of receiving no response. Graph 1 Companies involved by number of employees As per Graph 1 below, micro-enterprises with fewer than 10 employees represent 28.94% of the 235 companies surveyed, small companies between 10 and 49 workers represent 39.15%, medium companies of workers are 17.02%, and large companies of , lie in the range of 9.79%. The class of the largest companies including multinationals in Mozambique is represented by a total of 5.11% of those surveyed. Making a geographical distribution of companies, the City of Nampula contains a relatively large share of the companies surveyed, with 37.45%, followed by Maputo City with 32.34%, and in turn, the City of Beira with 30.21%. In each region there were researchers who carried out the surveys at companies. While Nampula had researchers who represented the northern region, those of Beira represented the central region and those of Maputo the southern region. It is important to note that some of the companies surveyed are outside the capital cities as is the case of Kenmare in the District of Moma in Nampula Province and Tongaat Hulett - Açucareira de Moçambique SA (Mozambique Sugar SA) and Companhia de Sena (Sena Company), located in the Districts of Mafambisse and Marromeu, respectively, in Sofala Province. These companies were surveyed via by completing a Questionnaire (the first 2) and telephone (the last) from the project office. These companies are also divided into those that have a single business and those that carry out various businesses (multi-business), with each group representing 65.96% and 34.04%, respectively, as shown in Graph 2. According to the survey it was necessary to rank the companies according to the type of 9)

24 16 II. Descriptive analysis of the data of the companies surveyed Graph 2 Distribution of enterprises by number of businesses Graph 3 Customers of the companies involved Multi-business Companies Mono-business Customers Companies and consumers customers they serve, i.e. if the main customers are companies, ordinary consumers or both. In the first case, 120 surveyed companies serve companies, representing 51.06%, 70 companies, corresponding to 29.79%, serve ordinary consumers (individual consumers) and the remaining 45 with the rate of 19.15% have both companies and individual consumers as customers, according to Graph 3. The Mozambican companies interviewed, as shown in Graph 4, buy or acquire their goods mostly in their own country and this represents a rate of 86.81%, followed by South Africa with 44.68% as opposed to a rate of purchases made in other countries where China dominates with 18.72%, Portugal with 17.02% and Europe in general, where about 16.17% of companies buy their goods and raw materials. The remaining regions with smaller scale as a source of goods to Mozambique according to the companies surveyed are India and other Asian Countries with a slight difference of 12.77% and 12.34%, respectively. Following the order of countries from which goods come to Mozambique, besides the large supplying countries, is Dubai Graph 4 Source of raw material of companies South Africa North America South America Australia China Dubai Europe India Mozambique Other African countries Other Asian countries Portugual

25 II. Descriptive analysis of the data of the companies surveyed 17 Graph 5 Destination of products South Africa North America South America Australia China Dubai Europe India Mozambique Other African countries Other Asian countries Portugual with about 11.06% of companies who purchase their goods there, Other African Countries with 7.23%, North America and South America with the same rate 5.11%, and the last and smallest supplier of goods is Australia with 0.85% (only 2 of the companies surveyed) buying goods in that country. However, almost all of these companies sell their products in Mozambique, as shown by 98.72% of the companies surveyed. The same companies also sell their products on a small scale in other African countries at 9.36%, South Africa and Europe at 7.23% and 7.66%, respectively, followed by countries like Portugal 3.83%, Other Asian Countries at 3.40%, China and India both at 2.55%, South America, North America, equal to 1.70% and Australia with a figure equal to 1.28% (98,72%). This means that Mozambican companies sell their products in the domestic market, as shown in Graph 5. One of the contours of this research is to obtain information from companies on their situation regarding whether or not they are listed on the stock exchange. The Mozambique Stock Exchange can be accessed in two distinct markets: the Official Listed Market (for large enterprises) and the Second Market (for small and medium enterprises). When the companies were questioned whether they were registered in a stock exchange, the result was much lower, only 4.68% of the surveyed companies are listed on stock exchanges inside and outside the country. According to data from the Mozambique Stock Exchange (BVM), of the surveyed companies there are 6 companies admitted and registered at this point, including 2 general trade companies, 1 in the beverage industry, 1 in civil construction, 1 in mining exploration and 1 in services, for example: CDM Beers of Mozambique and CETA - Construction and Services, SA., Bolor Africa Logistics Mozambique, CETA, G4S, mcel, Kenmare and others. The companies surveyed in this project are grouped into business sectors. Of these, the sectors Trade, Transportation, Storage, accommodation and food service activities are the most commonly represented with 34.47% of the companies surveyed. The sector of manufacturing, mining and other activities represents 12.34%. The sector of construction companies, corresponds to 11.06%, professional, scientific, technical, administrative and support

26 18 II. Descriptive analysis of the data of the companies surveyed service activities corresponds to 9.36%. The sectors of information and communication services and financial and insurance activities have 4.68% and 4.26%, respectively. The sector of agriculture, forestry and fishing has a representation of 2.55%. The other service activities sector is represented by 20.43% of the companies surveyed. There are no companies in sector covering real estate activities. Almost all companies surveyed are from the private sector, with 0.85% of companies belonging to the public sector: public administration, defence, training or education, health and social assistance Motivations of Mozambican companies for corporate social responsibility In this question the companies evaluated the relevance of the proposed reasons on a scale of 1 to 5, meaning 1 = not relevant, 2 = somewhat relevant, 3 = relevant, 4 = very relevant and 5 = very relevant, according to the proposed items or options, e.g. the motivation could be to improve the company s image or stay competitive, among other reasons. The average level of motivations prompting Mozambican companies to promote social responsibility lies at a higher than average value of the scale proposed. In this case, contributing to solving social problems more effectively is the most important motivation for companies to promote corporate social responsibility, standing at the midpoint of 3.9 which corresponds to 42.98% of companies that classified this option as very relevant. However, 2.13% of companies left this option blank, meaning that for them it constitutes no significant motivation. Also in terms of relevance this same option was chosen by 28.51% of companies that consider it very relevant, giving it level 4 relevance according to the classification presented. Therefore the following are considered to be very relevant options: maintaining competitiveness at 3.8 points, corresponding to 40.85% of companies that have this option as the maximum level of relevance; sharing resources with society at 3.65 points, corresponding to a percentage of 39.15% of companies that consider this item as the most important reason to engage in social responsibility activities; avoiding problems with laws and regulations is the last option that companies considered as the most important motivation, at the midpoint of 3.4 points, representing 37.87% of the companies surveyed; improving the company s image is a very relevant option at the midpoint 3.6, as considered by 34.04% of the surveyed companies. The minimum level (least relevant) is under No good reason for not doing so with 2.6 points on average, corresponding to 40.0% of companies that do not consider it relevant. The other proposed items that could be a reason motivating companies to promote social responsibility actions are listed below, sorted in descending order, i.e. from those considered most important and relevant to those that are least relevant for companies, according to whether their responses are at relevancy 4 to 1. Their relevance values are presented as percentages in Graph 6: personal satisfaction of managers (29.36%); meeting the expectations of stakeholders (28.94%); creating investment opportunity (27.66%); public recognition of moral leadership (27.23%); meeting the expectations of shareholders (18.72%). The remaining items such as serving the interests of the company s long-term concern for the future of society, avoiding future problems for the business, learning from non-profit activities and strengthening global networks were considered to be somewhat relevant in the sense that the companies simply consider them relevant.

27 II. Descriptive analysis of the data of the companies surveyed 19 Graph 6 Level of motivation of companies to promote CSR Contribute to solve social problems more effectively Protect competitiveness Safeguard the future of society Avoid problems with regulations and laws Improve image Share resources with society Serve the long-term interests of the company Comply with stakeholders expectations Avoid potential problems for the business Create investement opportunity Satisfy shareholders expectations Satisfy manager(s ) s personal expectations Learn through non-profit activities No reasons not to do so Strengthen global networks Public recognition of moral leadership Not relevant Somewhat relevant Relevant Quite relevant Very relevant 2.3. Barriers to greater involvement of companies in social responsibility The involvement of companies in corporate social responsibility has met certain constraints called barriers, which have been identified as the lack of: support from senior management, skilled human resources, financial resources, clear laws and regulations, technology, demand by customers, clear benefits, motivation and time. The relevance or importance of these options at each company is demonstrated by the responses given. The level of relevance is from 1 to 5, where 1=not relevant, 2=somewhat relevant, 3=relevant, 4=very relevant and 5=very relevant. The average level of relevance of these barriers lies at the point above 2.5, which means that most of the identified options are not relevant barriers that might restrict companies performance of corporate social responsibility actions in Mozambique. At level 5 and as shown in Graph 7 (the option very relevant) it was FOUND that the majority of companies considered as the highest barrier the lack of financial resources, with 33.19% of companies surveyed, followed by the lack of laws and regulations as another barrier, considered by 22.55% of companies, and finally the lack of qualified human resources was another barrier that constrains effective business involvement in social responsibility actions, according to % of companies. The converse, i.e., the companies that think that certain options are not relevant (i.e. they constitute no barrier) is 47.23% in relation to the lack of time, 46.38% of companies surveyed think the time is no barrier, while 46.38% and 43.83% of these companies consider that the lack of management support and lack of motivation, respectively, do not constitute a barrier to engaging in social responsibility.

28 20 II. Descriptive analysis of the data of the companies surveyed Graph 7 Level of barriers to the promotion of CSR in companies Lack of financial resources Lack of clear regulations and laws Lack of qualified human resources Lack of customer demand Lack of clear benefits Lack of technology Laco of motivation Lack of time Lack of top management support Not relevant Somewhat relevant Relevant Quite relevant Very relevant There were companies that abstained from giving answers concerning the barriers that are impediments to engaging in corporate social responsibility actions, on average 5.10% of all companies in all options thought to be much less relevant barriers Current organization of social responsibility in the company In this section we describe the various forms of organization-type that a company may have in order to carry out a social activity, for example, whether or not there is one sole person responsible for social responsibility, and whether or not there are funds allocated for questions of social responsibility, among others. According to Graph 8, of the 235 companies surveyed, 128 of them (54.47%) said they did not have any person or unit responsible for CSR working full or part time within their organisational structure. This rate, which represents more than half of the companies surveyed, indicates little experience in CSR measures, precisely because it is a new concept in the context of Mozambican entrepreneurship. Those stating that they have a person or unit that deals with CSR issues part time make up almost a third of the companies surveyed (25.11%), and among these are medium and large companies. Companies whose manager or unit responsible for CSR works full time represent 20.43% of those surveyed. Graph 8 Full-time Part-time None Relative work time of CSR managers

29 II. Descriptive analysis of the data of the companies surveyed 21 Graph 9 Managers dedicated to the functions of CSR Head of the Board of Directors (BoD) Communication, Public Relations Dept Human Resources Dept Risk management and compliance Dept General Director Dept Marketing Dept Finance and administration Dept None The answers given by the surveyed companies with 50 or more employees (40 companies corresponding to 17.02%) on the question to whom is the CSR manager responsible were diverse and, as shown in Graph 9, in 17.45% of companies it was the General Director of the Company and in 7.23%, the Chairman of the Board of Directors (CBD) while in others (5.96%), they answer to the Human Resources Department. In the other companies, the person responsible for CSR depends on the Department of Communication and Public Relations (3.40%), Department of Risk Management and Compliance (1.28%), Marketing Department (2.13%) and the Administration Department (2.98%). Finally, about 55.74% of the companies surveyed did not answer this question, with this rate being equivalent to those whose organizational structure has nobody responsible for CSR whether full or part time. Another crucial aspect in the organization of companies in relation to socially-responsible actions is the existence of its own specific funds (budget) for CSR issues. This question was answered by 13.62% of companies that affirmed they have a specific budget for CSR activities, as opposed to 28.94% who said no specific budget for the area of CSR exists at their company. Against all expectations, the majority of companies, representing 57.45%, did not answer the question, which raises doubts as to whether there is any serious social responsibility activity at these companies. Associated with the existence of funds is the question of whether these companies have their own foundations, non-profit organizations responsible for the management of the social funds of a company or certain public or private bodies. In this context, only 8.94% of companies said they had their own foundations as opposed to 34.89% who do not, adding to the rate of 56.17% of companies that did not respond to this question Profile of CSR Manager The issue of gender was taken into consideration in the analysis of the profile of CSR managers, as shown in Graph 10. Knowing that a total of 45.54% of the companies surveyed claimed to have a full or part time CSR manager, the survey found that 70% of these are men and 30% are women. Graph 10 Man Woman Distribution of managers by gender

30 22 II. Descriptive analysis of the data of the companies surveyed With regard to the academic education of each of these managers, as shown in Graph 11, most of them hold a degree, with this level representing 20.85%, followed by midlevel technicians, representing 12.77%. The remaining levels are, respectively, primary (0.43%), secondary (1.28%), Bachelor (1.70%), Master s (4.68%) and PhD (0.85%) Influence of the parent company (foreign or Mozambican) The results indicate that 68.09% of the companies have no parent company while 14.47% do, i.e. they are branches of Mozambican companies and 17.45% belong to foreign companies. Generally, few of these companies have established a CSR or sustainability policy for the entire group, as demonstrated by the results in which 4.26% set the policy for specific issues, 2.98% for business, 14.04% are general policies. In 10.64% of cases, the parent company did not establish any CSR policy. Also, in 13.62% of the companies surveyed, there is no organizational form for CSR for the whole group, while in 18.30% there is indeed such an organizational form. Against this backdrop, the intention was to find out the level of autonomy between the parent companies and the subsidiaries. For 6.81% of companies, the level of autonomy is very low, in 4.26% it is low, in 8.51% it is medium, in 6.81% it is high and in 5.53% it is very high Adherence to national and international CSR Policies Typically, the corporate social responsibility actions are carried out under the auspices of national and international policies and principles such as the case of the PARP (Action Plan for the Reduction of Poverty) in Mozambique, Millennium Development Goals, Graph 11 Primary school Secondary school High school Bachelor degree Undergraduate degree Master degree PhD Distribution of CSR managers by academic level UN Global Compact, ISO26000, Principles for Responsible Investment, etc. The PARP 10 is based on three main pillars: governance, capital and economic development. These pillars, in turn, have as their foundation the process of multisectoral coordination between different State institutions, Civil Society organizations, including domestic business, and other development partners as a touchstone that ensures the harmonious and sustainable development of the country (Points 1 and 23 of PARPA II PARPA Links with other Planning documents). The Millennium Development Goals and the Global Compact are the UN programs that aim to mobilize member countries to take action to improve the welfare of their population. The ISO standards are a set of requirements to ensure the best in goods, products, processes, materials and systems, as well as in terms of good practice for conformity assessment, managerial and organizational skills. These standards are produced by the International Organization for Standardization based in Switzerland, a globally recognized body (Rodrigues and Duarte 2012:91). The standards make the designation in numbers, it is the case of standards: 10) Initially PARPA I and II (Action Plan for the Reduction of Absolute Poverty) / is a program of the Government of Mozambique, which aims to reduce the incidence of poverty. The plan establishes the link between its specific priorities and those that affect the resources for the period of its validity.

31 II. Descriptive analysis of the data of the companies surveyed 23 Graph 12 Adherence and/or compliance with international standards PIR ISO26000 ODM PGNU PARP No Make reference to Compliant ISO 9000 on customer quality requirements and the applicable regulatory requirements; ISO on minimizing the adverse effects of business activity on the environment and achieving a continuous improvement of environmental performance; In turn, the ISO standards relate to the desire for organizations to incorporate environmental considerations in social decision-making processes and to take responsibility for the impacts of their decisions and activities on society and the environment. The Principles for Responsible Investment are the initiative of former UN Secretary General, Kofi Annan (2005) and are intended to help integrate environmental, social and governance issues into investment decision making and ownership practices, thereby improving the long-term returns to beneficiaries 11. The issue at stake in this item was whether or not the surveyed companies adhere to or make reference to these principles. As can be seen in Graph 12, there are few companies that have adhered to or make references in their actions to the international standards or the Mozambique Government program, which means that the factors demonstrating the application of CSR in these companies are still incipient Stakeholders involved On this issue the Questionnaire sought to discover which of the stakeholders listed, including: employees, trade unions (workers representatives), customers, suppliers, minority shareholders, institutional investors, communities, environmental protection organizations, consumer associations, organizations for the protection of human rights, NGOs, industry associations, political parties, foundations, churches and/or religious groups, researchers, independent CSR professionals and others, were currently involved in the development of CSR strategy in the company and what was the frequency of their involvement. We can see how in many companies, according to Graph 13, political parties have not been involved in CSR strategy, since 89.79% of companies surveyed said there was no involvement of such political organizations. Also, more than 86.0% of companies do not involve consumer associations and foundations, with the same happening with Human Rights organizations at 84.26% of companies and independent social responsibility professionals (85.11%). However, once a year, the employees of companies (20.0%), local communities (13.91%), NGOs (19.0%) researchers (12.77%), minority shareholders (11.0%), churches and/or religious 11) - accessible on 10/01/2014.

32 24 II. Descriptive analysis of the data of the companies surveyed groups (10.64%) and (10.21%) of companies are involved, respectively. Once a semester the customers are involved at 12.77% of companies and the suppliers at 7.66% of companies. Once per quarter there is very little involvement of the stakeholders, with very little involvement of churches and independent CSR professionals, with only 0.85% of companies speaking of these, corresponding to 1 or 2 companies. The stakeholders who have been involved once per month or more are employees, customers and unions in 10.64%, 7.23% and 6.38% of companies, respectively. The forms of dialogue between companies and stakeholders, as shown in Graph 14, are the forums, debates, lectures and other, with confirmation of 36.17% of the companies surveyed, thus following the participation in public events (26.38%). The other possible forms of dialogue that were included in the proposal are not performed frequently between the companies studied and the stakeholders such as research, personal interviews and online dialogue. However, at a significant number of companies (39.15%) there is no form of dialogue that constitutes practice between the company and the stakeholders. As previously referenced, the levels of relevance for each motivation varies from 1 5, with not relevant = 1, 2 = slightly relevant, relevant = 3, 4 = reasonably relevant and very relevant = 5. Graph 13 Frequency of dialogue with stakeholders Not involved Once a year Once per semester Once per quarter Once per month or more

33 II. Descriptive analysis of the data of the companies surveyed 25 Graph 14 Most frequent subjects in dialogue with stakeholders Meeting with specific stakeholders groups Participation to public event Dialogue initiatives (forums, discussions, workshops, etc.) On-line dialogue Interviews (in person or remotely) Survey None Others The motivations to be reviewed are all at the very relevant level except the motivation external pressures that force the company to dialogue with stakeholders which lies in the not relevant scale, representing 45.11% of companies that rate it at the not relevant level. Therefore, about 106 companies do not consider external pressure as a reason for them to engage in dialogue with stakeholders. It is important to highlight that at the same time the motivations: avoiding reputational risks (23.40%), obtaining direct information about the company image (22.98%), defining future strategies (21.28%) and important value in itself (20%), are considered very important so as to keep companies in constant dialogue with stakeholders. Given the same levels 1 5, the companies surveyed rated the reasons for its commitment to adopting donation policies to the areas of activities such as those in Graph below. Graph 15 Relevance of dialogue with stakeholders Avoid reputational risks Directly obtain information on firm image Define future strategies Important value in itself Develop good relationships with stakeholders External pressures Not relevant Somewhat relevant Quite relevant Very relevant Relevant

34 26 II. Descriptive analysis of the data of the companies surveyed 2.9. The areas of donation policies Graph 16 illustrates how the companies surveyed channel their donations into different fields of activities of the donations policy according to the importance that they attach to them. As you can see the companies that consider education (primary studies) to be very relevant represent 26.38%, against 28.51% of those who consider it irrelevant. The scenario is repeated for education (university studies) with 17.45% of companies considering it very relevant as opposed to 40.85% who consider it irrelevant. The not relevant option is prevalent for religious activities at 54.89% of companies, scientific research (46.81%), shows, art, restoration, exhibition (49.79%) and cooperation projects (44.26%). With this in mind and taking into account the donation policies, the Questionnaire questioned how companies intended to acquire additional skills on CSR in the coming years. Among the many options proposed, namely, no way, because there is no budget for it, no way because it is not a priority for my company, training courses, hiring of experts in work teams, participation in forums/conferences with help of external consultants, with partnerships, the responses of significant relevance are participation in forums/conferences (29.36%) and partnerships (26.38%). However, about 28.51% of respondents said they do not have this goal because there is no budget CSR activities The activities of CSR are the same as those performed in the normal life of a company, focusing on socially responsible actions. The following are the activities that are implemented at the companies based on the answers obtained by the questionnaire. A. Governance of CSR In the investigation, the governance process based on social responsibility combines the existence of activities such as: Graph 16 Donation policies Education (primary or secondary level) Workers Medical care Education (undergraduate or graduate level) Social projects in the local area Sports Environment Religious activities Scientific research Show, art, restoration, exposition Cooperation projects Others 1.3% 1.7%1.7% Not relevant Somewhat relevant Relevant Quite relevant Very relevant

35 II. Descriptive analysis of the data of the companies surveyed 27 general idea that guides the CSR policy; document that formalizes the CSR policy; reference to CSR in the strategic plan; reference to CSR in meetings with investors; code of ethics or ethical procedure manual; document on environmental policy; document on donations policy. The overall level of CSR governance expressed in all possible forms listed above, is implemented by an average of 25.37% of the companies surveyed. Now looking at the different governance activities, listed above, the code of ethics is the one that best expresses the inclination of many companies (43.40%), with the document formalizing the CSR policy and the donations policy being the least used, as shown in Graph 17. Moreover, looking at the organizational structure of the companies it is clear that among the three options presented (person responsible for CSR, manager or other person) most companies leave management of this issue to the manager (21.33%), as shown in Graph 18. Finally, with reference to the forecast of available funds for the same activities mentioned above, this study confirms the same trend seen previously, the code of ethics being the most budgeted instrument and the documents formalizing CSR and the donations policy the least budgeted, as shown in Graph 19. Graph 17 Activities implemented Code of Ethic (Ethical Procedure Manual) General idea which guide CSR policies Reference to CSR in the mission/vision Reference to CSR in the Strategic Plan Reference to CSR during meeting with shareholders Formal environmental policy Formal CSR policy Formal donation policy Graph 18 Activities implemented (Who runs the activity) General idea which guide CSR policies Code of Ethic (Ethical Procedure Manual) Reference to CSR in the mission/vision Reference to CSR during meeting with shareholders Reference to CSR in the Strategic Plan Formal CSR policy Formal environmental policy Formal donation policy Other person/function CSR manager Head/Top manager

36 28 II. Descriptive analysis of the data of the companies surveyed GRAPH 19 Activities implemented (Budget) Code of Ethic (Ethical Procedure Manual) General idea which guide CSR policies Reference to CSR in the Strategic Plan Formal environmental policy Reference to CSR in the mission/vision Reference to CSR during meeting with shareholders Formal donation policy Formal CSR policy Graph 20 CSR activities (Report Implementation) Social/Sustainability/CSR Report Exposure on TV, newspaper, advertisement Dedicated CSR section in the website Graph 21 CSR activities (Report Who manages the activity) Exposure on TV, newspaper, advertisement Social/Sustainability/CSR Report Dedicated CSR section in the website Other person/function CSR manager Head/Top manager Graph 22 CSR activities (Report Budgeting) Exposure on TV, newspaper, advertisement Social/Sustainability/CSR Report Dedicated CSR section in the website

37 II. Descriptive analysis of the data of the companies surveyed 29 B. CSR Reports The report is one of the CSR activities that enables the dissemination of information about the activities of social responsibility and its impact on programs where communities are involved. The report allows the measurement of the performance, i.e. the company s achievements (Crane et al. 2000: ). This research was intended to find out if the companies surveyed were implementing the social report (or sustainability report), the website or significant social and environmental initiatives that have taken up space on TV, newspapers and advertising in the last five years. Only an average of 7.66% of companies are implementing it and rest are not, as shown in Graph 20. The process of implementing these activities is directed by the head/manager (13.62%), as shown in Graph 21. As for budgeting this activity, Graph 22 shows us little available money with greater relevance in television, newspapers and advertising space (9.79%). C. Dialogue with stakeholders Dialogue with stakeholders necessarily involves the adoption of a general policy of stakeholder involvement, evaluation of customer satisfaction, evaluation of employee satisfaction, the existence of the focus group in CSR, meetings with consumer groups, mechanisms of discussion with the community to define the CSR policy, as well as the discussion of community problems in search of solutions. Of the companies involved, only 8.33% said Graph 23 Dialogue with stakeholders (Implementation) Graph 24 Dialogue with stakeholders (Who manages the activity) Other person/function CSR manager Head/Top manager

38 30 II. Descriptive analysis of the data of the companies surveyed that the dialogue with stakeholders was implemented and the other did not. The most commonly implemented dialogue is the evaluation of customer satisfaction (50.21%) of companies and the evaluation of satisfaction of workers (54.47%). The least practised dialogue is the mechanism of discussion with the community in defining the CSR policy, with only 8.51% of the implementing companies, as shown in Graph 23. The dialogue is directed by the head/ manager (21.03%), as shown in Graph 24. The companies surveyed indicate that there is a budget for evaluation of customer satisfaction at 16.17% and that of workers in 14.04%, while the CSR focus group, meeting with consumer groups and the mechanism for discussion with the community to define the CSR policy are budgeted at 4.26%, 3.83% and 3.40% of companies, respectively, which means there is a lack of budget for these areas, as shown in Graph 25. The relationships with community companies consist mainly in carrying out activities and projects in conjunction with local NGOs and sponsoring cultural and sporting events, which is implemented by an average of 26.24% of companies. The sponsorship of cultural and sporting events is the most implemented activity with 44.26% against 18.30% of companies that implement the performance of activities and projects in conjunction with local NGOs, as shown in Graph 26. These activities are managed, in general, by the Manager (31.49%) and the Head of CSR (14.89%), as shown in Graph 27. Although the rate of companies that implement these activities is relatively large, it is just 9.36% (minimum) and 17.87% (maximum) of companies that have a budget for them, as shown in Graph 28. D. Relationship with the community Graph 25 Dialogue with stakeholders (Budgeting) Graph 26 Relationship with the community (Implementation) Donations Sponsorship of cultural and sport events Realization of activities and projects together with local NGOs

39 II. Descriptive analysis of the data of the companies surveyed 31 Graph 27 Relationship with the community (Who manages the activity) Donations Sponsorship of cultural and sport events Realization of activities and projects together with local NGOs Other person/function CSR manager Head/Top manager Graph 28 Relationship with the community (Budgeting) Donations Sponsorship of cultural and sport events Realization of activities and projects together with local NGOs E. International certifications The international certification of companies occurs at an average of 20.43% of companies, with the most commonly implemented certification being that of the Health and Safety (25.53%), as shown in Graph 29. What is notable in this section is that over 54% of companies did not answer this question. The rates with regard to who manages this activity indicate that it is the head or manager of the company, as shown in Graph 30. The results also indicate that this activity has no budget due to the shortage of fees for the possessing companies, with a maximum of 11.06% and a minimum of 3.40%, as shown in Graph 31. Graph 29 International certifications (Implementation) Health and Safety (ex: OHSAS 18001) Environment (ex: ISO14001, etc.) Human Rights (ex: SA8000)

40 32 II. Descriptive analysis of the data of the companies surveyed Graph 30 International certifications (Who manages the activity) Health and Safety (ex: OHSAS 18001) Environment (ex: ISO14001, etc.) Human Rights (ex: SA8000) Other person/function CSR manager Head/Top manager Graph 31 International certifications (Budgeting) Health and Safety (ex: OHSAS 18001) Environment (ex: ISO14001, etc.) Human Rights (ex: SA8000) F. Human Resources This activity is the most commonly implemented. In this corollary 39.65% of companies surveyed have implemented it. The implementation of this activity is best seen in actions against discrimination in hiring and promotion of employees (67.66%) in corporate volunteering (48.51%), gender policy (42.55%) and actions for family support (42%) of companies, as shown in Graph 32. The average percentage of companies for which it is the head or the manager who directs the activity is 29.29%, as shown in Graph 33. And those who that say that these activities have a budget correspond to 37.45%, with the activities of health and safety at work (37.45%) and action against discrimination in hiring and promotion of employees (16.17%) being the most budgeted, as shown in Graph 34. Graph 32 CSR activities Human Resources (Implementation) Health and Safety in the workplace Action against discrimination in the hiring and career process Policy on equal opportunities Work-life initiative/policies Corporate volunteering Specific training on CSR

41 II. Descriptive analysis of the data of the companies surveyed 33 Graph 33 CSR activities Human Resources (Who manages the activity) Health and Safety in the workplace Action against discrimination in the hiring and career process Policy on equal opportunities Work-life initiative/policies Corporate volunteering Specific training on CSR Other person/function CSR manager Head/Top manager Graph 34 CSR activities Human Resources (Budgeting) Health and Safety in the workplace Work-life initiative/policies Policy on equal opportunities Action against discrimination in the hiring and career process Corporate volunteering Specific training on CSR G. Provision In this item prominence is given to the suppliers, not the supply in itself, as the act or effect of providing something. This emphasis on CSR consists in considering companies that, in the selection of its suppliers, consider whether they follow certain social and environmental criteria. The Questionnaire intended to find out whether the companies, in their relations with suppliers, were found to take into consideration those who meet certain criteria such as socioenvironmental monitoring or purchase of Graph 35 CSR activities Provision (Implementation) Social and environmental criteria in supplier selection Purchase of social products from social cooperatives, NGOs, Social and environmental monitoring of suppliers

42 34 II. Descriptive analysis of the data of the companies surveyed Graph 36 CSR activities Provision (Who manages the activity) Social and environmental criteria in supplier selection Purchase of social products from social cooperatives, NGOs, Social and environmental monitoring of suppliers Other person/function CSR manager Head/Top manager Graph 37 CSR activities Provision (Budgeting) Social and environmental criteria in supplier selection Purchase of social products from social cooperatives, NGOs, Social and environmental monitoring of suppliers products of social value, in average companies that implement corresponding to 16.88%, as there were none of those aspects (social and environmental criteria used for the selection of suppliers, socio-environmental monitoring of suppliers, purchase of products of social value from social cooperatives, associations, NGOs, fair trade) implemented with greater relevance. The rate companies for each component range from 14% to 21.28% of companies that implement it, as shown in Graph 35. These activities are directed by the head or manager as stated by an average of 13.05%, as shown in Graph 36. And a maximum of 9.36% of companies have a budget to purchase products with social value from cooperatives, associations and NGOs, as shown in Graph 37. H. Operational activities and actions regarding environmental protection These activities are related to the reduced consumption of energy, water and chemical pollutants to preserve the environment. They are implemented on average by 22.16% of companies with higher incidence in actions to reduce energy consumption (34.89%) and actions to reduce water consumption (31.31%). However, the actions for the conservation of protected areas and the protection of endangered species is the least implemented, applied in only 7.66% of companies, as shown in Graph 38. The person responsible for managing these activities in the companies at which they are implemented is the head or manager of the company, as in all other cases, at an average of 15.85% of companies, as shown in Graph 39. The budget exists in transport with low environmental impact (11.91%) and in actions to reduce the consumption of raw materials (11.06%), as shown in Graph 40.

43 II. Descriptive analysis of the data of the companies surveyed 35 Graph 38 Actions regarding environmental protection (Implementation) Graph 39 Actions under the environmental protection (Who manages the activity) Reduction in energy consumption Reduction in water consumption Reduction in raw material consumption Preservation of biodiversity Waste treatment, reduction or elimination Noise reduction Systems for energy efficiency Transport with low environmental impact Reduction of pullutant emissions (ex: NOX, COX, OSX, ) Use of renewable energy Ecological packaging (recycled, reused, reduced, ) Conservation of protected areas to preserve endangered animals Other person/function CSR manager Head/Top manager

44 36 II. Descriptive analysis of the data of the companies surveyed GrAPH 40 Actions regarding the environmental protection (Budgeting) I. Marketing and Sales Marketing and sales is a section with four particular activities, development of products for the community, development of products for disadvantaged groups, development of products with a low environmental impact and marketing campaigns with environmental and social elements. These activities occur at an average of 26.38% of companies with more emphasis on product development for the community (35.32%), as shown in Graph 41. Approximately 19.89% of companies appoint the head or manager responsible for the managing these activities, as shown in Graph 42, and the existing budget goes to the development of products for the community (16.06%) and for marketing campaigns with environmental and social elements in 15.74% of companies, with the least funded activity being product development for disadvantaged groups, in only 9.79% of companies, as shown in Graph 43. GRAPH 41 Marketing and Sales (Implementation) Products for community Products for disadvantaged groups Marketing campaign with social/ environmental content Products with low environmental impact

45 II. Descriptive analysis of the data of the companies surveyed 37 GRAPH 42 Marketing and Sales (Who manages and activity) Products for community Products for disadvantaged groups Products with low environmental impact Marketing campaign with social/ environmental content Other person/function CSR manager Head/Top manager GRAPH 43 Marketing and Sales (Budgeting) Products for community Marketing campaign with social/ environmental content Products with low environmental impact Products for disadvantaged groups

46 38 III. A comparative statistical analysis