Corporate Social Responsibility and the Fight Against Corruption: Towards the Concept of CSR in Egypt after the January Revolution

Abstract

Among the fundamental factors that led to Egypt’s 25 January Revolution (“The White Peaceful Revolution”) was the failure of the Mubarak administration’s economic strategies, which resulted in augmented costs of living and a rising perception of wealth disparity among Egyptians. In addition to abject poverty of the masses, the unfair distribution of wealth in Egypt had be come increasingly more noticeable under Hosni Mubarak. Prices for staple food products, essential goods, and many routine services had risen to extraordinary levels under the Mubarak regime due to a system of limited licenses given to cronies, resulting in a lack of competition in the market place, and widespread and manifold corrupt practices.

Egyptians, already fed up with corruption, bribery, a clenched-fist government, were driven into the streets out of frustration over the cost of living, economic stagnation, social immobility, and a general lack of optimism and hope in their own economic and social future. Although Egypt has experienced notable economic improvement throughout the last decade, middle-class and poorer Egyptians did not feel such progress. The unrestrained corruption of public officials and businessmen who were involved in politics drove economic growth only in the direction of a powerful few.

Poor economic conditions were, and continue to be, behind Egypt’s growing crime rate. Since rich people are openly involved in corrupt behavior, like embezzlement, tax evasion, kickbacks, and bribery, desperate poor people are increasingly resorting to stealing and cheating and even robberies and other violent crimes have become rampant and widespread during the most recent era. Egypt’s international trade has not been exempt from the corrupt business behavior. Though omnipresent, corruption remains socially unacceptable in Egypt, even though it is widely known that private companies regularly resort to illegal corrupt activities when dealing with individuals in the public sector, be they domestic or foreign public officials.

In the same vein, corrupt activities are deeply tangled in Egypt’s governmental bodies. Egypt ranks 118 out of a total of 176 countries on the Transparency International (“TI”) Corruption Perception Index (“CPI”), with a score of 2.9/10. This Chapter commences in Part I with a description of the various concepts of CSR in literature emphasizing it basic principles. Part II presents a brief survey of the existing literature of the CSR practices in Egypt and is accompanied with an assessment of the CSR practices that exist in the fields of human development, social development, and environmental awareness. Part III examines the role of CSR in combating unethical conduct, especially corruption, through anti-corruption and anti bribery programs, along with other preventive measures for combating this phenomenon with particular emphasis on the 2003 United Nations Convention Against Corruption (“UNCAC”).

To elucidate the analysis, Part III focuses on the following two sets of inquiries:

First, are businesses and corporations acquainted with the relevant soft law instruments and the universal anti-corruption documents? How do they perceive these instruments and documents? What impression, if any, have these conventions had on enterprises? Have businesses adjusted or altered their behavior as a result? Second, have corporations voluntarily adopted codes of conduct or other internal measures that endorse CSR? Do these means include an obligation to eliminate bribery or corrupt behavior internally and on the part of their executive agents and those in their supply chain? Is CSR a useful, convenient, and effective tool in confronting corruption generally? If so, to what extent? The Chapter concludes in Part IV by arguing that CSR should be a priority among practitioners and specialists in fighting unethical corporate behavior around the globe and especially in Egypt.

Keywords: CSR, Islamic law, Corruption, Bribery, International Conventions, Commercial Law, Business Transactions, Poverty, Crime, Economic Conditions, Economic Welfare, Corporate Governance