Introduction :

It has been broadly accepted that without getting deeply into CSR practices,
growth and development is not possible. Corporate social responsibility (CSR) is
broadly defined by McWilliams and Siegel (2001) as “actions that appear to
further some social good, beyond the interests of the firm and that which is
required by law”. While Carroll (1979) describes CSR: “The social responsibility
of business encompasses the economic, legal, ethical, and discretionary
expectations that society has of organizations at a given point in time” (p. 500).
Stakeholders have forced the managers to spend their considerable amount of
resources on CSR practices. Whetten et al. (2002) defined CSR as “societal
expectations of corporate behavior; a behavior that is alleged by a stakeholder to be
expected by society or morally required and is therefore justifiably demanded of a
business”.
In order to survive in the international market, like other sectors textile industry of
Pakistan has also recognized the importance of CSR. Although Pakistan was not
very much indulged into CSR practices but increased level of textile exports and a
continuous demand by the international buyers put a lot of pressure on textile
industry to incorporate CSR practices. Securities and Exchange Commission of
Pakistan (SECP) was the first one to take the initiative with its code of corporate
governance and trade policy 2002. Pakistan is a country whose major part of the
GDP (8.5%) is earned from its textile sector. About 38% of the labor force of
Pakistan is being employed in this sector. With the passage of time, Pakistan’s
textile industry has gained a dominant position in the world market as it is the 8 th
largest exporter of textile products in Asia. According to express tribune the news
paper, out of total $12.5 billion revenues from 20 countries $10.2 billion are earned
from textile exports. And it is the impact of GSP+ that the textile exports have
been increased by 6.5% in the recent years. Federal Minister for textile industry of
Pakistan while giving the textile policy said, “The annual exports target of $ 26
billion by 2019 is ambitious but not beyond our potential”. Along with this
growth, Pakistan’s textile industry is also facing major challenges in order to
exploit this GSP+ status and to meet the changing needs of international business.
So far very little research has been done on the textile industry of Pakistan in terms
of CSR. So this study aims to explore how far the CSR practices are embedded in
the textile sector of Pakistan. Our main objectives of this research are

 To get an understanding of how companies define CSR?

 To explore the major drivers of CSR practices in textile sector of Pakistan.
 To search for the barriers in the way to earn a tag of being socially
responsible.

History of Textile industry of Pakistan :

Pakistan is involved in the production of cotton since 1947. An impressive growth

can be seen in this sector since 1947 to up till now. In 1947 there were only 3
factories operative and the number has reached to 600. Similarly, the number of
spindles has also been reached from 177,000 to 805 million. Government’s efforts
are also incredible in maximizing the export level of textile to its fullest. During
the period 1973 to December 1992, some 71 spinning units with 1,136, 835
spindles, 6,600 rotors and 7,329 looms were closed down. The rise in export of
value-added products from Pakistan was another point of encouragement for the
textile sector. “The export of value-added products rose to 57.4% from 53.9% in
2002 which is clear sign that we are moving in the right direction, “said the
Chairman of all Pakistan textile mills association. The trade policy is considered an
acceptable paper, but in the industry does not fine anything that could lead to a
high level exports achievement and remove trade imbalance.

Pakistan’s textile sector earned US$5.77 billion during the 2003 year, compared
with US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%. The total
exports of textile sector in 2004 were US 5.7 billion which shows 2.5% growth it
increase to 4% growth in 2005 as compared to 2004.The textile sector shows 8%
negative growth in 2006.T he negative growth continue in 2007 also with the value
of 5%.The textile sector shows 15% growth in 2008. At present, there are 1,221
ginning units, 442 spinning units, 124 large spinning units and 425 small units
which produce textile products. Even with so many advantages, Pakistan’s total
share in global textile trade is less than 1%.
Literature Review:

According to Carroll (1999) a lot of material on CSR is present since 1930s.these

literature has helped a lot in making CSR theories and practices. Pioneering
thinking on the subject of CSR started in 1953 with
Bowen’s book Social Responsibilities of Businessmen (Carroll, 1979; Valor,
2005).Bowen (1953) treated companies as moral and social agents when he
defined CSR as “the obligations of businessmen to pursue those policies, to make
those decisions, or to follow those lines of action which are desirable in terms of
the objectives and values of our society” (p. 6).
Much has been done by researchers to redefined the definition and scope of CSR
especially in from late 1950s to through 1980s (Carroll, 1999). In this stance Davis
(1973) stated that companies were expected to fulfill the social obligations as a
normal extension to economic and legal responsibilities. In this time period, CSR
was primarily normative, requiring basic moral and social conducts that companies
as good corporate and social citizens should undertake.
According to Jamali,2008 during past two decades a shift in CSR focus has been
witnessed.
The condition of CSR in Pakistan is still in its immaturity state. Only few
companies have an existing CSR strategy and mostly they are the multinationals
who follow their own CSR policies and standards. Unfortunately, the local industry
is either unaware of the benefits brought by CSR or they feel that even if they do
not adopt such policies, they are not in any state of danger.
In 2003 a multi stakeholder forum “Pakistan Compliance initiative” was launched
with support from international buyers, the textile sector,and the Ministry of
Commerce. A draft national standard was developed for use as compliance
standard approved by Government to replace many international social and
environment compliance standards and buyers code of conduct.

In Pakistan CSR is frequently equated with corporate philanthropy, the terms being
often mistakenly used synonymously. Some consider CSR to be a simple consent
with law.This creates a difficulty because top management is still uncertain about
the true meanings of CSR. This indicates the need for a mass awareness campaign
supported by the government, targeting businessmen, entrepreneurs and customers
so that they are able to appreciate CSR and also the general hazards of
noncompliance in today’s environment. Frequent and open discussion defining and
understanding CSR, detailing its nature and promoting and developing
methodologies on how local businesses adopt and manage their CSR obligations
would be a useful first step.

Reference:
1-Carroll, A.B. (1999). Corporate social responsibility: Evolution of a definitional
construct. Business & Society,38 (3) 68–295.

2-Jamali, D. (2008). A stakeholder approach to corporate social responsibility: A

fresh perspective into theory and practice. Journal of Business Ethics, 82 (1), 213–
231.

3-Davis, K. (1973). The case for and against business assumption of social
responsibilities. Academy of Management Journal, 16 (2), 312–322

4- EVALUATION OF THE STATE OF CORPORATE SOCIAL

RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR
IMPLEMENTATION FOR SECURITIES & EXCHANGE COMMISSION OF
PAKISTAN And UNITED NATIONS DEVELOPMENT PROGRAM
PAK/98/011 PARADIGM-UNDP By Ambreen Waheed