Editor's note: This article originally appeared at BSR Insight.
This year, the Chinese Ministries of Commerce and Environmental Protection jointly released guidelines for Chinese companies doing business abroad on how to operate sustainably and responsibly and comply with host country regulations and international standards.
The guidelines directly respond to concerns from the international community and help Chinese companies more effectively target the international market. The guidelines consist of 22 comprehensive provisions for corporate responsibility that Chinese companies should take into account when they operate overseas. The main points include:
• Environmental conservation: Analyze potential local environmental impacts, including a baseline survey of the ecosystem, and develop an environmental risk management plan and monitoring, assessment and reporting mechanisms.
• Community development: Create a long-term local community development plan based on potential areas of impact and build monitoring, assessment and reporting mechanisms, including implementation of a social impact assessment.
• Stakeholder engagement: Communicate with local stakeholders and involve them in business strategy as much as possible and secure the social license to operate from local civil society.
The guidelines are not compulsory, but that doesn't mean companies should not implement these recommendations. Many cases have illustrated that neglecting corporate responsibility seriously affects business goals and economic growth, particularly if companies don't adhere to international standards or fail to achieve the promises agreed to with host countries.
For example, acquisition of the Nexen oil sands project by the China National Offshore Oil Corp. still faces challenges from local stakeholders in Canada, although the company has received permission from the Canadian government to proceed.
Chinese flag image by Dora Tang via Shutterstock.
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