BUISNESS ETHICS AND CSR IN NEPAL BBM TU UNIT-6

UNIT 6 BBM 7th

1. BUISNESS ETHICS AND CSR IN NEPAL UNIT 6 UNIT 6

2. Traditional Nepalese business practices M Traditional business of Nepal promote favoritism and nepotism. Friendship was regarded with high value, whether based on personal friendship, family friendship or school friendship. A large portion of employees in company are family members relatives and friends. Profit was one and only objectives of the firms.

3. Present scenario of business ethics in Nepal Nepalese business firms have not completely adopt ethical business practices. Most of the business organization are of small scale in Nepal and they lack awareness and understanding of business ethics. Organization are slowly marching towards adoption of business ethics.

4. Business code of Conduct FNCCI 2061 Abstain from activities considered detrimental to the general health of people. There should be no adulteration. Maintaining faith in fair business competition, provide maximum benefits to the consumers. Abstain from the usage of merchandise or standards prohibited by law. Show special sensitivity towards environmental protection. Oppose monopolistic business practices and controlled supply systems (e.g. syndicates and cartels) and not be involved in any such groups or systems. Submit documents, papers, statements of accounts as well as pay taxes, tariffs and levies as required by law in time. UNIT 6

5. Examples of ethical company of Nepal UNIT 6 M Nepal telecom Working to build ICT center in schools of earthquake affected districts. It is supporting green movement. It had provided 8.5million to national cricket team.

6. Ethical Standards Ethics is two things  well-founded standards of right and wrong that prescribe what humans ought to do . ethics refers to the study and development of one's ethical standards.  Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. Ethical standards help members of the discipline to coordinate their actions or activities and to establish the public's trust of the discipline . For instance, ethical standards govern conduct in medicine, law, engineering, and business. It's also sometimes called a code of conduct. It sets forth core values and ethical principles and is designed to help promote and encourage a certain level of professional conduct . UNIT 6

7. NBI business Code of Conduct National Business Initiative (NBI), a non-political NGO, was founded by fourteen major Nepalese business associations in 2005 with the objective of strengthening the role and capacity of the Nepalese private sector to contribute to sustainable peace in Nepal. PREAMBLE Realizing our responsibility towards the nation, society and the people, with esteemed honour and commitment to national unity and sovereignty, desirous of contributing to the national campaign of creating a prosperous, well-managed and peaceful nation through socio-economic development, and as a part of our continuous effort to improve the living standard of Nepali citizens, We the members of the business community issue this Business Code of Conduct prepared under the coordination of National Business Initiative (NBI). 1. Believing in a single un-fractured market throughout the country, we uphold the principle that all citizens should have the freedom, within the limits of the law, to conduct his/her business freely in any part of the country. 2. We believe in the overall development of the country through democratic, peaceful and healthy political practice. UNIT 6

8. 3. We believe that any form of destructive conflict now or in future will have a detrimental impact on the country as well as the economy. Therefore, we proactively seek to help resolve the conflict in a peaceful manner and promote peace. We oppose all forms of destructive strikes, bandhs and violence. 4. We will continue to extend our active participation and support, through our institutional mechanisms, to the state for formulating new policies and laws or amending existing laws, without any mal-interest. 5. We believe that non-transparent and corrupt malpractices undertaken for momentary gains harm the overall development and credibility of the industries and businesses in the long run. We will identify ways to control such activities and strive to implement them. 6. We will continue our efforts to solve common problems that arise while doing business through consensus and solidarity. UNIT 6

9. 1. Consumer Rights 1.1 We will not harm the state and the people while running our businesses. 1.2. Mindful of the concept of “the sovereignty of consumers” we are committed to the universal rights of the consumers including the rights to safety, rights to consumer education and rights to choice. 1.3. We believe that our products and services should address the security and satisfaction of the consumers along with accurate information. 2.1 We remain committed to and will advocate for open and market-oriented economy. 2.2 We do not support monopoly and unhealthy business practices. 2.3 We believe in healthy fair competition and will support implementation of related laws. 2.4 As the state has adopted open and liberal economic policy and has also become a member of the World Trade Organisation, we believe that the government should create a favorable enabling environment for business and we will support this cause. UNIT 6 2. Competitive Market

10. 3. Taxation 3.1 We express our commitment to timely payment of taxes as per the law of the state. We believe that the taxation system must be business-friendly and the representation of private sector should be ensured in formulating such policies and laws. 3.2 Fairness, transparency, and corporate responsibility are the bases of our work. We will make our accounts transparent and we expect support from all other sectors to do this. 4.1 We respect the legitimate demands of workers/employees, but will not support acts that harm our businesses and the nation. 4.2 We will adopt transparency in procuring materials and recruiting workers/employees required for the business and will procure goods on the basis of quality and recruit individuals on the basis of the individual's qualification and capacity. 4.3 We believe that all labor disputes should be settled through negotiation and when required through tripartite dialogue between government, labor representatives and business people and we expect positive support from other stakeholders. UNIT 6 4. Labour Management

11. 5. Environment Protection 5.1 We will strive for sustainable business development by improving and managing the adverse impacts that our business activities leave or could leave in the environment. 5.2 We strive for promotion and development of environment-friendly business. 5.3 Remaining alert about our social responsibilities, we will strive to fulfill our responsibilities as per the principles of the United Nations and International Business Organisations. 6.1 We respect fundamental human rights and personal freedom of all Nepalese and we believe that the right to legally earn, possess and use personal property should be protected. 6.2 Our business activities will neither support nor oppose any political parties or groups discriminately. But if any act is likely to have an adverse impact on legitimate business, we will protest collectively. We will not give any kind of donation, presents or services/facilities to any political person or party with an intention of gain in the future. UNIT 6 6. Corruption Control

12. Contd. 6.3 We express commitment to follow the law of the land. But we oppose actions and procedures that leave adverse impacts on business promotion and create a chance for corruption, such as incomplete laws, long administrative procedures, impractical implementation and unnecessary discretionary power and will collectively support reforms in these areas. 6.4 We uphold the principle that we must not bribe, give gifts, donations, presents directly or indirectly for our business and financial advantage. If any situation is created where we are forced to conduct such acts, we will lodge complaints in concerned agencies. We will not provide any kind of presents, gifts or hospitality other than the ones accepted by our culture and social traditions. 6.5 We will ensure transparency when giving donations and support to any philanthropic organizations or cause, institutions or individuals affected by disaster, helpless individuals or families and the communities. We are committed to the underlying principles of this Business Code of Conduct and will develop it to suit sectors and companies. We realize that implementation is of crucial importance. To achieve this we expect cooperation and seek understanding from all sectors in Nepal. UNIT 6

13. ethical issues and dilemmas in nepalese business organization Bribery and Gift Giving Issues of Government Tax Issues of working Environment Issues of Consumer Protection Environment Issues Other Issues Transparency and disclosure Just Wage Harassment and discrimination Conflict of Interest Unfair competition Money Laundering UNIT 6

14. The Sources of ethical issues and dilemma According to Keith Davis and William C Frederick ethical challenges in business take several forms and raise different kinds of ethical dilemmas. Ethical challenges and their attendant dilemmas may arise due to ( i ) failure of personal character; (ii) conflict of personal values and organizational goals; (iii) organizational goals versus social values; and (iv) hazardous, but popular products. UNIT 6

15. The Sources of ethical issues and dilemma In Case of Nepal: Self- Interest of Actors Pressures by the stakeholder’s interest Country-specific situation UNIT 6

16. Consumer protection in Nepal In Nepal, the Consumer Protection Act of 1998 (2054) was enacted to govern the rights of consumers, making it the first legal instrument for governing consumers' interests. The prevailing Constitution of Nepal under Article 44 has also guaranteed the 'Right of Consumer' as a fundamental right of the Nepalis. The Act was revised in 2018 to address the shortcomings of the previous act. Section 5 of the Consumer Protection Act 2018 specifies that the government shall determine the standards or quality of goods or services that are inherently undetermined, there has been a lack of action in enforcing these regulations. UNIT 6

17. Unfair trade practices “Unfair trade practices- means the sale or supply of consumer goods or services by making false or misleading claims about their actual quality, quantity, price, measurement, design, make etc., or the sale or supply of consumer goods produced by others by affecting their quality, quantity, price, measurement, design, make, etc.” - CPA 2054 (1998) Section 2 Section 10 of CPA prohibits against unfair trade practices regarding consumer goods and services UNIT 6

18. 10. Prohibited Actions Regarding Consumer Goods or Services : No one shall take or cause to take any of the following actions in respect to any of the consumer goods or services: (a) To produce, sell, supply, export or import a sub-standard consumer goods. (b) To imitate any of the consumer good in such a manner as to mislead consumers. (c) To sell or supply any of the consumer goods or services by making false or misleading claim that the consumer goods or services are separate one or by describing the substandard consumer goods or services as of higher standard. (d) To engage in unfair trade practices in such a manner as to make false or misleading publicity or advertisements relating to the use, usefulness, or efficacy of any of the consumer goods or services. (e) To produce, sell or supply any of the consumer goods or services which may cause harm to the health of the consumers’. (f) To take such other actions as prescribed. UNIT 6

19. Consumer protection council’s functions, powers and duties Consumer protection council formed under section 3 of CPA 1994. The Ministry of Supplies shall function as the Secretariat of the Council. The functions, duties and powers of the Council shall be as follows (Section 4): (a) To offer suggestions to Government of Nepal on matters relating to the protection of the rights and interests of consumers, the supply system and prices, quality and purity of consumer goods and services. (b) To disseminate or cause to disseminate information relating to the rights and interests of consumers in order to inform them about the standard of goods and services so as to protect them in matters concerning consumer goods and services. (c) To inform or cause to inform consumers about the prices, quality, quantity and purity of consumer goods and services, as well as about unfair trade practices concerning them. (d) To conduct or cause to conduct studies in connection with the protection of the rights and interests of consumers. UNIT 6

20. Contd. (e) To offer suggestions to Government of Nepal on changing the existing policies or framing new policies relating to the protection of the rights and interests of consumers. (f) To maintain or cause to maintain updated national and international information relating to the protection of the rights and interests of consumers. (g) To monitor or cause to monitor the rights of consumers and offer suggestions to Government of Nepal to rectify the shortcomings noticed in the course of such monitoring. (h) To discharge or cause to discharge the functions prescribed by Government of Nepal. ( i ) To discharge or cause to discharge such other functions as are deemed appropriate for the protection of the rights and interests of consumers. UNIT 6

21. Protection and Promotion of consumer rights Mentioned in section 6 of CPA, 2054. For the purpose of protecting the rights and interests of consumers, every consumer shall have the following rights: (a) Right to be protected from the sale and supply of consumer goods and services which may harm life, body, health and property. (b) Right to be informed about the prices, attributes, quantity, purity, quality, etc. of consumer goods and services so as to be safe from unfair trade practices. (c) Right to be assured of an opportunity to choose consumer goods and services at competitive prices as far as possible. (d) Right to be assured that an appropriate agency will hear matters concerning the protection of the rights and interests of consumers. (e) Right to be heard and compensated against exploitation and grevances ……. hardships resulting from unfair trade practices. (f) Right to consumer education. UNIT 6

22. Prohibition to influence demand, supply and price Mentioned in section 7 of CPA 2054. No one shall influence the demand, supply and price of any of the consumer goods or services by taking any of the following actions in collusion with others: (a) By fixing the quota of raw materials needed for any of the consumer goods, or reducing the production of any of the consumer goods, or taking any other similar actions. (b) By hoarding any of the consumer goods or service or otherwise creating an artificial shortage, or selling and supplying such goods or services at specified times or places only, or taking any other similar actions. UNIT 6

23. Power to Systematize and Control Supply of Consumer Goods and Services Mentioned in section 8 of CPA 2054. For the purpose of protecting the rights and interests of consumers, Government of Nepal shall exercise the following powers in order to systematize, control and regulate the supply of consumer goods and services: (a) To formulate policies relating to the quality, price and the supply system of consumer goods or services. (b) To formulate action plans in connection with the monitoring, prevention and control of unfair trade practices and monopolies which are likely to harm the rights and interests of consumers, and implement such plans. (c) To analyze and review the situation in respect to the demand and supply of consumer goods consumed within the country. (d) To make necessary arrangements for checking any undesirable increase in prices by producers, vendors or distributors of consumer goods. (e) To discourage unfair trade practices which are likely to create shortages through artificial or other improper means. UNIT 6

24. CSR in Nepal - History Nepalese businesses too have been practicing corporate social responsibility (CSR) in different ways for decades ( Ligal , 2006). CSR has not well developed conceptually and institutionally in Nepal (Adhikari, 2012). Additionally, there are no independent CSR rating agencies in Nepal to till date. There are some studies regarding the status of CSR in the Nepalese context SAWTEE & ECCA, 2010; Chapagain , 2010; Adhikari, 2012; Ghising , 2013; Adhikari, Gautam & Chaudhari , 2016 UNIT 6