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INFO RUEHCV/AMEMBASSY CARACAS 0928
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UNCLAS BOGOTA 003135 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON SOCI CO
SUBJECT: COLOMBIA'S TRADITION OF CORPORATE SOCIAL 
RESPONSIBILITY CONTINUES TO GROW 
 
¶1.  (U)  SUMMARY:  Colombia has a long tradition of Corporate 
Social Responsibility (CSR).  Philanthropic foundations and 
industry associations have, fueled in part by absences of 
state presence or resources as a result of civil conflict, 
provided social services and built infrastructure in areas 
where the conflict made it difficult for the GOC to operate. 
Private company CSR investment has risen exponentially in 
recent years as companies seek to realize "win-win" benefits. 
 Together these three forms of CSR make Colombia a regional 
leader in the field.  As a result of this culture of activism 
the GOC has enacted some CSR programs into law and has 
created a formal mechanism to incorporate CSR into GOC 
development policy design.  END SUMMARY 
 
Colombia's Rich CSR Traditions 
------------------------------ 
 
¶2.  (SBU)  Colombia's history of CSR includes three distinct 
strands: philanthropic foundations with a regional emphasis 
on improving worker living conditions, industry associations 
focused on infrastructure, and corporations that view CSR as 
a strategic tool.  Juana Oberlaender, Director of Enlaza 
Colombia, a consulting company that helps corporations 
develop CSR projects, told Econoff that modern corporate CSR 
differs from the efforts of foundations and associations in 
that it ties into specific corporate strategies and has 
"hard" dollar benefits to companies through increased worker 
productivity, public relations and lowered production costs 
by incorporating environmentally friendly practices into the 
production cycle.  She thinks associations and foundations 
will continue to have an important role in Colombian CSR, but 
that corporate programs will become the dominant model. 
 
¶3. (SBU)  Irena Bello, the editor of a Colombian magazine 
devoted solely to CSR, called Colombia a regional CSR leader. 
 Bello told Econoff that hard data on CSR in different 
countries remains elusive, but a recent study found that 
Colombia had 111 CSR foundations while Peru, Argentina and 
Chile all had less than 60 such foundations each.  Bello also 
noted that 140 Colombian companies registered as 
participating members of the UN Global Compact on CSR, but 
Peru, Argentina and Chile respectively registered half or 
less this amount. 
 
Why Colombia? 
------------- 
 
¶4.  (SBU)  Oberlaender said Colombia's history of political 
instability actually strengthened CSR.  She said that 
companies stepped into the gap to provide social services 
where conflict made it difficult for the government to 
operate.  Oberlaender noted that Colombian CSR often focuses 
on worker-oriented areas, such as education, housing, health 
and food.  Andean AFL-CIO representative Rhett Doumitt, a 
frequent critic of Colombian companies, admitted to Econoff 
that companies in Colombia often did more than their Andean 
counterparts for workers because conflict-weakened unions 
largely lacked the resources to create worker social safety 
nets. 
 
Providing Social Services 
------------------------- 
 
¶5.  (SBU)  Andres Penate, the  head of CSR for 
Bavaria/SABMiller, one of Colombia's largest beverage 
companies, said that many large family-owned companies 
established semi-independent foundations with a regional 
focus (usually where the family came from) in the 1960s when 
new tax laws made such donations tax deductible.  Penate, the 
former Director of the Department of Administrative Security, 
said conflict spurred such foundations in two ways.  First, 
company founders with a "patron" relationship with employees 
used foundations to provide services in areas where the GOC 
had difficulty operating.  Second, Penate said that wealthy 
families saw CSR as a form of risk insurance to create 
goodwill and insulate them from attacks against their 
companies, or themselves. 
 
¶6.  (U)  Penate pointed to the Carvajal Foundation as a 
paradigm of a Colombian philanthropic foundation.  The 
Carvajal family created the foundation in 1961 by donating 35 
percent of the shares (currently valued at USD 200 million) 
of its 100 year-old multinational Carvajal company. 
Foundation Director Roberto Pizarro told Econoff the 
Foundation spends USD 10-15 million per year in the family's 
home department of Valle del Cauca, especially in the slums 
of Cali, on social programs for the poor focused on housing, 
 
health, education, and entrepreneurial development.  Pizarro 
said the Foundation has trained over 50,000 
microentrepreneurs and helped over 10,000 people own their 
own homes. 
 
Building Critical Infrastructure 
-------------------------------- 
 
¶7.  (SBU)  In one of the most prominent examples of an 
industry association involved in CSR, the National 
Association of Coffee Growers (FedeCafe) and its 565,000 
coffee-growing members have directed much of their CSR focus 
on infrastructure.  Maria del Pilar Fernandez, special 
advisor to FedeCafe's Director, told Econoff that FedeCafe's 
strong grassroots relationships in rural areas allowed it to 
build critical infrastructure in areas with traditionally 
weak GOC presence.  Over an eighty-year history FedeCafe has 
worked on infrastructure critical to the coffee industry in a 
quarter of Colombia's municipalities, including building 
6,000 aqueducts, 16,000 kilometers of roads and over 2,000 
bridges.  FedeCafe also constructed over 16,000 classrooms 
and 50 health clinics.  In 2007 alone FedeCafe spent USD 145 
million on CSR activities with most devoted to infrastructure 
development, quality of life, and productivity enhancement. 
 
Creating "Win-Win" Corporate Programs 
------------------------------------- 
 
¶8.  (SBU)  John Karakatsianis, CSR Director for the National 
Association of Industries (ANDI), Colombia's most powerful 
private sector group, told Econoff that a recent survey 
showed 98 percent of ANDI members had CSR programs with 
average contributions of 2.7 percent of sales funding 
programs in worker education and health with a growing 
emphasis on environmental protection.  Karakatsianis noted 
that ANDI-member CSR investment more than quadrupled in the 
last four years, from USD 100 million in 2003 to USD 450 
million in 2007. 
 
¶9.  (SBU)  Andres Penate pointed to Bavaria/SABMiller's CSR 
as an example of the "win-win" model.  Bavaria/SABMiller 
invests USD 10-15 million per year in CSR, the majority of 
which goes towards helping small Colombian farmers improve 
and expand the production of domestic grains suitable for 
beer.  While this helps small farmers, Penate said it also 
benefits Bavaria/SABMiller which buys the grain since 
currency fluctuations will have less impact on the company, 
the company will have tighter control over its inputs, and 
the program will create up to 100,000 rural jobs for small 
farmers thus giving Bavaria/SABMiller a large group of voters 
on whom it could call when it needed "political goodwill." 
 
Spearheading Government-Private Sector Collaboration 
--------------------------------------------- ------- 
 
¶10.  (U)  CSR has lead the way in developing social programs 
later adopted by the GOC.  Karakatsianis said that in 1954 
ANDI created the Family Compensation Fund of Antioquia to 
ensure a "living wage."  ANDI and 45 Antioquian companies 
created the fund by matching 4 percent of workers salaries. 
In 1957 the GOC adopted the idea and made such compensation 
funds mandatory.  Colombian companies now contribute over USD 
500 million annually to such funds with 10 million Colombians 
receiving benefits.  Similarly, a Carvajal Foundation program 
for microenterprise development evolved into a National Plan 
for Microenterprise Development.  The GOC recently began 
institutionalizing the private-public CSR relationship with a 
national "Roundtable on Sustainability."  Chaired by the 
office of the Vice-President, the Roundtable brings together 
the private sector, various government branches, academia, 
and labor to create a formal mechanism to incorporate CSR 
into GOC development policy design. 
BROWNFIELD