Essay on Accountability in CSR Through Humanitarian Logistics

Contents

1. Introduction
2. Stakeholders and roles linked to accountability in CSR through humanitarian logistics
3.  Review of available data
4. Potential solutions to the issue of accountability in CSR through humanitarian logistics
5. Challenges in implementing potential solutions
6. Conclusion

Introduction

The issue that this paper will address is accountability in corporate social responsibility (CSR) through humanitarian logistics. Humanitarian logistics is a field of logistics dedicated to the delivery of vital goods and services to populations impacted by humanitarian crises. These crises may be man-made or natural, and have tremendous impact on their victims. Humanitarian logistics is a field where the risks and stakes are high, the impact of relief is great, and the situations involved are typically filled with unpredictability, uncertainty and miscommunication. The number of actors in humanitarian logistics is also very high, which increases the complexity of coordinating such operations. Nonetheless, it is an area ripe for corporate social responsibility (CSR) work by third-party logistics providers such as USP, DHL and FedEx, given the tremendous social and humanitarian benefits that are created through successful humanitarian logistics operations. These include the delivery of blood, medicine and food to affected flood populations, the rebuilding of shelters and infrastructure in earthquake zones, and the provision of clean water to communities whose water sources have been destroyed by civil war.

However, the issue of accountability remains a big challenge in CSR through humanitarian logistics. This is because the field of humanitarian logistics operations is still one filled with information asymmetry, where different stakeholders have different levels of visibility over a given issue. As a result, accountability issues that CSR humanitarian logistics operations face include misappropriation of donor-provided resources, misallocation of aid, duplication of efforts, inefficiency and corruption.[1] In many operations, different stakeholders, such as NGOs and government agencies, can also lead third-party logistics providers who are engaging in CSR through humanitarian logistics to be unaccountable in their actions to their supporters and donors. This essay will therefore outline the issues, stakeholders, potential solutions and challenges facing third-party logistics providers who want to implement CSR through humanitarian logistics. Accountability remains a thorny ethical issue in CSR, because it impacts donor trust, CSR effectiveness and CSR impact, and demonstrates how ethical a company is in stewarding their responsibility toward the community.

Stakeholders and roles linked to accountability in CSR through humanitarian logistics

The stakeholders involved in CSR through humanitarian logistics are the government, the military, donors, non-governmental organization and third-party logistics providers. Foremost, the government often provides the regulatory and policy environment that governs the delivery of CSR through humanitarian logistics. Governments and the military typically hold political authority over the respective areas affected by a humanitarian crisis, and therefore have disproportionate influence in enabling or hindering the success of third-party logistics providers who pursue CSR through humanitarian logistics operations. They can serve to either increase or decrease accountability in CSR through humanitarian logistics. For example, the Japanese government was instrumental in holding third-party logistics providers and NGOs accountable when they were pursuing CSR efforts through humanitarian logistics operations, by ensuring that their operations had impact and were not simply to obtain a good reputation. Conversely, in the aftermath of the Sichuan earthquake, the Chinese army and government, for political reasons, restricted access by third-party logistics providers to the disaster site and drastically reduced the accountability of CSR-driven humanitarian logistics operations in the affected region as a result. Corruption by local government officials also reduces accountability in CSR-driven humanitarian logistics operations.[2] Secondly, the donors help to increase the accountability in CSR through humanitarian logistics, given that they have a vested interest in ensuring that their donations are going toward an efficient, sustainable and impactful CSR cause. Thirdly, non-governmental organizations typically increase the accountability of CSR-driven humanitarian logistics operations by ensuring that third-party logistics providers abide by local regulations and have a meaningful impact in the delivery of aid. Finally, third-party logistics providers themselves strive to be accountable to their stakeholders, such as their shareholders and employees, in delivering CSR through humanitarian logistics. However, the accountability of their CSR-driven humanitarian logistics operations can be severely restricted by local corruption, interests of local stakeholders, information asymmetry, difficult terrain, and other issues. [3]

Review of available data

The resources devoted to humanitarian aid have been rising in recent years, with emergency response aid taking the lion’s share of aid at $15.57 million in 2015, followed by disaster prevention and preparedness (1.55 million) and reconstruction rehabilitation and relief (1.39 million).[4] The United States continues to lead in aid at $6 million per donor in 2014, followed by the UK and the EU. Furthermore, most of the aid came in the form of ODA grants ($17 million), followed by ODA loans (0.87 million). [5] This demonstrates the increasingly high stakes involved in CSR-driven humanitarian logistics, and shows the importance of accountability in this sector.

Potential solutions to the issue of accountability in CSR through humanitarian logistics

Solutions to address the issue of a lack of accountability in CSR performed through humanitarian logistics include the use of trusted local partners, and the application of technologies such as blockchain, data analytics and drones. In particular, the use of advanced technologies in such CSR-driven humanitarian logistics operations would allow for greater verifiability. For example, by encoding humanitarian logistics deliveries in a distributed database and blockchain ledger, the records would not be interfered with, and this action would therefore preclude corruption by intermediaries such as warehouse managers and delivery agents. [6] Furthermore, the use of data analytics and drones to map terrain, identify victim needs and optimise humanitarian supply payloads would ensure greater efficiency and accountability in the use of CSR resources in humanitarian logistics operations.[7] Finally, external audits and greater collaboration between different stakeholders will ensure that CSR-driven humanitarian logistics operations would be performed with a higher degree of accountability.

Challenges in implementing potential solutions

Several challenges remain in implementing the above solutions to achieve greater accountability in CSR-driven humanitarian logistics. Foremost, several third-party logistics providers pursue CSR as a side project not vital to their core corporate interests, and therefore do not devote enough financial and material resources to ensuring greater accountability in their CSR-driven humanitarian logistics operations. Secondly, regulation in humanitarian disaster areas, which restrict independent auditors and third party logistics providers from entering and providing humanitarian aid, often handicaps potential solutions to greater accountability. [8] Thirdly, the vested interests of stakeholders such as the governments and the military, who may restrict visibility and accountability in humanitarian logistics operations for political reasons, can greatly impact the effectiveness of accountability measures such as audits and advanced technologies used by third-party logistics providers engaging in CSR-driven humanitarian logistics operations. [9] Finally, short-term interests by third-party logistics providers who seek to use CSR-driven humanitarian logistics operations primarily for reputational gain may also lead to poor accountability over program impact. In particular, this reason reflects the ethical (or unethical) nature of a company.

Conclusion

This essay has reviewed the nature, challenges, solutions and stakeholders involved in ensuring greater accountability in CSR-driven humanitarian logistics operations. While the challenges remain daunting, it is clear that greater accountability is needed in humanitarian logistics operations driven by CSR efforts by third-party logistics providers.

References

Bealt, Jennifer, Jair Camilo Fernández Barrera, and S. Afshin Mansouri. “Collaborative relationships between logistics service providers and humanitarian organizations during disaster relief operations.” Journal of Humanitarian Logistics and Supply Chain Management 6, no. 2 (2016): 118-144.

Chong, Mark. “Employee participation in CSR and corporate identity: Insights from a disaster-response program in the Asia-Pacific.” Corporate Reputation Review 12, no. 2 (2009): 106-119.

Daud, Mimi Suriani Mat, M. Z. S. M. Hussein, M. E. Nasir, R. Abdullah, R. Kassim, M. S. Suliman, and M. R. Salu-din. “Humanitarian logistics and its challenges: the literature review.” International Journal of Supply Chain Management 5, no. 3 (2016): 107-110.

Ferguson, David. “CSR in Asian logistics: operationalisation within DHL (Thailand).” Journal of Management Development 30, no. 10 (2011): 985-999.

Fontainha, Tharcisio Cotta, Patricia de Oliveira Melo, and Adriana Leiras. “The Role of Private Stakeholders in Disaster and Humanitarian Operations.” Journal of Operations and Supply Chain Management 9, no. 1 (2016): 77-93.

Kiatkulthorn, Pakitta, and Thanaporn Sathapornwanit. “Corporate Social Responsibility (CSR) impacts as selection criteria when buying services from Third Party Logistics (TPL) providers: A case study of ITAB Scanflow.” (2012).

Piecyk, Maja, and Maria Bjorklund. “Logistics service providers and corporate social responsibility: sustainability reporting in the logistics industry.” International Journal of Physical Distribution & Logistics Management 45.5 (2015): 459-485.

Van Wassenhove, L. N.. “Humanitarian aid logistics: supply chain management in high gear.” Journal of the Operational Research Society 57.5 (2006): 475-489.

End-notes

[1] Ferguson, David. “CSR in Asian logistics: operationalisation within DHL (Thailand).” Journal of Management Development 30, no. 10 (2011): 985-999.

[2] Daud, Mimi Suriani Mat, M. Z. S. M. Hussein, M. E. Nasir, R. Abdullah, R. Kassim, M. S. Suliman, and M. R. Salu-din. “Humanitarian logistics and its challenges: the literature review.” International Journal of Supply Chain Management 5, no. 3 (2016): 107-110.

[3] Van Wassenhove, L. N.. “Humanitarian aid logistics: supply chain management in high gear.” Journal of the Operational Research Society 57.5 (2006): 475-489.

[4] Piecyk, Maja, and Maria Bjorklund. “Logistics service providers and corporate social responsibility: sustainability reporting in the logistics industry.” International Journal of Physical Distribution & Logistics Management 45.5 (2015): 459-485.

[5] Chong, Mark. “Employee participation in CSR and corporate identity: Insights from a disaster-response program in the Asia-Pacific.” Corporate Reputation Review 12, no. 2 (2009): 106-119.

[6] Ibid.

[7] Bealt, Jennifer, Jair Camilo Fernández Barrera, and S. Afshin Mansouri. “Collaborative relationships between logistics service providers and humanitarian organizations during disaster relief operations.” Journal of Humanitarian Logistics and Supply Chain Management 6, no. 2 (2016): 118-144.

[8] Ibid.

[9] Kiatkulthorn, Pakitta, and Thanaporn Sathapornwanit. “Corporate Social Responsibility (CSR) impacts as selection criteria when buying services from Third Party Logistics (TPL) providers: A case study of ITAB Scanflow.” (2012).