Algeria

The role of CSR

There is an increasing awareness in Algeria that globalization will have a profound impact, both on the overall structure of Algeria’s society and, more specifically, on its business sector. However, there is no evidence that companies are assuming relevant responsibilities on a wider scale.

It is also clear to Algerian society that structures are in flux; yet so far there has been no serious public discussion of whether companies should assume greater responsibility for meeting social needs.

One reason why Algerians have relatively modest expectations of the companies that do business in their country lies in Algeria’s colonial past, which spanned the period between 1830 and 1962. French rule led to the political, social and ultimately economic marginalization of large segments of the native population, which left little opportunity for a sense of social responsibility and economic participation to develop.

Public perceptions of Algerian companies and their proper role are also influenced by the country’s socialist past. After gaining its independence from France in 1962, Algeria initially chose the path of Arab-Islamic socialism under its first leaders, Ben Bella and Boumedienne, and remained a one-party state until the democratic opening of 1989. This led to the nationalization of Algerian companies in a centrally controlled economy. The main and essentially only responsibility of the country’s state-owned companies was to provide goods, services and jobs. It was neither expected nor demanded that they take on other duties in areas such as social security, political discourse or environmental protection, or that they address social problems outside of the corporate context.
Socialism, like the colonial period that preceded it, offered the Algerian people little opportunity for personal development and individual responsibility. It was just as uncommon for individuals to be engaged in social issues as it was for companies to assume social responsibility.

Since progress toward a market economy is still sluggish, developing a corporate sense of social responsibility is likely to take a considerable period of time.

Among the most important company-driven institutions that promote corporate social engagement are Cercle d’Action et de Réflexion autour de l’Entreprise (CARE) and Réseau des Entreprises Maghrébines pour l’Environnement (REME).

Source: German Embassy, Algiers

CSR understanding

From the corporate perspective

Overall, there is an increasing awareness in Algeria that globalization will have a profound impact, both on the overall structure of Algerian society and, more specifically, on the business sector. After years of state control and a centrally planned economy, Algerian companies, like businesses elsewhere, need to operate efficiently and take a profit-oriented approach if they are to be competitive in the international arena. In many cases this leads to downsizing and a loss of jobs in the state-run businesses, which are often in dismal shape and highly inefficient.

There is as yet no evidence that companies in Algeria are assuming relevant responsibilities on a wider scale.

Over the medium term, the presence of multinational companies in Algeria could play a major role in changing perceptions of CSR. Such companies set new standards for social responsibility, making them a model for other enterprises in Algeria.

In contributing to the well-being of their workers, foreign companies are primarily motivated by performance concerns. Some companies, for example, arrange for transportation to and from the workplace as a means of increasing worker productivity. Just as medical care is often available on site, businesses may provide meals for their employees to ensure that they receive adequate nutrition.

Multinational corporations, which generally feel an obligation to the principles of CSR, can serve as an example for Algerian companies. It is important to note, however, that the financial and structural situation of the overwhelming majority of Algerian businesses is too precarious for them to play a significant role in greater social engagement in the foreseeable future.

It is still the exception for Algerian companies to take on responsibilities in the social arena. This is evident, for example, in the area of human resources. With the exception of a few state-owned companies, the overwhelming majority of Algerian companies assume no significant responsibility for the well-being of their employees beyond paying their wages. With respect to employee benefits, healthcare and training, corporate involvement is generally limited to the minimum required by law. Companies contribute 26 percent of social insurance costs.

The state-owned hydrocarbons company Société Nationale des Hydrocarbures (Sonatrach) is an exception to the rule. According to the Algerian media, it is the first and so far only Algerian company that has developed a serious CSR strategy and is putting it into practice in a consistent way; it exceed statutory requirements in its employee benefits, training and wages. Sonatrach, which produces petroleum and natural gas, and the state-run energy supply company Société Nationale de l’Électricité et du Gaz (Sonelgaz) are notable in their emphasis on providing basic and further training for their employees. With the help of their budget for advanced training, they send their employees for training to such institutions as the Institut National de la Productivité et du Développement industriel (INPED) and the Institut National du Management (INSIM). These initiatives are rooted to some extent in Algeria’s socialist heritage, but they are also motivated by a lack of qualified workers in this sector as well as the unusually high cost-effectiveness ratio of such training.

Other companies and institutions (e.g. Banque d’Algérie) carry out targeted initiatives that benefit their employees. They may organize vacation trips for the children of their workers or provide bonuses at Eid-al-Adha, the festival of sacrifice, to help with the purchase of a sacrificial animal. Some state-owned companies also pay an advance on employee wages during the month of Ramadan and on other religious holidays. Others provide financial support at the beginning of the school year so that workers can buy school supplies for their children. Private companies do not appear to offer these types of benefits.

A few companies make donations to humanitarian and social causes, although nongovernmental organizations report that much more remains to be done in this area. NGOs are demanding that private businesses step up and play a greater role. Again, the only exception to this rule is the state-owned energy company Sonatrach, which not only contributes money, but also donates such items as computers and books to schools. Its role is not limited to this area, but goes considerably beyond the ten principles of the Global Compact. Sonatrach’s social commitment is reflected in projects aimed at combating poverty, vocational training programs, infrastructure projects in remote rural areas, health initiatives and projects involving sports and culture. Sonatrach is particularly committed to environmental protection (used-oil collection and disposal, waste removal, emission restrictions, etc.).

From the political perspective

Little attention is paid in Algeria’s current political discourse to the proposition that companies should accept more social responsibility. Since most Algerian companies are still state-owned, the role of Algerian industry in the political order is a moot point. Because the government and the business world are closely linked, political decision makers generally have direct access to the information they need.

From the perspective of society at large

While Algerians are very aware of the consequences of globalization and the changes occurring in the country’s economic conditions, there has been no serious public discussion of whether companies should assume greater responsibility in society. There have been only isolated media reports focusing on the need for an increase in CSR; the daily newspaper El Watan, for one, explored this topic in depth in early 2008.

Major concerns include the food supply, widely regarded as inadequate, and continually rising prices for everyday goods. From time to time, the media point out that companies share responsibility for ensuring that necessities remain affordable for the masses.

The press also raises issues of CSR in connection with announcements of projects and joint ventures with foreign companies; media reports focus particularly on the number of jobs scheduled to be created in Algeria and on proposed training initiatives.

Many nongovernmental organizations in the social and humanitarian fields regularly call upon companies to accept social responsibility and to do more to help disadvantaged groups. The NGOs would like them to provide financial support for projects to aid widows, orphans, socially disadvantaged young people or the disabled. A number of organizations have pointed out that companies have failed to live up to their responsibilities; however, only rarely have the efforts of these organizations resulted in support for humanitarian action.

Source: German Embassy, Algiers

Expectations towards companies

Even today, some 20 years after Algeria’s political and economic opening, the overwhelming majority of Algerian companies are still state-owned, and the private sector is only slowly gaining in significance. The planned privatization of a number of state-run companies has not been fully achieved.

Given this situation, Algerian companies and their role in society cannot be measured by the standards that might be applied to a well-functioning market economy. The country’s state-owned businesses and companies are primarily responsible for producing goods and services within the framework of the existing legal order. A study conducted by the Algerian Bureau International de Travail has concluded that Algeria’s economic structure makes it difficult to develop the mechanisms needed for greater corporate social responsibility. It will require drastic economic reforms to enable companies to play a greater role in society, one that goes beyond simply achieving their basic objectives.
The Algerian people, for their part, expect the country’s state-owned companies to provide jobs. In view of Algeria’s high unemployment rate, particularly among teenagers and young adults, jobs are urgently needed if social tensions are to ease over the medium term.

Aside from isolated voices in the Algerian media, no public calls have been raised for companies to assume additional roles or duties in society, other than the two mentioned above.

Source: German Embassy, Algiers

Basic conditions

Government regulations - CSR-relevant laws and the implementation of international regulations and guidelines

According to the Algerian Chamber of Commerce and Industry (Chambre Algérienne de Commerce et d’Industrie, CACI), Algeria has no laws concerning the social responsibilities of companies. This topic is almost entirely unfamiliar to the Algerian public and plays no real role in political discourse.

Algeria has been a member of the ILO since 1962 and has ratified a total of 54 conventions, 51 of which have already entered into force, including eight fundamental conventions. President Bouteflika has announced the ratification of four additional conventions (workers’ representatives, occupational safety and health, safety and health in construction, private employment agencies). Further information regarding Algerian involvement in the ILO can be found at www.ilo.org.

The four core labor standards (freedom of association and the effective recognition of the right to collective bargaining, elimination of all forms of forced or compulsory labor, effective abolition of child labor, elimination of discrimination with respect to employment and occupation) are included in Algeria’s labor law 90-11 of April 21, 1990.

Article 5 defines worker rights, including the right to engage in union activity, strike and participate in collective bargaining, as well as issues of social security, hygiene, medicine and pensions.

Article 6 categorically bans discrimination in working life and expressly guarantees workers the right to physical inviolability.

Although there is no explicit mention of a ban on compulsory labor in the text of the statute, it can be implied from a number of standards stating that an employment contract is required (Art. 8 ff.).

The minimum age of employment is 16.

To sum up, Algerian labor law appears, on paper, to be quite progressive. However, it is difficult to determine whether legal provisions have in fact been adequately implemented; there is clearly room for doubt.

Economic initiatives – CSR instruments in the business community

No information is available on initiatives to regulate companies or impose standards. Algeria has no reporting standards similar to the Global Reporting Initiative; there are essentially no forums for establishing standards or collective action.

One exception is an agreement between the Ministry of the Environment and 40 Algerian companies in the metalworking, electrical, cement, ceramics and food industries, which was voluntarily signed on July 25, 2007 and provides for an increase in joint efforts to promote environmental protection.

Certain companies (such as Sonatrach) adhere to the ten principles of the Global Compact. However, no network exists. 

Chambre Algérienne de Commerce et d’Industrie
1er novembre – Place des Martyrs
16003 Algiers
Tel.: 021-96 77 77 / 021-96 66 66
Fax: 021-96 70 70
Internet: www.caci.dz

WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT 

Network in place since 2000

On-site contact
APEQUE
(Association pour la Promotion de l'Eco- Association pour la Promotion de Efficacité et la Qualité des Entreprises)
Mr.  Bentir Mohamed, Secretary General
Lot El Bina No. 07
Postal address 16320
DELY IBRAHIM
Algiers, Algeria
Tel.: +213 (0) 21 919 379
Fax: +213 (0)21 919 679
Mobile: +213 (0) 61 513 393
E-mail: m_bentir (at) gecos (dot) net

Source: German Embassy, Algiers

Areas of activity