Breadcrumb

Argentina

The role of CSR

CSR is a relatively new concept in Argentina. The economic crisis of late 2001 highlighted the social problems that affect even relatively prosperous segments of the population. The active role played by NGOs became particularly noticeable; it has increased dramatically over the past few years. This, in turn, has prompted companies to show more social commitment.

Some 250 Argentine companies joined the UN Global Compact in 2004 and have submitted regular progress reports since that time. Their numbers have grown only slowly, however; by the end of 2007 the number of Argentine companies in the Global Compact had risen only to 279. Not all companies recognize the role of CSR as a strategic factor in long-term entrepreneurial success, and it is only larger companies that have made CSR activities a permanent part of their corporate policy, whether because they have been required to do so by their headquarters or because of direct pressure from policymakers, investors or society at large. Major companies generally use CSR to burnish their corporate image as well as to influence the political environment to their benefit. Economic considerations may also be a factor; some companies are able to use certain CSR activities to avoid export or marketing restrictions. They adjust their production or procurement policies to conform to environmentally friendly or socially conscious regulations. A great deal of social engagement is also motivated by a desire to help. This holds true for small and medium-sized enterprises as well as larger companies, but the efforts of smaller businesses tend to be somewhat scattered or reactive in nature and usually take the form of donations of money, goods or services.

The government provides a certain amount of support for CSR activities; in some cases it is happy to provide political backing. There are no tax incentives or programs specifically focused on promoting CSR activities. However, some companies are involved in a government program called “Manos a la Obra,” which helps microenterprises with technical training and by purchasing their products. The Ministry of Labor is currently negotiating a cooperation agreement with UNDP, CEPAL and WTO, under which these organizations will provide technical and financial support for the establishment of an official agency to monitor and gather data on national CSR activities.

Media reports focus mainly on specific aid initiatives of companies as well as on awards given for socially responsible behavior; a fundamental discussion rarely takes place. Occasionally, private television stations and certain Internet sites will devote their attention to this topic.

A survey recently launched by the private foundation ComunicaRSE interviewed 1,200 respondents from civil society and produced the following findings:

  • The older the respondent, the more familiar he or she is with the concept of CSR. In the 18-24 age group, only 23 percent report being familiar with CSR, while 29 percent of 31- to 40-year-olds and up to 64 percent of 61- to 70-year-olds know the term.
  • Respondents who are unfamiliar with this concept assume that corporate social engagement primarily involves job creation. For those who are familiar with the term, CSR stands for quality fulfillment, working to eliminate child labor, environmental protection and promoting employee development.
  • The media sector is perceived to have the greatest amount of social responsibility, followed by the chemical and food industries. Public service providers are at the bottom of the list.
  • The most widely known CSR activities are fundraising efforts, followed by training and initiatives to promote employment.
  • Sixty-four percent of employees consider their employers to be socially responsible.

With the support of UNDP, CEPAL and WTO, an Argentine network was established in 2004 within the framework of the UN Global Compact. It is made up of 20 organizations representing a variety of areas. The network has become an important platform for increasing cooperation among the business community, the UN, the government and NGOs. It actively promotes CSR by holding seminars, publishing informational materials and providing advice. Consejo Empresario Argentino para el Desarollo Sustentable (CEADS), an organization of the World Business Council for Sustainable Development, is also active in Argentina. Some German companies are members of this group.

Germany’s federally owned Deutsche Gesellschaft für technische Zusammenarbeit (GTZ), along with the German-Argentine Chamber of Industry and Commerce and InWent, established the MERCOSUR center of excellence for CSR, which began its work in June of 2006. Since that time it has devised solutions for small, national and transnational companies in the area of social and ecological responsibility, aimed at enhancing their competitive position and sustainability. The CSR working group of the German-Argentine Chamber of Industry and Commerce organizes monthly company meetings; it also holds seminars and publishes informational material to encourage its members to engage in CSR activities.

The German Embassy in Buenos Aires arranges opportunities for CSR activities, such as organizing charitable events, promoting the German vocational training system and working closely with the Chamber of Commerce Abroad, InWent and GTZ/CIM to hold informational events on environmental issues and climate protection. One goal is to help private industry find sustainable solutions, particularly in the field of energy.

Source: German Embassy, Buenos Aires

CSR understanding

The Argentine society faced a catastrophic situation following the drastic devaluation of the Argentine peso and the severe economic crisis of 2002. The four-year-long recession led to a significant increase in unemployment and poverty and had a long-term negative effect on the government’s ability to promote health and education. This period gave rise to numerous social programs that provide direct support for the needy (funded by the Ministry of Social Development) as well as to subsidized prices for energy and transportation.

Reflecting the Peronist ideal are tax and economic policies that seek to redistribute wealth, coupled with efforts to build up an export industry that could create jobs, along with the agricultural sector.

Companies are evaluated based on their beneficial effects in this field, and they are influenced by market tools (price setting, wage freezes, nationalization). They are permitted to deduct up to 5 percent of financial donations from taxes on profits; no other CSR incentives exist.

Social inequality – which, while less pronounced than in neighboring countries, is greater than in Europe – is still a major reason for the importance of traditional private charitable contributions. Awareness of environmental issues and the idea of sustainability are only slowly growing in Argentina.

Source: German Embassy, Buenos Aires

Expectations towards companies

Argentine policymakers expect companies to assume a moral obligation to society and a commitment to social causes. Civil society, on the other hand, sees the main role of companies in terms of philanthropic activities.

German companies are expected to pay their employees well. Because of the country’s high poverty rate, both policymakers and the general population expect them to show a commitment to society as well.

German companies and brands are equated with quality and environmental consciousness. It is presumed that German standards are high, and training projects such as the dual vocational training programs run by the Chamber of Commerce Abroad and Volkswagen are well regarded.

Source: German Embassy, Buenos Aires

Basic conditions

Implementation of international regulations and guidelines

OECD Argentina

Ratification: Not a member

Local Contact:
Ambassador Rodolfo I. Rodríguez
Deputy Director of the National Directorate for Economic International Negotiations
Director of the OECD Coordination Unit
Ministry Arturo Hotton Risler
Deputy Director of the NPC
National Direction of International Economic Negotiations (DINEI)
Ministry of Foreign Affairs, International Trade and Worship
Esmeralda 1212, 9th floor
Buenos Aires, Argentina
Tel: (54-11)4819 7602 /8124 7607
Fax: (54-11) 4819 7566
Email: oecde (at) mrecic.gov (dot) ar
rro (at) mrecic.gov (dot) ar
ahr (at) mrecic.gov (dot) ar
gnt (at) mrecic.gov (dot) ar
Web: www.cancilleria.gov.ar/pnc

Industry initiatives

GLOBAL COMPACT NETWORK

Contact on site:
UNDP
Mr. Flavio Fuertes
flavio.fuertes (at) undp (dot) org

GC Office Country Coordinator
Mr. Jonas Haertle
E-mail: haertle (at) un (dot) org

WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

Network in place since 1992

Contact on site:
BCSD Argentina (CEADS)
Sebastian Bigorito, Executive Director
Suipacha 531 piso 5°
Buenos Aires (1008), República Argentina
Tel: +54 11 4328 9593 or +54 11 4327-3163
Fax: +54 11 4328 4512
E-mail: sbigorito (at) ceads.org (dot) ar
Website: www.ceads.org.ar

Areas of activity

The “Bicentenario” in 2010, which celebrates the 200th anniversary of the beginning of the road to independence, is an excellent opportunity for companies to highlight their CSR activities as part of a larger program organized by German industry.

Emphasis should be placed not only on traditional cultural activities, but also on the areas of education, training and innovation.

Source: German Embassy, Buenos Aires

Poverty

Due to the economic recovery and social-policy measures that were put in place after the crisis of 2001/2002, the official unemployment rate has dropped to approximately 8.5 percent. Still, one-quarter of those who are capable of working are underemployed. Both in the country’s interior and in the greater Buenos Aires area, people’s basic needs are only inadequately met, and 30 percent of the population remains below the poverty line.

Microcredits have proved to be particularly successful at bringing about sustainable improvement. In Argentina, as in other countries, studies have shown them to have a positive effect on the status of women in society, quality of life and education.

Basic information

  • Life expectancy: Total population: 76.36 years; males: 73.11 years; females: 79.11 years (2008 est.)
  • Infant mortality: Total: 11.78 deaths/1,000 births; males: 13.12 deaths/1,000 births; females: 10.37 deaths/1,000 births (2008 est.)
  • Malnutrition: 3% (2002/04)
  • Access to clean water: 96% (2004)
  • Access to sanitary facilities: 91% (2004)
  • Human Poverty Index: Ranks 4th of 108 (2007/2008)
  • Gini Index: 49 (2006)
  • Population below the poverty line: 23.4% (January−June 2007)

Argentina’s consumers are currently more concerned with getting good value for their money than with a company’s social engagement or environmentally friendly production. Nevertheless, strategic CSR initiatives enhance a brand’s image, strengthen its credibility and lead to greater confidence in the company. They can be an indispensable tool for cultivating political connections (to a range of people and institutions, from local mayors to agencies of the national government). They represent investments in the country’s development and thus also new market opportunities.

Participants

The German-Argentine Chamber of Industry and Commerce, the German Embassy and political foundations are good sources of information on institutions and local conditions.
An extensive list of foreign institutions and NGOs that are involved in Argentina’s social sector can be found on the website of the Argentine Foreign Ministry’s General Direction of International Cooperation: http://www.mrecic.gov.ar. More than 105,000 socially oriented organizations are active in Argentina, and many of them are potential facilitators for CSR activities.

The search engine Guia Solidaria (http://www.guiasolidaria.org.ar) provides a useful overview of the most important NGOs, organized by the focus of their work.

Some of the most important NGOs:

Opportunities and risks related to poverty initiatives

There are no specific cultural or social factors that might lead to conflict. In the case of indigenous communities, however, it is a good idea to make initial contact with the appropriate community representatives and organizations; rejection by the target group will doom the project to failure.

Company examples

In seeking to take direct and immediate action to combat poverty in high-poverty areas, the following should be kept in mind:

  • Centers for agricultural training
  • Hospitals and health centers
  • Work with indigenous peoples
  • Homes for the elderly
  • Homes for children and young people
  • Mother-child centers, soup kitchens
  • Preschools
  • Development projects in slum areas

The German Embassy’s small-scale projects are further examples of such efforts.

Companies are entitled to deduct up to 5 percent of financial donations from taxes levied on profits. Larger companies sometimes establish foundations to implement their CSR activities so that they can take advantage of additional tax breaks.

Source: German Embassy, Buenos Aires

Education

The level of training and academic potential in Argentina is considerably higher than in neighboring countries. Because of the economic boom that followed the crisis of 2001/2002, however, there is now a lack of trained workers, particularly in technical types of vocational training.  While the coun-try’s public educational system enjoyed an excellent reputation for decades, budget shortfalls during the past ten years have caused the country’s infrastructure to deteriorate and led to a capacity overload. 

In view of the above, help from companies is urgently needed in the following areas:

  • Vocational training, especially under the dual system
  • Partnerships with universities and research institutions, particularly in the fields of technology and the natural sciences (scholarships, equipment donations for well-respected institutions such as the Max Planck Institute for Biotechnology, currently under development in Buenos Aires, as well as company-endowed chairs).
  • Encouraging interest in science and technology from the early elementary grades; companies form partnerships with elementary schools and donate instructional materials, arrange for teaching to take place in companies, etc.
  • Donations for schools and school equipment in disadvantaged areas.

Basic information

  • Public spending on education (share of GDP): 3.8%
  • Compulsory school attendance: 5–15 years of age
  • Rate of school enrollment: 99% of children who are required to attend school (2004)
  • Literacy (definition: those over the age of 15 who can read and write): Total population: 97.2%; males: 97.2%; females: 97.2% (2001 census)
  • HDI Education Index: Rank 38 out of 177 (1 = max., 0 = no education)
  • Average years of education: Total population: 15; males: 14; females: 16 (2005)

The educational sector offers opportunities, but at a high level. Investment in this area is particularly promising because of the speed with which good results can be achieved. Moreover, since the Argentine people recognize the value of education, they particularly appreciate results in this area.

Participants

Opportunities and risks related to educational initiatives

President Cristina Fernández de Kirchner has specifically identified support for scientific and technological excellence as a political priority. Germany is regarded as a highly educated country, and many Argentine students are fluent in German, either because of their family background or because they have attended German schools. A major initiative organized by German industry is planned in conjunction with the celebrations in 2010 (the 200th anniversary of the beginning of Argentina’s road to independence), and this would be an opportunity to call particular attention to the various programs that are under way.  The only potential difficulties have to do with the overtaxed school bureaucracy, which attaches considerable importance to national sovereignty. Experience has shown that school authorities should be contacted at an early stage, with the help of the embassy. It is useful to seek out school principals who are flexible and to focus on pilot projects.

Company examples

German-Argentine Chamber of Industry and Commerce

In cooperation with Instituto Ballester (a German school in Argentina), the German-Argentine Chamber of Industry and Commerce has been offering vocational training in commercial fields since 1977; a training course in mechatronics has recently been introduced at Hölters School.

CSR WeltWeit case study (German): Deutsch-Argentinische Industrie- und Handelskammer - Förderung der Berufsausbildung

Argentinean-German Scientific Association (Argentisch-deutsche Wissenschaftsvereinigung)

Approximately 20 German and German-Argentinean companies joined together in 2009 to form the Argentinean-German Scientific Association (Argentinisch-deutsche Wissenschaftsvereinigung). In March, the German Federal Foreign Office, the German Academic Exchange Service (DAAD), the Argentinean ministries of education and research and the Scientific Association issued a declaration of intent to invest in a German-Argentinean university center.  The aim of the center is to strengthen the ties between German and Argentinean universities and research institutions and encourage binational study programs offering dual degrees.

Volkswagen SA

  • According to the head of the company, Volkswagen is training approx. 300 apprentices in cooperation with local vocational schools in Cordoba
  • In addition, the company is currently establishing an endowed chair of automotive technology at the Universidad de Buenos Aires.
  • The Volkswagen Foundation is financing a program to support outstanding scientists, in cooperation with the Max Planck Society. In a related initiative, Volkswagen is involved in planning an exhibition on innovation and science (among other things, an invitation has been issued to bring the Max Planck Science Tunnel to Buenos Aires in 2010).

CSR WeltWeit case study (German): Duales System – Lehrstuhl für Automobiltechnik

LANXESS SA

CSR WeltWeit case study (English): Educate to Grow: funding program to support educative projects

Source: German Embassy, Buenos Aires

Health

Basic information

  • Public spending on health (share of GDP): 4.3% (2004)
  • Medical care: 301 physicians per 100,000 residents (2000-2004)
  • Infant mortality: Total: 11.78 deaths/1,000 births; males: 13.12 deaths/1,000 births; female: 10.37 deaths/1,000 births (2008 est.)
  • Maternal mortality: 40 deaths/100,000 births (1990-2004)
  • Child malnutrition: 4% of children under the age of 5 (1996-2005)
  • HIV/AIDS prevalence rate (>15 years of age): <0.7 % (2001)
  • HIV/AIDS sufferers: 130,000 (2001 est.)
  • HIV/AIDS deaths: 1,500 (2003 est.)
  • Life expectancy: Total population: 76.36 years; males: 73.11 years; female: 79.11 years (2008 est.)

The health system was profoundly affected by the economic crisis of 2001/2002. The government increased its health budget in 2003 and introduced targeted measures to fight diseases. Despite these efforts, the country has a relatively high rate of infant mortality – the result of inadequate care for premature infants, cases of profound disability and infectious diseases during pregnancy and childbirth (2008, ~12/100). Because of inadequate sanitary conditions (roofs of straw or branches, standing water, lack of hygiene), the situation is particularly difficult in the impoverished provinces in the northern part of the country. Sanitary facilities, treatment rooms, infrastructure and medications are in short supply. There is also a need for sophisticated equipment and well-trained personnel to use it.

Participants

Opportunities and risks related to health initiatives

Over the medium term, unmet needs in the health sector and medical technology offer opportunities for German companies in the Argentine market. In mid-2008 President Kirchner announced the construction of 30 hospitals and 300 health centers by 2010. The government will not be able to invest large sums in the public health system until the economy and the state’s finances have fully recovered from the economic crisis. Nevertheless, the German medical technology industry will be able to benefit from the government’s social policy – by opening up new markets, undertaking PPP projects or becoming involved in private social initiatives.

Company examples

Major donations to modern hospitals, such as Hospital Alemán in Buenos Aires

Source: German Embassy, Buenos Aires

Political involvement

Basic information

  • Voting rights: 18 years of age, universal and obligatory
  • Freedom of the press: Ranks 82nd of 169 (2007)

Companies can become involved in providing training for political leaders, particularly at the community level. They can also help improve the quality of institutions and strengthen democracy.

Participants

  • CIPPEC
    NGO, engaged in analysis, advisory activities, support efforts and evaluation in a number of political fields (social policy, economic and financial policy, efforts to strengthen institutions and the rule of law)
    http://www.cippec.org
  • Poder Ciudadano
    NGO, since 1996 the local representative of Transparency International, supported by the Friedrich Ebert and Konrad Adenauer Foundations. This organization seeks to increase community participa-tion, promote transparency and provide access to public information in an effort to strengthen democratic institutions.
    http://www.poderciudadano.org/
  • Asociación Civil de Estudios Populares (ACEP)
    An association to promote basic rights and respect for the democratic values enshrined in the constitution. Among the focus areas of the association’s work are research into public administration and management, the environment and sustainable development, as well as regional integration, technology policy, business and security.
    http://www.acepweb.org.ar/home
  • Political foundations (Konrad Adenauer Foundation, Friedrich Ebert Foundation, Friedrich Naumann Foundation)

Opportunities and risks related to initiatives to promote political participation

Provided that partners and projects are carefully selected, the opportunities outweigh the risks in this area. By supporting or sponsoring specific projects, companies can substantially increase the visibility of their CSR efforts. Companies have already contributed a great deal to CIPPEC and Poder Ciudadano, which demonstrates that corporate support for political participation is already well established. However, so far very few German companies have become active in this area.

Company examples

Donations:

Approximately 400 local and international companies are supporting the work of the most important local political NGOs, such as CIPPEC (NRO – Centro de Implementación de Políticas Públicas para la Equidad y el Crecimiento), Poder Ciudadano (the local chapter of Transparency International) and/or NRO ACEP (Asociación Civil Estudios Populares).

Projects:

  • The Argentinean media company Clarín was involved in the CIPPEC project to provide access to public information.
  • The German Embassy supported the CIPPEC campaign to make election ballots more uni-form.
  • The Friedrich Naumann Foundation is helping to fund a project to provide training for city councilors, initiated by Poder Ciudadano and the opposition party alliance Coalición Cívica.
  • The Konrad Adenauer Foundation is supporting the ACEP project to provide training for trade unions.

Shell and Personal (mobile telephones) provide support for Poder Ciudadano

Trainings for members of the city council (organized by CIPPEC and the Friedrich Naumann Foundation) have received funding from NEXTEL (telephones) and Nobleza Piccardo (tobacco industry)

Source: German Embassy, Buenos Aires

Environment

Basic information

  • CO2 emissions: 0.5% of total world output (2004)
  • CO2 per capita: 3.7 metric tons (2004)
  • Energy consumption: 88.98 million kWh (2005)
  • Water consumption (households/industry/agriculture): Total: 29.19 km3/year (17%/9%/74%); per capita: 753 m3/year (2000)
  • Hydropower, solar, wind, geothermal energy: 4.6 % of primary energy consumption (2005)

The stark imbalance between success in passing legislation to protect the environment and the actual implementation of such legislation is probably the major problem facing Argentina’s policymakers in this area.

Particularly in the major cities, such as Buenos Aires and Córdoba, water pollution is a serious problem that has an effect on social conditions as well. One example is the catastrophic situation of the biologically dead inland river Riochuelo, which runs through the slums of Buenos Aires. Air quality in the large cities is poor owing to a high level of vehicle exhaust emissions as well as a lack of green areas. Further exacerbating the dismal environmental conditions in Argentina’s metropolitan areas is an inadequate waste disposal system.

Participants

  • Fundación Vida Silvestre Argentina
    Defensa 251 Piso 6 "K"
    (C1065AAC) Buenos Aires, Argentina.
    www.vidasilvestre.org.ar/
    Tel: (54 11) 4331-3631 / 4343-4086
    Fax: (54 11) 4331-2217
  • Fundación Fundapaz
    Castelli 12 2do A (1031) Buenos Aires, Argentina
    (5411) 4864-8587
    http://www.fundapaz.org.ar

Opportunities and risks related to environmental initiatives

Argentina has enormous potential in the sphere of renewable sources of energy. Nevertheless, further development in this area faces legal and institutional hurdles. Entrepreneurs complain of inadequate coordination between the various official agencies in the energy sector and point out that policy measures are not being properly implemented. German partners are supporting the government’s efforts to develop a sustainable strategy and strategically assigning CIM experts to work with the most important decision makers. 

 

Company examples

BASF Argentina

An energy-efficient model building (Casa E) was opened in early May 2010 to demonstrate the newest German technology in the field of energy efficiency. This model building will eventually become a training center for young people. In addition, a research project on environmentally friendly materials and technologies will be conducted in cooperation with INTA (Argentina's National Institute for Agricultural Technology).  BASF is investing approximately one billion euros in energy-efficient projects in Argentina.

Volkswagen Argentina

Volkswagen has donated a new all-terrain vehicle to the environmental foundation Econandina. Two CIM experts funded by the foundation are working with solar-powered installations in the Andean region.


CIM experts

Since early 2009, 15 CIM experts have been working with public and private institutions (for example with the Chamber of Industry and Commerce Abroad (AHK) in the sphere of renewable sources of energy and with the Universidad Nacional de Cuyo in the province of Mendoza).

Source: German Embassy, Buenos Aires

To top

Data & facts

Country: Argentine Republic
Capital: Buenos Aires
Area: 2.78 million km²
Population: 38.9 million
Economic system: Market economy
Polity: Presidential republic
Unemployment rate: 8.5 % (2007 est.)
Inflation rate (CPIX): Officially 8.8%, actual rate is estimated to be twice as high (2007 est.)
GDP: 260 billion USD (2007 est.) = 205.84 billion EUR
GDP/Head: 13,300 USD (PPP, 2007 est.) = 10,329.65 EUR
Religions: Catholic 90%, Protestant 2%, Jewish 1%, other religions 6%
HDI: 38th of 177 (2007/2008)
CPI: 105th of 179 (2007)
BTI: Status Index: 26th of 125, Management Index: 36th of 125 (2008)

Further links

Further studies