Corporate Social Resposibility

A few years ago I was asked by an acquaintance who was lecturing at one of the local Universities, if I would appear as a guest speaker at one of his classes.  He was in charge of a course on Business Ethics.  Although a certain amount of the discussion touched upon Bribery and Corruption, there were questions and discussion on a wide variety of topics.  It is easy to think of Business Ethics as being concerned primarily with Corruption and the prevalence of Bribery, but the topic goes much further and touches on the very way in which people conduct their business affairs.

Running a business is not a simple matter, as anyone who has run a business will tell you.  It is a question of fulfilling responsibilities and those responsibilities are manifold …

Responsibility to the client:

Now, the Celestial Mountains companies are commercial enterprises – and that means we obviously aim to make a profit.  Apart from trying to recoup their investment, the investors hope to earn some income from the enterprises and benefit from dividends.  That does not mean, however, that “the bottom line” is “all important”.

Most business, including ours, is based on the principle of striking a bargain, or agreement.  It is possible to look on an agreement as simply a commercial transaction.  Any transaction involves a number of participants but it can be thought of as a contract between just two parties:

  • The client, (consumer, tourist), and
  • The supplier (tour company)

A definition of a “contract” might be: “an agreement enforceable in law”.  In Kyrgyzstan there are certain problems here – a contract has to be signed and stamped by a person duly authorized to do so … but in the case of arranging a tour, it is not always possible to obtain a signed and stamped contract – especially where discussions and negotiations have taken place by email correspondence.

Details may very from country to country, from legal system to legal system, but in general the following features are present:

  • Identification of the parties: e.g. names, contact details (address, telephone numbers) and license and registration numbers, (if any) – it is important to be sure that the two parties are competent to make the agreement;
  • The subject of the contract: e.g. the provision of tour services;
  • Details of the agreement: e.g. dates, specific details about goods and/or services, price, special conditions …;
  • The rights and obligations of the parties: e.g. timescales, payment details, penalties …;
  • Provisions for the resolution of disputes: e.g. a system of arbitration;
  • Administrative issues: what happens in the case of force majeur circumstances, the language of the agreement, the choice of legal system or jurisdiction for enforcing the agreement, the number of copies, and any other conditions …;
  • Signatures signifying the agreement of the parties (stamped where appropriate), together with the date and place where the agreement was concluded.

In our discussions with clients – often conducted by email – the correspondence forms part of the agreement, the contract.   We identify ourselves – that is a matter of public record – and the client identifies themselves.  We ask for passport details – but that is not usually for the contract, it is so that we can fulfill the other requirements concerning visas, registration and so forth, and thereby meet our legal obligations under Kyrgyz law.  The subject of the agreement (provision of tour services), the details of the services requested and to be delivered, the price, method of payment and special considerations are contained in the body of the communications.

It should be noted that a contract is a double edged sword.  As well as our agreeing to certain certain obligations and responsibilities – the client also undertakes some.  The main obligation may be a question of payment – especially in commercial terms.  (Under Kyrgyz law they also have an obligation to carry insurance cover to meet the cost of medical expenses.)  In addition, we also ask the client to be a responsible tourist.  In our information Pack CD there are a number of Travellers’ Codes.  Each tour is different and not all aspects of the travellers’ codes are relevant to every tour … but we also ask the client to respect the environment and culture that they have to see.

It is often said that: “The client is always right”.  We don’t believe this.  We DO believe, however, that: “The client has rights”.  The first of these is to receive the goods and services as agreed and for which they have paid.  Those goods and services should be commensurate with the price.  The client has a number of legal rights as a consumer.  In addition, they have the right to a quality of service; to be understood (for example if they are tired or worried); to be safe; to respect; to receive information and have questions answered; to have their comments and complaints considered; …

Likewise, when entering into an agreement, we not only accept responsibilities and obligations – we also have rights.  The obvious one is for to be paid, in full and on time.  We also have the right for our other obligations before the Kyrgyz government (e.g. concerning the registration of tourists) and to our partners and service providers to be respected.

Of course, there is always the possibility that something will occur which makes it impossible for us to deliver the agreed service.  In this case we reserve the right to make alternative arrangements – wherever possible we will do this in consultation with the client.

This two-sided “contractual” view, although important, is perhaps too simple … Tourism is a particular business with specific aspects which mark it out as different from other types of commercial activity.  For example:

  • The tourist buys a product “unseen” – they pay before they receive the goods and services and cannot try it out beforehand;
  • The tour company often sells goods and services of others, (“service providers”, “facilitators”), and has to enter into contracts or arrangements with them – over whom they have no control;

We take our responsibilities to the client very seriously.  Apart from remembering the “Golden Rule” … “Do unto others as you would have them do unto you” … we think it is important that we have the client’s trust.  So, we won’t lie to a client, and we won’t make promises that we are not certain that we can fulfill.  We will point out potential problems – the important word is “potential”, they may arise, but they may not … In some cases this can all work to our disadvantage.  Still, we think it is right to do so.

Responsibilities to others:

When entering into an agreement with a client we recognize that we enter into certain responsibilities towards the client.  The companies also have responsibilities to others.  A more complete list might be:

  • The clients: with whom we have a “contractual” agreement;
  • Our suppliers: the people from whom we purchase goods and services and rely upon us, and our clients, (at least in part) for their livelihood;
  • Our employees: who rely on the company for their livelihood;
  • The government: for example to pay our taxes and comply with legal requirements;
  • The wider community:  we are part of a wider community – and we try to play our part in that wider community in the form of supporting local businesses and good causes;
  • The Tourism Industry: preserving the good name and reputation of the country and the industry;
  • Our investors: who have placed their trust in us;

Of course making a profit is important – without it the companies would not exist, with all that this would entail for our employees, local businesses, state and local budgets, etc.  However, this is not the end of the story.

In our activities we try to remember that, in addition to our responsibilities to the client, we also recognize that there is a need to be responsible in a wider sense – for example, there is a need to respect the environment, the local culture.  These responsibilities may not have a contractual nature, but they are still important.

For example, it is possible that, if we act irresponsibly, then we would be damaging the very thing that we are trying to “sell”: the landscape and natural environment; the traditions and cultures of the local people and so forth – and in doing so we would be damaging the future development and prosperity of both ourselves and the community.  This is one of the reasons we do not undertake Hunting expeditions.

We want to see the country and the industry develop.  We try hard to support various initiatives, both within the country and within the industry.  Where possible we prefer to purchase goods produced locally, we take an active part in supporting good causes, we participate in discussions involving the development of civil society and we are active in a number of local associations.

In answer to the client who said – “the trouble with choosing Celestial Mountains is that the money leaves the country”, we reply that the vast majority of the money actually remains in the country … either in payment for goods and services, taxes, or further re-investment.

In answer to the person who expressed the view that our attitude towards “Corporate Social Responsibility” (CSR) was “a strange way to business” … we reply that it is a good thing to do, in itself – and that there is also good economic sense to this, as well.