The gift of giving

The earthquake in Sichuan province has jolted many Chinese enterprises into a greater awareness of their corporate responsibility to the public.

Other than the large amounts of aid money they have donated, many enterprises have contributed people and materials for rescue work in some of the worst hit areas.

There is much more work waiting to be done. The momentum of corporate goodwill must be maintained.

Corporate contributions in terms of money, materials and expertise in engineering, finance and logistics will be essential to the monumental task of reconstruction. It will involve not only rebuilding the infrastructure facilities, homes, schools, hospitals and other structures damaged or destroyed in the quake, but also the re-establishment of the local economy, which consisted of many thousands of small- to medium-sized privately owned companies engaging in services, food processing, distribution and retail, and light manufacturing.

The reconstruction is expected to stress the demand for steel, aluminum, cement and myriad other construction materials.

Enterprises engaged in the production of these essential materials must be aware of their responsibility to ensure an adequate supply. Any disruption in the supply chain could cause unnecessary price fluctuations that would complicate, or even delay, the rebuilding process.

Talking to a China Business Weekly reporter, a senior executive of a steel mill said that priority would be given to steel products for the quake-affected region. "We will not hesitate to divert supplies from our other customers to meet the demand (for reconstruction)," he said.

Many insurance companies have already initiated processes that can facilitate the payment of claims to customers who were injured or suffered losses of homes and other properties in the quake. Despite the threat of after shocks, some insurers were setting up makeshift counters in the towns and villages ravaged by the quake to handle claims.

It will be helpful if the banks can work out a scheme to provide low-interest loans with highly flexible repayment terms to help people rebuild their homes. Credit should also be extended at favorable rates to owners of small businesses that are crucial to the revival of the local economy shattered by the quake.

Indeed, the contributions made by the domestic enterprises to victims of this natural disaster, from rescue, resettlement to reconstruction, have set a new standard of corporate responsibility, which goes beyond the tax-deductible amounts of donations. It is hoped that the domestic enterprises which have shown such generosity to the victims of the quake will extend their new found commitment to good corporate citizenship in other areas such as the environment, culture, education and the welfare of their workers.

(China Daily 05/26/2008 page3)