Inside Economic Diplomacy Podcast- Episode 2: The Award for Corporate Excellence

Remarks
Bureau of Economic and Business Affairs
Washington, DC
January 28, 2015


MR. OMAR PARBHOO, SENIOR ADVISOR, BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, DEPARTMENT OF STATE: The United States has around 260 embassies and consulates around the world. And the State Department has more than 55,000 Foreign Service and locally employed staff stationed overseas. That's quite a footprint, but a necessary one when representing the U.S. on a global scale.

MS. EMILY-ANNE PATT, FINANCIAL ECONOMIST, BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, DEPARTMENT OF STATE: Fortunately, we're not in it alone. When it comes to representing America, U.S. businesses also play a vital role. Our brands, our goods, our music are often the face of the United States abroad. And that's usually a good thing.

MR. PARBHOO: Agreed. And at the State Department, we don't take this role for granted. In fact, we do our best to facilitate and promote the positive impact our companies make overseas.

MS. PATT: That's right. And we really think it's important to recognize these companies and highlight their achievements publicly. That's why in 1999, the State Department created the Secretary of State's Award for Corporate Excellence, or ACE, and has been awarding it annually ever since.

MR. PARBHOO: The ACE award is given to American companies that undertake responsible activities to improve lives and advance the needs of local communities around the world. On December 9, the 16th Annual ACE Ceremony was held to recognize three distinct companies that are doing well by doing good. Today, we'll talk to these winners and hear what being a good corporate citizen means to them.

I'm Omar Parbhoo.

MS. PATT: And I'm Emily-Anne Patt.

MR. PARBHOO: Welcome to another episode of Inside Diplomacy.

[MUSIC PLAYING]

Emily-Anne, before we get to the winners, I wanted to mention that they were chosen from nine well-deserving finalists, who were doing amazing work in Burma, Oman, Togo, and several other countries. You can read more about these finalists on our site.

MS. PATT: It must have been difficult to whittle down the list to just three winners, but luckily, that was someone else's job.

MR. PARBHOO: Right. So since the hard part was already done for us, let's get to the winners.

MS. PATT: Sure. Let's start with Coca-Cola and their operations in the Philippines. The company was recognized for providing disaster relief services after Typhoon Haiyan. It was also lauded for its work to improve water quality and access. And if that's not enough, Coca-Cola also partnered with the Philippines Department of Education to provide primary education to more than 60,000 disadvantaged children.

MR. PARBHOO: It's definitely an impressive list of activities. I had the pleasure of sitting down with their executive vice president to hear more about this work. Here's what he had to say.

First, let me say congratulations to you and your company for winning the ACE award. It's well-deserved. I'm here with Ahmet Bozer, Executive Vice President and President of Coca-Cola International. Thank you for joining us.

MR. AHMET BOZER, EXECUTIVE VICE PRESIDENT AND PRESIDENT OF COCA-COLA INTERNATIONAL: Thank you, Omar. Nice to be here.

MR. PARBHOO: So Coca-Cola has been active in the Philippines, including, but definitely not limited to, relief efforts after Typhoon Haiyan. But when it comes to how Coca-Cola engages in the community, do you devote explicit resources and talent to corporate citizenship, or does it happen more organically?

MR. BOZER: Great question. I guess I would side more on the side of happening organically, but I'd like to say a little bit more about it, in that we have a belief-- which I think comes from our heritage-- that for us to continue to earn the right to do business in a community, we have to really earn the hearts and minds of the community. And we have to understand their issues, their concerns, and by way of us being there, doing business there, that that community is a little bit better than what it would have been if we were not there.

So it is, in a way, an integral part of our business, that we should be contributing to the sustainability of the communities. Obviously, as a result of that, you do have resources who focus on it this way.

MR. PARBHOO: That's excellent. Thank you. And you were recognized specifically for working to increase access to primary education for more than 60,000 disadvantaged children. What motivated this outreach? It sounds fantastic, but how does primary education relate to Coca-Cola's bottom line in the Philippines?

MR. BOZER: Yeah. That's certainly one way to look at it-- that does your activity help your bottom line? Actually, if you think deep and long enough term, everything does. But if you think really short term, then you will find difficulty connecting the benefits of your program to your bottom line. But because it is our sort of culture and philosophy for our business to thrive, the communities must thrive.

Then we are a very local company in a way. We're global, but were very local. So our people on the ground are best equipped to understand the needs of the local community. In this case, it turned out to be education, which was the most pressing need. And we got involved and did it. And at the end of the day, it just enhances our social license to operate in that community rather than a specific numerical return on investment.

MR. PARBHOO: How else does the U.S. government play a productive role in facilitating or supporting any of your social responsibility efforts?

MR. BOZER: Well, not just the social responsibility efforts, but actually, also in the basics of getting our business done. The State Department has been an incredible partner to us. I have worked in over 100 countries-- have personally been to over 100 countries-- and the level of attention, support, and actually, capability that we find in the U.S. State Department is amazing. We know that we can't always rely on them to not only help us with our social responsibility projects, but also help support our base business through their great relationships they form on the ground with the local authorities as well as us. So we are very, very thankful to the State Department for the support that they've given us for all the time that I have been around. I know it goes way, way, way before that.

MS. PATT: It was nice of him to recognize our embassies and the role they play in facilitating business.

MR. PARBHOO: Yeah. And even though it made me blush a bit, his gratitude was definitely appreciated.

All right. Let's move on to the next winner, EcoPlanet Bamboo, and their work in Nicaragua.

MS. PATT: Right. For those who don't know, EcoPlanet is a leading harvester of bamboo as a viable alternative to timber. The company was recognized by the Secretary for fostering sustainable development through the regeneration of degraded pasture lands. It also set aside 20% of its plantations to create a natural habitat preserve. Lastly, EcoPlanet was praised for employing persons with disabilities and empowering women to take on managerial positions.

MR. PARBHOO: They do excellent work. And I was fortunate enough to talk to the CEO of EcoPlanet Bamboo. It's clear that he's dedicated to bidding for corporate citizenship. Here's some of that interview. I'm joined by Troy Wiseman, CEO of EcoPlanet Bamboo. First off, congratulations.

MR. TROY WISEMAN, CEO OF ECOPLANET BAMBOO: Thank you.

MR. PARBHOO: So EcoPlanet Bamboo has dedicated 20% of its plantations in Nicaragua as natural habitat to protect biodiversity. What do you hope to accomplish by setting up these habitats?

MR. WISEMAN: Well, we bought degraded land. Forests that had been degraded, a rainforest that was cut down and then used as cattle ranches. And the land got compacted, so you can't grow food. So we only buy land that doesn't compete with food security.

We could have cut down the forest that was part of the land, but we decided to make it a reserve, because eventually, as that bamboo grows, you have a canopy cover that allows all the biodiversity to come back. And because we only harvest a portion of the bamboo each year, that canopy cover never changes. We'd rather just reserve it.

MR. PARBHOO: So you mentioned fostering sustainable development by regenerated degraded pasture lands. Does this effort make sense economically for you as well as environmentally?

MR. WISEMAN: In the short term, it's tough. Bamboo-- once it becomes harvestable after seven years, you can harvest it every year. So unlike a tree that you'd plant and 15 years later you cut it down, you have to plant again. So at the beginning, it's expensive. The certification, paying 20% effectively, more of the land. Buying land that's not good soil takes an extra $1 million or $2 million before your bamboo really comes to maturity. So on the front end, it's expensive. But when you take that over the course of 70, 80 years of the plantation, and all the good that you're doing, it's a drop in the bucket. So we just felt that it's better to do it right up front and suffer through the first few years.

MR. PARBHOO: That's excellent. So your company is also being recognized in part for its focus on recruiting persons with disabilities and promoting women to managerial positions. How do your hiring practices affect the productivity of your company?

MR. WISEMAN: We don't necessarily actively pursue promoting women or people with disabilities. But if they come there, or they're qualified, they get an equal shot with everybody else. So you the woman that we talked about today, who basically started off in the nursery and worked her way up to plantation manager-- which we had 120 men walk off and strike because she's now their boss-- it wasn't because she was a woman, it's because she was qualified.

And Pedro Pablo went to law school-- got the same law degree as anybody else. Doesn't have any arms, doesn't have any legs. Had a much tougher time getting through all of that, but he was qualified. He had a law degree. And he was passionate about the environment and passionate about making a change. And so I mean, the difference is we give everybody-- it's not a curse. We bring our culture, our US-- my southern culture, where people are people to the countries. We don't adopt their culture to ours. And that's the difference.

MR. PARBHOO: Those are incredible stories. I heard you say before that there's a difference between capitalism and conscious capitalism. What does that mean?

MR. WISEMAN: Conscious capitalism is basically to me-- it's blending your head and heart, right? So capitalism today is much more about your head and your money, right? NGO and charity is about a handout, right? And so I believe in a hand up, not a handout. We'll give you an opportunity, but you've got to work hard. You've got to put in your time. You've got to be smart. You've got to learn.

And conscious capitalism is looking at the full stakeholder from the ground up, not from the top-down. And saying, how do we do this in the right way that's got a good blend. It's not about making-- we spend just as much time on sustainability, and rights, and fairness, as we do on making money. We watch every penny, but we work just as hard on sustainability.

So that balance of head and heart-- you don't have to pick. So we wanted to prove that you don't have to give up return to do good, which, basically, are people saying, you're going to get a 5% return because you're saving lives. As an entrepreneur, I say that's a cop out. You're not executing. That's why you're getting 5%. I think you can get a commercial return, a Wall Street-type return. 7%, 8%, 9%, 10% if you execute right and still do good. So I wanted to prove that. And conscious capitalism is that concept.

MR. PARBHOO: That's great. You're doing excellent work and we really do appreciate it. So thank you very much.

MR. WISEMAN: Thank you. Good to hear.

MS. PATT: Conscious capitalism-- I like that. He's definitely a great representative of the United States and well deserving of the award. Shall we move on to the final interview?

MR. PARBHOO: Sure. The third winner, in no particular order, was Wagner Asia Equipment, a large machine dealership operating in Mongolia. The company was given the award for its work with Mongolia's local and national governments to protect the environment. It rehabilitated waste sites and planted more than 900 trees in the country. Wagner also recruits and hires persons with disabilities, and provides employees with medical care and generous financing for housing. Here's a bit of that interview with Wagner Asia.

I'm joined here with Bob Barrows, former Vice President of Operations for Wagner Asia Equipment. Thank you for joining us and congratulations on receiving the ACE award.

MR. BOB BARROWS, FORMER VICE PRESIDENT OF OPERATIONS FOR WAGNER ASIA EQUIPMENT: Thank you very much.

MR. PARBHOO: So you were recognized in part for your clean-up efforts at a toxic site. As an equipment dealership, what made you focus on protecting the environment and specifically rehabilitating a toxic waste site?

MR. BARROWS: Well, I'm not sure it's accurate to say we focused on it. We focused mainly on pulling together an organization that could accomplish the things of an equipment dealer. But in doing that, we located people in a lot of different places around Mongolia. And just being good corporate citizens. But corporate citizens with equipment-- it made us kind of unique. And so when any project came along, including clean up of trash sites, toxic sites, or really anything that involved equipment, we generally get involved, because it's the thing to do. Not only that, but in some cases, especially in the villages of Mongolia, power is not always available. And so having things like power generation to supplement the villages is another thing that we did. But it wasn't the main focus. The main focus was running the business, but just being good citizens in the community that we were in got us involved in some of these things.

MR. PARBHOO: Great. You said it was the right thing to do, but do you see a direct benefit to your company through this sort of corporate citizenship?

MR. BARROWS: Well, direct is sometimes kind of a fuzzy line. But I think that it's pretty hard to be effective in any community unless you're involved in the things that are important to the community. And in Mongolia, they've been in a survival mode for a long time and haven't had the time, money, or equipment to take care of some of the things like waste treatment, power generation, and some of the things that are really essential to running any village.

And so as we've begun to work there, and as we've continued to work there, being involved in these kinds of things is mainly a function of just having the right stuff to get it done. And when we have a rental fleet that has loaders and generators, and things like that that can be used, it just makes sense. So whether it's really direct benefit or not, it certainly helps us accomplish the things that we're trying to do. And after all, we live there, too, so it benefits everyone.

MR. PARBHOO: I like that attitude-- you live there, too, you're part of the community. That's very true.

So your company was given special recognition for its focus on recruiting persons with disabilities. How do your hiring practices affect the productivity of your company?

MR. BARROWS: Well, I don't think it necessarily impacts the productivity either positively or negatively. I think as we began, we started hiring people with physical disabilities who had English language skills. And that made it easy for us to access information that wasn't in English, that was important to us. And so it wasn't a direct deficiency thing, but those people were very important as we developed an awareness of what was being said in the community about things that were important to our business.

MR. PARBHOO: Thank you very much for everything you've done.

MR. BARROWS: My pleasure.

MS. PATT: Another impressive winner who's doing important work.

MR. PARBHOO: Right. They deserve the recognition. So congratulations again to the winners and all the finalists.

MS. PATT: And thank you all for listening to another episode of Inside Diplomacy. If you like the podcast, please subscribe to us on iTunes.

MR. PARBHOO: And please leave a comment on our Facebook page, Facebook.com/EconBizEngage, or Twitter @EconEngage.

MS. PATT: See you next time, Omar.

MR. PARBHOO: See you, Emily-Anne. Bye, everyone.