Stakeholder engagement in the developing world is still very much in process. Many non-profit organizations charge that companies have to become more involved with local communities in order to fully appreciate the impact one company can have. This could not be truer in the case of Acer in Taiwan.
Acer is a very large computer manufacturing company. Over the last 30 years, Taiwan’s information technology (IT) industry has been developing rapidly and the government has been prepared to grant many concessions to IT companies. As a result, many companies have been able to damage local communities without their consent.
In the case of Acer, many non-profit organizations charge that their suppliers have been dumping untreated wastewater into the Shiaoli River over the last 8 years. Although Acer preaches stakeholder engagement as part of their CSR strategy on their website, it is clear that there has been a gap in terms of practice. This article will examine exactly what stakeholder engagement means and Acer’s recent activities. I will also examine the activities of AUO, one of Acer’s suppliers and look at the broader case of the IT industry in Taiwan and the concessions they have received.
What is Stakeholder Engagement?
Firstly, it is important to determine exactly who a stakeholder is. Several researchers, including Freeman, Mitchell and Clarkson, have examined who a stakeholder should be. According to Freeman, a stakeholder is any group or individual who can affect or is affected by a company’s achievements. Mitchell states that stakeholders have one or several of the following: power to influence, urgency of their claim and legitimacy of their claim. Finally, Clarkson states that a stakeholder is any person who bears a risk because of a company’s actions. All of these theories are very broad and can include almost any person or group; thus, it is important to examine who Acer considers to be a stakeholder.
According to Acer’s CSR report, there are primary and secondary stakeholders. Primary stake-holders include employees, consumers, suppliers, non-governmental organizations (NGOs), the media and government agencies. Secondary stakeholders include local communities, industrial organizations and academic institutions. It is important to note that although Acer can have a large impact on local communities, those communities are classified as secondary stakeholders, which could mean that their priorities are seen as inferior to primary stakeholders.
Strategies for Stakeholder Engagement
There are many ways to engage with stakeholders. The Acer CSR report stresses “open-minded internal and external communications” however, it is also possible for companies to allow local communities to participate in decision making or allow them to review decisions. These are known as participative and collaborative approaches, respectively.
According to the Taiwan Environ-mental Action Network (TEAN), Acer’s engagement with stakeholders is inadequate. On December 17 and 18, 2008, Acer organized a CSR meeting, but did not invite local communities.
However, some NGOs were invi-ted, including Greenpeace. After the meeting, several recommen-dations were made including more transparency and more involvement from executives in CSR activities. TEAN also stated that Acer has to reconsider which suppliers it does business with, as two of Acer’s suppliers have been accused of dumping chemicals into Taiwanese rivers. Acer should also lobby the government for tougher environmental regulations.
As mentioned above, the Taiwanese government has given the IT industry many concessions over the last 30 years in order to attract more investment. In 2001, the then Taiwanese president, Chen Shui-ban, visited Hsinchu Science Park, which hosts several IT companies including AUO, which is one of Acer’s suppliers and one of the world’s largest liquid crystal display (LCD) manufacturing companies. Chen stated that the local government’s environmental regulations were too high and that companies should be able to develop without barriers. As a result, President Chen decided that companies would not have to perform an environmental impact assessment (EIA) if they wanted to apply for space in the park. This leaves local communities vulnerable to pollution and workers vulnerable to abuses from the company, especially as the Taiwanese labour movement is quite weak.
The Effects of AUO on Workers
AUO is one of Acer’s main suppliers of LCD screens. These screens contain thousands of semi conductor chips that are harmful to workers and the environment. An 8 inch wafer with hundreds of chips generates 9 pounds of hazardous waste and 14335 litres of waste water. According to studies done by Boston University epidemiologists of IBM employees, workers in the semi-conductor industry have twice as many sick days as other manufacturing workers and more deaths from cancer than the average population. In Taiwan, the largest incidence of cancer is centered on the Western Plain, which has many industrial parks and polluted rivers. It’s also interesting to note that 32 out of 55 towns with the highest death rates are downstream of rivers.
There is also evidence of high cancer rates and environmental damage in the US’s Silicon Valley. In 1984, Professor LaDou examined occupational injuries among workers in the semi-conductor industry and he found that workers had been exposed to dangerous chemicals such as benzene and trichloroethane, which were later found to be carcinogens. Silicon Valley is also home to the most superfund sites in the US, which means that dangerous chemicals have been released into the ground. It has been discovered that 20 out of 29 of these sites became contaminated because of semi conductor production.
The Case of AUO and the Central Taiwan Science Park
There has been much controversy surrounding AUO’s actions. According to the AUO website, the wastewater produced from their plants is drinkable and the amount of hormones released into the environment is acceptable according to Taiwanese law. However, AUO has been accused by TEAN and other NGOs of polluting the Shiaoli River for at least 8 years. This river is an important source of drinking water in Northern Taiwan and 500 hectares of rice fields are irrigated using the river water.
AUO has also aided in building the Central Taiwan Science Park (CTSP). According to the Taiwan Review, 53 factories have been built there and 51 percent of the CTSP has been set aside for nature parks, a recycling centre and flood detention ponds. Compared with the Hsinchu Science Park, the requirements for entering the park are quite high. All companies have to do an environmental impact assessment and determine the volume of pollution they will produce.
Although the CTSP looks very environmentally friendly, it is clear that AUO has not engaged stakeholders properly. CTSP is situated very close to food and fish farms in Changhua County. The value of fisheries in this county is $1.6 million. It is important to note that the farms are irrigated with river water and many people living in the area have stated that they would not eat their own food if it is irrigated with the river water. Because of this, the Taiwanese president stated that the waste could be dumped into the ocean; however, the coast near the CTSP is a habitat for humpback dolphins, which are endangered.
Thus, it is quite clear that AUO has not consulted with local residents, although the company was praised for its attempts to cut electricity and water consumption, waste, and its efforts to reduce business trips and the use of plastic cutlery and paper cups.
It is clear that Acer and AUO have not lived up to the expectations of local communities and that their stakeholder engagement strategies are insufficient. However, it is also clear that the Taiwanese government has allowed IT companies the room for such abuses. Although the government would like the IT industry to expand in order for economic growth to increase, it is very important to take into account labour rights and the environment.
Given that semi conductor workers suffer a large incidence of cancer and that rivers highly valued for their fisheries are being polluted, it is imperative that the government tighten regulations as soon as possible in order to safeguard the most important resources.