Manual for Azerbaijan companies Rena Safaralieva



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There is a whole range of problems considered in the framework of Western corporate social 

responsibility, which are of little relevance for Azerbaijan companies at the current stage of Azerbaijan’s 

market development. First of all, there is excessive consumption of resources by a small group  of 

developed countries when compared to the scare access to resources  in the developing world. Western 

society debates as to what degree the West should be held responsible for delivering humanitarian aid and 

contributing to development in the third world. 

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 In our country the following question might be asked: 



how ethical it is to spend millions of U.S. dollars from the public budget to repair public agencies, while 

hundreds of thousands of Azerbaijan citizens still live below the poverty line? 

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Capital repair of the Philharmonic Hall cost $37 million,

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 which seems to be extremely expensive, 



especially when at the same time, the government failed to raise funds to dredge the bottom of the river 

of Kura to prevent spring flooding, which subsequently caused enormous damage to the state and 

population in 2003.  

 

Nobody denies the need to support national cultural heritage, but it should not be done at the expense of 



the country’s poor population.   

 

Transparency and social reporting 

 

Corporate social responsibility envisions regular reporting by businesses to the society through media or 

special publications. Namely, businesses should inform the general public of their activities that have an 

environmental or social impact 

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. It is also important to publish an annual profit and loss statement with a 



social report attached. Transparency implies that business should discuss projects of vital social 

importance with the public at large. For example, in 2002-2003 organizations funding the export pipeline 

of BP held consultations with the general public and discussed the impact of the pipeline construction on 

the life of local communities. Local and foreign NGOs monitored the process of payment of 

reimbursement to local population for the land plots in Azerbaijan, Georgia, and Turkey.  

 

Limits of corporate social responsibility 

 

The obligations of businesses have reasonable limits. It is difficult to deny that an inefficient system of 

social protection, high level of unemployment, and low income of population, together with relatively 

low revenues of the private sector, do not allow our businesses to meet all needs of the poor. Business can 

only help the state to alleviate poverty, but they cannot substitute for an effective system of social 

protection. Another aspect to setting limits to social spending is the consequences of the so-called 

“dependency” syndrome. Many people will not hesitate to accept free aid, even if the needs of other 

people are much more desperate.  

 

The Caspian Compassion Project eye clinics operating in Baku, offer low-cost, donor-subsidized service 



to poor people.  The clinics staff has recently had to go to extra effort to sift out the patients in most need. 

 

Often in this country people  believe that their connections to well-off or well-connected people give 



them sufficient grounds to demand aid. We would like to quote a “cri de coeur” of one local businessman, 

who does not understand why he must  pay for the education of the son of his neighbor in a private 

university, when free of charge higher education is available or cover funeral expenses of all his relatives, 

including providing them with ample food.

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Internal procedures of companies 

 

                                                 

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 N. D. World Poverty, in Companion To Ethics, edited by P.Singer, Blackwell Publications, 1997, pp. 273-283  



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 According to different estimates, between 60 and 80% of the total population live below poverty line

 

 

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 E.Gousseinov,  Luxurious Poverty in Monitor magazine, №21, 07.06.2003, p.35 

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 Please see a sample designed by Global Reporting Initiative at www.globalreporting.org 



54

 Wealthy People Cry As Well, a letter of businessman Samir Mirzoyev, Echo newspaper, 15 March 2003  




Most companies include corporate social responsibility into their codes of ethics and social deductions are 

included by their budgets. However, many companies do not have a clear policy. We would recommend 

that businesses design an internal document containing the basic provisions and directions of a company's 

social strategy. For example, this document might set out criteria for applicants for aid for one year. It is 

possible to restrict  consideration of applications for medical treatment or supply of food and clothes to 

orphanages, houses for senior citizens and mental asylums.. Alternatively, a company may consider 

applications only from a certain vicinity or take care of a concrete facility, for example, an orphanage. 

Some businesses prefer to refrain from individual help and consider projects which benefit  the general 

public, for example, organization of festivities, repair of schools, donation of books to libraries. It is 

reasonable to restrict the types of activities to which your organization will donate, for example, or to 

establish an upper limit for the cost of an individual project.  

 

Arguments against social expenditure 

 

The most common argument against engaging in philanthropy is a lack of time and skills to implement 

social programs. However, these difficulties can be overcome. First, a company can look for volunteers 

among its staff or their family members, who might wish to volunteer  after office hours. Second, 

companies may seek partnerships with NGOs who have the necessary capacity and experience to 

effectively implement social projects. It is also often argued that the public is not well informed of social 

programs. This task can also be assigned to experts from media or NGOs.  

 

Finally, companies need not preclude social expenditures due to the additional cost they represent, as 



even small donations can positively contribute to society.  Small enterprises might also combine their 

efforts with other like-minded businesses.  

 

In Moscow many small businesses donated towards the construction of the church of Christ the Savior, 



whereas the Church of Wives–Myrrh Carriers in Baku was repaired through funds donated by one person 

- Mr. Kurbanov, a Moscow businessman of Azerbaijan  descent. 

 

Russian surveys demonstrate that social spending often pays for itself through the positive advertising 



they provide for companies, and as a  means for market expansion.

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 Many small businesses do not 



believe that they can organize a good project for the couple of hundred dollars they can afford to spend. 

This is not quite true. One million manat

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 is sufficient to organize a good New Year’s party at an 



orphanage. Finally, many businesses can provide in– kind aid. A bakery can send day-old, but still edible 

products to local orphanages, or a photo shop can make free of charge photos of an orphanage party. A 

final argument against social spending, typical of all of the post-Soviet countries, claims that it is 

impossible to pay all taxes in full and still survive in the market. In addition, social costs might feed up 

interests of numerous auditing agencies.  

 

Many Azerbaijan businessmen make donations not on behalf of their firms, but on their own behalf and 



view this as implementation of one of the five prescriptions of  the Islamic religion – “zakkat”. We regret 

to state that this prescription is not followed by many newly converted Muslims.  

 

Donations can also be used to educate and encourage staff in social responsibility. For example, BP 



organized a matching funds program in Azerbaijan. Every employee was offered to donate any amount 

affordable to the charity fund and BP added an equal amount.

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The involvement of young people in social projects is a forward-looking strategy. It is a shame that while 

there are good examples of a tradition of social spending in Azerbaijan, it is currently mostly foreigners 

who feed our orphans and teach our children to collect toys for orphans. Azerbaijan people  recognized 

Zeynalabdin Tagiev with gratitude, even during the dark Stalin period. The list of projects supported by 

Tagiev would fill a whole volume: the first public water pipe in Baku, the first secular school for Muslim 

girls, the first public illumination of streets, a school for boys, about 500 scholarships for Azerbaijan 

                                                 

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 E.A. Utkin, Business Ethics, Moscow, Zertsalo Publishing House, 2000, p. 130  



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Equivalent of about $200 at time of publication.   

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 Matching Funds Program, BP Azerbaijan Business Unit  





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