Published: 2008-06-03

From Cover, issue no. 370, June 2, 2008
Translated by Zuo Maohong
Original article:

"The Ministry of Civil Affairs (MCA) is like the father of charity institutions," Wu Huanling, vice-president of AstraZeneca China, explained to her company's headquarters in Britain.

She was crestfallen when the latter didn't approve the donation her company had prepared to remit to the Ministry's disaster relief account.

To corporate leadership's understanding, a corporate donation could never be submitted to a government body, which the MCA represents. In Britain, as well as many other countries, there's a taboo against such donations, they said.

Getting desperate, Wu told them the MCA was in charge of charity institutions, and like a "father figure". "Then the father is the government," replied these firm believers of playing by the rules.

Wu thus redrafted the report, with the receiving party changed to the Red Cross Society of China and China Charity Federation, the donation was finally approved.

Compared with Duojiabao Group, whose chairperson Chen Hongdao made the decision of donating 100 million yuan during his morning tea time, AstraZeneca had experienced a delayed donating process.

By the time its donation was finally approved, AstraZeneca found itself on the "International Iron Rooster" list, which was drawn by Chinese netizens to criticize the stinginess and sluggishness of international firms. In Chinese, "iron rooster", which means wouldn't give up a single feather, symbolizes stinginess.

Clarification then became a tough task for Wu. The day after the earthquake, she said, her company donated one million yuan cash to the relief office of the Health Bureau of Sichuan Province. Drawn from the emergency budget of the China office, this money was the biggest amount they were permitted to appropriate, she claimed.

The other six million just approved by the corporate headquarters was already a second donation, she added, but payment was delayed for several days over concerns relating to the government's role in charity.

According to Wu, she chose to deposit the donation in the MCA because it was the first to announce a relief donation hotline, and people around her were more confident in the government for supervision over donated funds. It had never occurred to her that charity in China and western countries could be so different, Wu said.

The same scenario played out at other multinationals. On May 27, such firms in China were called together to discuss how they should respond to the massive earthquake in Sichuan. Though only 10 were originally expected, over 40 companies attended the meeting, according to the organizer, the Research Center of Multinationals under the Ministry of Commerce (MOC).

At the meeting, delegates of many companies stood up to clarify their donations to the media. Some complained that the MOC failed to publicize what they had done, which impelled the MOC officials to apologize to all multinationals that they had failed in part of their duties and caused unfair criticism on the latter.

Wu also suggested that the government clarify the charity system in China to companies, for example, associations which accept donation and their functions and relationship with the government.

Nokia, which donated three million cash and 5,000 mobile phones right after the quake, ranked second on the "iron rooster" list. As the situation in Sichuan worsened, the company's China office called for extra donations from the home office in Finland, its vice president Xiao Jieyun claimed.

Unable to give a clear answer to the home office's "why" on the phone, Xiao flied to Finland immediately. There, she was asked why China should be an exception since the company had donated the same amount to Indonesia for its tsunami and Myanmar for the hurricane.

Xiao then showed the "iron rooster" list to the home office officials, which was met by utter confusion. "Why should the donations be publicized? Why did they make a list?" they asked.

When she finally got the approval and went back to China, Xiao claimed, she was exhausted. Even in the case of charity, it wasn't a simple task for a multinational and multi-cultural company, she said.

Jiang Heng, deputy director of Beijing Xinshiji Research Center of Multinationals, was currently studying the subject of "active responses to the China earthquake from multinationals".

In her opinion, the corporate social responsibility concept in China was first brought in by multinationals, and their well-developed charity system and culture had been a point of pride. However, it was this mature system that had prevented them from making bigger donations during a disaster, she said.

In foreign countries, Jiang explained, corporate donations were usually dedicated to "the poor rather than an emergency", as the latter was expected to be dealt with by the government. Therefore, there wouldn't be a large sum at a time, but smaller ones over a long period.

Multinationals usually had an emergency fund so that they could use it immediately when a disaster occurred, she said, and the budget for this was usually several million.

The donations of Nokia, Yum!, and IBM to quake-stricken areas this time were all from their emergency funds, she added.

Hill & Knowlton employee Ye Jue had been trying to prove how unreliable and subjective the "iron rooster" list was. Some multinationals had donated cash and materials directly to government bodies in Sichuan, which he kept in touch with in his daily work.

For example, he said, AstraZeneca had contributed 8.1 million yuan cash, 500 thousand pharmaceutical products, and other materials worth 5.8 million yuan to the Health Bureau of Sichuan Province; Anglo American had given its donation to the Sichuan Provincial Department of Land and Resources for reconstruction and repair of damaged buildings.

Some had made the donation by their home offices to local charity institutions, where the donated amount of each organization wasn't listed. Some split donations and gave them to over four charity institutions.

The list that had been prevailing in the media was only grounded on the records of one or two organizations, and the "iron roosters" were in fact a result of mismatching of information and time, Ye argued.

He proposed to the MOC officials that the government take action to change the current donation culture in China. At bare minimum, it shouldn't publicize the names of the companies and their donations, she said.

Nonetheless, the list had been influencing the behavior of multinationals after all.

On May 12, the very day the earthquake occurred, P&G donated one million yuan out of its emergency fund. Later on, as further donations of both cash and materials were made, controversy arose in the company as to whether these donations should be publicized.

At an internal meeting, some senior officials insisted that actions of charity shouldn't be publicized at the moment in case of any suspicion over their motivation.

In the US, they said, if a company announced a donation and publicized the amount, people would think it was seeking benefits through a disaster. By tradition, corporate donation would only be clarified in the annual corporate social responsibility report.

Many Chinese employees, however, thought the company should publicize it to avoid misunderstanding. The latter's opinion was finally adopted, hence the daily updated donation amount on the homepage of P&G. Now, the same has been adopted by AstraZeneca, Nokia, and ABB, just to mention a few.

In late May, the US-China Business Council began recording donations of its member companies, which were sent to the Ministry of Foreign Affairs (MFA), the MOC and the media and published on its official website. The Council represents over 250 US companies that had business contacts within China.

Robert W. Poole, the Council's deputy director of Chinese affairs, said the Council had sent its member companies a list of local charity NGOs so that they could work more effectively with charity.