New guidance on foreign companies' business ethics

A Ministry of Commerce subsidiary has issued draft corporate social responsibility (CSR) guidelines for foreign companies.

Although the draft Guidelines on Corporate Social Responsibility Compliance for Foreign Invested Enterprises, issued by the Chinese Academy of International Trade & Economic Cooperation (CAITEC), are not yet law, it is possible they will become part of the country's legislation.

“At the very least they are an indication that the Government may be favourably disposed towards foreign companies which it considers to be CSR compliant,” Clare Person, CSR manager at DLA Piper, said.

According to the guidelines, a CSR-compliant company not only follows regulations and business ethics, but also actively balances interests of all its stakeholders and voluntarily undertakes social, economic and environmental development projects.

“These guidelines are the strongest indication yet of the Government's expectations of foreign investors,” said Liu Wei, partner at DLA Piper.