Madagascar - Responsible Business Conduct Madagascar - Business Conduct
Most large, formal sector companies, particularly those with foreign investment, apply corporate social responsibility (CSR) principles. These firms are not required to make public disclosure of their CSR policies, though most do publicize their efforts. Public opinion is favorable regarding those firms who pursue CSR.
There is no national framework for the promotion of responsible business conduct. The government enforces labor, employment rights, and consumer and environmental protections in part through periodic inspections. Social and environmental impact mitigation measures for investment projects are also monitored regularly through the existing environmental and social impact assessment framework. However, a lack of resources and capacity impedes the effectiveness of this enforcement. Nevertheless, the government does not waive requirements in order to attract foreign investment, except for some particular exemptions to its labor code provided to Free Zone companies having to do with overtime restrictions.
Many companies with foreign investment, particularly from western countries, adhere to international standards in these areas through their participation in voluntary certification schemes, such as the Worldwide Responsible Accredited Production (WRAP) principles in the apparel sector. Additional local associations, such as the Association for Free Zone Exporting Companies (GEFP – after its initials in French), which currently encompasses about half of all Free Zone certified companies, impose their own requirements for adherence to local and international standards as conditions for membership.
There is also a vibrant NGO and Civil Society sector, particularly regarding environmental, labor and population issues, but it too suffers from a lack of resources and capacity outside of the international organizations. These organizations are generally able to do their work freely.
The government participates in the Extractive Industries Transparency Initiative (EITI). The country was reinstated as an EITI candidate country in 2014 after a suspension following the 2009 coup d’état. However, the government has fallen behind on its contributions to the initiative and the EITI National Secretariat has recently had to rely on external contributions to fund its operations.
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