This document provides background on corporate social responsibility (CSR) in El Salvador. It discusses how CSR originated in Germany and other parts of Europe with a paternalistic view of businesses' moral obligations to society. In Latin America, CSR emerged amid pressure on businesses during economic downturns and a need for better economic and environmental conditions. The study surveys 463 Salvadoran businesses across sectors and sizes to determine the current level of CSR practices. It finds that most companies have codes of ethics and provide benefits beyond legal requirements. The majority of businesses support social projects and comply with international sustainability standards, showing potential to further promote CSR adoption.

1. Current Status of Corporate Social
Responsibility in El Salvador
March 2004
Business Foundation for Social Action (FUNDEMAS)
A publication by the Salvadoran Program for Corporate
Social Responsibility (EMPRESAL)

2. Presentation
FUNDEMAS, the Business Foundation for Social Action,
developed a study with the all round desire to promote and
deploy CSR practices in El Salvador, build awareness on the
importance and benefits of CSR, and contribute to the
economic and social development of the country.
FUNDEMAS fostered the development of this study to fulfill
its goal to uphold and promulgate corporate social responsibility
practices among Salvadoran entrepreneurs, mainly through
the domestic and international exchange and dissemination
of experiences on CSR, and networks linked to institutions
similar to FUNDEMAS.
It is important to highlight that these goals are in full harmony
with those of the W. K. Kellogg Foundation and the World
Bank, reason why, FUNDEMAS has received financial support
from the W.K. Kellogg Foundation and technical assistance
from the World Bank. Following is the study “Current Status
of Corporate Social Responsibility in El Salvador”.

3. Acknowledgements
FUNDEMAS, the Business Foundation for Social Action,
profoundly appreciates the support of the following
organizations and individuals:
1. W. K. Kellogg Foundation, for their financial support.
2. World Bank, for their technical assistance.
3. National Private Sector Association (ANEP), through Ing.
Waldo Jiménez, its Technical Manager, for the technical
contributions to this study.
4. Lic. Italo Cardona, member of the International
Programme for the Eradication of Child Labor (IPEC),
of the International Labor Organization (ILO), for his
observations.
• Ing. Francisco Escobar Thompson, coordinator
• Ing. César Catani Papini
• Lic. Jorge Zablah Touché
• Lic. Juan Valiente
• Dr. Roberto Rivera Campos
for their follow up, comments and observations to the final
draft of this study.
• Our special gratefulness to Lic. Roberto H. Murray
Meza, for his invaluable support, comments and
recommendations.

5. Table of Contents
Executive Summary 6
Introduction 9
Background 10
Chapter I 12
Concept of Corporate Social Responsibility
1. CSR History 12
2. CSR Approaches 13
3. CSR Concepts 13
4. CSR Benefits 14
5. CSR in El Salvador 15
Chapter II
Research Analysis 17
1. Principles, Ethical Values and Governance 17
2. Workplace and Human Rights 23
3. Market 34
4. Environment 38
5. The Community 44
6. Public Policy 57
Chapter III 60
Research Conclusions
Chapter IV 63
Ranking according to the International Finance
Corporation (IFC) (World Bank)
1. Business Sustainability Assessment 63
2. Sustainability Indicators 63
3. IFC ranking of surveyed businesses 65
4. Importance of IFC ranking 65
FUNDEMAS Information 66

6. Executive Summary
This study was executed by the Business developed this base line research, part of a much
Foundation for Social Action (FUNDEMAS), at more ambitious endeavor.
the initiative of the Salvadoran private sector, to
shed light on the status of CSR activities in the Besides, and with the technical assistance provided
country and, from this point of reference, urge by the World Bank, respondent Salvadoran
the private sector to become more proactive in companies were ranked using the IFC
streamlining those practices that meet the current sustainability framework indicators, which rate
and future needs of the Salvadoran population. the global performance of businesses.
The FUSADES Team was hired to develop the
data gathering task, based on a broad survey Main Findings
covering the nine CSR areas: Mission and vision,
ethical values, workplace, human rights, the Findings were grouped into six areas. The first
environment, marketing, community, public policy area grouped ethical principles, values and
and governance. A total of 463 businesses, governance. Outcomes showed that 75% of the
ranging from large to small, and covering the surveyed companies have a Code of Ethics that
whole gamut of economic activities were surveyed governs their activities and which is reviewed at
nationwide, in order to determine their current least once a year. It also revealed that the Code
level of development with respect to CSR and is drafted with the participation of owners,
its applicability in the country. shareholders, management and members of the
Board of Directors. Principles and Ethical values
The research tool was based on the one used by are disseminated among staff, customers and
The Instituto Ethos de Brasil, the Brazilian suppliers.
counterpart of FUNDEMAS, which has ample
experience on this topic and particularly on CSR The second area covers the workplace and human
indicators. This tool was tailored to the Salvadoran rights. The average work shift among the surveyed
economic, social and cultural reality. companies is 44.6 hours a week, slightly higher
than the 44 hours prescribed in our current law,
Purpose and Scope of the Study and overtime wages. The surveyed companies
Determine the current level of deployment and enter into contracts with their employees and
application of the CSR concept among the private communicate staff their rights and duties.
sector companies of the country. Build on the
current status of CSR data to promote a wider A striking feauture is that the majority of the
adoption and disseminate CSR in El Salvador. businesses surveyed provide social security and
other benefits beyond the regulatory requirements
To this end, FUNDEMAS, with the financial of the country, offering workers additional benefits
Support of the W.K. Kellogg Foundation, such as bonds, life insurance, individual health
6

7. insurance, education scholarships, among others. At the community level, businesses mainly support
Companies also assist their employees in their programs on education, the environment, health,
retirement proceedings, offer job opportunities technical training, and housing. Companies offer
to the physically impaired, evaluate the students internships to provide them with hands
performance of their staff members, invest in on working experience, and in turn they reap the
professional and technical training programs, and benefits of an enhanced image and reputation, as
comply with legal provisions respect to well as positive publicity for the company and
occupational hazards, occupational health and the promotion of solidarity.
working conditions. Public policy is the next in line.
The third area covers marketing. Respondent In this area, a predominant 95% of the surveyed
companies have policies and standards in place companies affirmed they do not support any
to screen and source domestic and international political candidate, or any political party; one
suppliers based on quality, price and deadlines. third stated that they have enforced anti corruption
They also have ongoing programs to enhance and anti bribery policies respect to any public or
their products, services and processes. private authority. Almost half of the surveyed
Additionally to this, they also have a Customer companies participate in business guilds and
Service Unit, and formal communications and forums and contribute in the making of social,
advertising policies. economic and political proposals.
The fourth area relates to the environment. Half On the other hand, a salient 72% of the surveyed
of the surveyed companies stated that they do businesses meet the minimum international
not impact the environment with their economic performance standards in accordance with the
activities, while the other half is aware of the methodology provided by the International
significant bearing that their processes have on Finance Corporation (IFC), of the World Bank;
the enivornment, and consequently have instituted 40% add value to their environmental, corporative
an emergency plan, developed research, governance, and community economic activities;
contributed with solutions and invested in projects 11% have undertaken a leadership role in best
to enhance the environment. To a lesser extent, practices.
the surveyed companies participate in
environmental seminars, sponsor environmental These outcomes reflect the fact that Salvadoran
projects, and carry out recycling projects. companies satisfactorily comply with international
standards and that one out of every ten sustain
The fifth area relates to the community. Sixty leadership practices. All of the above allows to
percent of the surveyed companies collaborate state that there is a platform from which to
in social projects, with either private, community, promote the adoption of CSR practices among
municipal or governmental institutions. These Salvadoran businesses.
contributions range from cash, goods or services
to equipment, material resources and skilled staff.
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9. Introduction
As a result of increased economic globalization, Salvadoran businesses have incorporated CSR
business transactions are continuously happening policies, positioning the entrepreneurial sector at
among companies of divergent sizes, sectors, the forefront of corporate social responsibility
continents and regions, to provide the goods and in the country.
services demanded by markets outside their
national borders; consequently, many enterprises This document analyzes the concept of corporate
die around the globe while others emerge every social responsibility, its background, its various
day, and only the fittest survive. approaches, benefits, and the quantitative and
qualitative analysis of the current status of CSR
El Salvador has learned the lesson taught by its in El Salvador. It is based on a comprehensive
history: economic growth cannot be separated survey, followed by the conclusions of the study
from social growth in this country. Also, that and finally, the ranking of Salvadoran enterprises
growth can be pursued through the creation or in accordance with the sustainability framework
preservation of sustainable sources of employment, of the IFC (International Finance Corporation)
and the protection of the environment. The of the World Bank.
private sector of El Salvador, cognizant of this,
responded to the appeal to strategically incorporate The findings of this endeavor will be translated
a set of business practices that encourage the into an outline portraying the position of our
advancement of their employees, the community country with respect to corporate social
and the environment by means of a Code of responsibility initiatives. The free trade
Conduct and ethical values that contribute to the negotiations and foreign investment attraction
economic and social welfare of the company and are just two of the many opportunities where the
society as a whole. Salvadoran business sector will be able to
demonstrate, or test its competitiveness. CSR
In this context, the strategy to face these challenges equates competitiveness, and businesses that
derives, in part, from corporate social adopt CSR practices will position their companies
responsibility practices. at an international level.
9

10. Background
In late 2002, FUNDEMAS, carried out a research and Usulutan. Firms were distributed by sector
based on the nine CSR areas: Mission and vision, and size; sectors were distributed in accordance
ethical values, workplace, Human rights, with the Uniform International Industrial Rating
environment, marketing, community, public policy (UIIR), based on a double digit figure, while size
and governance. The purpose of this research was distributed based on a series of parameters
was to determine the current level of development such as the number of employees, sales volume,
of the CSR concept and its application in the and asset price. The following table shows the
country. detailed distribution of the sample:
The research tool was based on the one used by
The Instituto Ethos de Brasil, the Brazilian Distribution of Companies in the
counterpart of FUNDEMAS, which has ample effective sample
experience on this topic and particularly on CSR SECTOR/SIZE Total Large. Med. Small.Micro
indicators. This tool was adapted to the Salvadoran
TOTAL 463 242 69 65 87
economic, social and cultural reality.
INDUSTRY 183 131 18 19 21
Food, beverages and tobacco 43 22 6 7 8
The survey was completed parallel to the quarterly Textiles, apparel and leather 67 46 6 6 9
Survey on Business Dynamics developed in late Wood products 7 4 1 0 2
Paper and printed products 13 10 1 1 1
2002, by the Economic and Social Studies Chemical products 33 30 1 2 0
Non metal minerals 10 5 2 2 1
Department of the Salvadoran Foundation for Metal minerals 4 4 0 0 0
Economic and Social Development (FUSADES). Metal products, machinery and equipment 1 1 9 1 0
Other industries 1 1 0 0 0
A total of 463 businesses were surveyed, covering CONSTRUCTION 27 21 5 1 0
a wide range of sizes and sectors, with the COMMERCE 129 46 21 31 31
exception of agriculture. The methodology used Retailers 20 17 3 0 0
Wholesalers 76 23 14 21 18
by FUSADES was followed to monitor the Restaurants and hotels 33 6 4 10 13
Salvadoran entrepreneurial drivers. The companies
SERVICES 118 44 25 14 35
surveyed were selected from amongst the 24,500 Transportation, storage and communications 28 8 4 6 10
companies from the data base of FUSADES, Financial services and Insurances 16 14 2 0 0
Real estate and services rendered to firms 16 2 3 0 11
located in the metropolitan area of San Salvador Personal services 58 20 16 8 14
and the cities of Santa Ana, San Miguel, Sonsonate
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11. Thirty five university students with over three Digit Uniform International Industrial
years of study were selected from the FUSADES Ranking.
surveyors’ data base. Surveyors were given
additional training on the mechanics of data 4. Sample Error:
application by FUSADES and on Corporative
Social Responsibility by FUNDEMAS. Nationwide: 5% (for a significance level
of 95%).
The technical considerations of the research are
detailed as follows: 5. Methodology:
Personal interviews. Thirty five university
1. Survey Universe:
students selected from the FUSADES
24,500 businesses data base of normally used surveyors, visited the
various businesses to conduct the surveys after
2. Valid Surveys: receiving training, as mentioned before.
Distribution by size was based on the combination
Nationwide: 463 surveys (out of the universe of
of the number of employees, sales volume and
the survey).
asset value.
3. Sampling:
6. Period of execution:
A distribution pattern based on sector and size;
Sectors were distributed according to a double From September 23 to November 8, 2002.
11

12. Chapter I:
Concept of Corporate Social Responsibility
1. CSR Background1 of the business sector and the State is well defined
and the latter is able to work effectively. The
The exact origin of the CSR concept cannot be
basic functions of the State are the same in all
traced back into history. Some believe it was
regions, but in Latin America, it is of outmost
first enacted in Germany where social laws such
importance to build a more solid and efficient
as health care and maternity insurance, 4
state.
occupational hazards, occupational health,
retirement benefits and death were included in
The need to reach better economic and
their labor provisions. Notwithstanding, the
environmental conditions for our societies drove
concept was being mentioned in other parts of
the business sector to apply corporate
the European Continent under a paternalistic
responsibility policies. Under this context, a
vision, stating the moral obligation voluntarily
group of entrepreneurs representing different
undertaken by businesses as an institution, towards
2 geographical areas of the Latin American region
society as a whole.
met to share ideas and debate on CSR related
topics; This effort resulted in the alliance of
Within the American continent, CSR was mainly
organizations that share a common vision, and
manifested as the individual right to life, freedom
promote the practice of CSR initiatives throughout
and the pursuit of happiness. The business
the American continent, by disseminating
world faced enormous pressure during the
information and creating opportunities for the
aftermath of the great depression in the United
exchange of ideas related to this topic. EMPRESA
States of America, and the economic
(The Forum of Private Businesses and Social
consequences at the end of World War II, due
Responsibility in the Americas), which today
to the changes in the world´s economic, social
3 groups twelve organizations highly committed
and political systems.
to CSR in the American Continent, constitutes
the natural delivery of these highly committed
CSR has reached a preponderant role in the
organizations that work towards disseminating
European continent, and is seen under a different
the benefits of CSR by preaching with their
perspective. Contrary to the US society,
example as they conduct their businesses with a
Europeans demand their rights effectively; their
socially oriented agenda and in a responsible
civil society is well organized and the role of the
manner.
State and its responsibilities are clearly outlined,
whereby the fine line that separates the valid role
1 Thesis “Proposal for the implementation of corporate social responsibility in 3, 4, and 5 fork restaurants in the municipality of San Salvador”
2 www.chile-hoy.de/opinion-ensayo/280202_estadobienestar.html. www.pnud.cl/pnud/pdf/mesas%20.pdf
3 http://usinfo.state.gov/journals/itsv/0197/ijss/ijss0197.htm
4 Interview with Maria Emilia Correa, vice president of social responsability and enviroment of Grupo Nueva, Instituto Deres, Uruguay, July/2003.
12

13. 2. Different CSR Approaches5 and that is also affected by the actions of the
company.
CSR has gone through several stages along its
history, characterized by various approaches Stakeholders are all those persons and
depending on the time of their development. organizations affected by the corporation or who
Following are some: can positively or negatively affect the corporation.
2.1 The Liberating approach which expresses 3. Diverse CSR Concepts
that businesses have one sole social responsibility
which is to use their resources and get involved There are various concepts of CSR as there are
in activities that render increased profits.6 several approaches that cover every area of action
involving CSR in its holistic concept. Following
2.2 Self-interest is another approach that states are some:
that society responds to the socially responsible
activities undertaken by businesses; and that social 3.1 According to the Centro Mexicano para la
responsibility can be seen as a strategy in the Filantropía (CEMEFI), CSR consists in fully
quest for business success or maximum profits.7 complying with the business´ economic, social
and environmental goals both internally and
2.3 Theorists use the personal morality approach externally. CSR means to be committed to one’s
to determine corporate social responsibility. This country, work towards social development, invest
approach analyzes both the structure and nature time, talent and resources to build a future with
of the corporation itself. If it is assumed that a better opportunities for all. It means to invest in
business is capable of acting and that its actions human resources for them to become the agents
can be compared to those of a natural person. It of change by means of their integration and
can be concluded that corporations can be morally linkage with the community. A socially responsible
liable in a fashion similar to individuals.8 business is one that besides offering quality goods
and services also generates profits and jobs, pays
2.4 The stakeholders approach states that the its taxes, becomes creative in identifying the
duty of a corporation is not limited to its problems of the community and strives to find
shareholders but to a larger group of stakeholders, alternatives for their solution. Why? Because it
comprised of the latter but also by every person is a win win situation. The money the business
without whom the company could not survive invests in development will improve the living
5 Thesis “Proposal for the implementation of corporate social responsibility in 3, 4, and 5 fork restaurants in the municipality of San Salvador”
Universidad Dr. José Matías Delgado, School of Economy
6 Friedman, Milton, “Social Responsibility. A Subversive Doctrine”, The Sunday Times Magazine, September 13, 1970 / The Social Responsibility
of a Business is to increase its Profits”, New York Times Magazine, Sep. 13, 1970.
7 Aram, John D., “The Paradox of Interdependent Relations in the Field of Social Issues in Management”, Academy of Management Review, 14(2),
1989, 266-283. Arlow, Peter y Martin Gannon, “Social Responsiveness, Corporate Structure and Economic Performance”, Academy of Management
Review 7, 1982, 235-241.
8 French, Meter “Corporate Moral Agency”, en W. Michael Hoffman and Jennifer Mills Moore, eds., Business Ethics: Reading and Cases in Corporate
Morality (New York: McGraw Hill Editors, 1990), page. 194-292.
13

14. status of all the inhabitants of the country. The incorporates these interests into its planning to
business in turn receives a series of benefits that respond to the demands of all, not only
impact the relations with its shareholders, shareholders and owners.
employees, suppliers, creditors, and consumers.9
3.5 Stephan Schmidheimy (a Swiss national) and
3.2 According to Business for Social Responsibility President of the Grupo Nueva, of which
(BSR), CSR generally refers to business decisions AMANCO is a part), states that CSR is the
closely linked to ethical values and the compliance capacity of a business to handle the positive and
with legal requirements and the respect for human negative impacts of its operations on its
beings, communities and the environment. In stakeholders. Each business has to think and
other words, CSR is equal to managing a business decide who are its stakeholders and action within
complying or excelling the ethical, legal and society, moving from the traditional concept of
commercial expectations of society.10 philanthropy to responsibility, understood as
corporative citizenship. The adherence of staff
3.3 Acción Empresarial of Chile believes there members to socially responsible labor is possible
is not one sole definition for corporate social with the commitment of high management,
responsibility; but rather a vision of a business continuous dialogue with employees, and learning
that incorporates the respect for ethical values, from past mistakes.
persons, the community and the environment.
CSR is seen by leading businesses as something 4. . CSR Benefits
more than a set of concrete practices, occasional
or market driven initiatives, public relations or CSR benefits can be measured through qualitative
other business benefits. CSR encompasses a wide and quantitative data. Several businesses have
range of policies, practices and programs experienced great tangible benefits both in their
integrated through business operations backed operations and in some specific CSR issues.
up by sound decision making and rewarded by
management. The benefits reaped by a socially responsible
business can be combined with efficiency and
3.4 Instituto Ethos of Brazil, states that Corporate effectiveness. These benefits can be evidenced
Social Responsibility is a way of conducting by measuring the impact of a business upon
businesses in which the business becomes co- society, the community and returning these
responsible for social development. A socially benefits. It is a win win strategy . A Socially
responsible business is one that listens to the Responsible business takes into account the costs
interests of several parties (shareholders, and benefits of its operations on society and the
employees, suppliers, consumers, community, environment. A Socially Responsible business
government and the environment) and complies with the legal requirements established
9 Centro Mexicano para la Filantropía - CEMEFI
10 Business for Social Responsibility – BSR
14

15. by the country it operates in, excelles in investing The commitment of a socially responsible business
“more” in human capital, the environment and in is to contribute to sustainable economic growth,
its relations with shareholders, suppliers and working with its employees, their families, the
customers. local community and society to improve the
quality of life of inhabitants. Business success is
The concept of CSR is mainly managed by large achieved by a set of practices aimed at benefiting
enterprises although socially responsible practices society.
exist in all types of public and private businesses,
including small and medium sized ones (SME) 5. CSR in El Salvador
as well as cooperatives. Each decides on the
importance, and especially the priority, of each Salvadoran businessmen have grappled with the
one of the nine areas encompassing CSR, in CSR issue for several years. One of the first
accordance with the type and size of the business, actions was the contribution of FUSADES in
aimed at strengthening its strategic objectives. 1999 with the document “La Responsabilidad
CSR works not only to create or make socially Social de la Empresa Privada en El Salvador”
responsible businesses. Employees also decide (Corporate Social Responsibility of Private
where to work based on these criteria and measure Businesses in El Salvador) an exploratory study
the contributions of a company to society. regarding the social responsibility of private
Employees share the perception that Socially enterprises in a sustainable development context”,
Responsible businesses offer more stability. Other based on a philanthropic vision, which was
benefits are lower turnover of skilled personnel, common in those days, and centered exclusively
and customer long term loyalty. on the community.
Employees, customers and the community The need to reach better economic, social and
informally grant businesses a license to operate environmental conditions, impelled Salvadoran
as a way to show that they believe in them, leading businessmen to create a foundation headed
Businesses must communicate with stakeholders by Roberto H. Murray Meza, to address CSR
to be granted this license; they must communicate issues.
their impact on society as a sign of operational
openness and transparency. A company’s social This is how the Fundación Empresarial para la
report could become an accountability Acción Social (FUNDEMAS) was born in May
communications tool, by which a business can 2000. It is totally rooted on businesses and seeks
demonstrate which activities are voluntary, the to contribute to the economic and social
contributions made to the community, or social development of El Salvador, by strengthening
projects, labor benefits over the legally established the social responsibility of private enterprises,
ones, ethical values, the code of conduct, and the promoting business philanthropy, fostering
impact of these decisions on the environment, entrepreneurial behavior, facilitating the
among others.11 development of social values and an
11 Promoting a European framework for corporate social responsibility. Green Paper. Industrial relations and industrial change. Employment &
Social Affairs. European Commission. July 2001
15

16. entrepreneurial culture, to face the modern global enterprises, foundations, guilds, associations, and
challenges ahead, through social responsibility higher education institutions.
practices, as engines of wealth that encourage an
equal, stable and sustainable society. FUNDEMAS as a member of the international
network Forum EMPRESA, can communicate
FUNDEMAS currently works with private with members such as BSR (Business for Social
businesses, non governmental and international Responsibility) in the USA, CBSR in Canada,
organizations, higher education institutions, AliaRSE in México, CentraRSE in Guatemala,
entrepreneurial associations and guilds, to Peru 2021, Instituto Ethos in Brasil, Acción
implement activities leading to social responsibility Empresarial in Chile, Deres in Uruguay,
practices and to drive CSR as a strategy to achieve Fundación del Tucumán in Argentina, CEDIS
success and contribute to sustainable development. and COMPAS in Panama, and learn about CSR
This is done by working together with employees, related activities carried out in each member
their families, local community, and society to country, and the achievements reached. Materials,
enhance the life standard of inhabitants and methodologies, tools and data are available
benefit businesses, the development of the through the network, as well as the lessons learned
community and the country. in each country. The international network handles
the same CSR concept, which allows standardizing
FUNDEMAS is a founding member of Forum and disseminating the CSR concept in such an
EMPRESA an international network with eighty ample manner that it has become an imperative
two founding members and fourteen new in the strategy of a company within the
members, comprised of individuals and private international arena.
16

17. Chapter II:
Research Analysis
Corporate Social Responsibility has become the 1. Principles, ethical values and governance
strategic imperative of competitive businesses in
2. Workplace and human rights
El Salvador. It is viewed as a set of business
practices aimed at contributing to the harmonious 3. Marketing
economic and social development of the country. 4. Environment
A means to benefit society and the business sector,
by rendering businesses more competitive, thus 5. Community
enhancing the competitiveness of El Salvador. 6. Public policy
The nine areas in which corporate social CSR related topics were analyzed based on these
responsibility is reflected are: sections and included in the survey. Outcomes
are presented based on three points of view: a)
1. Mission and vision sector (industry, construction, trade and services),
b) size (large, medium, small and micro) and c)
2. Ethical values geographical region (metropolitan area, Santa
3. Workplace Ana, Sonsonate, San Miguel and Usulután).
4. Human rights
1. Principles, ethical values and governance
5. Environment
Principles, ethical values and governance are
6. Marketing
understood as the explicit commitment of business
7. Community objectives towards CSR. Businesses incorporate
8. Public policy this concept in their mission, vision, strategic
plan, relevant documents and internal policies.
9. Governance CSR is institutionalized in a business as these
concepts are incorporated internally.
Understanding the status of a country’s CSR can
be simplified by grouping these areas into six Values help create a culture that supports an
sections, correspondingly with their similarity ethical behavior. The definition of ethical values
and the questions drafted. These sections are: lays the foundation for a code of conduct in the
enterprise, and its enforcement in the decision
making process, employee training and education.
17

18. Besides, it also refers to the creation of managerial It is estimated that 59% of the micro businesses
systems that support and reward CSR behaviors lack a code of ethics of any type, being this group
and practices throughout the company, such as the one less involved in this practice.
independency and diversity if the executive
structure, and board of directors (measure, report By region: The proportion of firms with a formal
and audit), the incorporations of CSR in decision code of ethics is higher in the metropolitan area
making (policies, training and performance) and (40%) than in other areas of the country. The
the commitment of all stakeholders: public and use of informal codes of ethics is more common
private sectors and international organizations. in firms located in San Miguel (57%) and
These are key aspects that should be taken into Sonsonate (43%). Regarding the firms that lack
account when defining the corporate social a code of ethics, it was shown that the areas of
responsibility strategy of a business. highest impact are Usulután (58%) and Sonsonate
(51%).
1.1 Code of Ethical Principles and Values
1.2 Participation in the drafting of ethical
A Code of Ethical Principles and values consists principles
of a code that guides the activities of a business.
A total of 336 firms out of the universe of
Three out of every four firms surveyed have a respondents affirmed having a code of ethical
code of ethics: 32% of the companies have a principles and values, representing a salient 73%
written code, while 41% have a verbal code. The of the total sample.
remaining 27% lacks a code of this nature.
In general terms, business owners or shareholders
By sector: The proportion of firms with a verbal are more involved in the drafting of ethical
code of ethics is similar in the industrial, services principles, with a 73% participation rate, followed
and construction sectors, around 40% and 52%, by managers and board members with 62% and
similar to the behavior of firms in those same 51% participation rate respectively. This
sectors with a written code approximately 22% corroborates the high level of commitment of
and 26%. Regarding trade, it was observed that these groups to the formulation of a code of
62% of the companies have either a verbal or a ethics in their firms.
written code and that the remaining 38% lacks
a code of ethics. By sector: The survey detected that the
participation of owners or shareholders in the
By size: It was observed that a formal code of drafting of a code of ethics was equal in the
ethics prevailed among large enterprises (48% of industrial, trade and services sectors with a
the large firms have this type of code); while an participation rate between 68% and 78%, and
informal code of ethics prevailed among medium that the construction sector attributes a very high
and small businesses (54% and 52%, respectively). rate to this issue reaching an outstanding rate of
18

19. 90%. Regarding the participation of board participation dropped in the remaining
members, it was evidenced that their participation departments of the country.
is higher in the industrial sector.
1.3 Periodical review of Ethical Values and
In general terms, the participation of the various Principles
leadership groups in the industrial sector is higher.
Worker participation is equal in the different A total of 336 firms out of the universe of firms
sectors with an average rate of 25%. surveyed, equal to 73% of the total sample,
affirmed having a code of ethical principles and
By Size: The participation of owners and values.
shareholders in the formulation of a code of
ethics is greater in small and micro businesses Of these only 62% reviewed its ethical principles
(86% to 97%) than in medium and large firms and values at least once a year.
(63% to 69%). This can be explained by the fact
that this task could be concentrated on owners By sector: Services, trade and industry show a
and shareholders in small firms, while in larger similar average regarding the periodical review
firms more people could be involved in this task. of ethical principles and values, ranging between
60% and 66%, compared to the 37% review rate
Board members and managers participate more in the construction sector.
in large firms compared to their participation in
medium sized businesses, while the participation By size: The review rate among small, medium
of owners and shareholders is the same in both and large businesses ranges between 51%, 67%
categories. Worker participation ranges between and 66% respectively, while the micro businesses
22% in the micro business sector and 32% in the review their codes of ethics in 44% of cases.
medium sized businesses.
By region: A high percentage of the firms located
By region: Board member participation in the in Santa Ana (78%), Sonsonate (72%), the
elaboration of ethical principles and values was metropolitan area (63%) and Usulután (57%)
(60%) and manager participation (75%) was more periodically review their ethical principles and
frequent in the metropolitan area of San Salvador values. San Miguel is the department with the
and in Santa Ana, (48% and 56% respectively). lowest rate of review of ethical principles and
The participation of owners was high throughout values. (42%).
the country, over 70%.
1.4 Participation in the review of ethical
Usulután showed the highest level of worker principles and values.
participation in the formulation of ethical values
and principles, with a rate of 57%, while only A total of 208 firms out of the universe of
27% participated in the metropolitan area. Worker surveyed businesses affirmed having reviewed
19

20. their ethical principles and values at least once a By size: The participation of owners and
year, representing 62% of the total number of shareholders in the review of ethical principles
firms with drafted ethical principles and values. and values is 68% in medium and large firms.
The size of the sample of small and micro
Owners and shareholders are also dominantly businesses that review their ethical principles and
involved in the review of these same principles values does not allow to extract any conclusion
and values, similarly to the findings regarding the form these groups; despite the aforementioned,
drafting of the Code of Ethics, followed by outcomes show a participation of 82% and 81%
managers and board members with a participation respectively. Board members and managers
rate of 70%, 69% and 52% respectively. participate more in large firms.
By sector: The participation rate of owners and By region: Board members and managers
shareholders in the review is 57% in the services participate more frequently (61% and 68%
sector, 74% in the industrial and trade sectors, respectively) in the review of ethical principles
and 86% in the construction sector. The and values in the metropolitan region, compared
participation of board members is equivalent in to the remaining parts of the country.
the various sectors, while managers participate
more frequently in the industrial sector with a
rate of 80%.
Principles and Ethical Valves
100
90
80
70
60
% 50
40
30
20
10
0
Existance of code Shareholders participation Ongoing periodical reviews Shareholders review
principles
Industry Construction Commerce Services
20

21. 1.5 Dissemination and communication of between 69% to 79%, to customers between
ethical principles and values 23% and 24% and to suppliers between 8% and
24%.
A total of 336 firms out of the universe of
surveyed firms affirmed having a code of ethical By region: Principles and values were
principles and values. communicated to customers in a high proportion
in the Department of Usulután (100%) and the
The main groups these ethical principles and metropolitan region (79%); while Usulután (64%)
values are addressed to are: administrative staff and San Miguel (36%) better disseminated these
and workers in 77% of the firms; mid management principles and values to their suppliers; and the
in 66% of the firms; customers in 35% of the metropolitan area (23%), Santa Ana (22%) and
firms; and suppliers in 21% of the firms. Usulután (21%) did a better job disseminating
these principles and values compared to the rest
By sector: The number of firms that communicate of the regions in the country.
these ethical principles and values to their mid
management, workers and administrative staff is 1.6 Strategic Planning: policies, strategies,
more frequent in the industrial sector with a rate objectives, action plans
ranging between 74% and 80%. Trade ranges
between 59% and 79%; Services between 57% A total of 463 firms, that is the total universe
and 76%; construction in 85%. surveyed, answered this question.
Thirty percent of the firms in the trade sector Outcomes show that owners or shareholders are
communicate their principles and values to their the most active groups regarding strategic planning,
customers, 33% in the industrial sector, 41% in with a participation rate of 74%. This group is
the services sector and 50% in the construction followed by managers with 56% and board
sector. Also 23% of the firms in the trade sector members with 45%.
communicate these principles and values to their
suppliers; 21% in the industrial sector, 41% in By sector: The participation of shareholders in
the services sector and 13% in the construction the construction industry was dramatically higher
sector. with a participation rate of 89%. The participation
of board members and managers in strategic
It is important to highlight that the size of the planning is lower in the trade sector compared
sample of construction firms with a code of ethics to the remaining business sectors, ranging between
does not allow extracting conclusions regarding 35% and 40%.
this group.
The participation of mid management (between
By size: The communication of ethical principles 22% and 28%), administrative staff (15% and
to managers, mid management and administrative 22%) and workers (6% and 10%) is similar among
staff increases as the size of the firm also increases, the various sectors.
while the communication to workers ranges
21

22. By size: The participation of owners and By size: The participation of board members in
shareholders in the strategic planning of medium, executive positions is 77% in large businesses
small and micro businesses ranges between 78% and 75% in the micro business sector. It is
and 88%. The participation of owners and worthwhile highlighting that this question applies
shareholders in large businesses is limited to 66%. to the majority of large businesses but that the
The participation of board members is higher in level of applicability drops as the size of the
large businesses with a rate of 73%, compared business decreases.
to other business sizes.
By region: The participation of board members
On the other hand, the participation of managers in executive positions is 78% in the metropolitan
increases as the size of the business increases, region, 74% in Santa Ana, 65% in San Miguel
conversely to the participation of workers that and 67% in Sonsonate. The applicability of this
decreases as the size of the firm increases, with issue decreases outside the metropolitan area and
the exception of the micro business in which main cities.
only 1% of the workers participate in strategic
planning activities.
Governance
By region: Owners and shareholders of businesses
located outside the metropolitan area participate
more frequently in the strategic planning of their 90
businesses, contrary to the businesses located in 80
the metropolitan area where board members, mid
70
management and managers are more involved in
this activity. 60
50
1.7 Participation of board members in %
40
executive positions within the business
30
A total of 310 firms out of the universe of 20
surveyed businesses, affirmed that this concept
10
was applicable to their businesses. Board members
of 76% of all businesses participate in executive 0
Services Commerce Construction Industry
positions within the company.
Board of directors in executive positions
By sector: The industrial and construction sectors
Board of directors strategic planning
(59% and 67% respectively), have a higher
participation of board members in executive Dissemination and comunication to workers
positions compared to the trade and services
sectors with 42 and 46 percent participation rate.
22

23. 2. Workplace and human rights By region: The average working week in Usulután
is 50 hours of work, followed by San Miguel with
Human rights in the workplace are understood 46 hours, while the businesses in Santa Ana and
as a fair and equitable working environment, the metropolitan area comply with the 44 hours
through the involvement of employees as a key per week regulatory schedule.
resource, the creation and compliance with human
resource policies, sound labor conditions, job 2.2 Overtime compensation
security, and occupational safety. The respect for
the human rights of internal and external Sixty six percent of the businesses pay overtime
customers of the business are also taken into compensation to their workers, and 33% to their
account, as well as the definition of policies and administrative staff. The businesses that do not
the monitoring of a code of conduct, the diversity pay overtime include professional services and
in the hiring of staff and suppliers, the eradication per item contracts, and the ones complying with
of child labor, the hiring of physically challenged the established 44 hours per week regulation. In
persons and equal opportunities for women and general, 96% of the surveyed businesses do not
men, among other. The labor law of El Salvador pay overtime compensations to their managerial
was used as the basis of this analysis. and executive staff because they are under a
different scale of benefits, including premiums
2.1 Working Hours and bonds per achieved goals, as well as special
compensations and privileges.
The hours of work of the surveyed businesses
average 44.6 hours per week, slightly over the 44 By sector: Businesses in the industrial and
hours established in the legislation in force. It is construction sectors pay more overtime to their
important to highlight that some businesses have workers (83% and 74% respectively), followed
production shifts over 44 hours, in 12 hour shifts, by trade (61%) and services (41%).
to comply with the legal provisions regarding
labor hours. Overtime is dealt with in a following By size: Overtime compensation increases as the
paragraph. size of the business becomes larger. For instance:
87% of the large businesses pay overtime
By sector: There is no evidence that indicates that compensation, compared to 54% of the medium
one sector in particular has a longer or shorter sized businesses and 45% of the small businesses.
work day compared to the other business sectors. Only 17% of the micro businesses pay overtime
compensation.
By size: Data reveals that a labor day is equal in
hours in large, medium and small businesses, 2.3 Proportion between the highest and the
although the number of hours increases slightly lowest wages in the business.
in the micro businesses with a total of 46 hours
In 66% of the surveyed businesses, the highest
a week.
wage corresponds to thirteen times the lowest
23

24. wage in the company. The remaining businesses By region: The percentage of formal contracts
did not answer this question. in the metropolitan area is 79%, while the rest
of the country frequently enters into informal
By sector: The gap between the highest and the contracts.
lowest wage is greater in the industrial and the
construction sectors, with a difference between 2.5 Code of Conduct, workers rights and
fifteen to sixteen times respectively. In the services duties
and trade sectors the ratio is 12 to 1 and 10 to 1.
The total sample of businesses surveyed was
By size: In the large businesses the gap between asked this question. 57% of these businesses
the highest and the lowest wage reaches a ratio transmit workers rights and duties mainly through
of 20 to 1, higher than the 7 to 1 index the internal regulations manual of the business.
corresponding to the mid and small businesses, Among the businesses surveyed, 29% of them
and the 3 to 1of micro businesses. have a policy, standards and procedures manual,
and 18% of the businesses communicate these
By region: The gap between the highest and the orally.
lowest workers wage is considerably higher in
the metropolitan area with a ratio of 16 to 1, By sector: The industrial and construction sectors
compared to the 4 to 1 ratio in the remaining use an internal regulations manual more frequently
parts of the country. than other sectors (67%). The services sector
uses this manual in 55% average of all its
2.4 Worker Contracts businesses while the trade sector only in 42%.
On the other hand, the percentage of businesses
The total sample of businesses surveyed was that have a policy manual is the same (27%
asked this question. Findings show that 62% of average) in all business sectors.
the labor contracts are formal written contracts,
while 36% are oral. Workers rights and duties are communicated
orally in 26% of all trade businesses, 17% of
By sector: The industrial sector accounts for 73% services firms, 15% of construction enterprises
of the formally established contracts, higher than and 13% of all industries.
in any other business sector.
By size: Micro businesses (44%) and small
By size: As the size of the business increases, the businesses (37%) disseminate workers rights and
number of formal contracts also increases. A duties in an oral fashion. As the size of the
total of 91% of the large businesses enter into a business increases, the number of businesses with
formal contract with their workers, compared to a written internal labor regulation increases as
12% of the micro businesses; 54% of the medium well. Thirty four percent of the large and medium
sized businesses and 34% of the small businesses. sized businesses have a policy manual.
24

25. By region: Sixty nine percent of the businesses Share in the business’s profits • 12%
located in the metropolitan area are governed by
Health care for family members in the business
internal labor regulations, while only 37% of
• 10%
them have a policy and procedures manual. In
the remaining regions of the country, 39% of the
businesses communicate workers rights and duties
orally. The sum of these benefits surpasses 100%, since
they can be provided simultaneously and do not
2.6 Labor Benefits exclude each other.
The total sample of surveyed businesses was 2.7 Information regarding retirement
asked this question. The chart summarizes the procedures
percentage of businesses and employee benefits
granted: The total sample of surveyed businesses was
asked this question. Out of this universe, 56%
of the businesses provide basic information
Health, maternity and professional hazards at the regarding administrative procedures to enter the
ISSS • 89% retirement program.
Pension Funds at the AFP or ISSS • 85%
By sector: the businesses in the industrial and
Holidays over the ones set forth in the law•74% construction sectors provide workers with this
information in 65% and 59% of cases, respectively,
Christmas bonus beyond regulatory standards •
compared to 46% and 53% of the businesses in
73%
the trade and services sectors.
Productivity compensations • 42%
By size: As the size of a business increases it
Life insurance contracted with private firms• 33% provides more information on retirement
Use of vehicle • 32% procedures to their workers. Consequently, 77%
of the large businesses provide this service,
Health insurance contracted with private providers compared to only 14% of the micro businesses.
• 28% The medium sized businesses provide this
Recreation, culture and sports programs • 23% information in 54% of the cases and the small
business in 39%.
Workers health care services in the business •
19% By region: Seventy percent of the businesses in
Worker education scholarships • 18% the metropolitan area provide this information
more frequently than the businesses in other
Purchase of school supplies • 13% regions of the country. The businesses in Usulutan
25

26. provide the least information to their workers By sector: The number of businesses that employ
(12%), followed by Sonsonate (27%). minors is similar accross the business spectrum,
with 2% of the businesses hiring minors
2.8 Employment of Minors permanently and 9% seasonally. Please note that
these figures include apprentices, whose work is
The total sample of surveyed businesses was not considered contracted labor.
asked this question. Out of the total number of
surveyed businesses 89% of them do not employ By size: Workers under the age of 18 years are
minors, while another 10% employs minors hired by the large (10%) medium (16%) and small
seasonally and 2% permanently but adhering to businesses (9%), while only 3% of the micro
the provisions in article 114 and following set businesses hire any.
forth in the labor code. The seasonal jobs
expressed herein could be, for instance, during By region: A high proportion of businesses in
the Christmas season. San Miguel (98%) and Usulutan (97%) abstain
from hiring minors, while in the metropolitan
Minors between the ages of 12 and 14 years are area youngsters under the age of 18 years are
hired under the modality of remunerated jobs in hired seasonally by 13% of the surveyed businesses.
the trade and services sectors. Of these minors
between the ages of 14 and15 years, 50% of them 2.9 Groups offered a job opportunity
are hired as remunerated workers and the rest
(43%) as apprentices; of the minors between 16 The percentage of businesses surveyed that offer
and 18 years, 58% of them are hired as a job to the various population groups is ranked
remunerated workers and 33% as apprentices. as follows:
Apprenticeship is not considered a working
Physically challenged persons • 33%
contract, since minors are learning a trade or
occupation. The Ministry of Labor authorizes Over forty five years of age • 56%
the hiring of apprentices, provided that they are
at least 12 years old, and places them under a Young workers lacking experience • 63%
special regime. The average number of working Minors • 11%
hours for minors is 33 hours a week with a
maximum of 36 hours a week and a work day Illiterate persons • 25%
between 6 to 7 hours a day.
This detail does not add to 100%, since this
Of the minors between 12 and 14 years, 100% selection is not excluding.
of them work during the day as well as 86% of
the minors between the ages of 14 and 15 and By sector: Out of the businesses that offer a job
90% of the minors between 16 and18 years of to the physically challenged persons, the industrial
age. sector has proven to be more committed regarding
this issue.
26

27. Besides, the industrial and trade sectors seem to other sectors, and also less minors (5%) and
be more inclined to hire young and inexperienced illiterate persons (17%).
workers, with percentages ranging from 68% and
64% respectively. In 70% of the construction By region: In general, businesses in the
sector, workers´ age surpasses forty years and on metropolitan area and San Miguel offer jobs to
the other hand, 48% of the businesses hire illiterate physically challenged persons with a frequency
workers, contrasting with the 8% of workers fluctuating between 39% and 30% respectively.
under the age of 18 hired in the services sector. Besides, businesses in the metropolitan area offer
jobs to workers over forty years of age more
By size: Large businesses show a higher index of frequently (63%) than other regions.
illiterate (27%), physically challenged (49%) and
over forty years of age (68%)persons, as well as Businesses in the metropolitan area, Santa Ana
a higher number of young inexperienced workers and San Miguel, share a similar rate of
(72%). inexperienced workers, ranging between 68%,
64% and 66% respectively, but still higher than
Micro businesses hire a lower number of young in Usulután (40%) and Sonsonate (32%). The
inexperienced workers (30%) compared to the rate of illiterate workers hired follows a similar
pattern ranging between 19% and 33%.
Worker Contrating
90
80
70
60
50
%
40
30
20
10
0
Average week shift Worker overtime Formal written Written internal working Information regarding Hiring of physically
payment contract regulation retirement procedures challenged persons
Industry Construction Commerce Services
27

28. 2.10 Existing Worker Organizations and /or By sector: Strikes occurred in 7% of the
Guilds transportation service sector, and 1.5% in the
textile, apparel and leather industries, representing
Sixty nine percent of the businesses surveyed did 2% and 0.5% for their respective sectors.
not have any type of worker organization; 20%
of them had cooperatives; 14% labor By size: No actual difference was evident regarding
improvement committees; and 6% workers unions. the size of businesses respect to strikes in the
specified time frame.
By sector: The businesses in the construction
sector outstand for the highest number of unions By region: No difference was observed among
(22%), while those in the industrial sector have the various regions regarding any strike activity
the most labor improvement committees and in the surveyed businesses.
cooperatives 21% and 26% respectively. The
number of businesses that allow the formation
of cooperatives in the trade, services and
construction sectors is similar with a 15% rate. Strike or stoppage activity
By size: Large and medium sized businesses
4.5
account for 10% and 3% of trade unions
4.0
respectively, while unions are absent in the micro
3.5
business sector for obvious reasons. The same
3.0
trend can be observed regarding labor
improvement committees and cooperatives with 2.5
%
22% in large businesses and 35% in medium 2.0
sized businesses. 1.5
1.0
By region: Unions are more prevalent in the 0.5
metropolitan area, as well as labor improvement 0
committees and cooperatives, with 9%, 18% and Industry Construction Commerce Services
25% respectively, while in the other regions this
percentage drops significantly. Average % of strikes or stoppages in
your company in the last two years
2.11 Strikes and shutdowns
Average % of strikes or stoppages in
Only 0.6% of the surveyed businesses affirmed other companies within your sector
having had any strikes or shutdown events in the in the last two years
last two years.
28

29. 2.12 Worker Performance Assessment 2.13 Incentives or rewards to workers who
provide improvement recommendations
Of the surveyed businesses, 72% affirmed having
instituted a program to assess worker’s Among the surveyed businesses, 35% of them
performance. In 41% of the cases the assessment offer programs that stimulate or reward worker’s
program is informal, and in 31% of the cases the contributions to enhance performance.
program is formal and in writing.
By sector: The rate of businesses that offer
By sector: The percentage of businesses with an programs that reward workers who contribute
informal performance assessment program is with suggestions to improve performance is quite
similar in both the industry (42%) and trade (43%) similar across sectors, with percentages between
sectors. It was also observed that the percentage 30% and 38%.
of businesses with a formal assessment program
is lower in the construction sector (22%) By size: The rate of businesses that offer programs
compared to the industry and services sector with that reward workers who contribute with
(34%) and (36%) respectively. suggestions to improve performance is quite
similar among large, medium and small businesses
By size: The percentage of large businesses with with 42%, 45% and 31% respectively.
an informal assessment program amounts to 37%, Nevertheless, only 13% of the micro businesses
compared to 46% of the medium and small offer this program.
businesses, and 43% of the micro business group.
This trend reverses in the case of formal By region: In the metropolitan area 40% of the
assessment programs, with 49% of large businesses offer this reward program.
businesses offering this program, and only 29%
of the medium businesses, 11% of the small ones 2.14 Internal Technical Training Programs.
and 0% of the micro businesses.
Of all the surveyed businesses, 41% of them
By region: The metropolitan area outstood as invest steadily in education and training; another
the region with more businesses offering 54%, only when needed.
assessment programs (79%), equally distributed
between formal and informal. In Santa Ana, San By sector: The percentage among the industrial,
Miguel and Sonsonate, the informal type of services, trade and construction sectors that
assessment is more prevalent, with 55%, 46% unvaryingly invest in education and training ranges
and 43% respectively. between 36% and 47%.
By size: The larger the business, the more it invests
in worker´s ongoing education and training.
Percentages range from 58% among large
29

30. businesses, to 38%, in medium businesses; 22% 2.15 Illiteracy and Elementary School
in small businesses and 10%, in micro businesses.
It was estimated that 2.6% of the workforce
By region: Fifty three percent of the businesses laboring in the surveyed businesses is illiterate
located in the metropolitan area provide ongoing and that 1.5% of the businesses offer reading
education and training. This percentage is higher and writing programs for their workers. On the
than in other regions of the country. The other hand, it was established that 12% of the
businesses in the metropolitan area train their workforce did not complete elementary school,
workers when a specific need emerges, the same and that 1% of the businesses offer elementary
as the businesses in San Miguel, (60%) as education to their workers.
compared to the other regions.
By sector: The various business sectors share a
similar illiteracy rate, less than 5%, with the
exception of the construction sector where the
Internal training programs illiteracy rate reaches 10%, although only a limited
number of construction businesses answered this
70 question. The average number of workers who
have not finished elementary school in the
60 construction sector is 26%, higher than in other
sectors.
50
By size: The illiteracy rate in medium, small, and
40 micro businesses is 4%; but only 1% in large
% businesses.
30
The smaller the business the higher the percentage
20 of workers who have not finished elementary
school, with 9%, 13%, 19% and 15% representing
10
the large, medium and small businesses
respectively. Elementary school education is
0
Training in specific Suggestions Formal performance
offered exclusively by the larger companies.
need program assessment program
By region: The percentage of illiterate workers
Industry Construction is higher in the regions of San Miguel and
Commerce Services Sonsonate, with 6%. The metropolitan area has
the lowest percentage of workers who have not
completed elementary school, with 11%,
compared to Santa Ana, San Miguel and
Sonsonate, with 15%, 13% and 17%, respectively.
30

31. The businesses in Usulután, Sonsonate and the offered by businesses in the area of Santa Ana
metropolitan area offer literacy programs ranging (2%) and the metropolitan area (4%), but not in
between 3% and 2% respectively. Santa Ana (2%) San Miguel, Sonsonate or Usulután.
and the metropolitan area (1%) are the two regions
that offer elementary education programs. Other types of programs are offered most
frequently in the metropolitan area (8%) and
2.16 Social Education Programs Santa Ana (6%), but not in Sonsonate.
The businesses surveyed responded to the major 2.17 Investment in Education
problems of their workforce by offering in-house
alcohol and drug abuse prevention programs. It Outcomes indicate that the 463 businesses
is estimated that 4.3% of the businesses offer surveyed invested an average amount of 1.5% of
alcohol and drug abuse prevention programs, their total sales in 2000 and 1.8% of their sales
while 1.5% of them offer external drug and in 2001, in the professional development of their
alcohol recovery programs. Another 6.3% offer workforce. A means differential hypotheses test
different types of programs. indicated that the level of investment could be
considered constant between the two periods.
By sector: The participation of the industrial and
services sectors in in-house drug and alcohol By sector: The average amount of the annual sales
abuse programs is 6% and 5% respectively. The invested in education in the years 2000 and 2001
construction sector does not participate in theses was 2.4% in the service sector, 1.9% in the
programs. industrial sector, 0.9% in the trade sector, and
0.8% in the construction sector.
By size: The participation of large businesses in
in-house alcohol and drug abuse rehabilitation By size: The average amount of the annual sales
programs ranges between 5% and 7%. Micro income invested in education in the years 2000
businesses do not offer these programs. Eleven and 2001 was 1.8% in the large businesses, 3.4%
percent of the large businesses offer other in the medium sized businesses, 1.3% in the small
programs as well as 3% of the medium sized businesses and 0.2% in the micro businesses.
businesses.
By region: Investments in education are quite
By region: Prevention programs are offered in similar in both years throughout the country,
all the regions, although participation is higher although in the metropolitan area businesses
in the metropolitan area with 5% of the businesses invest an average of 2% of their annual sales,
compared to the 2% of the businesses in other amount which is higher than in other areas.
regions of the country. Recovery programs are
31

32. Internal education programs
7
Literacy program 6
Primary school teaching 5
program 4
Drug addiction and 3
alcoholism program 2
Average % of sales for 1
education development 0
Industry Construction Commerce Services
2.18 Health, Safety and Working Conditions businesses in the construction sector moderately
comply with these legal requirements.
With regards to labor health requirements in
force (hygiene, cafeterias, restrooms), occupational Findings indicate that 80% of the businesses
safety, hazard prevention) and working conditions affirm having preventive health and safety
(physical environment, illumination, ventilation), programs in place. In the construction sector
the survey revealed that 88% of the interviewed 63% of the businesses also have these programs.
businesses comply with the health provisions; The percentage for the trade and services sectors
48% of them moderately comply with them; 33% is 57% and 59%, respectively.
of them rigorously comply with these
requirements, 7% of them comply with these By size: Medium and small businesses (61% and
provisions beyond the legal requirements in force; 63% respectively) are more inclined to moderately
the remaining 12% stated that this question was comply with these standards, while large
not applicable to their case. businesses rigorously comply with legal standards,
and 12% exceed the provisions set forth in the
On the other hand, 67% of the interviewed law.
businesses affirmed having preventive actions in
place for those potentially harmful processes that As the size of the business increases more
could put the health and safety of their workforce preventive measures are established regarding
at risk. potentially harmful processes for the health and
the safety of the workforce, represented by 29%,
By sector: Throughout the spectrum it was evident 54%, 62% y 86%, respectively.
that more businesses moderately comply with
the health and safety standards in force, while By region: In Usulután 70% of the businesses
the industrial sector fully and rigorously complies are more inclined to moderately comply with the
with these requirements (37%) and 56% of the health and safety requirements in force, while
40% of the businesses in the metropolitan area
32

33. comply either rigorously or exceed these construction sector. Among the businesses that
regulations. In Santa Ana only 52% comply with follow a policy of negotiating cost reduction
the standards. alternatives with employees, 26% were found in
the industrial sector, 29% in trade, 30 % in services
Preventive actions against potentially harmful and 41% in construction.
processes for workers are undertaken more
frequently in the surveyed businesses located in By size: It was found that the medium sized
the metropolitan area, with a rate of 80%. businesses try the most to avoid layoffs (52%)
followed by the large businesses (50%); and small
2.19 Staff Cost Reduction Management businesses (43%). The least committed to this
effort is the micro business sector with 33%. The
In general terms, 46% of the surveyed businesses larger the business, the more it tends to limit
try by all means to avoid layoffs in the event of layoffs to only those strictly necessary cases, and
the need to reduce personnel costs, while another to negotiate cost reduction alternatives with
44% limits this procedure only to extreme cases. employees, with values that range from 57% to
On the other hand, 29% of the surveyed 15%.
businesses negotiate other cost reduction
alternatives with staff members, 10% offer early By region: The regions of San Miguel, Usulután
retirement benefits, and 8% offer support to find and the metropolitan area avoid dismissals with
another job. the highest frequency ranking between 50%, 49%
and 48% respectively. With regards to limiting
By sector: Surveyed businesses in the industrial dismissal to only indispensable cases, the
sector try to avoid compulsory dismissals in 51%, metropolitan area scored the highest with 51%,
as compared to 48% in the trade sector, 42% in followed by San Miguel with 39% and Sonsonate
the services sector and 26% in the construction with 35%. As far as negotiating other cost
sector. The percentage of businesses that follow reduction alternatives with employees, the
a policy of limiting layoffs to only extreme cases metropolitan area follows this procedure in 35%
in the industrial sector was 48 %, 40% in the of its businesses, with the highest score among
trade sector, 43 % in services and 33% in regions.
Health, security and working conditions
90
80
70 Industry
60
50 Construction
% 40
30
Commerce
20 Services
10
0
Moderatly comply with Occupational hazard Try to avoid layoffs Discursses Offer voluntary
legal requirements prevention alternative solutions retirement programs
(health, security) to reduce costs
33

34. 3. Marketing businesses have informal policies in 60% of their
businesses, while the large and medium sized
Marketing activates are understood as the businesses in only 45% of them and the micro
establishment and maintenance of relationships business in 37% of the cases.
with customers based on integrity, justice, and
honesty. Integrity in the production chain, product By region: The businesses in the metropolitan
reception and packaging; price definition; sales region use formal and informal supplier selection
practices, distribution and customer and employee policies with 37% and 49% respectively,
privacy, respecting anti dumping and free amounting to 86%. In the other regions, policies
competition practices. To this end it is important are mostly informal.
to highlight:
3.2 Types of goods and service providers
3.1 Supplier selection policies
Of the total surveyed businesses, 96% of them
Seventy six percent of the businesses surveyed work with domestic suppliers and 50%, with
affirmed having policies and standards to assess international suppliers. A total of 6% work with
and select suppliers based on quality, price and cooperatives and 2% with community associations
delivery deadline factors. Of these, 46% handle or groups.
their policies informally, while 30% have written
policies in force. By sector: The construction sector works in100%
of cases with domestic suppliers, followed by the
By sector: In the industrial sector 85% of the services sector with 98%; trade with 95%; and
businesses follow these policies and standards, industry with 94%. The opposite trend was evident
and of these, 34% follow formal policies, while regarding the percentage of businesses that work
51% have informally instituted policies; The figure with international suppliers: industry with 71%,
in the construction sector is 74%, with 22% followed by trade, construction and services with
formal and 52% informal; in trade 76%, of which 43%, 33% and 25% respectively. Seven percent
31% have formal policies and 45% informal; of the construction businesses work with coops.
services 58%, with 22% formal and 36% with
informally established polices. By size: The small and micro businesses tend to
work more (90%) with domestic suppliers
By size: It was found that the highest proportion followed by the large businesses with 93%. The
of formal policies are found in the large businesses larger the business, the more it seeks for
(43%), followed by the medium sized international suppliers. Regarding coops, only
companies(32%), small businesses (12%), and 7% of the large and medium sized businesses
the micro business with 2%. Conversely, small work with them.
34

35. By region: The regions of San Miguel and 3.4 Review of product expiration dates
Usulután, work with domestic suppliers in 100%
of cases. The businesses in the metropolitan area Forty percent of the surveyed businesses
characterized themselved for getting supplies periodically review the expiration dates of their
from international suppliers (67%), and coops products, labels, containers, brochures and other
(8%). communication materials distributed for final
consumption. Three percent do not follow this
3.3 Former employees as suppliers practice and the remaining 50% answered that it
was not applicable to their case.
Thirteen percent of the surveyed businesses
affirmed having former employees as suppliers. By sector: Expiration dates are monitored more
Of this total, 20% expressed that they preferred frequently in the trade sector (58%), followed by
to be supplied by their former employees. industries (52%); services (36%); and construction
(19%). The two sectors that least apply this
By sector: Twenty six percent of former employees process are construction (82%) and services (59%).
are hired as suppliers by the construction sector;
followed by trade (15%); industry (11%); and By size: The larger the business the more
services (10%). As far as the preference for hiring concerned about periodically reviewing expiration
former employees as suppliers, 29% of the dates, from 53% to 35%, and vice versa.
industrial and construction sectors affirmed to
share this preference. By region: This practice is more common in
Sonsonate and the metropolitan region, with 54%
By size: Large (20%) and medium (15%) sized and 51% respectively; followed by Usulután, with
businesses hired more former employees as 46%; Santa Ana, with 40%; and San Miguel, with
suppliers. Small businesses only in 1% of cases 27%.
and micro businesses in zero percent.
3.5 Continuous Enhancement Programs
By region: Eighteen percent of the businesses
located in the metropolitan area work with former Sixty six percent of the surveyed businesses have
employees as suppliers, followed by Santa Ana a special program to enhance products, services
with 6%, Usulután and Sonsonate with 3%, and or processes and to replace components,
San Miguel, with 0%. The rate of preference is technology and products, as they become obsolete
higher in the metropolitan region and Santa Ana, or deficient.
with 20% and 33% respectively.
By sector: The industrial sector participates in
78% of cases in this type of program; services
and construction in 59%; and trade in 57%.
35

36. By size: This enhancement program is more empowered to decide on the best way to solve
frequent in large businesses (81%) followed by the situation.
the medium enterprise with 64%. Small and micro
businesses participate in 48% and 40% respectively. By sector: The percentage of businesses in the
industrial, services and trade sectors with a group
By region: This program is more frequent in the with expertise in customer service and complaints
metropolitan area with 75%. Other regions range is 26% average, while in the construction sector
form 53% to 46%. the figure is only 7%.
Suppliers and product
120
100
Industry
80
Construction
% 60
Commerce
40
Services
20
0
Written standards Domestic Foreign Former employees Review Product
to evaluate suppliers suppliers suppliers expiration date enhancement
suppliers of products program
3.6 Customer Service – Complaints In the construction sector it is traditionally the
owner, manager or company executives who deal
In 25% of the businesses surveyed there is one with complaints as opposed to clerks or customer
person or department in charge of responding service personnel. The power delegated to this
to customer complaints; in 41% of cases, staff ranges from 91% in the trade sector to 84%
complaints are taken care of by managers; in 34% in the construction sector.
of cases by the owner; and in 27% of cases by
the company executives. By size: Large businesses (39%) handle customer
complaints through a specialized group of
In 90% of the surveyed businesses the staff tasked employees, while the medium and small
with handling customer complaints are enterprises only in 15% and 14% of cases
36

37. respectively. On the other hand, the smaller the that verify compliance with the consumer defense
company the more customer complaints are law before launching an advertisement campaign,
managed directly by the owner. the medium business represents 97% compliance,
followed by the large and micro business with
The persons in charge of dealing with customer 89%, and the small business with 77% compliance
complaints have more decision power in the rate.
medium, small and micro businesses as compared
to the large ones, with 97%, 96%, 95% and 84% By region: Businesses in the metropolitan region
respectively. and San Miguel accord high importance to
communications and advertisement, with 48%
By region: In Usulutan the staff in charge of and 36% respectively. In Santa Ana, Sonsonate
responding to customer complaints enjoys 100% and Usulután, compliance with the consumer
decision making power; Santa Ana, San Miguel protection law is verified in 100% before
and Sonsonate, follow with 97%; and the launching a publicity campaign. The metropolitan
metropolitan region with 85%. region follows with 88%, and San Miguel, with
81%.
3.7 Communication and Advertising Policies
Forty percent of the surveyed businesses have Customer service, communication
formal communications and advertising policies. and advertisement
Of these, 89% insures, a priori, that the advertising
campaign meets the consumer defense law 100
provisions.
80
By sector: In the trade, industry and services
sectors the percentage of businesses with
communications and advertising policies is similar 60
with 43% and 41%; with a variance in the %
construction sector with 26%.
40
In the construction sector, 100% of the businesses
verify and publicize their advertisement campaigns 20
insuring compliance with the consumer defense
law. This sector is followed by services with 96%;
trade, with 91%; and industry, with 83%. 0
Managers deal with Appointed person Formal Advertisement company
claims deal with claims communication and oversees compliance
By size: The formal management of these policies advertisement policy with consumer law
is more frequent in large and medium enterprises,
with 56% and 44% respectively, while in the small Industry Construction
and medium businesses it is 20% and 10% Commerce Services
respectively. Of the total number of businesses
37

38. 4. The environment on the environment and health. In the trade and
services sectors this percentage is lower with 25%
In order for a business to comply with the and 20% respectively, which is explained by the
environmental law in force and reach a sustainable statements of the businesses in these sectors
growth, it must operate under internal and external (64% and 61%) affirming the innocuity of their
conditions compatible with the environment, processes.
incorporating frequent self regulation and
environmental audits, and using eco efficient Among the businesses that cause an impact on
technologies and cleaner production processes environment and health, the following plan and
with regards to product design, production, and organize themselves to ameliorate said impact:
distribution, so as to produce more with less 83% services, 80% industry, 69% construction
waste generation. and trade.
4.1 Impact on the Environment and Health Besides, the following also train employees on
their emergency environmental plan: 87% in the
Of the 463 businesses surveyed, 87% of them services sector, and 75% in the trade sector.
affirmed having knowledge of the impact on the
environment and health caused by the activity of By size: It can be observed that 40% of the large
their particular business and their products, while businesses claim not to cause an impact on the
12% ignored this data. In 51% of the businesses environment or health; this figure is lower than
surveyed it was affirmed that neither the activity in the medium (60%) sized businesses, small
of their companies nor their products affected businesses 57%, and micro business (70%). The
the environment nor health, while 36%, that is opposite occurs with the percentage of businesses
168, affirmed the opposite. that acknowledge causing an impact on the
environment and health with their activities: 50%
Seventy seven percent of all the businesses that of the large businesses, 28% of the medium
acknowledge their effects on the environment businesses, 23% of the small businesses and 14%
and health have a plan to ameliorate these effects, of the micro businesses.
and 60% have an emergency environmental plan
relating all the activities that imply a risk situation. Large businesses are committed in 86% of cases
to the planning of environmental measures, a
Seventy nine percent of the businesses with an figure that is higher than in the medium (58%)
environmental emergency plan train their small (53% and micro (67%) businesses.
employees to follow it.
By region: The majority of the businesses that
By sector: The businesses in the industrial and acknowledge the consequences of their activities
construction sectors have a higher percentage of on the environment and health (46%) are located
companies (52% and 48% respectively) that in the metropolitan region. In Usulután, 79% of
recognize the harmful impact of their activities the companies in this region affirm that their
38

39. products do not cause any negative effects on By region: Of the 100 businesses that have an
the environment or health, followed by Santa environmental emergency plan, the ones located
Ana, with 70%, and San Miguel, with 68%. in the area of San Miguel and Santa Ana,
contribute equally to research studies and solutions
Usulután and the metropolitan region are the (100 %), while in the metropolitan area 80%
areas that have set up an environmental plan contribute to research and solutions and in
(67% and 63% respectively) that interlocks all Sonsoante only 50% of them do so.
the activities related to any risk situation, followed
by Sonsonate, with 55%. In San Miguel, 71% of 4.3 Information to consumers regarding the
the businesses lack an emergency plan. effects on the environment
4.2 Environmental emergency plans Of the 100 businesses that have an environmental
emergency plan, 36% of them report the
Of the 168 businesses that affirmed causing an environmental damages caused by their products
impact on the environment and health, 60% of and their disposal to consumers.
them, which is 100 businesses, have an emergency
plan, and 78% of these develop research on this By sector: The service sector provides the most
issue and contribute with solutions. information to consumers with a 60% divulgation
rate; the remaining sectors range between 33%
By sector: Of the 100 businesses that have an and 20%.
environmental emergency plan, the sector that
most contributes to research and solutions is the By size: The medium and micro businesses are
industrial sector reaching 84% of the businesses, the ones that most broadly inform their consumers
followed by the services sector with 80%; and about the damage to the environment (40%)
the construction sector with 60%; and finally followed by the large (37%) and small (17%)
trade with 56%. businesses.
By size: Of the 100 businesses that have an By region: Santa Ana and San Miguel share an
environmental emergency plan, 85% of them equal percentage (50%) regarding the information
belong to the large business sector that develops on environmental damage to consumers, while
research studies and solutions, and 20% to the in the metropolitan region and Sonsonate the
micro businesses , fact that proves that this factor percentages range between 36% and 33%
is directly proportional to the size of a business. respectively.
39

40. Environmental impact
90
80
Industry 70
60
Construction 50
% 40
Commerce
30
Services 20
10
0
No environmental impact Company plans based on Emergency Develop studies on
on company or products environmental impact environmental plan evironmental impact
4.4 Environmental forums and seminars 4.5 Sponsorship of environmental projects
Thirty five percent of the 463 surveyed businesses Fourteen percent, that is 63 of the 463 surveyed
participate in research studies, forums, seminars businesses, sponsor environmental projects.
or discussions related to the environment, in SALVANATURA receives 22% of this
order to foster and adopt laws, standards and sponsorship followed by reforesting projects with
regulations that will benefit them. a19%, and company own projects with a 16%.
By sector: Participation is more frequent in the By sector: The construction sector participated
industrial and construction sectors (45% and the most in this area with 26%, followed by the
41% respectively) followed by services (31%) industrial sector with 15%, and trade and services
and trade (21%) 11%.
By size: The larger the business the more it By size: Large businesses (23%) sponsor the most
participates in environmental forums and seminars. projects, followed by the medium sized business
The participation percentages for the large, (9%), small (1%) and micro (0%).
medium, small and micro businesses in this activity
are 52%, 32%, 12% and 5% respectively. By region: The businesses located in the
metropolitan region (18%) sponsor the most
By region: The businesses located in the environmental projects, followed by San Miguel
metropolitan area (44%) participate more (9%), Santa Ana, (6%); Sonsonate, (3%); and
frequently in environmental forums and seminars Usulután (0%).
compared to the rest of the regions with an
average participation rate of 29%, with the
exception of Usulutan where the rate is 6%.
40

41. 4.6 Recycling Programs By region: Thirty five percent of the businesses
located in the metropolitan region have recycling
Of the 463 surveyed businesses, 25% of them, programs; 13% in Santa Ana, 7% in San Miguel
equal to 117 businesses, have recycling programs. and 3% in Sonsonate and Usulután.
Of these, 32% recycle solid wastes and paper,
followed by businesses that recycle damages 4.7 Environmental certifications
(11%), waste waters, (9%), PVC/plastics (7%)
and oil (5%). The adoption of the ISO 14000 standards among
Salvadoran businesses is still dawning, reason
By sector: Thirty eight percent of the industrial why only 3%, that is 14 out of the surveyed
businesses have recycling programs, as well as businesses have adopted these standards, and 5%
17% of the trade and service enterprises. use another type of environmental certification
system, among which we can mention those
granted by the Ministry of the Environment, the
Environmental projects
Services
Commerce
Construction
Industry
0 10 20 30 40 50
%
Recycling program Sponsor environmental Participate in environment
projects seminars/forums
By size: The percentage of businesses with a Public Health Council and WRAP (Worldwide
recycling program is directly proportional to the responsible apparel production). This last one is
size of the business: large businesses 41%; medium exclusively for the apparel industry with a
and small 15% and 11% respectively; and micro percentage equal to 32%, 23% and 14%
businesses 2%. respectively.
41

42. By sector: Out of the 3% of the businesses that 4.8 Environmental Education
have an ISO 14000 certification, 5% belong to
the industrial sector and 2% to services. Industry, Nineteen percent of the businesses surveyed
trade and services also use other certification develop some type of environmental education
programs in 10% 2% and 1% of the cases program aimed at their own staff members,
respectively. The construction sector lacks an owners, board members, and others; 1%
environmental certification program. addressed to relatives of staff members and 2%
to the community. Seventy eight per cent of the
By size: The large and small businesses are the businesses do not carry out this type of activity.
only ones with an ISO 14000 certification
program, while other types of programs are more By sector: Industry (26%) and services (19%) are
frequent in the large, medium and small business more committed to the development of activities
with 7%, 4% and 2% respectively. within their businesses. The services sector
contributes more (8%) to education programs
By region: In the metropolitan area, Santa Ana addressed to the surrounding community, and
and San Miguel 2% of the businesses have an also to programs aimed at the relatives of staff
ISO 14000 certification program. Seven percent members (3%).
of the businesses located in the metropolitan area
have such a program and 3% in Sonsonate. By size: A higher proportion of large (29%) and
medium (19%) enterprises focus education
programs on their staff. The medium business
Environmental certifications (10%) is traditionally the one that reaches out to
the community, the same as to staff relatives (4%).
12
By region: The businesses located in the
10 metropolitan area offer programs for their internal
8 customers more frequently than other sectors
(25%) as well as for their relatives (2%) and the
% 6
surrounding community (1%). In the other
4 regions this trend is quite similar.
2
0
Certification ISO 14000 Other environmental
certifications
Industry Construction
Commerce Services
42

43. Environmental education
30
Environmental education 25
activity in the company
20
Environmental education
activity in the community %
15
10
Environmental education
activity with company 5
worker relatives 0
Industry Construction Commerce Services
4.9 Investment in environmental enhancement
programs and projects Average % of sales invested in
environmental enhancement programs
The average percentage of the sales income
invested in environmental enhancement programs
in the years 2001 and 2002 was 0.8% and 0.9% 1.2 1.3
respectively.
By sector: Investment in this type of activity
remained the same for the two years, being the
industrial sector the one with the highest
0.3 0.3
percentage of investment (1%) of their sales.
Construction and trade obtained 3% each for
both years. Industry Construction
Commerce Services
By size: Micro and small businesses invest less
than 0.5%. The medium and large business
investments reach 1%, with the medium business
showing a 1% increase in the year 2001.
By region: The businesses in the metropolitan
area invest more frequently in this type of activity
(1%). Sonsonate invests 0.7%; and in the
remaining regions 0.3%.
43

44. 5. The community services sector more with private and community
institutions.
Entrepreneurial Philanthropy is the name given
to the actions undertaken by a business to plan By size: The larger the business the more it
and execute actions that maximize the positive participates in social projects. Large businesses
effects and minimize negative ones of their collaborates more with private institutions than
presence in a given community. These businesses with community ones.
earmark cash and in kind donations, and even
the time of staff members, to community service By region: The businesses located in the
organizations, on behalf of both, the community metropolitan region collaborate more frequently
and the business. with private, municipal and community institutions
compared to other regions.
5.1 Social project beneficiary institutions
5.2 Assistance methodologies
Fifty nine percent of the surveyed businesses
affirmed collaborating in social projects. Following In order to carry out social activities, 42% of the
is a classification based on the type of institution businesses contribute with cash, 36% with
targeted for social welfare and the percentage of products and /or services; 10% with equipment
businesses that liaison with these institutions: and material resources (facilities), and 9% with
skilled human resources and voluntary personnel.
1. Private institutions • 30% Thirty nine percent of the businesses do not carry
out any social action.
2. Community institutions • 26%
By sector: Keeping in mind that the industrial
3. Non governmental organizations • 25% and services sectors attribute a high significance
4. Municipal institutions • 25% to social projects, it is also observed that the
industrial sector contributes with cash, products
5. Governmental institutions • 21% and/or services in a higher proportion (50% and
47% respectively) compared to the services sector
This detail does not add to 100% since said that contributes with skilled human resources,
selection is not excluding in nature. equipment and materials (15%) and voluntary
staff (19%).
By sector: The industrial sector collaborates the
most with private institutions. The construction By size: The larger the business the more it tends
sector cooperates more with municipal institutions to contribute to social projects through different
and private projects. Trade collaborates more means, but mostly in cash (58%), in the large
with private and community institutions, and the business sector, followed by products and /or
services, also in the large business (49%).
44

45. By region: The businesses in the metropolitan By sector: It was observed that the various sectors
area contribute more with goods and/or services seem to select beneficiaries in a similar fashion.
(46%), and cash (50%) as compared with other All sectors respond to sporadic requests, industry
regions. Other regions range between 25% and and trade respond in 80% of cases and the
13% in goods and services and between 34% and construction sector in 64%.
12% in cash contributions.
By size: Businesses seem to favor projects that
5.3 Selection of beneficiaries stem from specific requests. The larger the
business the more projects it selects.
Out of the 463 surveyed businesses, 60% of them,
equal to 280 businesses, carry out social actions. Larger businesses also participate more in
Seventy five of these select beneficiaries through cooperation agreements with local entities,
requests, and 32% are closely acquainted with compared to other businesses, since percentages
some of the work programs of these institutions remain quite similar.
and invest in specific projects, 14% of them
develop their own projects to benefit the By region: The businesses in the metropolitan
entrepreneurial group that the business is a part region focus their social project selection on
of, since they develop their own projects, and sporadic requests (80%) and specific projects
another 10% of the businesses enter into (33%). San Miguel and Sonsonate select own
cooperation agreements with local entities. projects that benefit local communities (26%)
and Sonsonate chooses to invest in specific
projects (44%).
Proyectos sociales
90
80
70
60
% 50
40
30
20
10
0
The business The business collaborates Funds for Volunteers for Products/services Executes specific Responds to
collaborates with with community social proyects social projects for social programs in the eventual petitios
municipal institutions organizations projects community
Industry Construction Commerce Services
45

46. 5.4 Specific Community Programs respectively. Regarding health projects, Usulutan,
Sonsonate and San Miguel execute these in 100%,
Out of the 280 businesses that carry out social 50%, and 40%; and 31%, in the metropolitan
actions, 24% of them, that is 67 businesses, execute region. Potable water projects are only executed
programs within their communities. The most in the metropolitan area in 6% of the businesses.
commonly executed programs in the communities
are: education (60%); the environment (37%); 5.5 Source of funds for social programs
health (33%); technical training (22%); housing
programs (13%); productive development (9%); Out of the 280 businesses that carry out social
and potable water (4%). programs, 24%of them, equivalent to 67
businesses, execute these programs in their
It was observed that these businesses tend to communities of operation. Ninety three percent
invest an average 4% of their total budget in these of these businesses use own funds to finance
activities. these projects, while 8% outsource contributions
from other sister businesses, 5% from
By sector: The industrial sector executes programs international assistance, 3% from municipal funds,
in education (56%), followed by environmental and another 3% from individual contributions.
and health programs (33%) each. The construction None work with funds from the Central
sector directs its technical training, housing and Government.
environmental programs in a similar fashion (25%).
Trade stresses of educational projects (67%), as By sector: The majority of the business sectors
well as services (63%). develop social programs using own funds: industry
96%, construction and trade100%, and services
By size: Large and small businesses participate 83%.
more in educational projects than the medium
sized businesses (64%, 67% and 44% respectively). By size : Small businesses invest in social programs
The large, medium and small business have the using own funds (100%), followed by large
same share in environmental projects with an businesses (94%), medium sized business (89%)
average 35%. The medium and large businesses and micro business (50%).
participate in water projects (11%) and (4%)
respectively. By region: Santa Ana, San Miguel and Usulután
carried out social programs using own funds in
By region: Santa Ana, Sonsonate and the 100% of the businesses; the metropolitan region
metropolitan region execute educational projects in 94%; and Sonsonate in 50%.
in 100%, 75%, and 61% of the businesses
46

47. Projects within the community
100
90
80
70
60
% 50
40
30
20
10
0
Education Health programs Handicapped project Children project Program rural and Own funds nature Company contributes
programs executed executed in the beneficiaries beneficiaries urban areas of influence per program with skilled human
in the community community resources
Industry Construction Commerce Services
5.6 Municipal management support programs In the year 2001, the trade sector earmarked 12%
of its budget to these works, followed by the rest
Of the 280 businesses that carry out social of sectors with 4% each.
programs, 13% of them, equal to 36 businesses,
invest in municipal management projects. These By size: Large businesses participated the most
businesses (53%) partially support park building in municipal management projects (16%);
programs, development of sports fields, and followed by the medium sized business (11%);
community halls. Other activities include roads none in the small business sector and 6% in the
(13%); basic services, such as potable water, and micro business sector.
drainages (11%); power and telephone projects
(6%). In the year 2001 the micro business sector
earmarked 10% of its budget to these works,
In the year 2001, these businesses earmarked 6% followed by the medium sized business with 9%,
of their budget to finance these works. Ninety and the large business with 5%.
two percent (92%) of the businesses used own
funds, and 11% used contributions from other By region: The businesses located in the
companies of the same business group. metropolitan region (14%) participate in
municipal management projects, followed by
By sector: Participation of the different business Santa Ana and San Miguel, with a 10%
sectors in municipal enhancement projects ranges participation rate each, and Sonsonate, with 6%.
from a ceiling of 27% in the construction sector Usulutan does not have any business participating
to a floor of 10% in the trade sector. in municipal management projects.
47

48. 5.7 Support to activities executed by followed by the remaining sectors with 3% each.
governmental organizations
By size: Medium sized businesses invested 6%;
Of the 280 businesses that carry out social actions, small business 5%; and the large and micro
50% contribute occasionally in specific events businesses 3%.
and activities promoted by governmental
organizations, while 34% do not participate in By region: Usulután is the city that invests the
these activities and 15% provide financial support most in social activities (9%), followed by Santa
to these initiatives. Ana, (7%), San Miguel and Sonsonate, (4%), and
the metropolitan region (3%).
By sector: The percentage contributed to support
the activities of governmental organizations is 5.9 Employee donations
similar in the industrial, trade and services sectors
(49%, 54% and 48% respectively); the Of the 280 businesses that carry out social
construction sector contributes the least 46%, activities, 17% of them have embedded
and the remaining sectors average 34% . mechanisms to stimulate employee donations.
By size: Support to these activities is quite similar By sector: twenty percent of the businesses in the
in the large, small and micro business (54%, 52% construction sector have donation mechanisms;
and 50% respectively. Medium businesses provide as well as 20% in the trade enterprises, 18% in
32% support. the services sector and 14% in the industrial
sector.
By region: Eighty two percent of the businesses
in the city of Usulután provide support to By size: Twenty one percent of the mid sized
governmental organizations, followed by the businesses have donation mechanisms, followed
metropolitan region and San Miguel with 52% by the large business with 19%; the small with
support, Santa Ana 37% and Sonsonate with 11%; and micro none.
25%.
By region: The percentage of businesses with
5.8 Total Investment in Social Actions embedded donation mechanism is similar accross
the regions, fluctuating from 21% in San Miguel
The 280 businesses that carry out social activities, to 13% in Sonsonate.
including community and municipal projects and
other donations, earmarked 3.9% of their total 5.10 Expected investment level (year 2002)
sales to social activities in the year 2001, 2% of
which was in cash and 1.9% in kind. Of the total number of companies that carry out
social activities, 61% of them expected to keep
By sector: The services sector invested the most the same level of investment in social activities
(7%), both in cash and in kind to social activities, in the year 2002; 20% expected it to be lower,
while 16% expected it to increase. Taking a three
48

49. year term as reference, 57% of the businesses 61percent of businesses planning to keep
expected to keep the same level of investment, investments at the same level in the metropolitan
while 29% expected it to increase and 10% region, Santa Ana, San Miguel and Sonsonate.
expected it to drop. Usulután is at a variance with 45%. Sonsonate is
the region where businesses (6%) do not expect
By sector: Sixty seven percent of the businesses to increase their investments.
in the trade sector expected to keep the same
level of investment in social activities in the year 5.11 Internal and external benefits of social actions.
2002, the same as 60% of the industry and trade
sectors and 55% of the construction firms. The Of the 280 businesses that develop social activities,
service sector (19%) expected their investments 51% perceived that the main internal benefit was
in social activities to grow; and the construction reflected in the achievement of their own identity
sector (46%) expected it to drop.
Level of investment at community level
14
Average % of total budget
12 in community programs
10
Average % of total budget
8 in municipal programs
%
6
Average % of total sales
4 contributed in cash
2
0
Average % of total sales
contributed in kind
Industry Construction Commerce Services
By size: Percentages are similar in all business (loyalty, presence and permanency); in 29% of
sizes regarding the amount of investments in cases, it was reported that the main benefit was
social activities for the year 2002, with an average the enhancement of the compnay´s organizational
62%; the average percentage of businesses that climate.
expect their investments to drop is 21%; and
15% expect them to grow. On the other hand, 54% of the firms considered
that the main external benefit received was an
By region: The same as before: Percentages are improved image and reputation; 19% believed
similar in the majority of regions, with 69 to that benefits are translated into a positive image
49

50. of the company; and 10% in the promotion of Regarding external benefits, micro businesses
solidarity among community members. perceive that the main benefit is the enhancement
of their brand image and reputation (72%);
By sector: The construction sector believes that followed by small businesses (59%); large (53%);
the main intrinsic benefit is a corporate identity and medium sized businesses (51%).
(82%), followed by trade and services (57%) and
industry (43%). By region: San Miguel heads the regions that
consider that the main internal benefit for their
With regards to external benefits, trade businesses businesses is brand identity (68%); followed by
believe that the main benefit is the enhancement Usulután, (55%); Sonsonate and the metropolitan
of the corporate image and reputation (60%); region (50%); and finally Santa Ana (47%).
followed by industry (55%); services (51%); and
construction (36%). Regarding external benefits, businesses in
Usulután consider that the main benefit is the
By size: Micro businesses also believe that the enhancement of their image and reputation (82%);
main internal benefit is a corporate identity (56%), followed by Sonsonate, (75%); San Miguel, (68%);
followed by large businesses (53%), small (48%) Santa Ana, (53%); and the metropolitan region
and medium sized businesses (45%). (50%).
Support to municipal management and benefits of social actions
100
80
60
%
40
20
0
Municipal management Municipal management Municipal management Cash / in kind Employee incentive Obtained identity Improved image
support programs support programs in support programs in contributions for programs / greater internal benefits greater internal benefits
recreational areas drinking water social projects donations for social actions for social actions
Industry Construction Commerce Services
50

51. 5.12 Social related Contests observed that the sector with the highest interest
in own projects was the industrial sector (24%)
Out of the 280 businesses committed to social followed by construction (22%); services (19%);
activities, 87% of them do not sponsor, or carry and trade (15%); regarding occasional participation,
out social contests or grant awards. the industrial sector showed the highest percentage
(25%); followed by services and trade (21%); and
By sector: The services sector has the highest construction (15%). In association with another
number of businesses committed to social institution: the services sector was more attracted
activities, granting related awards and sponsoring to this idea (26%); trade (17%); and industry
contests (24%); followed by industry (11%); and (15%); the construction sector did not find the
trade (7%). idea of working with another institution appealing.
By size: The highest percentage of businesses By size: Large and medium businesses are more
that carry out these activities is found in the large willing to increase their participation in social
business sector (15%); followed by the medium activities than the small and micro business. The
sized firms (13%); micro (6%); and small (4%). way in which they would increase their
participation is the same in the three types of
By region: participation in these activities is larger participation above explained, ranking from (25%)
in the metropolitan region, followed by San Miguel, to (19%) within the large and medium firms, and
Usulután and Sonsonate, ranking from15% to from 17% to 12% in the small and micro
6%. businesses.
5.13 Aspiration to increase participation in By region: Businesses from the different regions
social projects expressed a similar interest regarding the way in
which they would increase their participation in
Of the 463 surveyed businesses, 22% of them social projects. The participation in own projects
would like to start or increase their occasional ranged from 22% to13%, with the highest
participation; 20% of them wished to invest in percentage in the metropolitan region, and the
own projects, and 18% would like to participate lowest in Santa Ana. Regarding occasional
in association with another institution. Another participation, interest ranged from 26% to 14%,
40% of them stated that they were not interested with the highest percentage in the metropolitan
in either starting or increasing their participation region, and the lowest in San Miguel and
in social activities. Sonsonate. As far as their association with other
institutions, the highest percentage was found in
By sector: The interest expressed by the various Sonsonate (32%), and the lowest in San Miguel,
sectors in increasing their participation in social (9%).
activities is quite similar in general terms.
Regarding how they would like to proceed, it was
51

52. 5.14 Employee voluntary social work lowest percentage. The percentage in the
metropolitan region, Santa Ana and Sonsonate
Of the 463 surveyed businesses, 18% of them is 9%.
promote employees voluntary work; 6%
contribute in some way and 75% of the businesses During the period between 2000 and 2001, Santa
expressed that they did not promote this at all. Ana had the largest number of employees involved
It was calculated that between the years 2000 and in community work (15%) in 2000 and (16%) in
2001, a 7% average of employees developed some 2001. Sonsonate remained at 11% during both
kind of voluntary community work. years and Usulután at 2%. San Miguel at 6% in
2000 and 7% in 2001. The metropolitan region
By sector: The services sector promotes voluntary experienced an increase in 5% in 2000 and 6%
work more than other sectors (23%); followed in 2001.
by construction, trade (18%); and industry (16%).
Between 2000 and 2001, the employees in the 5.15 Link with educational activities
services sector worked the most in voluntary
community social projects (14%). The industrial Of all the businesses surveyed 22% of them have
sector had a 3% increase in the year 2000 and been linked to some type of educational activity
reached 5% in 2001. Construction and trade in the past two years, by either offering internships
remained at the same level during these two years or supporting educational programs.
at 2% and 5% respectively.
Of the 102 businesses involved in educational
By size: The large business sector promotes initiatives, 70% of them consider that said
employee voluntary work more than others (23%); involvement has been beneficial. Of the total,
followed by the medium enterprise (17%); small 32% focus on elementary level education, 51%
(15%); and micro (9%). The medium sized on high school and 48% on university education.
business remained at the same level (19%) in
2000 and 2001, regarding the number of The link between the business and the educational
employees developing voluntary work in the sector was initiated mainly by: the business itself
surrounding communities. Large businesses (40%); the school or educational institution 43%;
increased this contribution in 6% in 2000 and in education alliance building projects 11%; and by
8% in 2001. The small and micro sectors remained the Ministry of Education 11%.
at the same level during these two years, at 2%
and 4% respectively. Of the 102 businesses, 91% of those involved in
educational projects consider that the
By region: Participation in voluntary work Government could be more involved in
promotion ranges from 21% to 14%, with promoting these links.
Usulután at the lead and San Miguel with the
52

53. Among the 361 businesses that did not get other hand, medium, small and micro businesses
involved in educational projects these two last participated in 20%, 6% and 5% respectively.
years, 35% of them expressed their wish to
participate in activities of this kind, while 24% The medium sized business reported a higher
did not, and another 40% said they were not sure benefit from working closely with the education
with regard to this issue. sector (91%); followed by the small and micro
businesses with (75%); and the large business
By sector: Services and industrial sectors evidenced (65%).
to be more committed to this liaison with the
educational community (27% and 25% Between 90% and 100% of the businesses of all
respectively). Trade and construction ranged sizes, admitted that the Government could
between 15% and 11% respectively. stimulate the link in support of the educational
sector.
Eighty four percent of the services businesses
affirmed having received some kind of benefit Regarding the 361 businesses that have not had
from this tighter relationship with the educational any relationship with educational projects in the
sector; followed by trade with 70%; and industry last two years, the medium and small firms (46%
with 68%. and 41%) of the total would like to participate
in alliances with the educational sector, followed
Regarding the question whether the government by the large business with 35%, and the micro
could foster greater links between the educational business with 24%.
and the business sectors, 100% of the construction
businesses agreed, followed by trade (95%); By region: The relationship of businesses with
services (91%) and industry (89%) the educational sector varies depending on the
region of the country: the metropolitan region
Of the businesses that have not had any type of (27%); Santa Ana, (17%); Usulután, (12%); San
link with the educational system in the last two Miguel, (11%); and Sonsonate, (8%).
years, the services and industry sectors score the
highest among those that wish to start working
San Miguel and Usulután stated having received
in this area (37%), followed by trade (35%) and
100% benefits thanks to their closer contact with
construction (21%).
the educational sector, followed by Santa Ana,
(87%); Sonsonate, (67%); and the metropolitan
By size: The large business sector has proven to
region with (65%).
have a greater involvement in some type of
educational activity (33%). It was also evident
Regarding the 361 businesses that have not had
that the larger the business the more the
any relationship with educational projects in the
involvement in educational activities. On the
53

54. last two years but would like to participate in 2 • Student mentors / advisors
alliances with the educational sector we found
that 50% of them are located in Sonsonate, 37% Of the businesses involved in educational activities,
in the metropolitan region, 34% in Usulután, 28% 9% undertake a mentor/ advisory role with
in San Miguel and 20% in Santa Ana. students.
Linkage to education activities
Student visits to place of work
Support to labor experience
apprenticeships
Education activities addressed to
higher education levels
Education activities addressed to
high school levels
Linkage to education activities
Promotes the voluntary work of
employess in social projects
Sponsors awards for social issues
0 10 20 30 40 50 60 70 80
%
Industry Construction Commerce Services
5.16 Programs linking students to the business The behavior among the various sectors is quite
sector distinctive in this area, construction plays a major
role in this area (33%) followed by services (16%);
1 • In-service training opportunities trade (5%); and industry (4%).
It was calculated that 59% of the businesses offer 3 • Student visits
in service training opportunities to interns, being
this the most important activity of the Salvadoran The activity of students visiting the workplace is
business sector to support students. particularly important, since 49% of the firms
offer this option.
All groups showed an equal commitment to this
activity. Industry and services share an equal participation
in this activity (47%), which is significantly lower
to the participation of the construction sector
(67%).
54

55. 5.17 Support to Educational Projects percentage averaging between 17% and 19%
respectively.
1 • Support to educational projects executed by
the Ministry of Education 5 • Support to educational programs on business
or business administration
Of the 102 businesses committed to some type
of educational activity, 28% provides support to The support to educational programs on business
projects executed by the Ministry of Education. or business administration gains importance since
The industrial sector outstands with 34% 17% of the 102 businesses are involved in this
participation; while services showed the lowest program. The industrial sector shows a slightly
participation rate with only 22%. higher percentage of businesses collaborating in
this area (19%), compared to the 16% of the
2 • Support to Educational Projects executed by services sector.
other Institutions
6 • Support to other school assignments
Of the 102 businesses involved in some type of
educational activity, 38% of them, support This category is also growing in importance since
programs executed by other institutions, which 19% of the 102 businesses involved in some type
renders this activity the most important of all. of school activity participate in this area. The
In opposition to the commitment to the programs services sector shows a higher commitment to
of the Ministry of Education, the services sector this area with 31% of the sector’s businesses
showed greater participation in this area (41%), participating, as compared to 13% of the industries.
compared to the industrial sector (38%).
7 • Participation in School Boards and as teacher
3 • Support to Educational Programs executed mentors and advisors
by a foundation of their own
Both the involvement in school boards and the
Of the 102 businesses that support some type of participation as teacher mentors or advisors are
educational activity, 14% support programs within pretty uncommon activities among the 102
this category. Again, the services sector shows businesses related to education activities.
greater commitment towards this category, Participation ranges between 4% and 5%
participating in 16% of the cases, compared to respectively for industry and services.
industry with 11% participation.
8 • Teacher training (financial, technical support,
4 • Curriculum development support etc.)
Of the 102 businesses involved in educational Teacher training is an activity in which 10% of
activities, 16% of them support curricula the 102 businesses engaged in educational activities
development. Industry and services share a similar are involved in. This commitment is evident
exclusively in the services sector.
55

56. Support to education programs
60
50
40
% 30
20
10
0
Executed by Executed Executed by Curricula Business and Other school Participation of Mentors and Mentors and Student visits to Teacher
Min. by other own development business subjects government in advisors for advisors for job sites training
Education institutions foundation administration schools students teachers
programs
Next, they are shown the most excellent benefits that identify the different sectors, graphically
on the bond of the company with the educational sector
Benefits of linkage to the education sector
4.5
4
3.5 Industry
3
2.5 Construction
%
2 Commerce
1.5
1 Services
0.5
0
Improved reputation of company Better labor attitude due to Benefits to community due to
due to linkage to education sector linkage to education sector linkage to education sector
Benefits of linkage to the education sector
Participation in
business - education Industry
sector alliances
Commerce
Business benefited by Construction
linkage to education Services
sector
0 20 40 60 80 100
%
56

57. 6. Public policy While 85% of the micro businesses affirm not
supporting a political candidate or party, the
This term is defined as the alignment of business remaining sectors ranged between 68% and 59%.
and public interests, generally beyond the legal, By region: Sonsonate was the region that least
ethical, and transparency requirements, as well supported any candidate or political party (82%)
as advocacy in policies that render greater social followed by Santa Ana (74%).
leverage for the country in aeas such as health,
education and other. The metropolitan region was characterized by
the largest number of businesses (12%) without
6.1 Funding of political candidates a clear criteria on this issue compared to the other
regions. Nevertheless, the metropolitan region
Sixty six percent of the surveyed businesses and Santa Ana are the only regions that affirm
affirmed not supporting any candidate for public providing support based on their own interests
office or any political party; another 10% did not (2%).
have defined criteria regarding this issue and 5%
support candidates or parties based on their 6.2 Internal Policies against Corruption
commercial interests or goals. Twenty percent
of the businesses did not answer this question. Of the total number of businesses surveyed, 33%
of them have some sort of informal anti
By sector: Seventy percent of the businesses in corruption and bribery practices established,
the trade sector affirmed not supporting any regarding their relationship with public and private
candidate or political party; followed by services authorities. Only 12% have these policies written
with 69%, the industrial businesses 62% and the down in a formal format, and 54% of the
construction sector 59%. With regards to the companies do not handle this type of policy.
question of providing support in alignment with
business interests and goals, 9% of the trade By sector: It was observed that the construction
businesses answered affirmatively followed by sector is the one that handles informal anti
4% of the businesses in the industrial and corruption policies (41%) contrary to the industrial
construction sectors and 3% in services. sector with formally written policies in 14% of
the firms. The percentage among the various
By size: The percentage of businesses that lack sectors of businesses with no defined internal
a defined criteria regarding their support to policies against corruption and bribery ranged
political parties or candidates is higher in the between 64% in the trade sector and 48% in
medium sized businesses (20%) compared to the construction.
large business sector (11%). On the other hand,
with regards to the issue of providing support in By size: Large, medium and small businesses all
alignment with business interests and goals, the frequently handle informal internal policies with
large business sector responded in 7% of the 34%, 35% and 34% respectively. On the other
cases compared to the small business (5%), and hand, the larger businesses treat this issue more
medium sized business (3%). formally in 21% of the businesses, compared to
57

58. 6% and 1% in the medium and small business formulation of proposals as compared with other
respectively. regions, both on behalf of the company (17%)
and individually (10%). Usulután has the highest
By region: The metropolitan region and Sonsonate level of individual participation (18%). In San
are the regions with the highest rate in the use Miguel 91% of the businesses do not participate
of informal anti corruption policies with 35% in the formulation of proposals.
and 46% respectively, compared to 27% in
Usulután, 26% in Santa Ana and 14% in San 6.4 Participation in business forums and
Miguel. The metropolitan region is also the one associations.
where formal policies are established more
frequently (17%), compared to other regions A total of 44% of the surveyed businesses
(5%) participate in business associations or forums.
Of these, 36% participate on behalf of the
6.3 Proposals through public, private or mixed company and 8% individually.
institutions
With regards to memberships in business
Of the surveyed businesses 23% of them associations 38% of the businesses are associated
participate in the formulation of social, economic to the Chamber of Commerce and Industry of
and state policies, through public, private or El Salvador, CCIES, and guilds related to their
mixed institutions. Of these businesses 13% sectors; 29% of them are associated to the
participate as a company, while 9% do so through Salvadoran Association of Industrials (ASI); 29%,
related persons and on their behalf. of them to the National Association of the Private
Business Sector, ANEP; 9%, to non for profit
By sector: The sector that participated the most organizations; 3%, to the Salvadoran Institution
in the formulation of proposals is the construction for Professional Education (INSAFORP); 2%,
sector, both as a company (22%) and individually to the Corporation of Exporters (COEXPORT);
(11%). Industry and services participate as a and 20%, to other types of associations.
company in 14% of cases and 10% individually.
Trade is the sector that least participates in the Of the total number of businesses that participate
formulation of proposals (84%). in business associations and forums, 82%
participate in commissions and work groups
By size: Large businesses show a higher related to the advocacy and promotion of the
commitment with the formulation of proposals, specific interests of their sectors or business
both on behalf of the company (19%) and branch; 41% visit public authorities to promote
individually (12%). Micro and small businesses sector related issues; 23% participate in
rate higher as sectors that do not participate in commissions and work groups related to public
this issue with 92% and 91% respectively. interest and social responsibility issues; 20% in
processes to elaborate public interest and social
By region: Businesses in the metropolitan area proposals and 12% visit authorities to promote
participate with greater frequency in the public or social interest issues.
58

59. By sector: The industry sector participates more The large business sector participates in the
frequently in business associations and forums, majority of associations, particularly in the ones
both on behalf of the company (42%) and also that defend and promote sectorial interests.
individually (10%), collaborating actively in guilds The medium sized business participates very
such as the ASI, CCIES and others, and also actively in commissions related to public interest
participate in a higher more in commissions and social responsibility issues (35%), and also
related to the defense and promotion of the visits authorities to promote issues of sectoral
interests of their particular sectors. The next interest (55%), reaching the highest percentages
sector is the construction sector that also in this item.
participates on behalf of the company (44%) and
By region: The businesses located in the
individually (7%) collaborating actively in their
metropolitan region participate more actively in
sector associations and guilds related to the
associations and forums (47%), in opposition to
advocacy and promotion of their particular
the remaining regions which range between 28%
interests.
and13% participation. Usulután is the region
where a striking 94% of the businesses do not
Participation in the formulation of public interest
participate in business associations or forums.
and social responsibility proposals among the
various sectors is as follows: services, 37%; All the regions share a similar percentage (80%
construction, 25%; industry, (21%); and trade to 87%) regarding their participation in
(14%). commissions related to the advocacy and
promotion of sectoral issues. Regarding their
By size: Large businesses participate more in participation in public interest and social
business associations and forums, both on behalf responsibility issues, Santa Ana shows the highest
of the business (55%) and individually (10%). percentage ( 46%), compared to the other regions;
The micro business sector does not participate the metropolitan region (22%), Sonsonate (20%)
actively in business associations and forums (90%). and San Miguel (12%).
Public Politics
100
80
60
%
40
20
0
No support to Suport based on Internal formal Board of directors Company participates Participants in Participate in the
either candidates trade interests policies against draft policies in business forums own sector promotion of sector
or political parties corruption guilds own specific interests
Industry Construction Commerce Services
59

60. Chapter III:
Conclusions
Following are the most relevant conclusions business, the more formalized its labor relations
corresponding to the CSR analysis: are.
1. In general terms, the larger the business, the b • Two out of every four businesses surveyed
higher its level of compliance with the various use a different way to communicate employees
factors analyzed by this research, particularly, if their rights and duties, with the internal
it is located in the metropolitan region of San regulations manual prevailing among them.
Salvador. On the other hand, upon considering Nine out of every ten businesses have set forth
the different economic sectors, it is evident that a labor compensation system, being health care
behavior is not systematic. and pension fund contributions the most
important. Seven out of every ten businesses
2. Principles, ethical values and governance pay holidays and a Christmas bonus, over the
sum established by law. Only one out of every
Three out of every four businesses have a ten businesses employs minors during the day
Code of Ethics with a high level of participation shift, in accordance with the provisions of law.
of owners and shareholders in its drafting; this
code is disseminated to the administrative staff c • More than half of the businesses surveyed
in 77% of the businesses, to the mid provide labor opportunities to inexperienced
management level in 66% of cases and is youngsters and to workers over the age of
reviewed at least once a year in 60% of the forty, and one out of every three businesses
businesses. employ disabled persons. In accordance with
the Equal Opportunities Law, the Ministry of
3. Work place and human rights Labor has classified disabled persons as follows:
I) Physically impaired, hemiplegics (loss of
a • The average number of hours worked per one arm or leg) paraplegics (loss of functionality
week is 44.6, slightly over the hours set forth and numbness of lower limbs); quadriplegic
in the law. Overtime is acknowledged for 66% (loss of function of upper and lower limbs)
of the workers and 33% of the administrative sequals of polio, flat feet, and amputation of
staff. This is based on the type of contract in limbs. ii) Sensorial impairments, deafness,
force and the special compensation benefits persons with hearing problems, the blind, or
and policies each have. The ratio between the with a weak sight, or those who have totally
highest and the lowest salary among the lost the vision of one eye; and strabismus.
businesses surveyed was 13. The larger the
60

61. iii) Mental impairment, lack of understanding, industrial sector at the lead in this area. One
behavior disorder, and retardedness. out of every four businesses has a customer
complaint service. Nine out of ten businesses
d • Four of each ten businesses have ongoing verify publicity campaigns in advance, to insure
training programs, while five out of ten offer compliance with the Consumer Defense Law.
training according to need. Workers literacy
rate among the businesses interviewed is high 5. Environment
(97%) and 2% of the businesses have in house
literacy programs. Between the years of 2000 a • Nine out of every ten businesses affirm
and 2001, the businesses interviewed invested having knowledge of the impact of their
an average of 2% of their annual sales in the activities on the environment and health, and
professional upgrading and education of their every five of these claim their products do not
employees. The medium sized businesses cause any effect whatsoever. Eight of every
outstand in this area. ten businesses who accept their products cause
an impact on the environment and health
e • Nine out of every ten businesses surveyed develop research and seek solutions to the
comply with the health and safety provisions problem. One third of the businesses participate
and adequate labor conditions for their workers, in environment related studies, forums and
with the highest rate of compliance among the seminars, aimed at promoting and adopting
industrial businesses (80%) and (86%) of the environmentally friendly laws, standards and
large businesses. regulations.
4. Marketing b • Three percent of the surveyed businesses
adopted ISO 14000 standards and 5% of the
Eight out of every ten businesses have policies total workforce is under the certification
and standards in place to assess and select their program required by the domestic
suppliers, among which the industrial sector environmental law. In the period between 2000
(85%) and large businesses (60%) rated the and 2001, surveyed businesses invested an
highest. Ninety six percent of the businesses average of 0.8% of their annual sales in
work with domestic suppliers, while 50% work environment improvement projects, being the
with international suppliers. Among the industrial and services sectors the ones that
businesses interviewed, 13% of them use invested the most in this area.
former employees as suppliers, particularly in
the construction sector. Forty seven percent 6. Community
of the businesses surveyed review the expiration
date of their products, 58% of which belong a • Sixty percent of the total number of surveyed
to the trade sector; whiles 50% of them do businesses carry out some type of social activity
not apply this concept. Two out of every three or develop projects in coordination with
businesses have ongoing product, process and governmental, municipal, community, private
service enhancement programs, with the organizations, NGOs, churches and other. Of
61

62. these, 24% execute programs within the c • A total of 22% of the businesses surveyed
community and 60% of these dedicate their were linked to some type of educational activity
efforts to educational programs. The majority in the past two years (working experience by
of the businesses surveyed respond to means of internships, or financial and technical
occasional requests. support to schools). In 43% of the cases,
contacts were initiated by the school or
b • Businesses earmark an average of 3.9% of educational institutions and in 40%, of the
their total budget to community service cases by the company itself. The remaining
programs, and 93% of this percentage percentage was initiated through other means.
originates from own funds while another 8%
comes from contributions from other 7. Public Policy
businesses of the same entrepreneurial group.
Businesses not only provide cash contributions Three out of every ten businesses surveyed
to the communities they serve, but also skilled have well defined policies against corruption
human resources, facilities, technology, and to and bribery regarding public authorities and
a lesser extent, products and internships. 23% of the businesses participate in the
Regarding investments in employee’s formulation of social, economic proposals and
professional development and education, state policies. Four out of ten businesses
businesses earmarked 1.5% average of their participate in business associations or forums,
total annual sales in 2000 and 1.8% in 2001. the majority are members of the Chamber of
Commerce and Industry of El Salvador and
sectoral guilds.
62

63. Chapter IV:
Ranking according to the International Finance Corporation
One of the most remarkable outcomes available factors that define a positive impact, in terms of
to the businesses that daily develop Corporate sustainability and commercial arguments,
Social Responsibility practices, is the international particularly in emerging markets; one that justifies
ranking of their businesses regarding global the task of improving performance in those areas.
performance. This chapter provides an ample IFC commitment to sustainable development is
explanation of the sustainability assessment of decisive due to its capability to distinguish itself
the corporations, assessment indicators, and the from other financial institutions and provide
various ranking levels by the International Finance customers with valuable services that will enable
Corporation (IFC), a World Bank institution, them to face global challenges. IFC deems that
focused on the private sector. The various sustainability will become the driver of success
activities included in the survey were analyzed in of both its activities and profitability in the future.
order to get concrete results, and then they were
ranked following this criterion to obtain a Generally, private investments contribute to
domestic figure. development through the productive use of capital.
Additionally, they can contribute to the betterment
1. Evaluation of business sustainability of the environment, society and corporative
governance. As a part of its sustainable
The sustainability framework of the IFC will development initiative, IFC seeks to promote a
serve as the basis to define the results of CSR strong yield regarding the environment, society
activities or practices in El Salvador, obtained by and corporative governance in the private sector
this research. The International Finance so as to reach a greater development impact.
Corporation is the largest multilateral long term Entrepreneurial actions in the area of sustainability
financial provider of the private sector in target a higher added value, beyond the one
developing countries. Its mandate is to contribute created by the business with its capital investment.
to the alleviation of poverty in member countries
through the increase of private investment. 2. Sustainability Indicators
(In accordance with the IFC sustainability
The IFC framework aims at defining the framework)
components of a sustainable performance in a
tangible and concrete manner, allowing IFC
The target of reaching a greater impact in the
Management to assess the effects of the various
areas of governance, environment and community
projects. It also determines that it is fundamental
is a result of the logical evolution of the IFC role.
to clearly understand the relationship among the
63

64. The following levels of indicators were developed Impact regarding these areas was divided into
based of IFC experience in securing the financial four yield levels:
and economic sustainability of investments,
framed within three large areas, and divided into Level 1: mirrors compliance with minimum IFC
eight factors: and country standards. The economic activity of
the business is in agreement with domestic and
Management commitment and governance international standards.
Environmental management, commitment to Level 2: indicates the degree of added value from
the environmental, community or corporative
social development and capacity building. governance perspective. The economic activity
Corporative governance. of a firm creates local and global benefits that
Transparency and accountability. are distributed throughout the ocal community.
The Environment Level 3: indicates that the high impact of the
project or the business has largely influenced
other businesses when due performance is
Eco efficiency process.
translated into higher yields. Economic activity
Environmental accountability of products beyond the business focuses on increasing
/servicies. resources and adding new benefits. It includes
level 2 elements.
Economic development
Level 4: reflects a leadership position, where the
Local economic growth and collaboration relations. project or business has a strong impact regarding
best practices. The economic activity, far beyond
Community development. the business, focuses on increasing resources and
Employee health, safety and welfare. adding new beneficiaries. It includes level 3
elements.
64

65. 3. IFC ranking of surveyed businesses reducing poverty and enhancing the living
conditions of the population.
Since the content of this methodology targets a
larger range of activities, we adapted the four Businesses ranked by the IFC will reap major
IFC levels to the specific CSR areas yielded by benefits, one of which is the access to a special
this research. By giving each surveyed component line of credit. Nevertheless, the true value of this
a number figure, it was possible to rank these qualification lies on the fact that this funding is
businesses and provide each of them with a granted following a methodology by which
percentage corresponding to the four IFC levels. business persons gradually discover that their
funding can and should yield not only economic
The following chart shows the percentage scored gains but also social benefits.
by Salvadoran businesses in each level:
Within the international context, there is a clear
trend to include the responsible competitiveness
Level Firms IFC% of a business as a success indicator. IFC ranking
1 72.1 of concrete business actions and practices provides
the opportunity to scientifically demonstrate and
2 39.6 learn the social impact of business investments,
3 17.9 thus providing incentives for a more dynamic
sustainable development.
4 10.6
Additionally, IFC ranking helps businesses build
Seventy two percent of the surveyed businesses awareness on the opportunities within
were framed within level 1 regarding compliance sustainability, and to this end, establishes a series
with minimal IFC and World Bank standards, of international standards whose compliance
and therefore meet the domestic and international produces more benefits for the business, society
standards to reach a sustainable development. and the country. This ranking lays an objective
This means that seven out of every ten businesses and credible foundation to compute the added
comply with the above mentioned standards. value obtained from CSR practices and to
determine how this added value can be adopted
Eleven percent of the businesses are in level 4, by specific projects.
indicating a strong leadership position and ample
influence in best CSR practices management. Summarizing, only IFC ranking enjoys
international recognition and validity, fosters the
4. Importance of IFC ranking funding of private sector projects for sustainable
development, and supports private enterprises in
IFC mission is to foster sustainable private sector their financial transition into international markets.
investments in developing countries, aimed at
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66. FUNDE
What is FUNDEMAS? social values and an entrepreneurial culture in
harmony with the demands and challenges of
Corporate Social Responsibility is a strategic
globalization. Many activities were developed
imperative that motivates businesses to
with the invaluable support of voluntary workers
incorporate policies and practices that contribute
that contributed their time, talent and resources
to their relationship with shareholders, employees,
to the social development of the country.
the community and the environment, by means
of a new paradigm of ethical principles and values,
positioning the business sector as the competitive
What programs does FUNDEMAS have?
driver of economic and social development.
Following are the three programs of the
With this innovative idea in mind, a group of
Foundation:
Salvadoran visionary entrepreneurs created the
Business Foundation for Social Action
(FUNDEMAS), in May 2000, with the aspiration
to contribute to the economic and social
development of El Salvador, through the EMPRESAL (Salvadoran Business Sector for
strengthening of corporate responsibility, the Corporate Responsibility). This program seeks
promotion of entrepreneurial philanthropy, the to thrust the economic and social development
fostering of entrepreneurial practices and conduct of El Salvador, by promoting and supporting
and the enhancement of education quality in the socially responsible economic practices that will
country. in turn contribute to the welfare of human beings,
To this date, the Foundation has more than 90 organizations and society as a whole. The aim of
members among individuals, businesses, guilds EMPRESAL is to urge the business sector to
and higher education institutions. It is also a incorporate ethical values in their business
member of the Business for Social Responsibility strategies, based on the nine key areas of
(BSR) and the Private Sector Forum and Corporate Social Responsibility. To this end, the
Corporate Social Responsibility in the Americas Program publishes written material, holds
(Forum EMPRESA). conferences and forums to which businessmen
and women from all the business spectrum, as
How does FUNDEMAS work? well as members of the domestic production
sector are invited.
FUNDEMAS Works through four programs,
which attempt to facilitate the development of
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67. areas of human behavior: achievement, planning
and empowerment. To this date, the Program
has worked with more than 1,200 individuals and
is ISO 9001:2000, certified.
EMPRETEC (Program for the Development of
Entrepreneurs). EMPRETEC is a training
program that fosters the building and
strengthening of entrepreneurial behaviors to
enhance the competitiveness of the business,
particularly the small and medium businesses. FIDES (Fund for Education Development
The program is an international franchise whose Initiatives of El Salvador), fosters innovative
exclusive rights were conferred to FUNDEMAS initiatives that promise to open education
in El Salvador by the United Nations Conference opportunities and achievements for Salvadorans.
for Trade and Development (UNCTAD). The The Fund has adopted a corporate social
technological transfer and implementation of responsibility approach that enables the private
EMPRETEC in El Salvador were co financed sector to promote the economic, social and
by the Multilateral Fund for Investments and cultural progress of the country, and also the
managed by the Interamerican Development development of national strategies leading to the
Bank (IDB/FOMIN). FUNDEMAS, besides responsible competitiveness of El Salvador in a
implementing behavior workshops, as an worldwide economy, thus contributing to the
additional service, also collaborates with program social, economic and cultural development of the
participants interested in a productive credit line. country.
The Foundation schedules interviews of members
with credit officers of the commercial banks.
EMPRETEC provides information in three key
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68. Board of Directors 2001-2003
The current Board is comprised of 14 Founding Members: 7 Directors and 7 Alternate Directors.
1. Roberto H. Murray Meza, 9. Francisco Escobar Thompson,
Chairman Alternate Director
2. Jorge Zablah-Touché, 10. Ricardo Hill,
Deputy Chairman Alternate Director
3. Mrs. Miriam Garayzar de Sagrera, 11. Rafael Castellanos,
Secretary Alternate Director
4. Cesar Catani Papini, 12. José Gustavo Herodier Samayoa,
Treasurer Alternate Director
5. Juan Carlos Eserski, 13. Renata Mendoza,
Deputy Treasurer Alternate Director
6. Federico Colorado, 14. Michelle Gallardo de Gutiérrez,
Director Alternate Director
7. Glorybell Silhy de Daboub,
Director Observer:
8. Mauricio Samayoa, Rhina Reyes de Fuentes,
Alternate Director Executive Director
68