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.
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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.
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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.
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