Sustainable Development & Social Responsibility

Commercial success raises social responsibility, a principal that defines the idea of a social market economy, as defined by Prof. Müller-Armack in the 1950s. The "social" element to the model refers to support for the provision of equal opportunity and protection of those unable to compete in the free market. In general this means that commercial commitment to any market economy always needs to consider how to sustainably great long-term value for the society and integrate social aspects in its endeavor. In this context key aspects are viable investment projects, combined with local empowerment via education, comprehensive know-how transfer and qualification programs. Effective tools for the purpose therefore are Public Private Partnerships, in particular the Build-Operate-Transfer model (BOT), which encourages sustainable development.

With the help of BOT-projects stimulus can be introduced into the economy without the taxpayers carrying the bill, or the government taking on new debt. In a process where the private industry is given a business opportunity by the government, the industry finalizes the concept in a competitive bid situation, does detailed design, constructs, puts up the necessary finance and operates the business for a period of time to recover its costs and make a profit. Once the BOT period has expired, the business is turned over to the government which might carry on with the operation, sell it or grant concessions.

The biggest advantage of a BOT is that the viability of the project is validated by the private industry in a competitive environment. Taxpayers will see from industry proposals how profitable each project would be. The second advantage is that funding obligation is transferred to the private sector. With lending so limited, however, it may require government loan guarantees.

Thus, the project has the best conditions to run successfully, while covering the project costs, which lays the groundwork for an overall positive development. The private entity commits to extensive investment in the infrastructure and the creation of qualified jobs in the sector. One example is the El Salvador BOT-project, Mühlbauer has been operating the “DUI project” since 2011, working closely with the government, to replace the old system for the issuance of ID cards with a state-of-the-art, innovative and agile one. Next to the infrastructure as such, this also included the renewal of a network of service centers countywide. Part of the project moreover was the issuance of national ID cards in service centers in the United States and Canada with the local installation of data enrollment and delivery clients and a centralized personalization center operated by local staff. The government of El Salvador defined the project scope, based on which Mühlbauer worked out the solution proposal and in a competitive bid was awarded with the contract.

Investment and Social Projects

In 2011 Mühlbauer was awarded with a BOT contract, for the DUI El Salvador by the National Registry of Natural Persons (NRNP). Within five years, the new infrastructure has been completely set up and local operators, technicians and management have been trained to ensure the successful operation. Since 2011 approximately 3 million national ID cards have been issued. Around 7 million national ID cards are expected to be produced within the next five years. This provides the government with a tool to generate security and benefits for the people of El Salvador. Mühlbauer’s infrastructure investment totals to 65 million USD, and 250 highly qualified and well paid jobs have been created, which provide prospects to families and the community they live in. The project generates revenue to the government in form of proceeds, taxes and duties. The carefully designed interaction between the government entities ensures the mutually beneficial execution of the project, a classical “win-win” situation.

“We are delighted with the services provided by Mühlbauer”, says Margarita Velado, President of the NRNP. “His outstanding performance has contributed to the continuous improvement of the identification system of El Salvador.”

In parallel to the DUI project, Mühlbauer has developed social projects right from the beginning. In close cooperation with the Ministry of Education in El Salvador, the project “Escuela Verde” has been implemented, with the aim of training students and teachers in the cultivation of crops. The intention is to help reduce malnutrition rates in children of scarce resources, to improve their attention span thus ensuring better learning conditions, and to contribute to a healthy development of the students.

Conclusion

Social responsibility needs to be met wherever a company is active. Many entrepreneurs and business professionals have made this a basic principle of their business activities, proving that these topics go hand in hand with commercial success.

Press Contact:

Lara Schmaus

Phone: +49 9461 952 – 1579

Email: Lara.Schmaus@muehlbauer.de