Making CSR Sustainable: Critical Assessment of Indian CSR Policy and Industrial Responses

1. Making CSR Sustainable: Critical Assessment of Indian CSR Policy and Industrial Responses HimadriSinha Head – Department of Research and Planning & Professor of Rural Development Xavier Institute of Social Service Ranchi, Jharkhand, India email: himadrisinha19@gmail.com /himadrisinha@xiss.ac.in

3. Objectives of the article (a) AssessingIndian government’s industrial policy for creating a peaceful cohabitation of industries and people in neighbourhood, (b) Assessing the best practices of CSR to people’s trust and the faulty CSR practices of some industrial bodies that decimate industrial credibility, (c) Identifying CSR practices contributing towards sustainable inclusive growth and analyzing their social, environmental and economical implication for larger appreciations, and (d) Identify the principle of corporate governance for ensuring sustainable development through CSR activities.

4. Methodology • The study included both desk and field reviews from secondary sources and some evaluation studies of CSR activities conducted by the author in the recent past. • Governmental policy guidelines for CSR planning and execution and CSR reports of industrial bodies will analyzed through desk review. • Review included some industrial cases of exemplary CSR contribution and some industrial cases of flawed CSR practices from India based secondary information. • Cases were selected purposively where author was allowed to access the corporate data and the cases which were surveyed by the author as institutional assignments to assess the impact of CSR activities. • Case studies were based on the analysis of CSR policy of selected industries, financial commitment of industry towards CSR execution, implication of CSR activities on social, environmental and economical lives of people residing in industrial vicinity (15 km radius as per national policy).

5. Methodology

6. CSR Concept vis a visGoI Policy • General Concept - ‘The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’ • The emerging concept of CSR in India – goes beyond charity and requires the company to act beyond its legal obligations and to integrate social, environmental and ethical concerns into company’s business process. • Shift from ‘shareholder alone’ to ‘multi-stakeholder’ focus • The key components of CSR would therefore include the following: corporate governance, business ethics, workplaceand labour relations, affirmative action/good practices, supply chain, customers, environment and community

7. CSR Concept – Governmental Measures

8. CSR Concept – Weakness of GoImeasur • No specific monitoring of ESG (environmental, social and govern ace • Half hearted approach (Examples) • towards fixing of land price as per World Bank/ADB guidelines for the land losers • No employment opportunities for land losers • Weak institutional framework

9. Assessment of CSR Practices Only 3 parameters were considered in the current study

11. CSR and Industrial Responses in India • Its a mix bag

12. CSR – Best Practices

13. CSR – Best Practices

14. CSR – Best Practices

15. CSR – Best Practices

16. CSR – Best Practices

17. CSR – Best Practices

18. CSR – Faulty Practices

19. Faulty Environmental Practices Sponge Iron Factories Facts • Mainly cause air pollution • It happens due to non-installation or non-operation of pollution control equipment • inspection reports show • 92% had abnormally high emissions from kiln • 100% of the sponge iron factories bypassing pollution control equipment (CSE report, 2009). • In Odisha, evidences of soil and water contamination , human health hazards were found, • In Chhattisgarh, more than 60 companies are functioning illegally

20. Faulty Environmental Practices Perils of Union Carbide Bhopal Facts • In the early morning hours of December 3, 1984, a poisonous grey cloud (forty tons of toxic gases) from Union Carbide India Limited (UCIL's) pesticide plant at Bhopal spread throughout the city. • The incident exposed more than 500,000 people and resulting in the direct deaths of between 3,800 (UCIL estimate) and 15,000 (unofficial Indian Govt. figure).  • No medical help could be provided • UCIL did not provide any help either • No adequate compensation has been paid till death nor any perpetrators had been punished till date (Peterson, 2010).

21. Withholding the CSR contributions from communities Rehabilitation & Resettlement benefits • Currently in India, company buys land that produces per capita income of US $ 2 day/head/acre for a family of five (which is equal to US $ 3650/ household/year) at around US $ 2000 to Us $ 35,000 without providing any employment to any of the family members. • Such land rates is far below World Bank/ ADB recommended replacement value and therefore, highly inadequate • Monthly Pension/Annuity is barely US $ 25/ acre of land (in lieu of job) • Vocational trainings were given project affected youths without job placement • Forest dweller’s rights were not honoured in spurious manner • Low quality construction work in rehab colony

22. Withholding the CSR contributions from communities Using Peripheral dev fund for infrastructure dev within factory and staff colony As per NPRR 2007 of GoI, Problems Requirements Using CSR funds for

24. CSR & INCLUSIVE GROWTH • Concern for Inclusive Growth (IC) has now become global. • Sustained IC requires an optimal blend of three sets of actors and their respective responsibilities namely government, corporate and personal social responsibility (PSR) which means that every citizen above the poverty line must take her/his seriously, to help a few below the Poverty Line. • Job Outsourcing:- Vedanta Plc has out sourced most of transport, road management, garden management and series of non technical and semi technical jobs to displaced people and stabilised their livelihood. Number of power plants has out sourced the job of fly ash brick making to local youths. • Market Linkages: ITC and some other companies created village level sustained market channel to promote sustainable business ventures for villagers. • Rights based approach: Bill Gates Foundation supports UNICEF, DFID to strengthen right based development approach in India. It has yielded positive result in Health, Child rights, Women care & RCH • Is it a Dream? Tata group earlier days absorbed good number of project displaced placed people. But currently Tata is less willing to offer employment to the displaced. In such event companies CSR needs to create alternative livelihood and to support them till such livelihood ventures are stabilised. However, inclusive growth is still a dream than reality in business parlance.

25. Principles of corporate governance for sustainable development through CSR activities

26. Principles of corporate governance for sustainable development through CSR activities Prioritizing social issues & CSR strategy

27. Thank You