Bhubaneswar: A three day workshop on Corporate Social Responsibility was organized by the Global Gandhian Trusteeship & Corporate Responsibility Foundation at Hotel Panthanivas, Bhubaneswar on July 10-12,2014. The event attracted over 30 participants from Corporate Houses, Civil Society Organisations and students. Among the Corporate who participated were NALCO, OPGC Ltd, Rourkela Steel, Eastern Coal Limited, Jindal Power & Steel Limited, Jindal Stainless, GMR Energy and Rawnet Commodities.
The event was flagged of with a key note address by the Chief Guest Mr. Jagadananda, Secretary CYSD. He spoke about the growing importance of the civil society organizations to bring about social and economic change in the country. He said NGOs can play a very important role in the implementation of the New CSR policy.
Jagadananda drew attention of civil society organizations to the increasing opportunities, within and outside the country, to partner with business to bring about social and economic change. He said civil society organizations were better equipped to deliver change because of their grassroot connections.
At the same time he pointed out that NGOs should look into the need for accountability and transparency in their working. He said business would be willing to partner with them only if they are able to deliver and have systems of accountability and transparency installed into their functioning.
In an address spiced with national and international examples Jagadananda, asked both business and civil society to partner with the government in implementing schemes for the good of the people. He said government had many schemes for the welfare of the people but failed to implement these effectively. He felt that a partnership between the three would go a long was in solving many of the problems.
According to Jagadananda, discussions on poverty were not limited to India alone. These discussions were taking place even in developed countries of the west. He said the world over the people’s expectation from the government has gone up many fold. Governments did not lack the funds. The problem is that governments were not able to spend the money set aside for various programmes.
He said there was need to develop the last mile connectivity to ensure that the benefits’ of the various schemes reach those they were intended for. He said there was need for identify the actual needs of the people and thereafter create plans for their implementation. He pointed out that the people need small things which can be fulfilled with small sums of money.
Taking off from here Prof. S Mishra from the International Institute of Management profiled a very impressive presentation on What is CSR. Prof Mishra highlighted the fact that CSR was no longer a question of choice but that Corporates were legally bound to adopt and implement CSR policies and prorammes.
CSR,she said, defines how a company complies with environmental regulations and respects the local community and treats its employees and customers. Corporate social responsibility (CSR) is the heart of a sustainable business. According to Prof Mishra there were four strong reasons why companies need to adopt CSR practices. These include Moral obligation, Sustainability, License to operate and Reputation
Pointing out at over Rs 7000 crore would come under CSR because of the CSR provisions in the new Company Act Prof Mishra highlighted the fact that companies will have to rethink their objectives. Profit maximization at the cost of society, she said, will no longer be accepted. Companies will need to take into consideration the needs of the multiple stakeholders.
Prof Mishra traced the growth of CSR in the country. She highlighted the concepts of charity, philanthropy, trusteeship to the present day concept of CSR. Companies, she pointed out, have begun to realize that they must behave as good social citizens. There is growing realization among investor that a company’s social track record had to be taken into consideration before making any serious investment commitments. “You cannot get away with anything you do, on the cost of society.” Doing charity and philanthropy is not enough in comparison to the benefits a corporate is taking from the society. A holistic CSR model is needed.”
Speaking on Livelihood- Odisha Situation and Initiative, Mr Amalendu Pal, Director, Asian Institute of Poverty Alleviation highlighted the fact that Building a sustainable future from exclusion to empowerment with a provision of social and economic security should be the goal for livelihood programmes. He said every livelihood programme should aim at reducing poverty, discrimination and exclusion.
Pal pointed out that all livelihood programmes should be such that they help people live a dignified life based on equity, equality, mutual cooperation and inter dependence. The vision should be to create a world wherein all people can live in peace, prosperity, freedom and security.
The Speaker said Orissa was a land with rich natural resources. However it was also a state with a poverty rate of over 52 percent against the national figure of 37.2 percent Rural poverty rates where 60.8 percent against the national average of 41.8 percent. Quoting figures from the Odisha Economic Survey he said the rural workforce in the state was 87.3 percent against the national average of 65 percent. Literacy rates in the state was 73 percent.
Identifying 10 districts as the ones requiring priority for livelihood programmes Pal said there was need to take up programmes in the agricultural sector, including animal husbandry and pisciculture. Alongside the efforts of the government the Corporate sector had an important role to play in the creation of livelihood programmes. Working with NGOs Corporates could contribute significantly.
Day Two started with a presentation by Mr Bibhu Mohanty on CSR Strategy and How to build it. Stressing on the fact that a correct, well drawn out strategy, was the best guarantee for a successful CSR programme. A well drawn out would help the organisation attain sustainable development. Bibhu pointed out that a right CSR strategy would be one which will take into consideration the interests of all the key stakeholders as also the issues required to be addressed.
Bibhu walked the participants through the various stages of strategy building and how it was to be done. He said Stakeholder mapping was one of the important tools of CSR strategy. Unless this was done correctly/effectively problems could surface at the implementation stage and even later.
Bibhu said that it was important that all the stakeholders were taken into consideration while preparing projects of community interventions. Their contribution in the planning of a CSR activity was important. That, he said, would be a right strategy. The main aim of the strategy should be to create a golden bridge between the people, company and government. Roping in the government in the process of the solution is also important.
Speaking on the Anomalies in CSR and the NPO Context, Mr Manoj Fogla, Consultant, Evaluator, Facilitator on Financial, governance and legal issues for NGOs in South Asia, pointed out that he recent company’s act amendment contained several anomalies for company who want to adhere to these changes.
Among these, he said, was that Expenditure on Corporate Social Responsibility (‘CSR’) was not deductible under Section 37(1): He said any expenditure incurred by a Company on the activities relating to CSR referred to in section 135 of the Companies Act, 2013 will not be an allowable expenditure. CSR is not an expense under section 37 instead it should be expense post tax.
Fogla pointed out that exemptions offered under Income Tax were not equal for all CSR expenditure. He pointed out that tax exemptions for some expenditure was allowed up to 100 percent whereas for other it is 50 percent and less. So many companies, he said, would prefer for 100 percent tax exemption activities regardless of the need or impact of the expenditure.
He said he feared that since companies can only avail deductions on such CSR spending pursuant to section 80G of the IT Act, the expenditure on CSR activities is most likely to become a passive cheque book CSR spending. Companies would be tempted to make contributions to trusts under section 80G of the IT Act, so as to get the deduction benefit instead of making actual spending on CSR activities
Speaking on the Health Agenda for the Corporate Sector Amalendu Pal, claimed that considerable progress had been achieved in the public health since independence. He said, significant improvements in institutional deliveries, out-patient cases, full immunization, diagnostic and family welfare services and disease control programmes had been made.
Despite these achievements India has the highest number of malnourished children in the world today. Though the maternal mortality rate has declined over the past 30 years from 460 to 212 per 1, 00,000 live births, it still remains high according to the statistics available from the World Health Organisation.
Amalendu pointed out that the government had enacted several laws to help provide health care for the population. Despite these laws health care facilities in the country are still inadequate. Human resources for health were not enough and people had to spend substantial funds out of their own pockets. Added to this was the fact that the penetration of health insurance was low in various parts of the country
Speaking about the contribution of the Corporate sector for health Amalendu revealed that some of them had set up hospitals and taken up public health programmes and some health education campaigns. Many company towns, he said, have corporate hospitals of the highest quality and the health care provided for the employees is excellent. Access to the others has varied but when available it is a concession rather than a right.
Since the State is a major factor in providing public health protection, he felt, it would be ideal if both the company and the state can work together. He suggested that both the company and the state should work together in specific communities. Primary health centers have had problems in many parts of the country, both of resources and management. Corporate support in managing and monitoring health programmes of the government would go a long way in improving health care delivery in the country.
Corporate Social Responsibility under the provisions of the Company’s Act 2013 is both voluntary and mandatory. Voluntary because Companies have the right to choose the activities they would like to undertake under the CSR programme. Schedule VII in the Act has listed activities which companies can take up in their CSR Agenda.
It is mandatory because the Act lays down that companies are required to report their CSR activities. The law says that even where companies do not have a CSR programme they are required to state why they have not adopted CSR. In the case of companies undertaking CSR activities they are required to report on the choice of the project, the money to be spent, the number of people to be impacted and the duration of the project.
Speaking on Corporate Social Responsibility: A Medium to Sustainable Development, Dr Ashok Kumar Panda, Media Expert, Visiting Fellow, Oxford and Head Sanmarg Hindi Publication, Bhubaneswar, began by explaining the concept of Corporate Social Responsibility and Sustainability. CSR, he said, was essentially about how business takes account its economic, social and environmental impacts in the business it operates – maximizing the benefits and minimizing the downsides.
“While there is no universal definition of corporate social responsibility, it generally refers to transparent business practices that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment. Beyond making profits, companies are responsible for the totality of their impact on people and the planet. “People” constitute the company’s stakeholders: its employees, customers, business partners, investors, suppliers and vendors, the government, and the community. CSR, he said, is an entry point for understanding sustainable development issues and responding to them in a firm’s business strategy.
Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of ‘doing the right thing’ within a corporation can offset these risks.
CSR’s business returns are contingent on the stakeholder’s awareness of the company’s CSR activities. Studies have shown that awareness of a company’s CSR activities among internal and external stakeholders is typically low. This constitutes an impediment or stumbling block in the company’s quest to reap strategic benefits from its CSR activities. There is therefore need for companies to communicate their CSR achievements among the stakeholders.
According to Dr Panda advances in communications technology, such as the Internet and mobile phones, are making it easier to track and discuss corporate activities. Internally, this can facilitate management, reporting and change. Externally, NGOs, the media and others can quickly assess and profile business practices they view as either problematic or exemplary. In the CSR context, modern communications technology offers opportunities to improve dialogue and partnerships.
Taking off from here Mr Jyoti Prakash Mishra, Chief Public Relations Officer, East Coast Railway spoke about how CSR Managers can develop and maintain relations with the media. He said here was no need for Managers to fear the media. One needs to cultivate good relations with members of the media to create mutual trust and cooperation.
He said the media was not always looking at the negative side of any development. They were willing to listen to and provide coverage for positive stories of successfully created and implemented CSR initiatives. Externally, NGOs, the media and others can quickly assess and profile business practices they view as either problematic or exemplary.
It is necessary for CSR Managers to share the good and bad points of an activity with trusted media persons. With mutual trust the media will appreciate the problems faced by the company and try to highlight the positive side of the activities.
CSR reporting is necessary for any organisation and equally necessary is the medium to report. CSR reporting helps in image building and minimizes the stakeholder skepticism . Be very clear on what to communicate It is important to be very specific about the activities and not to clatter.
Speaking on How and Why GRI Reporting, Mr Nisheeth Srivastava, explained the need to follow the GRI System of reporting on CSR and Sustainability issues. He said the main mission of GRI was to create “A sustainable global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly and report transparently”. GRI, he revealed, has pioneered and developed a comprehensive sustainability reporting framework that is widely used around the world.
The Framework, which includes the Reporting Guidelines, Sector Guidance and other resources, enables greater organizational transparency and accountability. This can build stakeholders’ trust in organizations, and lead to many other benefits. GRI had become an internationally accepted reporting standard followed by large and small companies worldwide. He explained in some detail the various issues involved in reporting in the GRI mode
Nisheeth said a sustainability report is a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities. GRI is a ISO 26000 so companies following the framework indirectly comply with the standards. The latest version of GRI reporting is the G4 which talks about materiality. Material topics for a reporting organization should include those topics that have a direct or indirect impact on an organization’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large.
According to Nisheeth GRI is a network of organizations which includes among others Governance bodies, Organizational Stakeholders, Government Advisory Group, Training partners and training participants and Strategic Alliances with OECD, The Global Compact, UNEP, ISO. Its quality principles are Reliability, Accuracy, Timeliness, Clarity, Comparability, and Balance. The contents of GRI Reports cover materiality, stakeholder inclusiveness, completeness and sustainability context.
Drawing from personal experience Mr Jatin Mohan Dhir, Ex Head- CSR & CC, BALCO- VEDANTA spoke on the Challenges faced in implementing CSR projects said one of the major problems faced by CSR teams were the demands made by local opinion leaders/politicians, administration, people, state level politicians and bureaucrats. These demands were well over the company’s allotment for various services. Many of these demands are voiced in the name of public demand.
Dhir said companies should not commit to anything without due consideration of the practicality of the demand and what will be the benefit for the company. He advised the CSR managers to learn how to say No without unduly hurting the feelings of the person demanding the favour.
He said in all negotiations on such demands managers should follow a win win technique. He said there was need to provide for sudden demands from the administration. Once a project/demand was agreed to it should ensure that it is implemented urgently.
Speaking at the event the organizer, Mr Suresh Kr Pramar, Managing Trustee, Global Gandhian Trusteeship & Corporate Responsibility urged CSR Managers/Practitioners to understand the growing importance of their role in the success of their company. He said they should understand the potentials of their responsibilities and be prepared to play a more important and decisive role in the company.
The Managing Trustee said unfortunately most companies were still to accord prestige and respect to the office of CR Managers/Practitioners. Most CSR Teams were treated as errand boys of the management without being given the powers required for them to function effectively. This was largely because companies were still to understand the role of CSR as a result of which they continued to treat the CSR Wing as a mere money spending department, a financial liability for the company.
Pramar pointed out that CSR Managers need to understand that their responsibilities cover more than just spending money set aside for community development projects. They have the responsibility for issues like Human Rights, supply chain management, customer relations, environment etc.
He said CSR Managers, and more so companies, should not measure the success or failures of a CSR programme on the basis on money spend. More importantly they should take into consideration the impact create and the number of people who benefited from the programme.
Companies, Pramar said, cannot become responsible businesses just by spending money. A responsible business, he said, would be judged on the basis of the respect it accords to all its stakeholders. A responsible business is one which does not mislead stakeholders by making promises which it ultimately does not keep. Such an attitude reveals the arrogance of the management
Mr Ujjwal Kr Mukhopadhyay, Chief Manager (Personnel), Eastern Coalfield Limited, made a presentation on the CSR activities undertaken by the Eastern Coalfields. The company is one among a few companies in the Coal India stable which has been consistent in fulfilling its CSR commitments both physically and financially. A recent report by CAG reveals that the company has been spending its annually CSR allotments.
In his presentation Mukhopadhyay revealed that the company had taken up CSR activities in the area of Education, Health and livelihood creation. Expenditure on CSR programmes was increasing every year. In 2010-11 the company had spent about Rs 475 lakhs which in 1013-14 shot up to Rs 1254.25 lakhs.
According to the presentation ECL has been, among other things, IT training for children belonging to poor and underprivileged families. Computer training had also been provided to over 200 BPL students, from the minority community and weaker sections of the society. The company has given the district administration a sum of Rs.2.31 crore for the construction of ITI Building at Lalmatia under Godda District, Jharkhand
In the Health sector using mobile medical vans the company is providing medicines and medical care for people in the rural areas. It organizes medical Camps on immunization, school health, blood donation, HIV/AIDS awareness, thyroid awareness, eye camp, family welfare are undertaken for the villagers surrounding the mining operations as primary beneficiaries. It has provided medical equipment to the Netaji Eye Hospital which provides services to the rural population.
ECL has spent Rs 50 lakhs to provide Livelihood training the company is partnering with Apparel Training & Design Centre (ATDC), Nodal Agency Ministry of Textile, Government of India to conduct training programmes. So far eleven (11) Training Programmes have been held. These have benefitted 451 PAP’s and persons from weaker & needy section of the society. Of these, 228 have been gainfully employed in different textile industry.