Civil Society News
New Delhi
THE Steel Authority of India (SAIL) and the Neyveli Lignite Corporation were surprise winners of the 2006 Business World-FICCI-SEDF awards for corporate social responsibility. The awards were presented by the President of India at the FICCI auditorium on May 7. This is Indian’s first CSR award and was instituted in 1999. In this season of liberalisation, it is uncommon for public sector units to receivesuch recognition in competition against the private sector. But SAIL and Neyveli scored better than some 33 other companies that applied to be considered and seven that were shortlisted. In an inexplicable twist to the event, the Vedanta-owned Hindustan Zinc issued a press release saying that it had won an award when it had really come at the bottom of the shortlist. What Hindustan Zinc had really got was aletter saying that it had been among the seven companies that had made it to the final round.
The roll of honour, for the record, went like this:
Corporate Citizen I: SAIL; Corporate Citizen II:
Neyveli Lignite Corporation; Corporate Citizen III:
Tata Chemicals; Special Mention: Zensar
Technologies.
In the first stage, all 33 applications were run
past Grant Thornton, an accountancy firm, which
on the basis of the numbers in the books of the
companies, created the shortlist of seven names.
Then the Business Community Foundation (BCF)
team took over. BCF is a small but spirited outfit
led by Amita Joseph, an MBA and a lawyer in her
own right till she shifted some years ago to social
sector assignments.
BCF’s responsibility was to check out the companies
on the ground. What did the local community
have to say about them? How did the managements
bond with trade unions? What were their environmental practices like? How much social infrastructure have the business
activities of the companies been able to generate?
BCF has the skills to do this. It is well equipped to serve as a bridge between
social concerns and corporate performance. In addition to Joseph’s professional
background, Richa Tyagi, Director (Programmes), has an IIT degree. Vinod
Iyengar, who is from the corporate sector and has expertise on environment,
assisted them pro bono. All this adds up nicely to qualify BCF to talk to managements
and get them to open up. BCF, one gets the impression, is tough, but
not necessarily confrontational.
If Grant Thornton vetted the cold evidence on the applicants for the FICCI award, BCF took the pulse of the companies by talking to the managers, examining processes and seeing the impact the companies had on their hinterland. Claims always need to be checked out on the shop floor and around locations. It is one thing to talk of environmental measures as a part of managerial vision and quite another integrate them with daily practices. Both SAIL and Neyveli scored high on local support. People felt they had benefited from the presence of the companies. Schools, health facilities and so on have come up. The entire town stood by Neyveli during a recent corporate takeover threat. Children of the managers and the workers go to the same school. At SAIL, union leaders sat with senior managers and board members. This is not to say that there aren’t problems. Neyveli’s mining has had an impact on ground water, but that has more to do with the local geology than the company’s lack of concern. In fact, Neyveli is credited with good mining practice. It does continuous reclamation, as is the international norm, when other Indian mining companies just blast and extract and worry about reclamation later. SAIL’s mines are located in wildlife dominant areas. Its mining activities have affected an elephant corridor. It hasn’t been able to address the problem. But then on the other hand it has done much for afforestation.
An old company, SAIL is nowhere near being state of the art. But in the past 10 years it has made significant investments in technology. It has improved its energy efficiency. BCF found that SAIL was often too modest. The management didn’t hard-sell shopfloor advancements like many private sector companies often do. New technologies have meant environmental gains at SAIL. What is the significance of the FICCI award? Amita Joseph says it is “peer recognition.” Translated that means being known in industry circles for cutting edge work. BCF’s involvement is meant to lend credibility to the ratings because, though it is supported by companies that ask for its CSR advice, it is also recognised as an independent NGO. BCF also invested considerable time in doing its homework on the companies in the running for the award. It spoke to other NGOs and asked for advice. This provides a wider credibility. BCF itself has played this role for only the second year. The criteria for the award were set originally by Partners In Change in 1999. The award’s biggest shortcoming, however, stems from the fact that it is instituted by FICCI, which oversees the process and appoints the jury, to which BCF merely gives its recommendations. It surprises many knowledgeable observers that Vedanta-owned Hindustan Zinc should have made it to the last seven. It isn’t a corporate entity known for great CSR, but it is well known to be eager to repair its image. Is there more here than the eye can see, is a question people will ask.
Chandra Bhushan of the Centre for Science and Environment (CSE) points out awards given to companies by industry organisations are invariably lacking in wider acceptance. “They are regarded as the internal affair of industry and lack social acceptance,” says Bhushan, who is respected as a judicious observer of corporate behaviour. Bhushan also points out that such awards are invariably projected as going to the best companies in India. The truth is that they are only the best among the companies that apply for the award. The 33 companies that applied to FICCI are hardly a representative national sample. Shankar Venkateswaran of the American India Foundation says that he too sees awards as excluding more than they include. But they nevertheless do succeed in showcasing best practices. Venkateswaran was at Partners In Change when the FICCI award was instituted and was responsible for defining the criteria for judging competing companies.
BCF says the FICCI award helps integrate responsible decisions with core business strategy and deepen social consciousness and partnership with stakeholders. Every small step in this direction is worth it. For BCF the challenge is how to become more assertive because this will not only raise the bar for competing companies, but improve the credibility of the FICCI award. As an organisation, BCF works for AIDS awareness and opportunities for the differently abled, it helps provide volunteering opportunities and it undertakes studies for a professional fee. Perhaps it can help broaden the base for FICCI’s initiative.
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