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Philanthropy has always existed in every society, be it in the name of religion or due to simple generosity. In India, CSR (Corporate social responsibility) has traditionally been seen as a philanthropic activity. And in keeping with the Indian tradition, it was an activity that was performed but not deliberated. The Companies Act, 2013 has introduced the idea of CSR to the forefront and through its disclose-or-explain mandate, is promoting greater transparency and disclosure. Schedule VII of the Act, which lists out the CSR activities, suggests communities be the focal point. Section 135 of the Act is applicable to companies with an annual turnover of 1,000 crore INR, or a net worth of 500 crore INR, or a net profit of five crore INR and more (Source: PWC handbook).

This is the movement of transition, from its reliance on purely voluntary activity to the greater use of laws. The push for legalisation came because voluntary CSR presented problems such as free-riding (companies taking advantage of benefits without actually spending), greenwashing1 posing as CSR, and false disclosures. But has it really been successful to curb greenwashing or for that matter many other social or environmental issues?

The state today seems to have outsourced some of its vital responsibilities to the corporate kingdom. These include securing citizens’ basic rights and providing civic amenities. As a result, corporations have taken over the welfare policies of the neoliberal state and, in this way, have truly come to manifest the dialectics of profit motive, on one hand, and welfare objectives, on the other. In this manner, CSR has become the state’s alter ego, wielding ‘pastoral power’2 over workers, consumers, protestors and the society at large (Rana, 2015).

Now, every corporation in India has come up with different initiatives to ‘give back to the society’ in some form or another. The phrase, giving ‘back to the society’ is popularly used to create an illusion that the corporates have a moral/ethical conscience which has suddenly awaken. It is seen as a panacea for many of the existing problems. Broadcast and print media play a crucial role in disseminating and creating a positive image of corporates in consumers’ minds by familiarising them with the companies’ CSR.

A notorious case has been of the Vedanta Limited which had been exploiting the hills of Niyamgiri in Odisha and harassing tribals of that land. Vedanta Limited, a British MNC, has invested Rs. 5,000 crores to set up an alumina refinery with a capacity of one million tonnes a year at Lanjigarh in Kalahandi district of Odisha. The refinery planned to source its minerals from the Niyamgiri hills in Rayagada and Kalahandi districts. Projects like these have little consideration for environmental impact, social impact assessment and legal rights of people who own these lands, and disregard provisions of the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, and Panchayats (Extension to Scheduled Areas) Act, 1996, which are safeguards at least to some extent, for thousands of communities living in natural resource-rich habitats, which they have protected and preserved over generations. Given the potential strength of these laws, it comes as no surprise that governments, toeing the line of greedy corporates, make all possible efforts to dilute these laws and create an environment that is easy to exploit, with no regard for local communities and their rights.

But, the question remains as to how these corporations get away with such exploitative activities. Answers are not limited to the loopholes of either CSR or environmental laws but a whole lot of politics, corruption and vested interests of states.

The whole mandation regarding the CSR seems to be a contentious issue because it is rightly argued by the critics that the companies may try to adopt camouflaging activities to meet these regulations, particularly during an economic downturn. The problem lies in the fact that the CSR rules negate these principles and value a company’s 2% contribution for CSR more than the value of the company’s respect for ethical practices, human rights and environmental records. And these are true if we look at how Vedanta had been able to win several prestigious awards for energy management, green business, best community development; in spite of flouting basic human rights of indigenous people.

Another issue lies in the slippery definition and conceptualisation of CSR- The concept is open-ended and is prone to human rights violation because of the vague language of the definition which permits a high degree of self-interpretation that undermines legislative intent. CSR programmes that are tethered to their marketing programmes, enabling its marketing department to manage company’s external CSR agenda. CSR thus acts as a “trade-off” between corporations and the government officials, through which the former gets protection from the state for gross violation of corporate rules, government norms and guidelines. CSR also helps remove bureaucratic hurdles and enhances the image of the corporate as a social actor.

To set up any industry, an environmental clearance from the Union Ministry of Environment and Forests (MoEF) is necessary. This is the only hurdle, albeit insignificant. But, MoEF seems to be having a soft corner for industries as it decided to give a chance to the industries that had not previously obtained environmental clearance a period of six months to become compliant with the law, rather than leave them “unregulated and unchecked”. 2017. It is actually a way of legitimizing projects destroying forests and water sources, and hurting communities dependent on them. In the same year, it offered industries to obtain environmental clearance to become compliant with the law, rather than leave them ‘unregulated and unchecked’. “This gives violating industries a free pass, allowing them to bypass safeguards and public hearings otherwise required for such a clearance”, said Kanchi Kohli, an analyst at the Centre for Policy Research in New Delhi, adding that the ministry opening a “back door” for those who do not comply sets a bad precedent. India has undoubtedly enacted several laws to protect its forests, coasts and rivers, but they are rarely enforced. There are several problems with the implementing agencies as well. Presently, most industries and projects are supposed to take permission from the requisite state pollution control boards (PCB) for its operations. The PCBs (both central and states) are vested with absolute authority and function as autonomous entities, with no central authority to regulate their functioning. Therefore, the dual chain of command, the lack of a proper co-ordination mechanism between central PCBs and state PCBs and with the MoEF as well as human, technological and financial capacity constraints, are the major reasons for their lack of efficient administration of the environmental law regime in India, therefore resulting in the flouts of the rights of both indigenous people and environment.

State’s obsession with economic growth over environment concerns- The involvement of the state government(s) and their clear inclination towards these corrupt corporations are not just about authorising them to practice the operations, but manipulating and harassing the villagers and tribals who raise their voices. For instance, the Odisha government has attempted to use violence to influence the pro-tribal verdict, which clearly failed. There have been instances where villagers have been threatened by CRPF and police forces, and even conned away to Puri on a ‘purification’ visit while the perimeter wall of the Lanjigarh refinery plant was erected. All these not only pave the way for corporates but give a backbone and constant support for their unethical practices. While talking about the Dongria’s idea of development, tribal leader Lado Sikaka sternly points out other activities (CSR) of Vedanta trying to veil the actual corrupt ones, “That’s ironical because on its website VAL talks about projects for “sustained socio-economic and cultural development of local communities adjoining the plant site” including midday meals for school-going children, establishment of anganwadi centres (preschools) and health camps. The firm focuses on education, health and sanitation programmes” (Foil Vedanta, 2013). The progress of such cases hardly interests the national media which is another reason behind the open violation and exploitation of the laws and rights of the people by these corporations for which they hardly get reprimanded. The Odisha Mining Corporation, in an effort to undermine the rights of the adivasi communities residing in Niyamgiri, once again, filed a petition challenging the 2013 resolutions of the gram sabhas. The Supreme Court scrapped the petition on May 6, 2016. But, the unity of tribals made Vedanta back off in spite of having both Odisha government and Odisha Mining Corporation as its back up.

To conclude, the whole concept of CSR is merely a stealth tax and will impose unnecessary compliance burdens. It is nothing but a product of the neo-liberalism and economic concept of free markets. It upholds the ethos of market ideology, believes in the deterritorialization of business practices, and extracts surplus labour and surplus value, and the ‘invisible hand’ that would paper over economic cracks and imbalances (Rana, 2015). According to the philosophy of CSR, it has come into existence to bring about positive impacts on the society in which the businesses operate. Society here includes communities, cultures, and environments. The essence lies in the so-called holisticity and integration of business strategies however it has turned out that it is just symbolic and self-serving in nature.

 

Footnotes-

  1. The term greenwashing was coined by environmentalist Jay Westerveld in 1986, back when most consumers received their news from television, radio and print media – the same outlets that corporations regularly flooded with a wave of high-priced, slickly-produced commercials and print ads (Guardian, 2016). 
  2. Pastoral power is the term used by French philosopher Michel Foucault in his essay ‘The Subject and Power’ (1982). According to him the modern State consists of the convergence of a very particular set of techniques, rationalities and practices designed to govern or guide people's conduct as individual members of a population and also to organize them as a political and civil collective in the same way as a shepherd who cares for his flock from birth to death.
  3. Deterritorialization means not limiting the business practices just to its main operations and rather spreading it in many different directions. Here: Operating business activities under the banner of CSR.

Bibliography-

Chandran, R. (2017, March 24). India opens regulatory 'back door' for projects flouting environment l. Retrieved January 27, 2018, from https://www.reuters.com/article/us-india-landrights-regulations/india-opens-regulatory-back-door-for-projects-flouting-environment-law-idUSKBN16V19S

Jain, A., & Gopalan, S. (2017, June 30). In India, a legislative reform is needed to push corporate social responsibility. Retrieved February 01, 2018, from https://theconversation.com/in-india-a-legislative-reform-is-needed-to-push-corporate-social-responsibility-80169

Kaushal, L. A. (2017). A Case Study on Vedanta Alumina Ltd (VAL) Orissa India: State and FDI versus Democracy? Valahian Journal of Economic Studies, 8(1), 22nd ser., 107-114. Retrieved January 23, 2018.

Rakesh, V. (2015, April 05). Corporate Social Responsibility under Companies Act 2013: an Overview Retrieved February 01, 2018, from http://journal.lawmantra.co.in/?p=163

Rana, S. (2015). CSR as the New Age Corporate Practice: Reality, Issues, and its Impact on Workers in the Field. Asian Labour Review, 1, 115-124. Retrieved January 23, 2018.

Shroff , V., & Jejurkar, A. (2011, September 01). Environmental Law In India - Does It Lack Teeth? Retrieved January 28, 2018, from https://indialawnews.org/2011/09/01/environmental-law-in-india-does-it-lack-teeth/

Vedanta, F. (2013, August 20). Niyamgiri unanimously rejects Vedanta! Retrieved January 28, 2018, from http://www.foilvedanta.org/articles/niyamgiri-unanimously-rejects-vedanta/#more-1216

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Written By Sana Alam

MA in Sociology, Jawaharlal Nehru University (New Delhi)

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