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| Sreelatha Menon: CSR vs fair business vs entitlements | | The govt formula for CSR seems to blur the line between charity and entitlements |
| Sreelatha Menon / New Delhi Jul 18, 2010, 00:20 IST |
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Does a man running a grocery shop need to also run a primary school in his locality or run a mobile van for free dental checkups? Yes, if he wants to be seen as fulfilling his corporate social responsibility (CSR).
In the normal course, for those who buy from his shop or live near his shop, it would suffice that he does not sell adulterated stuff, that he does not dirty the surrounding areas or clog the drains with plastic.
But if he hires children and keeps them holed up in a hot room in the basement with no wages and food, maybe it would be a good idea for him to arrange free dental check-up for his neighbours every month to keep them in good humour.
If he begins to use the community well to sell water, there could be an issue. In the normal course, he should be paying whatever the seller demands. The amount should not be determined by his whims. He or the government cannot put it under CSR. For it is about entitlements, not charity or CSR.
The other day, a conference on CSR organised by industry body Assocham dwelt on what exactly CSR is, if at all it should be fulfilled.
Most people talked of charity as a means of winning over trust. In other words, a corporate bribe. This echoed the recently-issued CSR guidelines of the corporate affairs ministry which ask for a fund for CSR.
Here is what Corporate Affairs Secretary R Bandopadhyay had to say: “How much you collectively do is important to us,” meaning how much money industry spends on CSR is important to the ministry. It is like the fee businesses have to pay to continue doing whatever they are doing, no matter how good or bad.
Only one person, Planning Commission Member Arun Maira, sought to look at CSR in a simple and non-calculating fashion.
He said: “We may go to Church on Sunday. But what do we do on other days? What is the impact of our business practices, what values do we exhibit in our operations?”
He said even if all “corporations” were compelled to set aside 3 per cent of their profit for CSR, it won’t add up to make a difference. The larger impact will be made by how the rest 97 per cent is spent, he said.
Maira challenged business associations like CII, Ficci and Assocham to be the first to act and suspend members who don’t behave. He said CSR should be renamed as voluntary business responsibility.
Some companies have designed their business in such a way that they impact a large number of people. For example, ITC has its e-chaupals, which help a lot of people. Danish company Vestergaard Frandsen has made mosquito repellent nets that are used all over Africa and Asia. But that does not mean that iron ore mines or power plants should close down. CSR or corporate whim cannot determine best practices in their case. Instead, the law should do it. Again, running a school won’t help if a company is offloading resources worth crores from under your feet without sharing its profits. That is more about entitlements rather than charity, and a law has to address it. And the local community should decide the terms of this law each time it is exercised, whether it wants the returns in cash or kind, in instalments or in one go.
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