Priyanka Chaturvedi

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Posts Tagged ‘CSR

CSR- A brand building exercise for companies in India?

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Corporate Social Responsibility activities in India are not a relatively new phenomenon; the likes of Tatas, Birlas, Godrejs have been involved in various activities pertaining to social issues.  But yet there are only handful corporate houses in India who take Corporate Social Responsibility seriously and it is an idea which has still not grown into its own in this country.  Moreover lots of these companies look at CSR as a corporate exercise for profit maximisation or building brand equity.

There is no clear defined policy by the government on any CSR activities to be taken up by the private sector, though it is encouraged, it is not mandatory for any company to participate in CSR related activities. The Companies Bill 2011 proposes a minimum 2% allocation of net profit average in the immediate 3 preceding years for companies that have a net profit of 5 crores and more, again not mandatory. The government though has a set of guidelines for PSUs to mandatorily create a CSR budget; however loss making companies are exempted.

A recent piece in this week’s edition of Open Magazine , talks about how a company’s CSR activity turned out to be nothing but a corporate propaganda. The company in question is Essar Group. Essar is the largest private sector investor in Bastar region and has been operating there since the last 10 years. It operates a beneficiation plant and a 267-km-long slurry pipeline from Bailadila to Vizag. The company had signed a memorandum of understanding with the government in June 2005 to bring in Rs.70 billion investment in revolt-hit Dantewada.  It definitely hasn’t been an easy ride for the company to do business in that area. So it is obvious that the company in order to maintain long term healthy relations and build a trust factor with the residents would want to invest heavily in people relations. What better way than the CSR route? The company’s official site gives reader a glimpse into the various CSR activities the company has taken up for the tribal people residing in this region.

But then in this particular initiative, which the author calls nothing less than a sham  will show you just how a well intentioned effort can go awry if you do not have a planned, well thought out idea in place. The article goes on to say thus about the event & gives the reader an idea just how disconnected the organizers were from the on ground realities.

The scorching sun was no deterrent for the hundreds of children gathered together for the first-ever Essar Kahani Utsav, organised from 17 to 19 April in Dantewada (a district in Chhattisgarh where the media and government celebrate their own attempts at storytelling). They were used to the heat and this was their day out—a fantastic picnic party that the rich sponsors had thrown for them. Set aside the fact that the children had never been on a bus before and many were throwing up or fainting, this was a rare moment in history. They were going to be part of a celebration, a novel idea for cultural upliftment, a feather in the cap of the district administration and of the Essar Group, which claims to provide the children with ‘a better future’.

The kids going without food, in the heat waiting for an event to begin, the event doesn’t take off as it awaits the collector who is invited as a special guest. The entire extravaganza for the kids is handled by an event management team and this is not just any other team but the one that organizes the Jaipur Literature Festival every year.

No expense spared but also no thought spared as to what the people there would have really wanted.

While discussing this on twitter today this is the interesting exchange of ideas that came up to understand how social initiatives can work best

An earnest CSR initiative is usually a long term, well planned initiative, usually in conjunction with an NGO which is already doing ground work in the area. In this case it was clearly an ill planned, inefficiently handle initiative which came out looking like a PR exercise for the company. A controversy, which the company could have clearly done without.

This fiasco should also be a lesson for many such companies who wish to actively participate in causes but then instead of getting involved headlong into it usually hand it over to a third party to manage.


Written by Priyanka Chaturvedi

May 22, 2012 at 1:57 pm

Posted in Uncategorized

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