Corporate Social
Responsibilities and
Corporate Brandings
Sreerengan VR
ABSTRACT
Every organisation is considered as an artificial person, interaction of every such person to the society especially where they exist is inevitable. An economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth is known as Business., it covers employment, trade, profession, or occupation, a task, commercial activity, a industrial concern, etc.[1] Business establishments are established to generate profit and investments are made by calculating the returns on it. Corporate social responsibility is the commitment of organisations to the society. The initial consideration of business establishments on CSR was “financial burden without returns”. Even the companies are into some activities of CSR in India is considers it as philanthropy. Every such activity will have some finical burden to the organisation and this study is made to understand the benefits of such investments and investigating the CSR requirements is a duty or charity.
INTRODUCTION
The meaning of Homo sapiens in Latin is “wise man”, he is having a developed brain for analyzing, reasoning and for making rational justification. As a social animal he has to interact with different institutions of the society for his existence. What is owned by him and mostly used by others is his name and with that name, the society recognizes him when he interacts with the different limbs of the society and such interactions can be called relationship.
RELATIONSHIP
Communication plays vital role for creating links between the people and success such communications depend on the attention of other person. The information can be passed through word of mouth or in writing or by gestures or by any combination of these. If attention of other person is not gathered while interacting then it is equal to speaking to a mobile phone which is not in range. The media of communication should be capable of carrying the information and convince the other person.
If the information is informatory a link is created between the originator and receiver. Further communication through this link will lead to relationship and such relationship can be broadly classified into two, positive and negative. If the information exchange through the link is valid for both the parties then mostly relationship is positive and it is applicable only to one then it will be negative.
For a man it is necessary to have a positive relationship with all the people and institutions in the society because he has to interact continuously in his entire life span. A negative or bad relationship may restrict such interactions which may amount to stopping of personal and social development.
Promotion of relationships is the duty of the individual and the society because it is the essence of life and it is calculated to promote relationship among the men whose interests and roles seem to be conflicting. Better relationship can convert the conflicting ideas to common acceptable ideas which will give real fruit for the generation to come.
“I claim that human mind or human society is not divided into watertight compartments called, social, political and religious. All act and react upon one another” – Mahatma Gandhi
CORPORATE SOCIAL RESPONSIBILITIES
Business is a course of life, each organisation is independent from their promoters or the entrepreneurs. As an organisation it also interacts with different limbs of the society. Hence organisation is also responsible to have positive or healthy relationship. Organisations are expected to interact with the people around there establishment, government and non-governmental organisations. To have social responsibilities the organisation should be committed to the society outside the four walls of the organisation by providing environmentally responsible products & process, better employee relationship, involving and contributing to the social activities of the society where the industry is located. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large[2]"
CSR is a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis[3].
“In a free enterprise, the community is not just another stakeholder in business, but is, in fact, the very purpose of its existence” - Jamsetji Tata
CORPORATE BRANDING
Corporate Branding is the strategy for promoting the new products or new services from the same corporate. Corporate identity is essential to promote the product because the customers are interested to have good products and ensures it is from a better company. By using corporate branding with a successfully marketed product, a company can familiarize consumers with its products and may create brand loyalty. If the public likes one product from this company, then they may seek out the brand name when buying other products. Corporate branding is usually only successful if the company is well known and sells reputable products with a positive image. One of the disadvantages of corporate branding is that the company can become identified with only one type of product. All people in the organization is responsible for corporate branding. It is multi disciplinary strategies and achieved through internal and external networks with collective cooperation. Corporate sectors are involving in the areas of environmental issues, education, culture, hospitality, infrastructure development, traditional and religious festivals etc. to have higher brand loyalty. It is a good sign and shows the organisation is the part of the society. Growing concern about the climate change and waste management has brought environmental issue to the forefront of the policy agenda of every organisation. Going Green in manufacturing, supply chain, marketing sales etc. was the first step and the service sector including banks are thriving towards paperless office. Organisations realized that local support is essential for existence and smooth functioning.
“Measures must always in a progressive society be held superior to men, who are after all imperfect instruments, working for their fulfillment” – Mahatma Gandhi
BHOPAL GAS TRAGEDY AND AFTERMATH
Causalities caused by emission of poisonous gas to the atmosphere were in its aggrieved form due to bad selection of plant location. If the plant would have been very far from the populated area the number of casualties caused due to leakage of methyl isocyanate might have been less. By providing the employees residence at city and conveyance to the factory would have been restricted the growth of population near factory. Compensation payable through insurance and interest cannot compensate the loss caused to the people of that area. This incident diminished the brand value of the MNC in the minds of the people who saw the pictures of the accident, who heard the news of the accident, who came to know that the claims are defended by the company to the insurance level.
A FAILURE STORY - PLACHIMADA
Earth is the third planet from sun and formed around 450 crores of years ago. Water covers 70.9% of the earth’s surface and 97% of the same is filled with salt and other minerals, which cannot be consumed by human being. Purification of water by removing the salt is not advisable as it is not cost worthy. Two percent of the water on earth is glacier ice at Arctic and Antarctic regions which is very far from human habitat. Less than 1% of all the water on earth is fresh water available for human consumption. This small percentage is used for drinking, cooling, heating, and all other industrial and domestic purposes.
Plachimada is a small village located in Plaghat District of Kerala around 25Km away from Palghat town. A Coca Cola factory was established in 15-hectare plot of what used to be multi cropped paddy land. It has a working capacity of 1.500.000 litres water-based product; around 85 truckloads of soft drinks and mineral water leave the compound every day carrying approximately 600 cases each containing 24 bottles sized 300 ml. Around 60 bore wells and two ponds are used to extract water for the soft drinks and mineral water production. The factory employs 70 permanent workers and approximately 150-250 casual labourers. The solid waste tank was placed within the premises of the factory.
Groundwater is a precious natural resource for a community. Groundwater level in Plachimada and the surrounding area went down drastically. The acute water shortage and pollution hazard created by the actions of the Coca Cola Company in Perumatty Grama Panchayat has grave implications on domestic consumption of the residents of that area. Palghat is known for paddy fields and agriculturists, the excessive consumption of ground water resulted in dry cultivating lands and poverty. Even drinking water for human beings and animals were under scarcity due to this disproportionate & over extraction of water by the factory. The villagers are struggling for their subsistence and livelihood, the Perumatty panchayat, representing the local community, have chosen the legal battle to protect the people and the environment. The factory’s disposal of sludge which contained metals like cadmium, lead and chromium affected adversely to the environment. The sludge disposal also affected health of local residents especially on respiratory and dermatological problems.
Agitations led by environmentalists suffered different setbacks but they succeeded the litigation. The Coca-Cola bottling plant in Plachimada has remained shut down since March 2004 as a result of the community-led campaign in Plachimada challenging Coca-Cola’s abuse of water resources.
The Plachimada Coca-Cola Victims Relief and Compensation Claims Special Tribunal Bill, 2011, was passed without discussion on February 24, the last day of the last session of the 12th Assembly. High Power Committee established by the state government of Kerala in India has recommended on 22 March, 2010 that Coca-Cola be held liable for Indian Rupees 216 crore (US$ 48 million) for damages caused as a result of the company’s bottling operations in Plachimada.
The University of Michigan became the tenth university in the US to ban Coca-Cola from campus. The moves come over Coke's failure to address concerns related to deaths of union leaders in Colombia and environmental problems related to its factory in Plachimada. The temporary suspension of Coca-Cola products is being seen as a major victory for student activists. The activists, led by two groups, Corporate Accountability International and the Campaign to Stop Killer Coke, have found a sympathetic ear on college campuses. Within the last year, New York University, Rutgers University in New Jersey and Santa Clara University in California, among others, have stopped selling Coke products, which include Sprite, Dasani water, Minute Maid juice and Powerade sports drinks.
Coca-Cola at Plachimada was concentrating on their profit maximization by unbalanced extradition of ground water. The absence of CSR and depriving the natural rights of the residents were evident and the factory was concentrating on financial advantages by ignoring the people and the environment
A big global brand also can sustain injuries by a small community.
“God has given enough to satisfy the need not the greed”
-Mahatama Gandhi
TOYOTA AT BIDADI, BANGALORE
Toyota is having plants for assembling passenger cars, sport utility vehicles and multi utility vehicles at Bidadi, Ramnagara district, near Bangalore, Karnataka. Toyota Motor Corporation established the Corporate Social Responsibility Committee as the body responsible for promoting CSR and the CSR Department as the organization for implementing CSR activities. The collaboration of these two entities provides for long-term, company-wide CSR promotion and activities.
TOYOTA TECHNICAL TRAINING INSTITUTE (TTTI) established by Toyota at Bidadi industrial area near Bangalore Karnataka to provide industrial training and job oriented technical training to the students of the state. The localities can take up any job after the training and interested people will be absorbed by the Toyota Kirloskor Motors. The objectives of TTTI are to support intelligent but financially poor students from rural area & make them employable, Project TKM as Responsible Corporate Citizen, Impart Knowledge & Skill as per industry requirement, Inculcate Toyota Way thinking and develop them as future Leaders[4]. The entire training is done without any tuition fee and providing stipend to the students. The curriculum is prepared in such a way that it covers the general papers and engineering courses.
TATA FOR CANCER PATIENTS
TATA established a 350 cr. Project at Kolkotta for cancer treatment for the people who resides on the eastern side of India with the objective of returning wealth to the society it serves. Tata Medical Center (TMC), Kolkata is a philanthropic initiative from the House of Tata. Its mission is to promote Prevention, Early Diagnosis, Treatment, Rehabilitation and Palliation and Research for cancer patients. TATA already having a TATA memorial hospital at Mumbai, but in that 25-30% of the patients are from North East. TATA initiated this project by realizing the distance between eastern part of India and west and growing number of patients in western region. The hospital provides high quality treatment for the patients and educates them on the dieses. They pride the general awareness on the symptoms, reasons and treatments available for the dieses. TATA is well known for the CSR activities from decades. They are into education, supports for education, sports natural calamities reliefs etc. and contributed to setting up of National Centre for Performing Arts at Mumbai, Tribal Culture Centre set up for preservation and promotion of indigenous art and culture etc. People of the country always give a red carpet welcome to the projects of the TATA because it is always for supporting the common people of the country. The era of Late Sir Jamsetji Nusserwanji Tata to Late Jehangir Ratanji Dadabhoy Tata, the Tatas into the business from pin to plane. Presently under the guidance of Shri Ratan D. Tata, it has gone to the different dimensions with the motive of serve the people. Tatas are known for understanding the Indian mind and they set India as home even though they have global business establishment. Tata developed a car for common man with TATA-Nano, not merely for profit maximization, but it was aimed to put cover over head during rain for middle class Indians. The culture and belongingness what Tata created among the employees and people of India are immensely high and it will be there for ever.
CURRENT ISSUE
Endosulfan is colourless solid organochlorine insecticide and acaricide. Due to its acute toxicity it is phased out in US, Brazil and Canada and banned in more than 60 countries, including the European Union, West African countries, Asian Countries, Australia and New Zealand. Unfortunately it is extensively used in India as pesticide in the farms and agricultural areas. The workers of farms and the residents near the farms and agro production area are being victimized by the usage of endosulfan. Poisoning by endosulfan is affected much adversely in the northern districts of Kerala and southern part of Karnataka. A survey done by the Health Department of Kerala has identified nearly 4,000 victims after screening 16,000. The household survey and the screening done in 11 affected panchayats during December and January identified 3,937 victims, besides 336 in nearby panchayats. The numbers are likely to go up at least by 500 as the Health Department continues to receive complaints about non-inclusion on the list. Endosulfan is used as a pesticide for the production of crops like paddy, sugarcane, cotton, mango, cashew etc. Few studies have been conducted in this area and its adverse effects on human health and environment. Different studies reviles that it may amount to Mental Retardation, Parkinson's disease Neuro- behavioral disorders, Hydrocephalus, Cortical blindness, Seizure disorders, etc.
STOCKHOLM CONVENTION on Persistent Organic Pollutants (POPs).
India is the only country opposing the global ban on endosulfan by relying on the report prepared by the Food and Agriculture Organisation (FAO) of United Nations in 1998 where it said that Endosulfan does not create any health issues. But contrary to the earlier reports, however FAO representatives have informed the Convention that Endosulfan is hazardous. India further raised objections relating to the ‘absence of alternatives’ and the ‘procedural violations’ to the recommendations for a global ban on Endosulfan. A pesticide which kills pets but not human being can be recommended but not vice versa even on the account of no alternative. And-finally the convention banned the endosulfan with certain conditions proposed by India.
Requirement of total ban.
Victims of endosulfan were identified in the northern district of Kerala and southern district of Karnataka. Even though state government of Kerala banned this chemical in the year 2005, the execution of ban was not effective as the pesticides used to be brought from other states. The state wide ban prevented the open sale of the pesticides but it could not make any effect on usage. The Agricultural ministry asked for state views on their experience with endosulfan by a letter on April 27 and announced a meeting by the agricultural commissioner on June 03 with state agriculture department. Even though meeting was chaired by the agriculture commissioner the most of the representatives of the sates were from junior level. It was noticed the presence of stakeholders of the Endosulfan Manufacturers and Formulators Welfare Association and absence of environmental groups, civil society groups and farmer organizations. Out of the 21 states that attended a meeting, except Kerala, 20 opposed the ban on endosulfan and this included Karnataka, that has already banned endosulfan in the state and Madhya Pradesh, whose agriculture minister had sent a letter to the centre supporting Kerala's call for nationwide ban of endosulfan. Kerala agriculture department officials and a scientist from the Kerala Agriculture University suggested alternatives for endosulfan as Carbaryl (carbamate), Quinalphos (organothiophosphate), Malathion (organophosphate) and Dimethoate(organophosphate). Defense of the pestiside manufacturers was all opposition to endosulfan was politically motivated but the silence of other state representative especially Karnataka and Madyapradesh.
The Supreme Court Order
A Writ Petition[5] was filed under section Public Interest Litigation and on 13/05/2011, the petition was called on for hearing in the Coram of Honourable The Chief Justice, Honourable Mr. Justice K.S. Panicker Radhakrishnan and Honourable Mr. Justice Swatanter Kumar. In the petition petitioner submitted that use of endosulfan is a serious health hazard and the Court has got an obligation to protect human life, which is guaranteed under Article 21[6] of the Constitution of India.
Petitioner pointed out the ill effect of endosulfan usage in Kerala and the Honourable Supreme Court perused the report published by the Government of Kerala and the photographs appearing therein and passed an ad-interim order to immediate ban the production, use and sale of Endosulfan all over India and the Honourable Court further direct the statutory authorities to seize the permit given to the manufacturers of Endosulfan till further orders. The Honourable Court appointed a Joint Committee headed by the Director General of ICMR and the Commissioner (Agriculture) to conduct a scientific study on the question whether the use of Endosulfan would cause any serious health hazard to human beings and would cause environmental pollution. Unfortunately Central Government filed an affidavit infavour of the manufactures of endosulfan and congress spokesman appeared for the association of endosulfan manufactures! Before the honourable Supreme Court. The report of ICMR also was supporting the manufactures of endosulfan and not ban. They said it can be banned in the state of Karnataka and Kerala and it should be allowed to use in other states. They answered the question of the Supreme Court and state the casualties happened in Kerala is because of irregular use of endosulfan. It interns an admission that casualties happened because of endosulfan only. Here the Central Government stand is that let the people dies in all the states then only the total ban is possible!!!!.
“Let industry established in the countryside ‘adopt’ the villages in its neighbourhood: … it is also clearly in the interests of industry that surrounding areas should be healthy, prosperous and peaceful.” – J.R.D. Tata
ANALYSIS
| Sl No. | Case | Outcome | Reason | Aftermath |
| 1. | Bhopal gas tragedy | Higher death toll | Bad location strategy, lack of attention on safety & security | Victims and their families are still waiting for the final decision. |
| 2. | Coca-Cola at Plachimada | Ground water level went drastically down, land pollution due to solid waste | Business oriented production | Local area starved for water and waiting for the disbursement of the relief. |
| 3. | Endosulfan | Death, permanent and partial disabilities, mental destruction | Pure profit oriented | People in the Kasargode district of Kerala affected dieses which may continue till their last breath. |
| 4. | Toyota | Locally accepted foreign corporate | Commitment towards the society | Job oriented training to the public and prospering young generation for better life. |
| 5. | Tata | Help to cancer patience | Adopting new areas to help the people | Change of people perspective of a manufacturing company to facilitating organization |
Table No. 1
INTERPRETATION
From the first three cases it is revealed that even after the accident or incident the affected parties are paying price for many more years. Bhopal gas tragedy was single incident but rest two is hanging chain of incidents. The bottling plants should pay for the water consumption also should procure from the place where it is available. Only to make profit in the transportation of finished products, bottling plants should not be located in a placed where already there is a scarcity of water. Endosulfan case is pending before the Honourable Supreme Court and plea for extension of time for filing the report is rejected by the Court and given time frame to submit the report. Even ICMR reports are in favour of the manufacturers of endosulfan even though indirectly they do admit that the causalities happened because of endosulfan. Asking the Court to ban the endosulfan only for the affected area is ridiculous because the Government wants proof of death from across the country. But still the apex court said during the submission of the advocate of the petitioners that Court is more concern over the farmers of the affected area. Toyota a pure manufacturing company in the automobile industry is into technical education on non-profit base with the aim of education for the local people. Toyota is a MNC gaining affection of the local people for their CSR activities and TATAs are known for it. Each project of TATA is readily accepted by the public at large due to their concern for the people of Indian and better working environment. People in and out of TATA are proud of the company and their activities. The brand image build by the company is not by one or two activities but it is a continuous process from the time of industrialization in India.
CONCLUSION
Every business is expected to make profit which assures the existence of the business. Existence of business is the requirement of state too because it gives social and economical security to the employees and their dependents and provides revenue to the state in the form of taxes. As per the guidelines, companies with net profit of less than US$ 22.5 million will earmark 3-5 per cent of profit for CSR, companies with net profit of between US$ 22.5 million - US$ 112.5 million, will utilise 2-3 per cent for CSR activities and companies with net profit of over US$ 112.5 million will spend 0.5-2 per cent of net profits for CSR. According to a study undertaken by an industry body in June 2009, which studied the CSR activities of 300 corporate houses, corporate India has spread its CSR activities across 20 states and Union territories, with Maharashtra gaining the most from them. About 36 per cent of the CSR activities are concentrated in the state, followed by about 12 per cent in Gujarat, 10 per cent in Delhi and 9 per cent in Tamil Nadu. Profits are made on the process-process converts existing things to new useful thing- it destructs the existing, for the creation of new. The things extracted from the nature for conversion is not replenished or not made good, it is withdrawn forever. Every organisation what is extracted from the local area of its establishment is duty bound to return it, if it is not in the same form at least it can be anything equal to that. Plant locations are selected by availability of different resources and cost involved in that. The extraction of raw materials or environment advantages denies the privileges of the future generation of the local area and that has to be compensated by other means and it is the duty or responsibility or both for the corporate to serve the society and it is not just a charity or a brand promotion.
“A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so” – Mahatma Gandhi
[1] Chambers Dictionary
[2] The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts
[3] European Commission
[4] T. Somanath, Principal, TTTI on his article
[5] Writ Petition (CIVIL) No.213 of 2011
[6] Article 21 of the Constitution of India.
Protection of Life and Personal Liberty: - “No person shall be deprived of his life or personal liberty except according to procedure established by law”.
