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Millennium Post

Are big businesses misleading us on CSR?

It seems cheating is endemic to modern advertising and marketing, especially when it comes to multinational corporations operating in host countries with weak regulatory frameworks. They would go to any extent to mislead consumers, the public and the government with atrocious claims. The latest example of one such claim is a spate of TV ads by increasing number of India outfits of some of the giant multinational FMCG companies rather shamelessly asking consumers to buy brands – from soaps and detergents to health food and baby care products -- to support their corporate social responsibility (CSR) programmes. Aren’t such CSR-linked consumer ads unethical and misleading, if not totally illegal?

The creation of an imaginary public empathy for ‘good’ CSR initiatives by those multinational marketing firms to influence and improve consumer trust in their brands is key purpose of such innovative advertisements.  They are becoming increasingly trendy with FMCG firms. The fear is soon others may also join the bandwagon seeking to openly tap public pocket to pay for their CSR bills. The trend is a dangerous one for public trust in CSR. It may be misused by companies and may even mean to cheat consumers on the promise that MRP printed on each pack includes a rupee which the manufacturer would set aside to create a fund for undertaking social and community development works. It may just be another pricing trick to swell corporate bottom line.
Also doesn’t it sound like arbitrarily imposing a kind of cess by business entities -- private, deemed public or listed -- on consumers to meet their so-called CSR obligations? How could such deceitful ads be allowed by the Adverting Standards Council of India, the ministry of corporate affairs and government? 

Maybe, these ads are also intended to preach the government the virtue of voluntary CSR contribution by companies as against a compulsory CSR spending by drawing a percentage of corporate income for the purpose under the proposed revised companies act.
Compare and contrast the attitude to CSR of those MNCs, with that of some of the country’s top listed public sector undertakings silently serving the community, building social infrastructure, encouraging entrepreneurship and helping the deserving youth and handicapped realise their potential. Their CSR spend is transparent and delinked with product pricing strategy.
The CSR programmes of these PSUs are tailor made to suit specific needs of the community around their units and establishments irrespective of the volume of their income and the pressure they face from shareholders, including the government, to meet their growing expectations  in terms of financials and annual dividends.

There is no gimmickry about their CSR activities. The latter are in-built in their system, which has helped them tackle the societal odds much better and far more effectively to establish a healthy community-connect compared to their less willing private sector counterparts, barring a few exceptions.

All green-field central public sector enterprises in the core and infrastructure sectors are focused on providing service to communities around their project locations as part of their operations strategy as they want to be seen and perceived as good corporate citizens. Although Hindustan Steel (now SAIL) was among the first generation PSUs to recognise the need for securing community acceptance and appreciation for their operations, NTPC Limited changed the very concept of CSR and took it to the next level by providing the programme a new direction and dimension by connecting its community services with the needs of the local people. Instead of tasking CSR function to outside agencies or NGOs providing funds for specific programmes, NTPC itself does the job – from the sage of planning and identifying of a programme to its successful implementation. What is more, it conducts CSR audit in each cases to connect directly with beneficiaries.
NTPC’s CSR audit carries many startling facts which could delight any researcher in ‘inclusive growth’, a favourite subject of debate among our economic planners and politicians. Those facts show how even large projects do not miss small details when it comes to community welfare.
The stories of reincarnation of the once-sleepy Kundanpally Moghal Pahad as vibrant modern settlement with all basic social and physical infrastructure following the coming of NTPC’s 2,600 MW Ramagundam power project, social and economic transformation of families with rehabilitation package from NTPC’s Koldam Hydroelectric project and the wonderful community service being rendered by NTPC-supported Asha Kiran School for the hearing and speech impaired at Vindyachal in UP are among many bearing testimony of how well-intended and implemented CSR programmes can lead to true inclusive growth of the community.

Like mining and quarrying, large power projects – thermal, hydro or nuclear – too bear a big impact on rural and tribal life and living as they are invariably located mostly in remote areas and cause human displacement.  Thanks to its helpful and healthy focus on peaceful co-existence for the benefit of both the corporate and the community, all NTPC projects brought cheers to most land-losers – from remote Ramagundam in Andhra Pradesh to Tattapani by the Himalayan Satluj river snaking through the high Himachal hills.

The projects offered new possibilities and hope to the re-settlers, erasing the memories of earlier hardship and hapless existence for generations in the centuries-old dry and dreary settlements which, with NTPC’s presence, blossomed into bright, beautiful and caring neighborhoods. Even the most dreaded extremists of Odisha’s Kalahandi, one of the country’s highly impoverished and remote districts, found NTPC and its CSR programmes very helpful for their survival with dignity.
 Of course, there is no power tariff hike by NTPC to specifically support its CSR drive which is simply unthinkable. There is no regional or nation-wide TV publicity by the power company to tom-tom the success of its CSR programmes, either. Other PSUs such as SAIL, GAIL, BHEL, ONGC, IOC, HPCL, CIL, NHPC, NMDC and NPC too have been silently pursuing their individual CSR programmes, mostly to benefit the communities around their projects.

Few in the country may know that SAIL’s Bhilai Steel plant, which also owns and operates iron ore mines in the tribal region of Bastar in Chhattisgarh, runs dozens of schools, though largely for the children of SAIL employees, engaging several thousand teachers and supporting staff drawn largely from the neighbourhood.

Good CSR practices by ONGC around its on-shore fields in the insurgency-prone north-eastern region and those by CIL and NMDC in tribal areas of Jharkhand, Orissa, West Bengal and Andhra Pradesh benefited all the stakeholders and brought genuine community appreciation for their good corporate citizenship work. 

The prices of their products did not carry any overt or covert levies to support those citizenship programmes. There is no open lie or misleading ad and marketing gimmickry about the CSR spending by those PSUs.  IPA
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