To ensure that large projects do not come at the cost of social upheavals like the Maoist insurgency and serious environmental degradation, the government is mulling a mechanism under which corporates will spell out how their projects could potentially impact the relevant community, the society at large and the environment, in their annual financial results. A device to arrive at a ?fair wage? could also be part of the norms.
Planning Commission member Arun Maira told FE that the Commission has already taken a decision to this effect, and would shortly lay down the norms which the companies would require to adhere to. The idea is to start with a system of voluntary disclosures, in keeping with the principle of sustainable all-round development. However, if the government finds that voluntary compliance is not taking place, it might make them mandatory.
?If companies do not address the problems of the society, the government would be left with no choice but to make compliance with the norms mandatory. The guidelines could then become regulations,? Maira said. ?India?s growth story is at a cusp…we are growing, but we cannot ignore large parts of the country?s population,? Maira added. On the need to have a set of social and environmental norms, Maira elaborated: ?What we have today is companies merely giving data as to how much money they have invested under their corporate social responsibility (CSR) plan. This does not give the full picture.?
To facilitate voluntary compliance, the government might rope in industry chambers like the CII and the Ficci to encourage their members to adopt a fresh approach to sustainable reporting standards.
Maira said that such standards have already been drawn up by several international bodies like United Nation?s Global Impact and Amsterdam-based Global Reporting Initiative (GRI). The UN?s Global Impact has come out with 10 principles, which form part of its Sustainability Reporting Guidelines, varying from a corporate house?s responsibility towards human rights, labour standards, environment and anti-corruption.
Giving a peep into the kind of norms under preparation, Maira said they would deal with labour-related rights and on devising a principle to reach a fair wage. ?Labourers may not own the property for which they work, but surely they have certain rights,? he said. Similarly, with respect to the environment and the community, companies should state whether businesses have harmed water and other resources of the community where they operate. He said that these norms would be especially relevant for areas with large tribal populations.
?Of course, there are some big corporates who care for the environment. However, the number of such responsible companies needs to grow,? he said, adding that India is ahead of other countries in embracing the concept of inclusive growth.
The ministry of corporate affairs?from where Plan panel has found support?may also be part of this exercise. Recently, corporate affairs minister Salman Khurshid had urged India Inc to expand their social welfare measures to backward areas, especially in the Naxal-affected regions.
?In any area that is backward and distressed, and any subject which is a concern to all, to the humanity, I would urge greater corporate social responsibility (CSR),? Khurshid had said.