Central public sector enterprises seem to have spread their corporate social responsibility (CSR) resources too thin to be able to make a lasting and sustainable impact on the ground. It is not helping the matter either that PSUs? top leadership remains unenthusiastic about CSR.
The key requirements largely for an impact-making CSR programme include, firstly, a strategic approach by the company management and secondly, a passionate leadership, which believes in CSR.
These two conditions are generally missing in the PSUs, which do ad-hoc charity in place of strategic CSR and leadership commitment is rarely visible, except in a few cases. The ad-hoc approach prevents the PSUs from selecting the right CSR activity, beneficial to the company and sustainable in terms of budget and management involvement.
The author of this article had the opportunity of drafting the CSR guidelines for the PSUs in 2007, which was formally released in 2010 by the department of public enterprises (DPE). During the process of drafting, the brief received from the DPE was focus on preparing a draft that could help PSUs to be free from external pressures for CSR funds. The solution to this was provided in the form of a guideline, which was focused on ?strategic CSR ?in place of ad-hoc charity?. Strategic CSR sought to find CSR activities linked with the PSUs’ business processes and projects that could make a visible impact to influence stakeholders. However, the PSUs picked up only the peripheral areas for this, and essentially continued with the
old practices.
Based on the experience of ?compliance-orientation? of the PSUs in following the guidelines and the non-involvement of CMDs, the modified CSR guidelines were released in 2013, which focussed on the passionate involvement of CMDs/ top management, though without any mechanism of monitoring the same.
The ad-hocism in CSR programme is evident in the selection of projects, which are too widely spread to make a meaningful impact. The CSR activities being implemented in periphery areas are always considered very basic and the minimum required, almost like a licence fee to operate. For example, the CSR spend by companies like Oil India and ONGC in the North-East is often made for continuing their operations there. Many times odd groups of locals demand benefits and block the roads. The CSR spent on this segment may be for education, health or livelihood activities, which has limited visibility and impact. In contrast, the periphery area development approach of Sail, involving setting up townships and building infrastructure, benefits the communities around and makes a huge positive impact.
The ad-hocism of the maharatna companies is evident in the long list of their activities and disconnect between the business process and the activity list. For example ONGC, a maharatna company, has the following 12 areas of focus: Education including vocational courses; health care; entrepreneurship (self-help and livelihood generation) schemes; infrastructure support near operational areas; environment protection, ecological conservation and promotion; protection of heritage sites, Unesco heritage monuments, etc; promotion of artisans, craftsmen, musicians, artists for preservation of heritage, art and culture; women?s empowerment, girl child development, gender sensitive projects; promoting sports/sports persons; water management, including ground water recharge; initiatives for physically and mentally challenged; and sponsorship of seminars, conferences, workshops, etc.
Irrespective of the fact that ONGC has one of the highest CSR budgets among PSUs, in the rage of R400 crore, it is difficult to manage so many domains of CSR activities as each needs specific domain knowledge and implementing partners specialising in such domains. It is no wonder that ONGC?s CSR budget mostly remains unused.
Bhel, another maharatna PSU, has eight areas of CSR focus activity: environment protection & energy conservation; adoption of ITIs and setting up of skill development institutes; vocational training; education & promotion of talents; adoption of villages and community development; disaster/calamity management; health management; and infrastructure development. Most PSUs have more or less similar agendas. Such a plethora of activities make it difficult to find the right implementing partners and locations, which in turn ends up in non-use of CSR funds.
Data on CSR spend indicate the sorry state of affairs. To a question, the previous Parliament was told that during 2011-12, Coal India earmarked an amount of R553 crore for CSR but spent just R77 crore , while ONGC allocated R378 crore and utilised only R121 crore. IOC allocated about R96 crore and used R83 crore and Sail allocated R64 crore and spent R61 crore. Bhel, Gail, HPCL and RINL also did not fully utilise the allocated funds.
Scope has recently published a ?Compendium on CSR Contribution by CPSEs?, which also validates that funds are spent over too many domains to make a visible impact in any domain. Even where a project makes an impact, its sustainability is under a question mark. For example, during 2011-12, MMTC provided three mobile medical vans to the NGO, Tirtheshwara Hazarika Trust, Lakhimpur, Assam. But this contribution is only partial, since the sustainability of providing primary medical care depends on the NGO. In the same year, MMTC also conducted skill development programmes at three different locations in Goa and Odisha and trained 450 youth, out of which 293 got employed (65 %) with an average income of R3,130 per month. Now the sustainability of the employment of the trained youth is doubtful in absence of a follow-up mechanism and back-up support system. Similar is the fate of a large number of CSR activities undertaken by PSUs to satisfy the MoU requirements, as signed with the DPE.
The author is chief editor,
CSR Vision
