Special Articles / Henry J D'Souza / Social Work Foot Prints, Vol.V, Issue.4
Corporate Social Responsibility (CSR) in India as well as all over the world is a shift from industrial philanthropy of the past into strategic set of programmes to address the concerns of the stakeholders, besides the stockholders, what is commonly referred to as the “triple bottom line”—people, planet, and profits. Manifestations of grave wealth inequalities in the world as well as in India, widespread poverty, destruction of the environment, frequent natural disasters because of climate change, and wars, terrorism, and political conflicts have discredited the capitalist mode of wealth accumulation. Societies based on unlimited wealth accumulation and mass consumption are unsustainable. CSR, promoted by the United Nations Global Compact, is a feeble effort to counteract it. Revolutionary changes that go beyond CSR, and move our society toward the Gandhian vision of Gram Swaraj—self-governing, self-sustaining, decentralized and democratic village eco-communities, assuring good quality of life and wellbeing, are vital. This alone will save humankind from an impending apocalyptic sixth extinction predicted by climate scientists.
In a political documentary released in 2009, The Yes Men Fix the World, now available on YouTube, Andy Bichlbaum, tricking BBC, appeared on December 3, 2004 as Jude Finisterra, spokesman for Dow Chemical. True to its caption on the DVD cover, “Sometimes it takes a lie to expose the truth”, Andy announces that Dow Chemical, the parent company of Union Carbide, (responsible for the Bhopal gas tragedy that killed nearly 3,800 people and caused respiratory injuries to thousands, exposing over 500,000 people to methyl isocyanate gas and other chemicals), would liquidate Union Carbide, and use the $12 billion to compensate the victims, treat those who are suffering from the aftermath, and clean up the site. This announcement led to a loss of $2 billion in Dow’s stock value on the Frankfurt exchange in 23 minutes only to recover, two hours later, after BBC corrected this hoax (Servin, Vamos, & Engfehr, 2009). For all the deaths and injury and environmental devastation, Dow got away with a settlement of $470 million to the Indian government to distribute it to the victims—a mere $2,200 (Rs.1.32 lakhs at Rs.60.00 for $1.00) foreach family of the dead. Any corporation that was socially responsible would have done what Andy broadcasted. Twenty six years after the disaster, in June 2010, seven former employees of the Union Carbide in India were sentenced to two years imprisonment and a fine of $2,000 each. The eighth convicted employee had died before the judgement. Warren Anderson the CEO of Union Carbide Corporation, at that time, in the U.S. was never extradited to India and died in 2014 (Wikipedia). This episode clearly illustrates the limits to corporate social and moral responsibility. In the capitalist system, business corporations with the sole purpose of maximizing return to investors, limits corporate responsibility.
A commonly accepted definition of CSR is from the European Union (EU):
“The Commission has defined CSR as the responsibility of enterprises for their impact on society. CSR should be company led. Public authorities can play a supporting role through a smart mix of voluntary policy measures and, where necessary, complementary regulation.
Companies can become socially responsible by:
Chamberlain in the early seventies, explained this in his The Limits of Corporate Responsibility, citing Learson, former president of IBM, who quite accurately characterized it as the ‘iron law of profits’ from which one cannot escape (Chamberlain, 1973, p. 6). Corporate responsibilities to the public emerge when business corporations inflict harm on consumers by selling dangerous products and on the environment by ravaging it. He draws attention to the following as contributions to this stance: the demands of a mass-consumption society that alienates labour from the creative and fulfilling production process; limited public understanding and exposure to the impacts of environmental deterioration in the seventies leading to inaction or a gradualist approach to address it; shifting of educational system from a liberal arts education, promoting critical-thinking and a rich intellectual life, to more of a vocational and utilitarian focus—a progression of corporatization—education as investment in ‘human capital’; corporatization of city and national governments which Galbriath characterized as the “industrial state” where governments become the instruments of business corporations, and what Perkins’ labelled ‘corporatocracy’. (Perkins, 2004). These multinational companies have indeed become ‘anational’ companies. Chamberlain quotes a former chair of the Dow Chemical, “I have long dreamed of buying an island owned by no nation, and of establishing the world headquarters of the Dow Company in the truly neutral ground of such an island, beholden to no nation or society” (Chamberlain, 1973, p. 173). People’s welfare often is not consistent with the internal dynamics of a business corporation. International trade agreements and associations (World Bank, IMF, WTO, and TPP) are instruments of these mega corporations to undermine democracy in nation states and they do indeed do so if you look at these agreements carefully. That is the reason why these negotiations are carried out in utter secrecy and rummaged through parliaments without much debate or public understanding.
It is vital to understand Corporate Social Responsibility and the context in which it has emerged. Historically, corporations were set up to carry out a particular task for the benefit of society. Under capitalism, business corporations have emerged as one of the strong institutions amassing legal powers over the years and today, corporations are considered persons, enjoying the right of persons with far less liabilities and consequences. A groundbreaking documentary securing 26 international awards, The Corporation (Achbar & Abbott, 2003) now available on YouTube https://www.youtube.com/watch?v=Z4ou9rOssPg, exposes how corporations have harmed people and the environment and calls for improving them to serve society and when necessary, eliminating them. Anyone who wants to understand the contemporary corporations should watch it and read Bakan’s book, The Corporation: The Pathological Pursuit of Profit and Power, which waswritten during the making of the documentary (Bakan, 2005). A quick search on the web on corporate criminality reveals that it is widespread and very damaging to people and the environment and shows no sign of diminishing.
As I write this paper, (October, 2015) Volkswagen CEO Michael Horn apologized for the emissions cheating scandal in his testimony to the U.S. Congress, and The Guardian reported that emission cheating is a systemic problem, according to Nick Molden of Emissions Analytics, the company that tested the cars. Renault, Nissan, Hyundai, Citroën, Fiat, Volvo and Jeep Mercedes-Benz, Honda, Mazda and Mitsubishi have been guilty of this cheating, and therefore, of deteriorating the environment and public health and even causing deaths (Carrington, 2015). These automobile companies sell their cars all over the world and advertise them as greener and environmentally friendly.
The Public Eye Awards, which initially began as Public Eye on Davos in 1999, as a counter conference to the World Economic Forum (WEF), initiated this shaming award to criminal corporations. In the last 15 years, 23 multinational companies have received this award, and in January 2015, The Public Eye Lifetime Award was given to Chevron (The Public Eye Awards, 2015). Amazon Watch, an activist group that nominated Chevron for this shaming award, along with 40 environmental and human rights groups, protested the Commonwealth Club of California in San Francisco for honouring John Watson, CEO of Chevron as a “distinguished global citizen” in April 2015. Paul Pazy Miño of Amazon Watch:
“I work as the Director of Outreach and Online Strategy at Amazon Watch. The views expressed in this column are mine alone. Amazon Watch is proud to accompany the Ecuadorian communities affected by Chevron’s deliberate contamination in the Amazon for over a decade. During the course of our lengthy campaign, Amazon Watch has also allied with the legal team responsible for one of the most important environmental victories in history by achieving a $9.5 billion judgement against Chevron affirmed by the Supreme Court of Ecuador in a 222-page decision that meticulously documents the company’s environmental crimes, fraud, bribery, and subterfuge during the long eight-year trial.” (Miño, 2015)
This Commonwealth award was denounced by protestors outside the event and the campaign torescind this award is ongoing. (Amazon Watch, 2015). As of October 11, 2015, there were 5745 signatures for this internet petition (Amazon Watch, n.d.). The Commonwealth Club of California is a 20,000 member liberal organization, one of the oldest public affairs forum in the United States, holding 400 events annually, has the following mission statement: “The mission of The Commonwealth Club of California is to be the leading national forum open to all for the impartial discussion of public issues important to the membership, community and nation.” (Commonwealth Club of California, n.d.). It is difficult to understand how this award could have been given to a CEO of a company that deliberately dumps billions of gallons of oil waste in the Amazon rainforest, attacks people poisoned by Chevron waste as criminals, spends hundreds of millions on lawyers and greenwashing yet refuses to help people with cancer his company caused, spills over 100,000 gallons of crude oil off the coast of Brazil, allows deadly Nigeria oil explosion to burn uncontrolled for four weeks, violates Environmental Protection Agency of the U.S. safety standards at the Richmond refinery which then explodes sending 15,000 to hospital, spends over $3 million to buy Richmond, California elections, and ends renewable solar and wind programmes and continues to dig in Tar Sands, Canada—the worst environmentally damaging extraction (Amazon Watch, n.d.). Only a tiny fraction of the public will realize the deception of the “We Agree” advertising campaign of Chevron that promotes itself as a socially and environmentally responsible company (Chevron, n.d.).
Credit Suisse, a huge global financial corporation pled guilty in May 2014 of helping 22,000 wealthy U.S. taxpayers in the last ten years to file false income tax returns and dodge taxes for which it was fined $2.6 billion, a small sum compared to what the United States government loses—an estimated $170 billion and $200 billion—a year in taxes according to James Henry1 (Nader, 2015). Credit Suisse alone is not responsible to this entire loss of revenue, since there are other felonious financial institutions that collude in this rip off. Credit Suisse has presence in India. Stacking wealth in offshore banking is not new to India and one wonders which multinational banks are helping wealthy families in India to dodge paying taxes and enabling wealth transfers.
James S. Henry in his 2012 The Price of Offshore: Revisited estimated that $21-32 trillion, 10 to 15 percent of the global wealth, unreported, largely untaxed private wealth sitting offshore in 2010. This figure does not include landed property, luxurious villas, and yachts. The total external debt of 139 low and middle income countries was $4.1 trillion in 2010. When you subtract their financial reserves and national debts from offshore deposits of their wealthiest citizens, their debt was negative $10.1 to 13.1 trillion, essentially making them creditor nations (Tax Justice Network, n.d.). Henry argues that the third world debt problem is not really a debt problem but a tax evasion problem whereby transnational banking conglomerates like Credit Suisse, USB, Goldman Sachs, HSBC, and JPMorgan make the U.S., U.K., and Switzerland along with island nations like the Caymans,tax havens (Democray Now!, 2012). A list of countries and island nations designated as offshore tax havens by International Monetary Fund (IMF), Financial Secrecy Index (FSI), and Organization for Economic Co-operation and Development (OECD) puts the total number at 98. They differ in their listing, IMF (52), FSI (82), and OECD (70), all agreeing on 44 offshore havens (see list in Appendix A). (Wikipedia, 2013). Of the 44, only 10 are small countries and the rest are island nations. IMF and OECD did not agree on larger and powerful countries (U.S.A. and U.K.) that FSI includes. This disagreement on lists unmistakably confirms how nation states collude in helping the 10 million wealthiest families of the world to hide their wealth and protect them from taxation. As one of the protestor’s poster rightly summarized: OFFSHORE TAX EVASION THE BIGGEST SCAM IN HUMAN HISTORY, cannot continue without a significant influence of these wealthy families on the executives of the nation states to leave them alone in their pursuit of limitless wealth. No wonder, less than one percent of the United Nations Global Contact participants are banks. Only one bank from India is in the Compact (United Nations Global Compact, 2015). It would be hard for the banks to follow Principle 10—Anticorruption dealing with corruption, bribery and requires them to be transparent (See Appendix B).
Although corporate criminality is vast, very little data is collected systematically. Some watchdog groups in the U.S. collect information. A list of top 100 criminal corporations of the 1990s might shock people if they just read their names and criminality (Mokhiber, n.d.). In my earlier paper, I have cited local struggle against corporate pillages and exploitation in India (D’Sozua, 2014). Liberalization of the India’s economy in the 1990s increased the GDP growth rate and benefitted the top 25 per cent of the 1.2 billion people; it has transferred enormous amount of wealth to a very small number of families where merely 100 individuals now own a quarter of the GDP (Roy, 2014, p. 7). According to Credit Suisse’s 2014 Global Wealth Report, share of the wealth held by the top 10 per cent of Indians has increased from 64.9% in 2000 to 74% in 2014 (Stierli, Shorrocks, Davies, Lluberas, & Koutsoukis, 2014, p. 33). Global wealth distribution is even worse (see Figure 1).
Less than 1% at the uppermost have 44%, and top 8.6% have 81.3% of the wealth pie (Stierli, Shorrocks, Davies, Lluberas, & Koutsoukis, 2014, p. 24). Even among the top one percent, the distribution is unequal and therefore, the authors divide the apex of the pyramid as High Net Worth (HNW) (see Figure 2) and on to Ultra High Net Worth (UHNW) individuals and estimate:
“Worldwide we estimate that there are 128,200 UHNW individuals, defined as those whose net worth exceeds USD 50 million. Of these, 45,200 are worth at least USD 100 million and 4,300 have assets above USD 500 million. North America dominates the regional rankings, with 65,500 UHNW residents (51%), while Europe has 31,400 (24.5%), and 16,600 (13%) live in Asia-Pacific countries, excluding China and India (Stierli, Shorrocks, Davies, Lluberas, & Koutsoukis, 2014, p. 26).”
The Credit Suisse Global Wealth Data Book of 2015 continues to show the maldistribution wealth (see Figure 3) (Shorrocks, Davies, & Lluberas, 2015, p. 149) where top one percent of the world owns 50 per cent of the wealth and in India that figure is 53 percent. The shocking reality is that top one percent in India as well as the world now own more than rest, 99 per cent.
This kind of accumulation cannot happen without sophisticated form of robbery of public resources, offshore banking, and tax evasion, sometimes legalized and tolerated when illegal, under this system of capitalism. This is the background in which we need to observe CSR. As Rajak perceptively notes, “CSR, I argue, plays a much more fundamental role in sustaining corporate capitalism. Not because it provides corporations with ethics, but because it provides them with a moral mechanism through which their authority is extended over the social order (Rajak, 2011, p. 13).” It is indeed, a “business case” which has been labelled the “triple bottom line”—people, planet, and profit, a term originally coined by John Elkington, designated as the dean of corporate responsibility by Business Week (Wikipedia, n.d.), implying sustainable development and environmental quality alongside economic prosperity and social equity, sometimes referred to as eco-capitalism or green capitalism, ignoring the contradictions within them. Business elites are keenly aware that laws of nature will always trump the laws of capitalism if businesses continue their ecologically devastating plunder. In spite of the definitive conclusions by the International Panel on Climate Change (IPCC), that climate change is caused by economic activity and its call to end fossil fuel use to avoid the next species extinction, millions are spent in denying climate change and branding it a hoax to destroy capitalism (Oreskes & Conway, 2015) or dismiss it as God’s plan among the fundamental religious believers.
Philanthropic projects are only one aspect of CSR now. CSR has expanded to include the interests of what is called the many stakeholders, the stockholders being only one among the others such as employees, consumers, the public, community, and the environment, indeed the larger society. It extends beyond philanthropy to environmental sustainability, ethical conduct, sound labour standards, and human rights.
Corporate Social Responsibility has gone global. The ten commandments of Corporate Social Responsibility were established by the UN in the year 2000, what is called the U.N. Global Compact (UNGC). Labelling this as the world’s largest corporate sustainability initiative, these constitute ten principles in four areas—human rights, labour, environment, and anti-corruption. These principles are not new. They emanate from four previous declarations and charters—Universal Declaration of Human Rights, International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the United Nations Convention Against Corruption.2 Businesses are called to adopt these in their operations and management and are invited to participate in this compact. (United Nations, n.d.). On sustainability, the goal is to “push sustainability deep into the corporate DNA” an interesting genetic metaphor, used to seek change corporations which are mere legal entities (United Nations Global Compact, 2015, p. 7).
Former UN Secretary General, Kofi Annan, in his address to the World Economic Forum in Davos, 1999 proposed the idea of this Compact to give a human face to world markets in which he accurately noted its inhuman face:
“We have to choose between a global market driven only by calculations of short-term profit, and one which has a human face. Between a world which condemns a quarter of the human race to starvation and squalor, and one which offers everyone at least a chance of prosperity, in a healthy environment. Between a selfish free-for-all in which we ignore the fate of the losers, and a future in which the strong and successful accept their responsibilities, showing global vision and leadership. (United Nations Global Compact-UNEP, n.d.)”
Kofi Annan said this 16 years prior to Pope Francis, risking the resentment of global elites, boldly and eloquently exhorted in his 2015 Encyclical Letter, LAUDATO SI’, On Care of Our Home, in section 51:
“Inequity affects not only individuals but entire countries; it compels us to consider an ethics of international relations. A true “ecological debt” exists, particularly between the global north and south, connected to commercial imbalances with effects on the environment, and the disproportionate use of natural resources by certain countries over long periods of time. The export of raw materials to satisfy markets in the industrialized north has caused harm locally, as for example in mercury pollution in gold mining or sulphur dioxide pollution in copper mining. There is a pressing need to calculate the use of environmental space throughout the world for depositing gas residues which have been accumulating for two centuries and have created a situation which currently affects all the countries of the world. The warming caused by huge consumption on the part of some rich countries has repercussions on the poorest areas of the world, especially Africa, where a rise in temperature, together with drought, has proved devastating for farming. There is also the damage caused by the export of solid waste and toxicliquids to developing countries, and by the pollution produced by companies which operate in less developed countries in ways they could never do at home, in the countries in which they raise their capital: “We note that often the businesses which operate this way are multinationals. They do here what they would never do in developed countries or the so-called first world. Generally, after ceasing their activity and withdrawing, they leave behind great human and environmental liabilities such as unemployment, abandoned towns, the depletion of natural reserves, deforestation, the impoverishment of agriculture and local stock breeding, open pits, riven hills, polluted rivers and a handful of social works which are no longer sustainable” (Francis, 2015, pp. 36-38).
Subsequently, Dalai Lama (June 28, 2015) (Mellino, 2015) endorsed the Pope’s Encyclical to protect the planet and 60 Islamic scholars followed Pope’s lead and called on 1.6 billion Muslims, by declaring: “We recognize the corruption that humans have caused on the Earth due to our relentless pursuit of economic growth and consumption.” (Dizard, 2015) (Democracy Now!, 2015). The declaration recognizes the anthropogenic climate change and agrees with conclusions of the IPCC and urges the political leaders of the world, and Conference of Parties (COP) and business corporations to take steps to reduce greenhouse emissions, interspersing the text with passages from the Holy Qur’an and responsibility as Muslims is to act according to the example of the Prophet Muhammad.
He raised the heaven and established the balance
So that you would not transgress the balance.
Give just weight – do not skimp in the balance.
He laid out the earth for all living creatures.
Qur’an 55: 7-10 (International Islamic Climate Change Symposium, 2015)
The Hindu declaration on climate change was released as early as 2009 at the Melbourne’s Parliament of the World’s Religions where the first convocation of Hindu spiritual leaders was held. Hindus address the Earth, Bhudevi (Earth Goddess) with fondness, reverence, gratitude, and divinity—the universal mother. The Declaration begins with the Bhumi Suktam in the Atharva Veda, xii.1.3, “Earth, in which the seas, the rivers and many waters lie, from which arise foods and fields of grain, abode to all that breathes and moves, may She confer on us Her finest yield”. In the spirit of Vasudhaiva Kutumbakam (world as one family), the Declaration calls upon 700 million Hindus in the world, to live in harmony with the earth by reducing consumption, using alternate energy sources, and seeking sustainable food production and vegetarianism. (Hindu Press International, 2009). It is brief, and unlike the Pope’s Encyclical, lacks systemic analysis, critique of the capitalist system, or the exposition of climate injustices between the rich and poor countries and the intergenerational injustice. It relies on life style change by individuals. In spite of such endorsement by religious leaders, the Republican candidates running for the nomination of the party for the 2016 presidential elections in the U.S., and other conservatives, who are climate change deniers, were quick to criticize Pope Francis and some even labelled him a communist. (Page, 2015).
As of October, 2015 there were 9,503 businesses (72%) and 3719 non-businesses (28%) from 161 countries had joined this U. N. Global Compact. (United Nations Global Compact, 2015). Table 1 gives the participation rate of top 20 countries and India now ranks 10 with 317 (2.4%). (United Nations Global Compact, 2015).
Figure 4 gives the distribution of the type of organizations participating contrasting India with the world. Obviously, business organizations dominate followed by NGOs, business associations, and academic institutions at the global level. While the business participants are relatively lower in India, the participation by the NGOs, academic institutions, and foundations is almost twice as high. Labour participation is very poor globally and as well as in India, which is an indication that labour does not endorse United Nation’s Global CSR initiative.
Many NGOs along with academic institutions have joined. What motivated these to join is a matter of study by itself. One could speculate that those which joined sought to establish their credibility and sincerity about their corporate social responsibility. The non-business sector is interested to seek collaboration with the business sector in implementing their programmes of social responsibility.
General industries, software & computer companies, extractive and chemical industries are in the forefront in India. In fact, there are two members on the board of UNGC from India3 (United Nations Global Compact, n.d.). Most organizations in India have joined the ONGC in the last five years (See Figure 5).
Passage of the Companies Act 2013 which mandates the top companies4 to allocate up to two per cent of the net profits of previous three years for CSR activities, may have offered some incentives to the businesses as well as the NGOs. Being an active participant in the UNGC, offers credibility and respect and enticement to the business corporations to invite the NGO sector as partners. The Companies Act also recommends a list of CSR activities (see Appendix C).
A study conducted in 2007 by the German Development Institute with Centre for Social Markets in India, on the impact of the Global Compact on CSR in India, based interviews with top 40 Indian and foreign companies, and 32 stakeholders, makes the business case for CSR as indicated in Figure 6.
Clearly, the intent is brand enhancement or good public image as well assecuring a motivated and productive workforce. CSR projects, which are likely to attract productive employees, such as improving working conditions, community development and educational, and training programmes are given priority. Access to socially responsible capital remains low in India.
Discussion of CSR in India often begins with the well-publicised contributions of industrial philanthropists such as, building educational institutions, hospitals, and temples. The Tata charities and Birla Mandirs (temples) are well known among others. Gandhi’s trusteeship principle is often referred to without any figures to back up the number of programmes, expenditures, or the extent of the social good it generated. If trusteeship principle was widely adopted, most of the wealth in India should have been distributed for eliminating hunger, poverty and disease. An example of a typical CSR project by a major corporation, set up in congruence with the U.N. Millennium Development Goals, by Tata Steel in Jharkhand, included building a village link road, drinking water project, mobile dispensary and family planning, women development, community forestry, and education and vocational training (Ghosh & Chakraborti, 2011). Unfortunately, one is not sure what percent of the profits were devoted to such projects.
Coca-Cola has a troubled history in India. It damaged its reputation in Plachimada, Kerala where its bottling plant was closed in 2004 after a long struggle and legal battle. Coke products were boycotted. Ten years later, the Mehdiganj plantnear Varanasi, was also forced to shut down. The Central Ground Water Authority (CGWA) 2013 report stated that Coca-Cola’s bottling plant had worsened local water quality from safe to critical in the intervening 13 years (Hansia, 2014). However, Coca-Cola’s success story in dealing with the Sangarsh Samitis (Protest Groups), in Kaladera in the Thar Desert region of Rajasthan is cited as a business case for CSR. The company adopted CSR projects such as, subsidizing drip irrigation, involving local people and leaders, third-party monitoring to enhance transparency, providing jobs to locals, and initiating water conservation measures such as building step wells and tanks, locally known as bawaris to store water, and constructing recharge shafts to harvest rain water (Chaklader & Gautam, 2013). Nonetheless, a closer examination reveals a different story. Coca-Cola has not been as transparent as it claims in revealing the monetary allocations for these projects and its CSR projects will not change the overexploitation of scarce water resources. The Central Ground Water Authority (CGWA) rules state: “permission to abstract ground water through any energized means will not be accorded for any purposes other than drinking water” (Karnani, 2014, p. 30). Since August 13, 2011 the CGWA, declared this region overexploited which means, “industries using water as raw material/water intensive industries like packaged drinking water, mineral water industries, distilleries, breweries, soft drink manufacturing industries, textiles, paper & pulp, etc. shall not be granted NOC [no objection certificate] for groundwater withdrawal” (emphasis in the original) (Karnani, 2014, p. 30).
Such are the limits that the environment imposes and with climate change, these limits are going to be even more severe. Besides ground water depletion and pollution, soda products have caused a public health nightmare. The relentless advertising in all the media along with product placement trickery of sugar-loaded drinks in the hands of popular actors and actresses in Bollywood movies, have increased consumption of these sugary drinks especially among the middle class in India. This has led to obesity and type 2 diabetes, heart disease, and tooth decay among its consumers, especially children all over the world. Professor Marion Nestle of New York University, in her book Big Soda (and Winning), has exposed that: 85 percent of the studies funded by the soda industry, find soda to be harmless; when New York State was considering tax on soda to fund health care costs of diabetic treatment, Coke offered to fund a park initiative, and in Philadelphia, it gave $10 million donation to the Children’s Hospital. By setting up and funding fake grassroots groups such as Citizens against Unfair Taxes, and massive disinformation campaign, the American Beverage Association—the lobby group of the soda industry—defeated this tax initiative. The Global Energy Balance Network, a front group funded by Coca Cola, promotes exercise, not dietary changes—most important being eliminating sugary soda drinks—as the main solution for obesity. Advocacy for health has become a threat to the industry’s profits—seriously limiting corporate social responsibility that demands well-being of the people. (Nestle, 2015).
The political climate has changed in India with the passage of the Companies Act, 2013. The predecessor of this effort was in 2011 when the Indian Ministry of Corporate Affairs released the National Voluntary Guidelines on Social, Environmental & Economic responsibilities (NVGs) for India (Ministry of Corporate Affairs, Government of India, 2011) with following nine principles similar to the ten of UNGC:
The Securities and Exchange Board of India (SEBI) mandates the top 100 companies by market capitalization to submit Annual Business Responsibility Reports based on the NVGs as part of Annual Reports (Thakkar).
Studies that evaluate the CSR activities of Indian companies indicate poor participation and mostly poor ratings. A recent study of 50 companies in India revealed that these companies spent only 65 per cent of two per cent of the three-year average profits of total Rs.289,389 crores (1 crore = 10,000,000) for the financial year 2013-14, that is a mere 1.3 percent, Rs.3756.78 crores (Chandra & Kaur, 2015, p. 76). In a study by Karmayog in 2011 of 500 of the largest companies, none received a highest rating of 5 on a 0 to 5 scale. Only 10 (2%) received a rating of 4 and 30 per cent, the lowest grade. Karmayog5, a think tank on CSR, recommends each company to spend 0.2 per cent of its sales (not net profits) on CSR activities. Yet, according to the study, these companies barely spent 10 per cent of this recommended amount, that is, Rs.740 crores, ($113.8 million at $65 exchange rate) (Mid Day, 2011). Under the Companies Act of 2013, 8000 companies are expected to spend between $3 and $4 billion (Rs.20,000 to Rs.26,000 crores at an exchange rate of Rs.65 for a dollar) a year (Ray, 2013, p. 115). While this amount may appear large, it is nearly the expenditure for the rural employment guarantee programme (The Mahatma Gandhi National Rural Employment Guarantee Act-MGNREGA), which is Rs.21,923.8 crores ($3.37 billion at Rs.65 exchange rate) (Ministry of Rural Affairs, Government of India, n.d.). Therefore all the whining that CSR is an interference with the free enterprise system and that two per cent CSR allocation is a form of taxation—loss of profits—victimizes a few thousand High Net Worth and Ultra High Net Worth Individuals, 100 of whom already own a quarter of the GDP in India, reflects market fundamentalism devoid of any trusteeship. Advocates of liberalization such as the Center for Strategic and International Studies (CSIS), in their report on CSR in India and the Companies Act, often tout that per capita income in India has risen from $355 in 1993 to $1499 in 2013 (Rossow, 2015, p. 1). In an economy when most of the wealth is concentrated in the top one per cent, per capita income exaggerates the average income considerably. For example, Credit Suisse’s 2015 estimate of the mean wealth per adult6 in India is $4,352, and the median is $868, which is five times smaller than the mean (Shorrocks, Davies, & Lluberas, 2015, p. 104). Yet in the same CSIS report, the author points that on the Human Development Index of the United Nations Development Programme, India still ranks 135th among the 187 nations in 2014, barely moving up a single space since 2008 (Rossow, 2015, p. 1). This is further evidence to the fact that per capita income might indicate the increase in wealth but this wealth has not contributed to the general well-being of the masses of Indians most of who still live under the poverty level of less than Rs.20.00 a day (< $0.33 a day).
When we talk about corporate social responsibility, we need to be clear about what a corporation is. A corporation is a legal entity set up by individuals with permission of the society to achieve certain goals. In this context, business corporations are set up to conduct business activities that make profit for the investors—the owners of the corporation. They are the actors the HNW and the UHNW individuals who make sure that wealth will accumulate in their hands and the CSR, isn’t going to change it. Evocations of dharma, or Gandhian trusteeship doctrine, or chanting of the Bhumi Suktam praying to Bhudevi (Universal Mother) to shower her blessings, or the dharmic doctrine of Vasudhaiva Kutumbakam, have not prevented this class from polluting the holy Ganga (Thotam-Pipola, 2010)—denying millions of devotees the privilege of spiritually cleansing baths in the Swachh Ganga (Clean Ganges)—polluting the air, eliminating 80 percent of the forests, and not only failing to expand the existing forests in 21 per cent of the land to one third (Hance, 2012) but cutting quarter of the remaining, for fast track industrial growth, dams and mines. The environmentalists fear that the Ganga will run out of water (Mukunth, 2015) with receding Himalayan glaciers which will disappear with increasing global temperatures in the next century. Swachh Ganga (Clean Ganges) movement along with Prime Minister Narendra Modi’s assertion that he was chosen to clean the Ganga (Conaway, 2015) are hopeful signs and provide CSR environmentalists with unlimited opportunities to clean the Ganges. CSR will provide opportunities to business executives to confer in five-star hotels; newspapers, radio and TV news will feature CSR projects, with exotic names in local languages, preferably in Sanskrit, such as green Kumbh Mela7, developed by cleaver public relations (PR) experts in the company’s PR departments or consultants (Sarkar, 2015). Ironically, the Government of India suspended the registration of Green Peace, India for campaigning against building nuclear plants, coal and uranium mines, and industrial projects (The Chronicle of Philanthropy, 2015). In India, Laxmi Devi (Goddess of Wealth) is in conflict with Bhudevi (Earth Goddess). Earth Goddess will continue even if climate change might eventually make human life unsustainable and extinct on Earth in pursuit of Laxmi. In spite of the enormous wealth offerings to the Hindu temples all over India by devotees, constructing magnificent temples by industrial philanthropists, which attract as many tourists as devotees, one needs to honour and protect Bhudevi and not destroy her, in pursuit of wealth. Earth will continue to exist without us even if we fail to halt climate change.
After studying the CSR projects of the mining companies that colonized and exploited the black miners in apartheid South Africa, Rajak observes with keen insight of an anthropologist, “The capacity of the CSR to re-appropriate the language and symbols of its critics as a corporate resource draws some of even the most vocal campaigners of corporate irresponsibility into its projects” (Rajak, 2011, p. 59) and concludes, “In the end, the moral economy of CSR represents, not an opposition to the contemporary world of corporate capitalism, nor a limit to it, but the very mechanism through which corporate power is replenished, extended and fortified.” (Rajak, 2011, p. 239). Even Pope Francis says:
In the meantime, economic powers continue to justify the current global system where priority tends to be given to speculation and the pursuit of financial gain, which fail to take the context into account, let alone the effects on human dignity and the natural environment. Here we see how environmental deterioration and human and ethical degradation are closely linked. Many people will deny doing anything wrong because distractions constantly dull our consciousness of just how limited and finite our world really is. As a result, “whatever is fragile, like the environment, is defenceless before the interests of a deified market, which become the only rule” (Francis, 2015, p. 41).
His Holiness, then raises the question, “Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations?” (Francis, 2015, p. 139).
Societies based on industrial mass production and consumption are not sustainable. The capitalist system as it functions today has given us massive inequalities in the distribution of wealth as well as in consumption. Fifteen percent of the wealthy people, mostly in North America and Europe, in the world consume 86 per cent according to Kelle Lasn of Adbusters. He could not find a single TV station to air his paid advertisement on Buy Nothing Day (CNN, 2012). Indeed, it is an intergenerational plunder—adharma of tragic proportions towards our children and those unborn. There is no reason why majority in the world puts up with such a system that keeps it poor, oppressed and rushing us to an apocalyptic end. In fact, the resistance is emerging. The Bolivian President Evo Morales proclaimed, “Capitalism is Mother Earth’s cancer,” at the World People’s Conference on Climate Change, held in October, 2015 at Tiquipaya, Bolivia, where nearly 7,000 environmentalists, farmers, and indigenous people gathered. They concluded with a 12-point declaration—the the Declaración de Tiquipaya—demanding among others:
These demands will be placed before COP21 in November-December 2015 in Paris to reach a binding agreement on dealing with climate change (Fulton, 2015).
The political conflicts in the Middle East, especially in Syria, in the Sudan, in the Congo, and other parts of Africa have their origins in climate change. The U.S. Defence Department’s assessment on threats to global security point to climate change, “The impacts of climate change may cause instability in other countries by impairing access to food and water, damaging infrastructure, spreading disease, uprooting and displacing large numbers of people, compelling mass migration, interrupting commercial activity, or restricting electricity,”8… (Schlanger, 2014)
Environmental projects, reforestation of India, elimination of hunger and poverty, promoting transparency and ending corruption, enhancing the quality of life for the masses will require revolutionary changes leading to massive distribution of wealth from the super elites. It will require us to abandon this dystopian and unjust mass consumption society and strive towards the Gandhian utopia of Gram Swaraj, built on decentralized, sustainable, self-sufficient, and self-governing village republics—eco communities that will provide us with a good quality of life—where prosperity is measured in gross national happiness and not gross domestic product or mass consumption. Until then, CSR will not only remain feeble attempt to rectify the injustices and ecological devastations of global corporate capitalism, and a U.N. sponsored public relations ploy to continue the usurpation of wealth by the super elites but also a feebler endeavour to slow the race towards impeding ecocide through these sociopathic corporations.
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