Concrete
Creating Value through CSR
Industrial and social progress can go hand-in-hand, while economic targets are being efficiently met. This can be deduced to be the goal of the current Corporate Social Responsibility (CSR) programmes that are being curated by cement companies. CSR has evolved with a deeper understanding of human and environmental factors that have a direct impact on economic growth.
The world has come a long way from Milton Friedman’s statement, “The purpose of corporate social responsibility is to make profits.” The jury have settled for a clear mandate that corporations have the responsibility to partake in the development of the society around the place where such development is in severe shortage. In India, on 29th August, 2013, The Companies Act 2013 replaced the Companies Act of 1956 and the New Act has introduced far-reaching changes that affect company formation, administration and governance, and incorporates an additional section i.e. Section 135 – clause on Corporate Social Responsibility obligations (‘CSR’) for companies listed in India. The clause covers the essential prerequisites pertaining to the execution, fund allotment and reporting for successful
project implementation.
Most industrial activity in India is in locations far away from the developed cities and towns; there are only a few bright spots, where the township got developed around the industrial unit and the unit only prospered as the development gained ground around the place, whether it be in education, basic health, welfare or skill development. The network effects got better off single units spilling over to a cluster of units. Surprisingly these examples like Jamshedpur, Renukoot and Rourkella in the East or the industrial hubs that later fructified in many regional clusters happened without the enforcement of CSR as a legal requirement.
The early entrepreneurs believed in the role of CSR as a value creating idea, not a mere formality of stipulations and budget exercises, however the need for a uniform code of conduct has made the progress in this area far more structured and corporations can now actually transparently showcase their progress made, which wasn’t the case before.
For an industry such as cement, which starts with a mining activity that is only possible at remote locations, given the limestone deposits, CSR has always been at the forefront of management attention; the Section 135 has put some structure of governance around the subject with specific reporting guidelines.
Of the many areas which outline the focus, the spate of disruptions that Covid-19 had spearheaded threw some additional pointers to the need of additional work. There are three such areas:
- Responsibility towards the pool of migrant workers in times of disruption
The disruptions around the pandemic started with displacement of people in both directions, from the place of work to the place of home and vice versa. Lack of information, communication, absence of logistics, absence of mobile health services, all of this compounded into a cascade of events leading to major dislocations that impacted lives and livelihood of people. When such dislocations happen, the corporates suffer in the form of production losses, delivery delays and rising cost of sales. Concerted preventive work needs to be done in a planned manner as in remote locations that depend on migrant workers, all of these cannot be left for government support only as has been the case in the last pandemic. - Facilitating skill development centres at the industrial cluster
Skill development is one of the central tenets of CSR activities, which needs to be also seen in the light of those specific skills that are in short supply in the cluster where the unit operates. Investments in this area have to go up many times to ensure that rigid dependence on migrant labour can be minimised. Skill development is more than just the numbers and hours, but actually ensuring the quality of skills to match what skilled migrant labour provide, whether in the area of masonry, carpentry, fitter or technician to the specialised skills around kiln maintenance. - Employability improvement program at the cluster
This is the final step to ensure that skills developed in the cluster are retained through employment in the cluster, which is a logical progression of the theme. Schemes that focus on a comprehensive skill development program that is targeted to certain specialised jobs in the industrial activities of the cluster, will make the circle complete.
Cement industrial complexes in remote settings suffer from local skills and while the migrant labour fills up this void, it remains the responsibility of the unit to create a sustainable supply of labour that will create continuity of operations. This is more than just CSR, it is a core business challenge that we are talking about here. Take kiln maintenance, refractory lining, replacement, overhauling of key equipment and none of this can be done with only the local skills available at the cluster.
A crisis like the pandemic has taught us that those skills, which make our units run efficiently, more often than not, come from the distant quarters in our land. If we take care of these migrant labour in times of crisis, we could do better in staving off major disruptions. Having a more long-term view on this will lead us to make changes in the way we look at skill development in the clusters of industrial activities.
This is where CSR moves to a value creating role, both for industrial progress as well as for the society where such activities are entrenched.
– Procyon Mukherjee
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