Description
The doc highlights on the CSR initiative at POSCO.
“I believe that the CSR of a company should be undertaking all actions as would maximise the probability of its long-term survival and sustained growth.” -- R C Bhargava (C`hairman, Maruti Suzuki India Ltd)
Ore mining in Orissa
The issue The issue of relocating indigenous tribes, used to their very own way of living has always been a contentious issue. The issue becomes even more complicated when the tribes are endangered tribes. POSCO India has been facing tremendous and continuous resistance from the locals, to its plant of capacity 12 million tons annually, located in Jagatsinghpur District of Orissa, 10 km south of Paradip Port. The issue is further complicated from time to time, with opposition parties coming into the picture and indulging in rabble rousing. The bigger picture here is that the tribes of Orissa carry with them the bad experiences from past, be it the Hirakud project, or NALCOs mining project. The R&R in these cases was not very effective to put it very lightly. In fact in the case of NALCO, whereas earlier the indigenous forest dwellers were completely self-reliant, now 70% are part of BPL families. The management of POSCO has got to realize 2 facts: ? The process of winning over the tribal people is going to be slow ? And rehabilitation is going to be as much important if not more than relocation The state of Orissa is mineral rich, and upon the handling of this 1 st project will depend the future of the company in this state. Needless to say, a sustainable model developed here will go a long way in smoothening future endeavors. As of now POSCO is working with the Government of Orissa, and other stakeholders to come up with a proper CSR strategy. In the meanwhile it has come up with forays like “villager’s friendly program”, medical camps and scholarship for students. We as a group think that POSCO in order to overcome the problems it is affecting right now, it is better to channelize its efforts. The current efforts are too scattered and don’t really help in solving the issue which the company faces. Stakeholders The primary stakeholders in this problem are ? The state government – The state government can help a great deal in gaining understanding of ground realities and can help gain contacts with other important stakeholders. Also security is an issue, which makes the State Government a very important stakeholder. ? The tribes/people who would be displaced/local community – Without their support the venture could still be a success, but the model won’t be a sustainable one. On the other hand gaining their co-operation gives POSCO access to peace of mind, access to workforce as well as an example to use elsewhere.
? Employees – The employees might have security concerns. But it is of paramount importance to see that such concerns are allayed, for without the employees there can be no project. ? NGO’s/Social bodies – Accessing the tribes/local communities may not be possible for POSCO, and the tribes as of now have a lot of hatred and distrust of the state government. So in order to gain access to these tribes, to know their expectations, to tell them about POSCOs plans for them, to allay their fears, POSCO would need good NGOs and other socially active bodies. Also a lot of such bodies would claim to be representatives of the indigenous tribes and would oppose POSCO tooth and nail. ? Suppliers – Though big suppliers are probably roped in by the state govt., even the small suppliers are important. Now these small players may not be very gung ho about the project, and might have strong sympathies for the displaced people. So this is something that needs to be kept in mind. The secondary stakeholders are ? Media – Along the process of R&R there are bound to be some hiccups. If the media wants, it can indulge in a lot of mud-slinging during such events, making things even more difficult for POSCO. On the other hand, media as an ally will really help by keeping the news in proper perspective and even showing good news in positive light, as it should be. ? Other players in the state like TATA Steel and Vedanta – Right now all these 3 companies have a presence in the state, and anything good or bad (vis-à-vis the reaction of the locals) that happens to one company will affect the other players too. A case in point is the recent violence that started at POSCO plant and spilled over to the TATA plant at Kalinga too. It didn’t matter that TATA Steel had already got considerable success in its R&R efforts. Because of the old bad experiences of the tribes in Orissa, these 3 players’ fates in this state are tied together to some extent, if they want to do business in Orissa in the future too. Is the opposition likely to give up? The opposition in this case is primarily from the indigenous tribes. There are other bodies too which oppose the POSCO plant, but they are of secondary importance, for they derive their power from the dissatisfaction of the tribes. And it is to be understood that what POSCO proposes is a HUGE change for the tribes, being accustomed to their way of life for generations. It is not just a question of relocating for them but rather of keeping their identities, their cultures intact. So it would be outright stupid to expect them to give up their opposition. So the way ahead is to find common ground where all parties concerned are benefitted. Stage of life cyclehttp://businesstoday.intoday.in/index.php?option=com_content&task=view&id=7227 This issue is basically an issue of R&R, which has become pretty common by now. A lot of companies as also governments have faced this issue and there are well defined laws for R&R by now. Nowadays a lot of big/small projects require displacement of people and as a result a lot of companies have actually well defined policies/programs to handle the R&R which is supposed to follow. A case in point is NTPC. Almost for all its projects some amount of R&R is needed, and so over the years the company has
developed a very good program for handling this. In fact NTPC goes beyond the obligation part, and indulges in a lot of community development work too. Salient features of the existing R&R laws ? ? ? ? ? ? Will establish an R&R administration at the central and state levels Administration will plan and implement R&R Guidelines laid down for identifying 'affected areas' and 'affected families' Projects will be mandated to seek a Social Impact Assessment (SIA) Emphasis on minimizing large scale displacements Grievance redress mechanisms like project/district R&R committees, an ombudsman and a National Rehabilitation Commission ? Civil courts restrained from intervening in disputes ? Focus on providing land for land rehabilitation ? Unutilized land to be returned to the government
R&R BILL: SHORTCOMINGS ? ? ? ? ? Project planning process excludes local community participation No in-built mechanism to minimize large scale displacements No guarantee of land for land and alternate livelihood-based rehabilitation No clear time frame for completion of R&R No penalty for violations of the guidelines
Alternatives ? Do the bare minimum necessary/Only what is required by law /Compliance mode of organizational learning – This mode of action requires the company to do only what it is required to do by the law. But doing this will hardly be of any use given the circumstances of the ? Managerial mode of organizational learning ? Strategic mode of organizational learning ? Civil mode of organizational learning
doc_103564129.docx
The doc highlights on the CSR initiative at POSCO.
“I believe that the CSR of a company should be undertaking all actions as would maximise the probability of its long-term survival and sustained growth.” -- R C Bhargava (C`hairman, Maruti Suzuki India Ltd)
Ore mining in Orissa
The issue The issue of relocating indigenous tribes, used to their very own way of living has always been a contentious issue. The issue becomes even more complicated when the tribes are endangered tribes. POSCO India has been facing tremendous and continuous resistance from the locals, to its plant of capacity 12 million tons annually, located in Jagatsinghpur District of Orissa, 10 km south of Paradip Port. The issue is further complicated from time to time, with opposition parties coming into the picture and indulging in rabble rousing. The bigger picture here is that the tribes of Orissa carry with them the bad experiences from past, be it the Hirakud project, or NALCOs mining project. The R&R in these cases was not very effective to put it very lightly. In fact in the case of NALCO, whereas earlier the indigenous forest dwellers were completely self-reliant, now 70% are part of BPL families. The management of POSCO has got to realize 2 facts: ? The process of winning over the tribal people is going to be slow ? And rehabilitation is going to be as much important if not more than relocation The state of Orissa is mineral rich, and upon the handling of this 1 st project will depend the future of the company in this state. Needless to say, a sustainable model developed here will go a long way in smoothening future endeavors. As of now POSCO is working with the Government of Orissa, and other stakeholders to come up with a proper CSR strategy. In the meanwhile it has come up with forays like “villager’s friendly program”, medical camps and scholarship for students. We as a group think that POSCO in order to overcome the problems it is affecting right now, it is better to channelize its efforts. The current efforts are too scattered and don’t really help in solving the issue which the company faces. Stakeholders The primary stakeholders in this problem are ? The state government – The state government can help a great deal in gaining understanding of ground realities and can help gain contacts with other important stakeholders. Also security is an issue, which makes the State Government a very important stakeholder. ? The tribes/people who would be displaced/local community – Without their support the venture could still be a success, but the model won’t be a sustainable one. On the other hand gaining their co-operation gives POSCO access to peace of mind, access to workforce as well as an example to use elsewhere.
? Employees – The employees might have security concerns. But it is of paramount importance to see that such concerns are allayed, for without the employees there can be no project. ? NGO’s/Social bodies – Accessing the tribes/local communities may not be possible for POSCO, and the tribes as of now have a lot of hatred and distrust of the state government. So in order to gain access to these tribes, to know their expectations, to tell them about POSCOs plans for them, to allay their fears, POSCO would need good NGOs and other socially active bodies. Also a lot of such bodies would claim to be representatives of the indigenous tribes and would oppose POSCO tooth and nail. ? Suppliers – Though big suppliers are probably roped in by the state govt., even the small suppliers are important. Now these small players may not be very gung ho about the project, and might have strong sympathies for the displaced people. So this is something that needs to be kept in mind. The secondary stakeholders are ? Media – Along the process of R&R there are bound to be some hiccups. If the media wants, it can indulge in a lot of mud-slinging during such events, making things even more difficult for POSCO. On the other hand, media as an ally will really help by keeping the news in proper perspective and even showing good news in positive light, as it should be. ? Other players in the state like TATA Steel and Vedanta – Right now all these 3 companies have a presence in the state, and anything good or bad (vis-à-vis the reaction of the locals) that happens to one company will affect the other players too. A case in point is the recent violence that started at POSCO plant and spilled over to the TATA plant at Kalinga too. It didn’t matter that TATA Steel had already got considerable success in its R&R efforts. Because of the old bad experiences of the tribes in Orissa, these 3 players’ fates in this state are tied together to some extent, if they want to do business in Orissa in the future too. Is the opposition likely to give up? The opposition in this case is primarily from the indigenous tribes. There are other bodies too which oppose the POSCO plant, but they are of secondary importance, for they derive their power from the dissatisfaction of the tribes. And it is to be understood that what POSCO proposes is a HUGE change for the tribes, being accustomed to their way of life for generations. It is not just a question of relocating for them but rather of keeping their identities, their cultures intact. So it would be outright stupid to expect them to give up their opposition. So the way ahead is to find common ground where all parties concerned are benefitted. Stage of life cyclehttp://businesstoday.intoday.in/index.php?option=com_content&task=view&id=7227 This issue is basically an issue of R&R, which has become pretty common by now. A lot of companies as also governments have faced this issue and there are well defined laws for R&R by now. Nowadays a lot of big/small projects require displacement of people and as a result a lot of companies have actually well defined policies/programs to handle the R&R which is supposed to follow. A case in point is NTPC. Almost for all its projects some amount of R&R is needed, and so over the years the company has
developed a very good program for handling this. In fact NTPC goes beyond the obligation part, and indulges in a lot of community development work too. Salient features of the existing R&R laws ? ? ? ? ? ? Will establish an R&R administration at the central and state levels Administration will plan and implement R&R Guidelines laid down for identifying 'affected areas' and 'affected families' Projects will be mandated to seek a Social Impact Assessment (SIA) Emphasis on minimizing large scale displacements Grievance redress mechanisms like project/district R&R committees, an ombudsman and a National Rehabilitation Commission ? Civil courts restrained from intervening in disputes ? Focus on providing land for land rehabilitation ? Unutilized land to be returned to the government
R&R BILL: SHORTCOMINGS ? ? ? ? ? Project planning process excludes local community participation No in-built mechanism to minimize large scale displacements No guarantee of land for land and alternate livelihood-based rehabilitation No clear time frame for completion of R&R No penalty for violations of the guidelines
Alternatives ? Do the bare minimum necessary/Only what is required by law /Compliance mode of organizational learning – This mode of action requires the company to do only what it is required to do by the law. But doing this will hardly be of any use given the circumstances of the ? Managerial mode of organizational learning ? Strategic mode of organizational learning ? Civil mode of organizational learning
doc_103564129.docx