With companies hardwired to make money, the impetus behind corporate social responsibility can only function as advertisement – largely empty and potentially misleading.
A brown, life-size papier-mâché dog, its hind leg elegantly elevated, aims a stream of urine onto a large replica of Tata Tea packet. In January 2007, the dog was part of a tableau created as part of a ‘Boycott Tata’ procession by survivors of the 1984 Bhopal disaster. Ironically, Tata’s efforts at corporate social responsibility had landed its best-known brand at the receiving end of fake dog piss. In a well-publicised series of letters written in 2006 by Ratan Tata to Finance Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Prime Minister Manmohan Singh, the industrialist had professed a desire to act in the “national interest” by roping in “responsible corporates in the private sector” to clean up the contamination in Bhopal. But the real motive had been the “desire to bail out Dow Chemical and Union Carbide, who – as polluters – were required to clean up,” says Bhopal survivor and activist leader Rashida Bee.
Indeed, Tata’s letter to “Dear Montek” was devoid of any reference whatsoever to corporate social responsibility. Dow Chemical and Union Carbide (the latter of which is a wholly owned subsidiary of the former) have stated that they have neither the intent nor the interest to heed the principle of ‘polluter pays’ at the Bhopal site. But Ratan Tata, in his letter to Ahluwalia, wrote: “I understand from Andrew Liveris, CEO of Dow, that he would like to also discuss approaches/solutions to this issue.” The reference, it seems, was actually to solutions that would let Dow off the legal hook.
“Tata’s offer is classic CSR – hypocritical, insincere and surreptitious about the real intent,” says Rachna Dhingra of the International Campaign for Justice in Bhopal. “It is about blowing one’s own trumpet and about everything but responsibility in one’s own business.” Dhingra is referring to the numerous toxic hotspots that have been caused by pollution from Tata Group companies. “If Tata wants to clean up,” she continues, “it can start by setting its house in order.” The list of Tata ‘legacy’ sites provided by the Bhopal activist is long. These hotspots include chromium pollution in Orissa’s Sukinda Valley caused by Tata Steel chromite mines; the contaminated site left behind by Tata’s Rallis pesticide factory in Patancheru, in Andhra Pradesh; pollution in the Gulf of Kutch caused by Tata Chemicals’ soda-ash plant in Mithapur, Gujarat; and the towering mound of boiler ash from Tata Steel’s smelters near Jugsalai, a working-class neighbourhood near Jamshedpur in Jharkhand.
The purpose here is not necessarily to single out the Tata Group, as many corporate houses can be blamed for environmental and other types of devastation. What is important in this instance, though, is that Tata is considered by many to be something of a gold-standard in terms of ethical corporate behaviour. But as the Bhopalis point out, public scepticism of CSR initiatives has bloomed in recent years due to the widespread failure of corporations to take on even the minimum ‘responsibility’ required by law. Ironically, faced with an increasingly powerful corporate sector, governments and even the United Nations is opting for voluntary self-regulation by industries, rather than working to tighten law enforcement by regulators.
The UN Global Compact is a notable example. Initiated by former UN Secretary-General Kofi Annan, the Compact invites corporations to adhere to a set of nine principles covering commitments on human rights, the rights of labour to organise and associate freely, environmental performance and transparency. Starting with the 2002 Earth Summit in Rio de Janeiro, the Compact marked the beginning of a new UN philosophy in which “confrontation” with corporations was “replaced by cooperation”. Thus, in one particularly glib moment, all enforcement measures over corporations were vilified as ‘confrontation’.
Annan’s approach was trashed by many international organisations. Several wrote a coalition letter to the then-secretary-general, warning him that the Compact “threatened the mission and integrity of the UN”. Signatory organisations, including Corpwatch, Friends of the Earth and Focus on the Global South, collectively argued that “by associating with corporations with poor human rights and environmental records, while failing to monitor these companies’ activities, the UN is permitting [them] to gain all the benefits of association with the UN without any responsibilities.”
There seems to be some truth to such accusations. In September 2008, ITC Ltd – a multi-business conglomerate best known for its tobacco products – was caught dumping hundreds of tonnes of foreign municipal wastes, imported in the guise of unsorted paper wastes, into agricultural wells and farmlands near its paper factory close to Coimbatore, Tamil Nadu. ITC is also a Global Compact member. Interestingly, around the time that the company was illegally disposing of this foreign trash, one of the company’s CEOs, Chand Das, was quoted in The Hindu Businessline talking about the Coimbatore unit’s supposedly sterling environmental practices. “According to him,” the article noted, “the recycled paper plant at Coimbatore has already achieved zero solid waste.”
Initiatives such as the Global Compact will not work, due to the simple fact that they depend on their appeal to a ‘corporate conscience’. Unfortunately, this is a fanciful and dangerous, assumption. Dow Chemical’s business strategy for the pesticide Dursban, for instance, demonstrates how ‘corporate conscience’ needs to be considered an oxymoron. In 2000, Dursban – a neurotoxin that can damage the mental development of children – was withdrawn from all domestic use in the United States. In announcing the move, the head of the US Environmental Protection Agency, Carol Browner, declared that doing so would “significantly minimise potential health risks from exposure to Dursban … for all Americans, especially children.”
Dow seems to have taken Browner’s statement quite literally. Thereafter, American children were indeed protected, while Indian kids were not. Around the time of its withdrawal in the US, Dow executives bribed officials from the Indian Agriculture Ministry with INR 8 million to expedite registration of Dursban. This came to light when the Securities Exchange Commission of the United States of America fined Dow Chemical USD 325,000 for having paid USD 200,000 in bribes to Indian officials. Today, the fraudulently registered pesticide is freely sold and used in India, including for household use. Dow has been a Global Compact member since 2007.
For many, the key to this issue is the inherent duplicity of CSR as an approach. A good summary of the main objections to CSR from the pro-capitalism point of view was offered in January 2008 by a study in The Economist. Subtitled “Does CSR Work?”, the article criticised CSR for “encroach[ing] on what should be the proper business of government”, and accused it of being a “sideshow” that involves “playing with other people’s money”. The latter argument has had takers for decades now. In 1970, free-marketeer Milton Friedman was already lambasting the notion of CSR. “The only social responsibility of business is to increase its profits,” he declared.
Corporations, after all, are money-making machines, and the ones that survive are those that are most efficient at doing so. If corporations are to be expected to work in the interest of anyone other than their shareholders, such a requirement would need to be coded into the corporate DNA. And for this, the corporate structure would need first to be dismantled, substantially disempowered, and then re-assembled as bite-sized chunks that can be regulated and controlled by communities – of workers, consumers, shareholders and citizens. As it stands now, CSR is merely a promise of good behaviour, an assurance that is neither fully regulated nor enforced by governments. Companies are thus able to continue with socially damaging activities without penalties, with communities bearing the brunt of corporate misconduct.
Singur, Nandigram, Kalinganagar, POSCO, Niyamgiri, Raigad, Chengara – in India, these names have now come to signify the clash between communities on the one side, and the government and corporations on the other. The Internet has made it easier to expose corporations’ claims of decency, responsibility and caring as hollow. There is now a profusion of websites carrying content on corporate excess with regards to the environment and human rights – Corporate Europe Observatory, the Multinational Monitor, Corporate Crime Reporter, PRWatch, Corpwatch, Crocodyl, Business and Human Rights, and Amnesty International being just a few. Last year, the UK made a significant move by introducing a Corporate Manslaughter and Corporate Homicide Act. According to a UK Ministry of Justice explanatory note, “The Act sets out a new offence for convicting an organisation where a gross failure in the way activities were managed or organised results in a person’s death.”
The effort to introduce international legislation governing corporations, particularly in view of human-rights excesses in their sphere of influence, has come a long way. The UN Draft Norms on the Responsibilities of Transnational Corporations & Other Business Enterprises with Regard to Human Rights, adopted in 2003, is an acknowledgement of the need to rein in corporations. But these norms are fighting for life, as corporations are lobbying hard – and, it appears, successfully – to ensure that the norms remain voluntary and non-binding.
As it stands, the only good corporation is the one that maximises profits. Going by this criterion, Tata is a good corporation. For instance, it has not given in to any of the criticism about its proposed Dhamra Port in Orissa, which is alleged to be endangering the Olive Ridley turtle. The port’s current location is in Bhitarkanika, one of the most significant turtle nesting grounds on the Indian East Coast. “Tata’s CSR claims stand exposed: when it affects the bottom line, it’s a different ballgame,” says Greenpeace India’s oceans campaigner, Ashish Fernandes. “Tata is perversely using the Olive Ridley for greenwash.” While the proposed port will directly damage the habitat of this threatened species, the Tatas are attempting to portray themselves as environmentally conscious and deeply concerned about the future of the Olive Ridley turtle.
Indeed, Tata Group’s Titan Watches, in collaboration with WWF-India, is currently selling a series of ‘endangered species’ watches. For every watch purchased, Titan donates INR 150 to WWF, to be used for conservation efforts. WWF’s programme director, Sejal Wohra, acknowledged that the Orissa coastline was “critically important and very sensitive” as a nesting site for sea turtles. When asked whether or how the Dhamra Port would impact the Ridleys, she said, “Primary impacts are still to be determined as no detailed studies have been carried out. But there will almost certainly be secondary and tertiary impacts from dredging, lighting, etc.” Wohra was unaware of the Titan-WWF partnership. However, she continued, “As far as we know, Tata has never used WWF to ‘greenwash’ … Our engagement with industry is on a case- by-case basis, and we are very careful about this.”
No matter how loudly companies express their commitment to CSR, it is a hindrance for any profit-driven entity. Ultimately, it is only the tightening of regulation laws, and their proper implementation by governments, that will force companies to be truly socially responsible. A Titan-WWF press release, for instance, says, “The main objective of this partnership is to spread awareness about these highly endangered species in India, some of which could soon be extinct.” But given Tata’s own potentially significant hand in this matter, is such a statement to be taken as a prediction or a threat?
~ Nityanand Jayaraman is a Madras-based independent journalist and researcher focusing on human-rights and investigating corporate abuse of the environment.
Romila Thapar addresses invitees at the
Southasian relaunch of Himal Southasian,
IIC, New Delhi, January 2013.
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