India’s oldest steel maker Tata Steel says it is listening. It is listening to local communities around its factories and mines in Jharkhand, Odisha and Chhattisgarh. It is also keeping an ear out for its thousands of workers and miners. And it is doing so because being attentive to the needs of local stakeholders is in the interest of the steel magnate.
The top ranked company in the ET Futurescape-IIM Udaipur CSR survey 2014 believes that the culture of social responsibility has been hardwired in its DNA, thanks to the philosophy of its founder, Jamsetji Tata. “Our commitment to society stems from the guiding principles of our founder and we remain committed to facilitating inclusive growth and empowerment of communities around us,” says managing director TV Narendran.
CSR may be a relatively new buzzword in India Inc but the company has been at it for over a century. At the heart of Tata Steel’s CSR policy is Jamshedji Tata’s dictum: a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.
“As an organization and in our case as a manufacturing and a mining company, one will have some negative footprint. We have to reduce, minimise, mitigate and even offset some of the impact that we have not just on the environment but also on the community,” says Biren Bhuta, chief, CSR, Tata Steel.
Tata Steel’s project Mansi focusing on maternal and newborn survival is underway in 167 villages of Seraikela district and has brought down the infant mortality rate by 26.5 per cent and neonatal mortality rate by 32.7 per cent.
The company is in the process of scaling up this programme. It is also launching its ”1,000 schools project” in Odisha, aimed at improving the quality of education in government primary schools.
India’s Best Companies For CSR 2014: Tata Steel uses Human Development Index to keep track of CSR in villagesIndia’s Best Companies For CSR 2014: Tata Steel uses Human Development Index to keep track of CSR in villages
The concept of CSR in India is gaining ground not only because of the government directive mandating companies to allocate 2 per cent of their net profits but also because industrial projects are increasingly facing headwinds of social unrest. CSR offers companies a chance to build goodwill in local communities.
“Undoubtedly CSR earns a lot of goodwill and a lot of traction from multiple stake holders, including your labour unions, workers and contractors, and also local communities, government officials,” said Bhuta. “There will be people who believe we haven’t done enough and we take that. We have created forums, where we listen to communities.”
In recent years, Tata Steel’s CSR programs have adopted a bottom-up approach to development and most of the initiatives are designed and delivered through grassroots engagements with village panchayats, say company officials.
Tata Steel’s CSR interventions are more participative in nature now. The company has also developed a Human Development Index, which it uses to assess the effectiveness of its interventions in villages. “Tata Steel through its CSR penetrates internal areas where even other development agencies have not reached. They especially have the interests of the tribal population in mind,” says Joe Madiath, a social entrepreneur, who is best known as the founder of awardwinning NGO Gram Vikas in Odisha.
Madiath is also on Tata Steel’s CSR advisory board. Tata Steel’s CSR team is 550-people strong and is run like a professional company. At the beginning of every year, after consulting various stakeholders including the government, communities, panchayats, Tata Steel puts together a business plan for the year. The plan is reviewed by the managing director TV Narendran and the board of directors.
CSR is viewed like any other line function in the company, said Bhuta. Employees work on their targets, key performance indicators and budgets. However, Bhuta is says the ‘entitlement mindset’ of communities is challenging. “That to me is not development. From a sarkari mai-baap, you become a corporate mai-baap. It is a difficult problem to crack but we need to put our heads into how we build this thing in communities that they need to participate in the development process rather than just we passive recipient. It will make it more sustainable.”