Corporate Social Responsibility in India: A Human Rights Perspective

Abstract

CSR – Corporate Social Responsibility has become the buzzword for corporate sector. Often CEOs of the companies use this abbreviation in their speech to speak about their companies’ social concerns. CSR is no longer only associated with the philanthropic functions of a company; rather it has acquired an ingrained status in the corporate culture. CSR has become a barometer to test the permeation of a company into society. Society, now, to an extent judges a company on the basis of its CSR Quotient. CSR now is turning to Corporate ‘Strategic’ Responsibility, where a corporate does a strategic investment in its CSR initiatives. No longer has it remained a voluntary exercise; and at times even is pressurized by various stakeholders. CSR is a container concept which encompasses many different ecological, social and economic issues. Human Rights as a CSR concept took prominence during 1990s as oil, gas and mining companies expanded into increasingly difficult areas. In 2005 UN Secretary General Kofi Annan appointed Harvard Professor John Ruggie to present a report on the issue of human rights and transnational corporations and other business enterprises. Ruggie presented his Guiding Principles, popularly known as ‘Ruggie Framework’ (Protect, Respect and Remedy) which was endorsed by UN Human Rights Council. The basic approach of Ruggie Framework is that “the corporate responsibility to respect human rights cannot be met by words alone; it requires specific measures by means of which companies can ‘know and show’ that they respect rights”. The responsibility of the corporation to respect human rights forms one of the three pillars of Ruggie Framework, the other two being, the duty of the State to protect against human rights abuses and the shared duty to remedy. OECD Guidelines for Multinational Enterprises (2011) also advocates for respect for human rights. It may be noted here that the term “responsibility” rather than “duty” is meant to indicate that respecting rights is not currently an obligation that international human rights law generally imposes directly on companies, although elements of it may be reflected in domestic laws. A company’s responsibility to respect applies across its business activities and through its relationships with third parties connected with those activities – such as business partners, entities in its value chain, and other non-State actors and State agents. In India, over the last two-three years there has been debate over the compulsory CSR initiatives and in fact the Draft Companies Bill 2011 provides for a constitution of a CSR Committee for companies having net worth of Rs. 500 crore or more or turnover of Rs. 1000 crore or more or a net profit of Rs. 5 core or more (Clause 135). Ministry of Corporate Affairs came up with the Corporate Social Responsibility Voluntary Guidelines in 2009 which has been developed further as “National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (2011)” which has nine principles, one of which is “Business should respect and promote human rights”. There is a development from one line to a page on human rights in the guidelines. The present paper would examine these developments and the prospective actualization of the concept in Indian context particularly in light of human rights abuses involving corporations (e.g. Union Carbide Bhopal, Enron’s Dabhol power project, Tata’s Singur, Vendanta in Orissa).