CORPORATE SOCIAL RESPONSIBILY: A CASE STUDY

OF MINING INDUSTRY IN GOA

INTRODUCTION
Iron ore mining began in Goa as a private sector initiative unlike most other
sectors of Indian Industry. The mine owners developed their own logistic,
infrastructure, markets & strategy to stay globally competitive.

Goa is a small state with a population of approximately 14 lakhs (2001).

However, in economic terms it is not very small to its neighbours -
Maharashtra & Karnataka- who lead the country in virtually all-Economic
indicators.

The compounded annual growth rate of NSDP over the past three decades
was 9% for Goa compared to 6.24% for Karnataka and 5.63% for
Maharashtra.

Iron ore mining has played a vital role in Goa’s economic growth. Whatever
little Goa earned by way of foreign exchange prior to 1961 was from
exporting this resource. In fact, the value of ore exports was roughly equal to
the tax and non-tax revenues earned by the State Government (Rs .700 Cror
es in 1996-97). Today iron ore mining remains the biggest contributor to
Goa’s foreign exchange earnings exceeding even tourism. Mines are still the
largest employment sector while the White Collar jobs in the service sector
are the major source of employment in non – mining area.
In the new century, no industry can afford to ignore the aspirations of
society. Goa is one of the India’s most literate state and so the expectations
are high. It is essential that the population residing in the mining belt should
be satisfied socially and economically. Most importantly, the air they
breathe, the water they drink and the soil they live on should be unpolluted.

Goa’s iron ore also went through a difficult period of transition. (NCAER)
National Council of Applied Economic Research New Delhi attempted to
arrive at a social cost of a typical 3 million tons per annum mine. The total
cost of environment effect management activities work out to Rs 10 per ton
at the discount rate of 18 % considering both capital and recurring
environmental management cost over 15 years useful life (NCAER
REPORT 2002).

The net social benefit, considering a foreign exchange premium of 25 %

after discounting all kinds of transfer payments worked out to between Rs
183 and Rs 202 per ton. The social profit on 16 million tones of iron ores
exports from Goa thus works out to Rs 300crores annually (NCAER
REPORT 2002).

The state of Goa is located between co-ordinates 14o 53’ 57” to 15o 47’ 59”
N and 73o 40’ 54” and 74o 20’ 04” E with an area of 3702 sq. kms.

Mineral production in Goa began in the late 1940’s. Initially manganese was
mined but later on shifted to iron ore with a phenomenal growth in
production. In Goa at present iron ore mining belt extends 65 km from South
east to North West covering around 700 sq. km. Goa is the only Indian state
with large area under Iron Ore Mining.

Regular mining of the ore started in the year 1950 and up to the period 1957
there was a boom of Goa Manganese ore mining with an annual export of
over a lakh ton of high grade manganese ore.

Mining is the dominant industry in Goa, which has earned the significant
Foreign Exchange for the country. It is an important iron ore producing state
in the country. The state of Goa is rich in minerals such as iron ore,
Manganese ore, Bauxite, Limestone and Clay.

The evolution of Goa’s iron ore mining industry and its manifold impact on
the state’s Socio-Economic milieu has not been sufficiently researched.
Besides this, Effects of mining on the Environmental Protection, Socio-
Economic Development of people in Agricultural sector, Infrastructure,
Human resource development, Employment to backward classes, Effects of
mining on health, Responsibilities towards Community Development were
not considered for the research purpose. An attempt can be made to do an
analytical study on the above area.

BACKGROUND:
An overview of the studies in India reveals that all studies with respect to
Corporate Social Responsibilities (CSR) were carried out on public
enterprises and it suggests an appropriate social accounting system for them.
(Bhadani 1990), noted that companies social responsibilities are measured at
levels of the social transformation process. The groups affected by social
expenditure are Employees, Community and public (Pramanik 1996). There
are other factors influencing the company to undertake Social Accounting
Programme (Batra 1997 & Gupta 1994). The Companies, which are quite
careful and analytical with respect to their business investment, often
manage their social investments on an arbitrary and sentimental basis
(Bhadhani & Saksena 1994). Community Development, Human Resources,
Physical Resources and Product or Services are the major requirements for
corporate social performance (Batra & Kaur 1984).

Over and above Business responsibilities, increasing dominance and control

of business corporations, companies think about corporate social
responsibilities including moral and ethical aspects of business corporations
(Bhuiyan 1994). CSR must be committed one and that it should be better for
the sector to embark on the right direction in proactive manner (Narayanan
& Chandrashekharan 1994). Companies are highlighting environmental
issues and the innovative tool audit scheme on environmental pollution
(Rastogi 2003,Selvam & Mangaiyarkarasi 2000 &Shukla 2004).
GLOBAL SCENARIO:
The world business council; for sustainable development in its publication
‘Making Good Business’ by Lord Homes and Richard watts, says CSR is the
continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the community
and society at large. The UNITED NATION has also acknowledged the
global imperative of direct intervention by body corporate in the social
sector.

The global compact in an initiative under the auspicious of UN to promote

social contribution by private and public enterprises all over the world. Even
the Ex- President of India. Mr. K. R. Narayanan in the Republic Day (26th
Jan 2002) message has urged the private sector to adopt social policies that
are progressive and more egalitarian; it appears that social values will drive
tomorrow’s companies

As far as Global scenario of CSR is, concerned Local Groups in CHINA

contributes immensely to crystalise thoughts and practice on CSR (Ray
2004). Germany has a long tradition in mining and still an important mining
country. They are also practicing CSR and giving environment as a first
priority (Schaecter and Jacob 2005). Green mining techniques focuses on
water preservation in mining areas in China (Xu, Zhu, Lai and Qian 2004).
In Indonesia mining companies contributes to regional government, local
government and community development, in some cases mining projects
also opened up areas to new activities such as agriculture industry, forestry
and farming (Wahzu 2004). Mining industries in South Africa gives more
emphasis on Health and Safety (Hermanus and Marx 2001& Hardly 2005).
Australian mining companies respect to Safety and Welfare of the
Employees (Aziz and Craim 2001). In France a Social Reporting is
compulsorily given by every company as per legislation passed in the year
1977(Sheikh 1998).

The growing global needs have made corporate, to face challenges to accept
and adopt the concept of Social Responsibilities for a better tomorrow.
INDIAN SCENARIO
In India only a few giant corporations are fulfilling their social
responsibilities effectively like Tatas, Birlas, Dalmias, Reliance, Infosys,
Wipro, NTPC, etc. Corporate citizens like Infosys and ARB India have been
sponsoring mid day meal for school children to transform the younger
generation into a literate and highly productive human resources. A large
number of villages have been adopted by AMBANIS in Gujarat, which were
struck by tremor in 2001. Community work being carried out by “The
Aditya Birla Center for Community Initiatives and Rural Development”. It
has straddled 3500 villages across the country. Business tycoons like N.R.
Narayana Murthy has sold 36500 of his own shares in Infosys to contribute
towards charitable activities. Whatever the big giants are doing their
Corporate Social Responsibilities amounts to a drop in an ocean. A better
educated, more aware and critical public has begun to question the value of
ever-increasing production, which results in pollution and environmental
decay (Bareja 2004).

Recently, Hewitt Association and Business today have adjudged NTPC the
best PSU employer. It has also received recognition for good corporate
governance, a socially responsible enterprise and for a good environmental
arrangement (Sen, Jain, Bala 2003).

Some fundamental factors which affects extended Social Reporting in India

specially the study was designed to determine the impact of six explanatory
variables viz. size, age, profitability, review of accounts, competition and
nature of industry (Vasal 1994).
SRIVASTAVA (2003) Evaluated social cost and social benefits from
business organizations. Some corporate organization in India like BHEL,
MMTC, ACC etc are disclosing social costs and benefits in their financial
statements by way of supplementary information .The changing economic
scenario demands that such disclosures must be made mandatory in the
long-term interest of Indian public.

MENDES (2001) studied the Socio-Economic condition of the people living

in the mining village. This is done through a comparative study of the
mining and non-mining villages by taking the later as the control group.
Economic status and Health status are examined through a comparative
study of both the strata. His study examined:
1. The Socio-Economic development of the people in the mining areas is

significantly determined by mining activities.

2. Mining activities have significantly affected the health of people living
in the mining areas.

CHOWDHARY (2004), Focused on the historical facts relating to Kautilya

and the history of ancient mining in India.

BANERJEE (2004) examined the growth of mining sector and discussed the
various measures likely to be adopted by the mining industry for protection
of environment.
MOHALIK, SINGH, BANSAL, PANDEY AND SINGH (2004) assessed
the causes of coal mine fire in open cast working of developed galleries and
suitable suggestive measures for controlling and combating the intensity of
the fires.

TRIPATHI AND MANOHAN (2003) studied the operation of National

Mineral Development Corporation Limited Hyderabad, in Iron ore mines in
Bailodila region in Chattisgarh and Donimalai in Karnataka.

RASTOGI (2003) Pointed out that industrialist and mining entrepreneurs to

utilize the heaps of left over quarry waste in Goa-engineering project which
have been neglected due to lack of concern and awareness for environmental
degradation.

WEBER (2003) discussed the most recent trends in development of the

world’s total mineral production compared to different trends by continents,
regional and economic grouping, different developing status like developing
countries, less developed countries, centrally planned economies and newly
recovered countries

ASTAKHOV and KHARCHENKO (2003) drawn mining communities

attention to some points influencing the executed ecological policy of the
Mining significantly.

BRAHMANANDAN and IYER (2004) highlighted the domestic production

of iron ore in 2002-03 and compared Karnataka, Orissa, Chattisgarh, Goa
and Jharkhand and their contribution towards iron ore mining.
RESEARCH PROBLEM:
The existing literature on CSR concentrated only on public sector enterprises
in India.The prominent are SINGH and AHUJA (1983),-study on 40 PSU’s.
SENGUPTA (1988) –study on 25 PSU’s. BADHANI (1990), - study on 36
PSU’s. PORWALandSHARMA(1991)-study on 30 PSU’s. The above
studies adopted standard Social Responsibilities Accounting (SRA) model,
and only responsibilities towards society was considered and AGARWAL
(1992)-study on 20 companies which are awarded best presented accounts
by ICAI. Out of the 20 companies, only 6 were reporting in the Abt model,
others were using directors reports, footnotes, schedules etc for Social
Responsibility Reporting. There is a very limited literature on the socio
economic condition of people living in mining village and non-mining
village and the study focused only on Bicholim Taluka in Goa where
economic status and health status are examined(Mendes2001). There is no
literature on CSR of mining companies in Goa, where in financial status and
environmental status is not touched. The present proposed study tries to fill
the existing research gap.

There is clearly a lacuna in the research relating to Corporate Social

Responsibility Accounting and reporting of mining companies. One aim of
this study is to make a contribution towards filling this gap. There are few
studies dealing with the performance of mining companies and focused on
mineral availability and environment protection, however no substantial
study was done on safety, research and development and on new and modern
techniques for protecting environment. .
This proposed research aims to fill this gap by addressing the following
questions:
1. What is the status of Mining Companies in Goa in relation to CSR?

2. Do mining companies in Goa fulfill the demands put forth by public at

large living in mining areas?

Today environmental management is evolving and incorporating a complete

new strategy to minimize waste and pollution for industrial development.
However, how far it is practicing in mining companies in Goa is not being
studied.
In Goa, Literature on mining exist, But it is very limited. Some of the
research works has briefly considered mining companies but the scope for
future research and extension is considerable.
It was revealed that the chlorophyll, total proteins, sugar and proline content
of plant were affected by mine wastes. There was an increase in the amount
of proline accumulated by the plants. Study on the Pale iron ore mine of
Chowgule co ltd. (Veeresh1989).

There is an impact of earthworm introduction on iron ore mine wastes and

plant growth and establishing vegetation on iron ore mine wastes.- study on
the Pale iron ore mine. (Coelho 1990).

There was a significant positive response to Arbuscular Mycorrhizal (AM)

inoculation in growth of seedling of arto carpus netorophyllus. There is a
significant arbuscular mycorrhizal dependency in plants in order to survive
on disturbed lands.-Study on Codlim iron ore mine. (Bukhari 2002).
There was a significant effect of Mining on Fauna. Study on iron ore mines
located at Bicholim and Sanguem. (Ganihar1990).
The mine owners were a rich and dominant group economically and played
an important role in promoting trade and commerce in Goan economy (Da
costa2002).

It is observed that all these studies done in Goa related to mining are
reported in respect to Botanical, Biological and Historical prospective
wherein no Corporate Social Responsibilities are touched upon. As such, a
study in this direction is essential.

There are few committees stressed on importance of responsible

stakeholder’s policies. However, none of them has given any guidelines
regarding the responsibilities of corporate organization towards community
and society. However, the corporate organizations are performing their
responsibilities towards other stakeholders such as employees, customers,
suppliers and Government. The community and society need to be given
more attention. Thus with intention of filling this gap, this study will be
undertaken. In addition, responsibilities towards medical services and aid to
community will be considered.
Mining companies continued to be the backbone of Goan economy.
Indications are that it will continue to be so in the years to come. Mining
companies in Goa is the core Industry that plays a significant role in
economic upliftment of the state. Corporate social responsibility towards
energy conservation, research & development, environmental control,
consumerism will be taken care of while doing research in this field.

OBJECTIVES:
The proposed research attempts to explore the field of Corporate Social
Responsibilities with following objectives:
1. To compare and evaluate the Corporate Social Responsibility (CSR)

practices followed by Mining Companies in Goa.

2. To identify Social Accounting Practices followed by Mining
Companies in Goa.
3. To study Socio- Economic Impact of Mining Companies in Goa.

RESEARCH DESIGN & METHODOLOGY

The proposed study shall begin with a general introduction on mining in
India, mining in Goa, status of mining in a few foreign countries and present
status of mining in Goa. As Corporate Social Accounting and Reporting is
now emerging in different parts of the country, a review of the literature on
mining and Corporate Social Accounting in mining companies in Goa will
be given an overview in this study.
As the study will focus on Mining industries in Goa and their social
responsibilities to different stakeholders in Goa, the issue of Corporate
Social Accounting and Reporting will be examined and the necessary legal
and regulatory issues will be discussed.

The Environmental health, financial health, economic health of mining

industries will be considered. The study will also examine the different
social responsibilities shouldered by mining industries over the last seven
years and the new projects in the benefit of the society. The study will move
to examine the social responsibility of mining industries in mining and non-
mining areas of Goa. The study will also highlight what public expects from
mining industries and does companies satisfies it or not, will examine how
industries serves in the welfare of the society. The role and impact of mining
industries on employees, people at large will be studied as a separate section
in the study. The data of all mining companies available in their reports will
be considered.

METHODOLOGY
 Period of the Study: The period of the study is defined as 2000-2001 to

2006-2007, which covers social responsibilities of mining industries to

different stakeholders.

 Coverage: The study covers all mining companies, which are registered

member of Mineral Foundation of Goa. Practices of Corporate Social

Responsibilities in different Mining Industries in Goa will be considered.
 Data: Data for the study includes export of iron ore from state of Goa

and revenue earned by Mining Companies. The Social Cost and Benefits
analysis of Mining companies through their Annual reports.

 Tools & Techniques: Several earlier studies have used ‘chi square test’,

spearmen’s Rank correlation test, H test, Regression model to answer the

type of question posed by the study. Appropriate and suitable technique
will be identified at a later stage after extensive literature review.
 Sources of Information: Websites of respective Mining Industries,

Annual reports of all Mining Industries, Goa Chamber of Commerce,

Internet resources, Directorate of Planning, Statistics & Evaluations ,
Govt. of Goa, Mineral Foundation of Goa, IMB Goa, NCAER Report,
Survey based on questionnaires.
CHAPTERISATION SCHEME
This study consists of six chapters.
Chapter I –Introduction
Introduction, Background of the study, History of Mining Companies,
Global scenario, Indian scenario & Goan scenario, coverage of the study,
methods of analysis.

Chapter II- Research & Methodology

Introduction, Problem of the study, Significance of the study, Literature
review, Objectives, Methodology of the study, Limitation of the study,
Chapterisation scheme.

Chapter III- Corporate Social Responsibility Practices in Mining

Companies in Goa
Introduction, Nature & Scope of corporate social responsibilities, the need
of corporate social responsibilities, Approaches to social responsibilities,
Social responsibilities of Mining Companies towards different groups,
Corporate social responsibility practices in Mining Companies in Goa,
Promoting CSR and development, performance of Mining Companies in
Goa in a field of CSR with special stress on various projects undertaken by
Mining Companies for betterment of stakeholders, concluding observations.

Chapter IV-Social Accounting Disclosure Practices in Mining

Companies in Goa
Introduction, Nature & Scope of social accounting, Social accounting in
India, Social Accounting in Goa, Areas of Corporate Social Accounting,
Categorization of mining companies in Goa, Social Accounting disclosure
practices followed by mining companies in Goa, Social cost & benefit
analysis of mining companies in Goa, concluding observations.

Chapter V – Socio- Economic Impact of Mining Companies in Goa.

Introduction, Iron ore mining companies in Goa, Production & Export
aspects of mining companies in Goa, methods of mining of Iron ore in Goa,
Employment, Welfare measures in mining by the mining companies in Goa,
Socio-Economic analysis of mining and non-mining villages in Goa, Impact
of mining on health of people in mining and non-mining villages in Goa,
concluding observations.

Chapter VI – Conclusion
This chapter will summarize the main finding of the study, policy
implications & the scope for the future research.
List of Mining Industries under Study

Sr. No. Company Name

1 Sesa Goa Ltd.
2 Chowgule and Company Ltd.
3 V.M.Salgaokar & Bros. Pvt. Ltd.
4 Sociedade De Fomento Industries Pvt. Ltd.
5 M/s Cosme Costa & Sons
6 Timblo Pvt. Ltd.
7 Dempo Mining Corporation Pvt. Ltd.
8 Emco Goa Pvt. Ltd.
9 Damodar Mangalji & Co. Ltd.
10 Smt. Kunda Raghuvir Gharse
11 Smt. Ahilabai Sardessai

List of References :

Annual Report of the Mining Industries for the last 7 years

Indian Bureau of mines, Goa Regional Office
Directorate of Mines and Industries Govt. of Goa
Directorate of planning, statistics & evaluations, Govt. of Goa
Mineral Foundations of Goa.
NCAER REPORT 2002.

REFERENCES
1. AGARWAL R.S. Social Reporting by Central Public Enterprises – A
case study. The Management Accountant May 1992 P. 349-351.
2. ASTAKHOV S. and KHARCHENKO V.A.; Mining and
Environment; journal of Mines, Metal & fuels; Vol. 51 No. 9 & 10
Sept-Oct 2003 PP 89-292.
3. AZIZ N. I. and CRAIM-Safety and welfare of Australian black coal
Mines employees-Journals of mines,metals and fuels Sept 2001
PP 97-102
4. BADHANI K.N. And SAKSENA R.M. (1994) Reporting social
performance in ABT’s model: The Indian experience . Current issues
in accounting p 194-205.
5. BANERJEE S.P.; “Vision 2020 statement”, The Indian Mining
and Engineering Journal Vol XV Nov. 2004 PP 23-29.
6. BAREJA SUSHMA , Corporate Social Responsibility – A key for
better Corporate Governance – The Management Accountant Vol.
XXX IX No. 8 Aug. 2004 P. 138-141.
7. BATRA G.S. And MS KAUR NARINDER (1994) ‘Social accounting
in India ; Empirical study of public sector’ curreant issues in
accounting, PP 108-115.
8. BHAL KANIKA T. (2002) ; ‘Construct of Corporate Social
responsibility A framework’ Management and change volume 6
number 1 (Pg 37-48).
9. BHATWADEKAR R.M., Exploration of Mining and Mine closure
present status & features challenges in Iron Ore Mining. The
Indian Mining & Indian Journals Nov- Dec 2003 PP 32-36.
10. BHUIYAN M.D.NAZIM UDDIN -Corporate social accounting and
reporting- A Oral and ethical aspects of business corporations-current
issues in accounting, 1994 pp95-108.
11. BRAHMANANDAN M. And IYER S. D. -Export potential of Indian
iron ore –The mining and engineering journal May 2004 pp 25-35.
12. CHIDAMBARAM R. and SUNDARAJAN A.R. ; Challenges in
Mine Safety ; Journal of Mines, Metals & fuels; Vol. XLIX No. 8
& 9 Aug. Sept 2001 PP 284-289.
13. CHOWDHARI N.K.; Indian Mining Industry – emerging challenges;
Journals of mines Metal & fuels; Vol. XLIX No. 8 & 9
Aug-Sept 2001 PP 271-275.
14. CHOWDHARY S.K., ‘The History of Indian Mining’, the Indian
Mining and Engineering Journal. Vol. XIV Nov. 2004 PP 17-22.
15. GUPTA R.K. (1994) “Social reporting : A challenge for corporate
sector accounting decision making p 146-156.
16. HARDLEY M.F.-Status of the mining industry in republic South
Africa- A Synoptic view-Journals of mines, metals and fuels august
2005. PP 112- 119.
17. MANOHAR R.: ‘Corporate Social performance Reporting the
Management Accountant – Aug 1998 (Pg 552 –555).
18. MOHALIK N.K., SIGH R.V.K., SURAL G., BARNWAL R.P.,
PANDEY J., and SINGH V.K.; Environmental impact of Coal
Mining fire during excavation of developed galleries by opencast
method ; The Indian Mining and Engineering journal ; Vol. XLIX
Nov. 2004 PP 30-35.
19. NARAYANAN S.V. And CHANDRASHAKHARAN UMA (1994)
Towards better corporate social reporting ,current issues in accounting
PP 136-153.
20. PORWAL, L.S. AND SHARMA N. , Social Responsibility disclosure
by Indian Companies. The Chartered Accountant Vol. XXX IX No. 8
Feb. 1991 P. 630-635.
21. PRAMANIK ALOK (1996) Corporate social accounting and
reporting : A case study. Issues in finance and accounting p 209-223.
22. PRUZAN PETER And ZADEK SIMON ‘Socially responsible and
Accountable Enterprise’, Journal of Human Values , 1997 (Pg 59-76)
23. RAGHUNANDAN K.R.; Mining in ancient India – glimpses of
gloriest part;; Journal of mines metals fuels; Vol XLIX – No. 5, May
2001 PP 136-140.
24. RASTOGI S. P. -Environmental umbrella for mine waste disposal on
Geo Engineering considerations-Journals of mines metals and fuels
Sept. 2001 PP 329-336.
25. RAY SUBHASIS (2004); ‘Corporate Social Responsibility - the
Chinese Scenario’ Global CEO Aug 2004 (Pg 53-57).
26. REED DARRYL ‘Corporate Social Responsibility and Development
in India. Journal of Human values, 1998 (Pg. 201-215).
27. SCHAECTER M. And JACOB K F. -The German mining industry-
Recent development-Journals of mines ,metals and fuels Oct 2005
Vol.53 No. 10 PP 201-205.
28. SELVAM M. And MAGAIYAKARASI S. (2000) The environmental
audit : A management tool’ strategic management accounting
PP 310-314.
29. SHUKLA HITESH -Corporate environmental reporting in India-
A study-The accounting world 2005 pp 43-50.
30. SRIVASTAVA ASHOK (2003) ‘ Social Audit in the changing
Economic Scenario’, Prabandh June, 2003 (Pg 158-162)
31. VASAL V.K. (1994) Corporate characteristics and extended social
reporting- some Indian evidence. Indian journal of accounting Vol.
XXV.
32. WAHJU B.N. -CURRENT STATUS OF MINING IN INDONESIA-
Journals of mines metals and fuels Oct 2001 pp 92-96
33. WEBER L.; Trends in global mineral production, journal of Mines,
Metals and Fuels; Vol. 51 No. 5 & 10 Sept – Oct 2003 PP 277-283
34. XU JIALIN, ZHU WEIBIN, LAI WENG,And QIAN MINGGAO -
Green mining techniques in the coal mines of china –journals of
mines metals and fuel Dec 2004 pp 395-398.
35. National Council of Applied Economic Research Report , New Delhi
– Role of Mineral Ore export in the Economic development of Goa-
A Historical and Economic enquiry 2002.
36. GANIHAR S.R.; Impact of mining on faunal composition of Goa. PhD
dissertation Goa University 1990.
37. BUKHARI MEHTAB JAHAN ; Arbuscular mycorrhizal fungal
diversity of degraded iron ore mines wastelands of Goa. PhD dissertation
Goa University 2002.
38. VEERESH A V.; Response of plant species to the mining rejects . PhD
dissertation Goa University 1989.
39 COELHO. F. L; Reclamation and Rehabilitation of iron ore mines waste
PhD dissertation Goa University 1990.

 