CHPTER-2 CORPORATE RESPONSIBILITYSOCIAL

A LITERATURE REVIEW

Introduction
Wood (1991) defined Corporate Social Responsibility (CSR) as a form of corporate self-regulation integrated into a business model. It is also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business or corporate social performance. CSR policy functions as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business embraces responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. CSR-focused businesses proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. In essence, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, and Profit. The term CSR has come in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those on whom an organization's activities have an impact, was used to describe corporate owners beyond shareholders as a result

of an influential book Strategic Management: a stakeholder approach by Freeman, way back in 1984. The World Business Council for Sustainable Development in its publication "Making Good Business Sense" (2000) by Lord Holme and Richard Watts, used the following definition of CSR. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." Holme and Watts (2000) have advocated that in the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws. Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia, descriptive approaches are also taken. The range and quantity of ethical issues in business reflect the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate

websites lay emphasis on commitment to promoting non-economic social values under a variety of headings. CSR is about opportunities, not about obligations and rules. It's a way one can add value to the business by taking a closer look at social and environmental aspects of the operations. The advantages to the company are: (a) Better Reputation and Customer Loyalty, (b) Increasing Competitiveness, (c) Improved Risk Management, (d) Higher Satisfaction and Motivation levels among Employees, and (e) Enhanced Stakeholder Trust.

Practice of CSR
The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; and yet some others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. In recent times, Corporate Social Responsibility (CSR) has become an everincreasing topic of interest among researchers and practitioners. However, an exact definition of CSR is elusive and opinions vary. CSR has been defined as a

function that transcends but includes making profits, creating jobs and producing goods and services (Oketch 2005). Some researchers claim that it has come to mean the positive actions that a company takes to help discharge its responsibilities to external stakeholders; while other definitions include financial performance as an aspect of CSR. In line with this, a wide range of behaviours are classified under CSR including cause-related marketing, sponsoring charitable events, offering employee volunteerism programs, making charitable donations, utilising environmental initiatives and demonstrating a commitment to health and safety issues (Maignan & Ralston 2002). Perhaps the most oft-cited definition of CSR is that of Carroll's model (1979). Carroll designed a four-part conceptualization of CSR that included economic, legal, ethical and

philanthropic elements. According to this model, all business responsibilities rely upon the economic responsibility, which includes maximizing profitability and maintaining a strong competitive position. Legal responsibilities include complying with laws and regulations. Ethical responsibilities reflect societal standards, expectations and norms that have not been specifically legislated. Finally, philanthropic responsibilities encompass actions that are in response to society's expectation that businesses be good corporate citizens. These are distinguished from ethical responsibilities in that they are of a charitable nature and, as such, a company is not considered unethical if it does not provide them (Carroll 1991).

However, despite the common use of Carroll's definition, the literature still lacks a unified and definitive understanding of CSR. This weakness is problematic for both practitioners and academics. It provides little guidance as to what practices corporations should be undertaking due to the broad assortment of activities now considered to constitute CSR. For example, if a company responds to a crisis related to its business activities, such as the Chernobyl Nuclear Power-Plant accident, the Exxon Valdez oil spill, or the Union Carbide pesticide plant accident in Bhopal, does this constitute CSR? Does CSR only cover behavior not required by society? According to Carroll's definition, this is certainly not the case because Carroll's model includes economic and legal responsibilities, both of which are required. This lack of a unified definition of CSR also inhibits a cohesive empirical view of CSR and its impact, such that research cannot measure CSR effectively, nor pronounce conclusive findings. Nevertheless, whilst a universally accepted definition of CSR will vastly improve progress in the field, how to go about developing this definition is a rather complex process, largely because CSR could mean different things to different stakeholder groups. To shareholders CSR may mean maximisation of profits. To Governments it may mean meeting legislative requirements and ensuring safe products and

workplaces. To consumers CSR may mean high quality products at a good price, and perhaps ethical or philanthropic behaviour. Finally, to other stakeholder groups such as the community, employees and society, the meaning of CSR is likely to vary even more. Hence, whilst a succinct single definition of CSR would be convenient, it is argued herein that an adequate conception of CSR needs to be developed in terms of each stakeholder group. European Union and UNDP jointly conducted a study on CSR Practices in the new EU Member States and Candidate Countries in 2007. The research was carried out by a team of two international CSR experts Mr. Mark Line (csrnetwork Ltd., UK) and Mr. Robert Braun (Braun&Partners Ltd., Hungary), who were responsible for developing a common methodology for desk research and interviews with companies and stakeholders across the Region, and 8 national experts teams (NETs) from Poland, Hungary, Lithuania, Slovakia, Croatia, Macedonia, Bulgaria and Turkey, who were responsible for applying the methodology in their countries and producing national baseline reports on CSR. This report sets out the international teams synthesis of the substantive work completed by the national experts. The observations of the study have a significant impact on the practical application of CSR at a conceptual level in the Region. A dynamic dialogue between business and society was broadly regarded as an essential driving force for responsible business practice. Without it, the expectations made of

companies will be limited and although this may lower business risk in the short term, it also means opportunities, though market development and innovation are lost. The company level research suggested that, in most of the project countries, it was more often foreign, multinational companies with long-term commitments to local and global economic success that were key corporate drivers of the social agenda. These companies were, in most cases, applying general standards of corporate governance, transparency, management systems and operational tools. They have imported their own models for CSR, though application of global standards of business operation in local operating environments. The summary data from 88 companies across the 8 countries has provided a new level of detail into the baseline. The overall results suggested, that companies were more open to the concept of expressing a CSR strategy and engaging in dialogue with stakeholders. CSR is not new to India. Companies like TATA and BIRLA have been imbibing the case for social good in their operations for decades long before CSR become a popular cause. In spite of having such life size successful examples, CSR in India is in a very nascent stage. It is still one of the least understood initiatives in the Indian development sector. It is followed by a handful of public

companies as dictated by the very basis of their existence, and by a few private companies, with international shareholding as this is the practice followed by them in their respective foreign countries. Thus the situation is far from perfect as the emphasis is not on social good but rather on a policy that needs to be implemented.

A lack of understanding, inadequately trained personnel, non availability of authentic data and specific information on the kinds of CSR activities, coverage, policy, etc. further adds to the reach and effectiveness of CSR programs. But the situation is changing. And CSR is coming out of the purview of doing social good and is fast becoming a business necessity. Several major CSR initiatives have been launched in India since the mid1990s. Among these is the first voluntary code of corporate governance, Desirable Corporate Governance: A Code, was established in April 1998 by the initiative of Confederation of Indian Industry (CII), Indias largest industry and business association. A National Foundation for Corporate Governance (NFCG) has been established by the Ministry of Corporate Affairs. This is a partnership with the CII, the Institute of Company Secretaries of India (ICSI) and the Institute of Chartered Accountants of India (ICAI). The purpose of the NFCG is to promote

better corporate governance practices and raise the standard of corporate governance in India towards achieving stability and growth. Legislation authority in India is shared between the Central Government and the State Governments. Some laws, such as those regulating minimum wages, differ from state to state. Likewise, the implementation and supervision mechanisms may vary between states. Indias domestic law on child labour, Child Labour (Prohibition and Regulation) Act (1986), bans employment of children in some dangerous occupations, such as: factories and mines. Most Indian states have enforced an act for minimum wages for labourers in scheduled employment, as stipulated in the Minimum Wage Act from 1948. In 1976 India was the first country in the South Asian region to enact legislation against bonded labour. India has enacted legislation that prohibits discrimination due to gender, religion, ethnicity or caste, at the workplace. The main law on environment and production is The Environment (Protection) Act (1986). This law gives the central government the authority to protect and improve environmental quality, as well as control and reduce pollution from all sources. The responsibility for environmental governance is shared between the corporations and the government. Many Indian institutions have come up with voluntary guidelines on environmental friendly practice.

Among these is a partnership on voluntary pollution control, developed by the Indian Ministry of Environment and Forests together with the industrial sector. Other initiatives include the Energy Efficient Initiative by the Indian Chamber of Commerce, the Indian Ecomark and the Clean Technology initiative by the Confederation of Indian Industry and others. In the Transparency International Corruption Perceptions Index in 2008 India was ranked as number 85 out of 180 countries. The biggest problems were found with regards to politics and governance. According to a Global Compact report, there are low levels of government capacity for law enforcement and implementation in India, causing relatively high levels of corruption. In 2005, Right to information (RTI) act was established. This law gives the general public the right to government information, and is meant to promote transparency and responsibility in the work of all governmental institutions. Singla and Sagar (2010) have mentioned that a phenomenon that has preceded the coining of the term CSR, the link between the karma as espoused by sacred Indian texts and initiatives anchoring corporate as responsible citizens has been amply evident in India since the early days. The turn of the millennium has witnessed mammoth bankruptcies, accounting scandals and obstruction of justice allegations. The consequent tarnishing of gilt edged names like Enron, WorldCom, Xerox, Arthur Andersen, Kodak, to name a few, has had widespread ripple effects in the corporate world in India. There has

been a general mood breeding a lack of trust in regulators following recent scams unearthed in the Indian stock markets. The brooding has had its fallout on unsuspecting companies, as ICICI Bank, one of the countrys largest banks, would confirm. A short message service that the bank was on the verge of bankruptcy started the run, gathered momentum as messages were flashed across mobile phone networks, ICICI Bank branches across many cities witnessed the unedifying spectacle of queues of people waiting to withdraw their money as fast as they could. Respect is a much sought after tag in the Indian corporate world. This is one of the reasons for the immense popularity of The Most Respected Companies of India Survey, initiated by one of Indias premier business magazines, Business World in 1983, long before skeletons began toppling out of the corporate closets around the globe. In fact, the magazine admitted in a cover feature following its first survey that the overwhelming reader response to its first ever ranking of corporate reputations indicated that there is a great deal of interest within the management community in the subject of corporate reputations and that this interest was more than academic. Respect, as viewed by the survey was an aggregation of two broad parts of a companys deliverables: quantitative (like profitability) and qualitative (like community responsibility).

CSR Trend in India

Nearly all leading corporate organizations in India are involved in Corporate Social Responsibility (CSR) programs in areas like education, health, livelihood creation, skill development, and empowerment of weaker sections of the society. Notable efforts have come from the Tata Group, Infosys,NTPC, Bharti Enterprises, ITC Welcome group, Indian Oil Corporation among others. The 2010 list of Forbes Asias 48 Heroes of Philanthropy contains four Indians. The 2009 list also featured four Indians. India has been named among the top ten Asian countries paying increasing importance towards corporate social responsibility (CSR) disclosure norms. India was ranked fourth in the list, according to social enterprise CSR Asia's Asian Sustainability Ranking (ASR), released in October 2009. According to Indian Brand Equity Foundation (2010), a study was undertaken by an industry body in June 2009, which studied the CSR activities of 300 corporate houses. The study report indicated that corporate India has spread its CSR activities across 20 states and Union territories, with Maharashtra gaining the most from them. About 36% of the CSR activities are concentrated in Maharastra, followed by about 12% in Gujarat, 10% in Delhi and 9% in Tamil Nadu. The companies have on an aggregate, identified 26 different themes for

their CSR initiatives. Of these 26 schemes, community welfare tops the list, followed by education, the environment, health, as well as rural development. Further, according to a report in the Economic Times, donations by listed companies grew 8% during the fiscal ended March 2009. The article mentioned that disclosures made by companies showed that 760 companies donated US$ 170 million in FY09, up from US$ 156 million in the year-ago period. As many as 108 companies donated over US$ 216,199, up 20 per cent over the previous year. Although corporate India is involved in CSR activities, the central government is working on a framework for quantifying the CSR initiatives of companies to promote them further. According to Minister for Corporate Affairs, Mr. Salman Khurshid, one of the ways to attract companies towards CSR work is to develop a system of CSR credits, similar to the system of carbon credits which are given to companies for green initiatives. Moreover, in 2009, the government made it mandatory for all public sector oil companies to spend 2% of their net profits on corporate social responsibility. The government is also ensuring that the public sector companies participate actively in CSR initiatives. The Department of Public Enterprises (DPE) has prepared guidelines for central public sector enterprises to take up important corporate social responsibility projects to be funded by 2% - 5% of the company's net profits.

CSR activities are still taken as charitable initiatives by most companies in India. Government may make CSR a law. The government will look at all options, including legislation, to make more companies adopt corporate social responsibility (CSR). A few companies have embedded their CSR activities with their existing business models. Among these are the ITC group, the Tatas,NTPC, Bharti Airtel and state-run firms like the State Bank of India. The government is in the process of issuing guidelines to state-run firms on CSR spending, which could be in the range 3%-5% of net profits of up to Rs 100 crore. Those earning net profit of more than Rs 100 crore may be asked to contribute up to 2% cent of the amount. (www.igovernment.in). On the above backdrop, the present study has been designed to ..

Concept of Corporate Social Responsibility?

Corporate social responsibility (CSR, also called corporate responsibility, corporate citizenship, responsible business and corporate social opportunity) is a concept whereby organizations consider the interests of

society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. When youre shopping, does it make a difference to you that the company cares about your health, the environment and their employees? Apparently a lot of people do nowadays! Marketing Mag just published results from a survey that reported: Fully 90% of consumers feel its their duty to contribute to a better society and improve the environment; 84% feel they can personally make a difference, and 87% are willing to change their own consumption habits to help make the world a better place. But then there are the critics. They say that most companies arent really serious about their CSR initiatives, that many choose self-serving ways to give back and are merely flashy, half-hearted attempts to woo consumers.

Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance,[1] is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, selfregulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit. The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Corporate Social Responsibility has been redefined throughout the years. However, it essentially is titled to aid to an organization's mission as well as a guide to what the company stands for and will uphold to its consumers.

Development Business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles). Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia, descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have re-branded their core values in the light of business ethical considerations (e.g. BP's "beyond petroleum" environmental tilt). The term CSR came in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those on whom an organization's activities have an impact, was used to describe corporate owners beyond shareholders as a result of an influential book by R Freeman in 1984.[2] ISO 26000 is the recognized international standard for CSR (currently a Draft International Standard). Public sector organizations (the United Nations for example) adhere to the Triple Bottom Line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities. Corporate Social

Responsibility is a much talked about subject these days. Every company seems to be adopting it, and generating press about their efforts at being a good citizen. Well according to one study in Business Week, philanthropic efforts by corporations have actually dropped in comparison to those 25 years ago. The study used a much more quantitative measure to conduct this study, rather than basing it off the popular press. It notes that in contrast to 25 years ago, when corporations donated 2% of their pre-tax earnings for philanthropic causes, companies nowadays only allocate 0.7% of their earnings. I guess that companies have started finding it easier (and cheaper) to publicize good actions than to actually do them. After all, the only thing that matters to their business is what the public thinks of them, rather than how much good they are actually doing. However, I agree that just looking at a single figure is not reflective of all the efforts, but it is definitely better than a purely qualitative measure. The study could be improved by looking at a number of factors, ranging from conducting surveys of employee happiness to having a detailed analysis of each of the companys efforts (and crimes). It should also be noted that the simple action of donating a significant portion of a companys revenue does not make it a socially responsible one, as it could be causing damage (like undercutting employees or pollution) or having poor practices in so many other ways. Similarly, a company does not need to donate to be responsible. It could just prevent pollution, increase expenses (by offering higher wages) or even generate awareness. Despite the study being flawed, I still feel that it does hold truth. The only way to inculcate the concept of CSR is to bring out the truth about companies, both the good as well as the bad ones. Society in itself will need to make a more of an effort to ingrain these concepts, and prevent itself from being swayed by simple press releases and media articles. What is the role of HR in CSR?

Companies increasingly need to co-ordinate their CSR activities and demonstrate their commitment to CSR. Effective CSR depends on being seen as important throughout an organization. Delivery, not rhetoric, is the key to stakeholders developing trust in an organization.

HR has a key role in making CSR work. CSR without HR runs the risk of being dismissed as PR or shallow window-dressing. And CSR is an opportunity for HR to demonstrate a strategic focus and act as a business

partner. CSR needs to be embedded in an organizations culture to make a change to actions and attitudes and the support of the top team is critical to success. HR already works at communicating and implementing ideas, policies, cultural and behavioral change across organizations. Its role in influencing attitudes and links with line managers and the top team mean it is ideally placed to do the same with CSR. HR is also responsible for the key systems and processes underpinning effective delivery. Through HR, CSR can be given credibility and aligned with how business run. CSR could be integrated into processes such as the employer brand, recruitment, appraisal, retention, motivation, reward, internal communications, diversity, coaching and training.

The way a company treats its employees contributes directly to it being seen as willing to accept its wider responsibilities. Building credibility And trusting their employer are being increasingly seen as important by employees when they choose who they want to work 1.0 NTPCs integrated Responsibility 1.1 For achieving its vision approach towards Corporate Social

To be one of the worlds largest and best power utilities, powering Indias growth, NTPC mission statement on CSR states Be a socially responsible corporate entity with thrust on environment protection, ash utilization, community development, and energy conservation.

1.2

NTPCs approach towards CSR has also been articulated in the corporate objectives on sustainable power development as stated below: To contribute to sustainable power development by discharging corporate social responsibilities. To lead the sector in the areas of resettlement and rehabilitation and environment protection including effective ash-utilization, peripheral development and energy conservation practices.

1.3

NTPC is a member of Global Compact, a UN initiative launched by its Secretary General Mr Kofi Annan and is committed to adhere to its ten principles in the areas of Human Rights, Labour, Environment and Anti-corruption. NTPC is also a member of Corporate Roundtable on Development of Strategies for Environment (CORE) initiated by TERI and confirmed its support for the principles outlined in the CORE Sustainability Charter drawn from International Chamber of Commerces Business Charter for Sustainable Development.

1.4

1.5 NTPC has also adopted the Social Code framed by India Partnership Forum promoted by Confederation of Indian Industries (CII) and UNDP.

1.6 NTPC thus follows the global practice of addressing the CSR issue in an integrated multi-stakeholder approach covering the environment and social aspects. 1.7 The environmental concerns include: Environment Impact Assessment, Environment Management Plans, Ash Utilisation, Energy Efficiency, A forestation, Decentralised Distributed Generation and supply of power, Rain water harvesting, Energy Conservation and adoption of international standards like ISO14000. These are administered through specific policy frameworks and dedicated institutional set up like Environment Engineering Group (EEG), Environmental Management Group (EMG), Ash Utilization Department (AUD), CENPEEP, SPV-A, Non-conventional Energy Sources Group etc.

1.8 Similarly the social concerns include: Resettlement & Rehabilitation, Community Development, Safety, Adoption of International Standards like OHSAS-18000, Social Security for Old Age, Health, Education, Gender Equality, National Calamity, and special focus on the marginalized section of society during recruitment etc. These are administered through specific policy framework and dedicated institutional set up like R&R cell, Safety Department and respective sections of HR Department. 2.0 NTPCs approach towards Community Development 2.1 Most of NTPC stations are located in remote rural areas which are socio-economically backward and deficient in the basic civic amenities. NTPC, as responsible corporate citizen has been addressing the issue of community development in the neighbourhood area of its stations, which had been impacted due to establishment of the project. This is administered primarily as part of resettlement and rehabilitation effort.

2.2

Thrust areas at national level NTPC has now expanded it horizon and social vision to make its impact felt at national level by addressing the following niche domains of socio-economic issues at national level through establishing NTPC Foundation. a) To promote DDGS through covering the initial risks like cost of feasibility studies for the entrepreneur/ local communities,

b)

To facilitate economic self- reliance of physically challenged persons, through establishing a development centre for physically challenged persons as national resource and development centre

c)

To organise conservation of the national monuments and cultural heritage sites on selective basis

d)

To provide relief and assistance during national calamities etc.

e)

To facilitate unemployed people in and around the new projects/ old stations in self-employment through co-operatives / selfhelp groups

f)

Any other program/ activity as deemed appropriate by the Foundation.

2.2.1 NTPC also recognizes that generation of power is key to development, particularly in the remote and far-flung places where the power is either not available or is in acute shortage. The decentralized distributed generation and supply (DDGS) of power could be a plausible solution though it involves initial risk while formulating the project proposal. NTPC has the wherewithal of providing requisite technical support, formulating the project proposal and establishing the feasibility of DDGS on the specific request of an entrepreneur. Yet additional resources will be required to provide risk cover during the formulation of project proposal and establishing feasibility. 2.2.2 NTPC recognizes that in the changing environment of liberalisation and globalization, the job opportunities are getting restricted. Thus, in future, the opportunities will depend on the entrepreneur skills and attitude of the individuals. This is more applicable to the section of disabled persons. Hence development of entrepreneurship among disabled persons is key issue for promoting economic self-reliance. Further, additional resources and support will be needed to fructify the entrepreneurship of this marginalized section of society.

2.2.3

NTPC also recognizes the need for conserving national monuments and cultural heritage sites and providing relief in case of national calamities.

2.2.4

The programme of facilitating the unemployed people in and around the new projects / old operating stations, in self-employment through co-operatives / self-help groups may be considered under the national programme. The programme may include provisions for the enabling mechanism such as backward linkage like tying up the input resources and forward linkage like marketing etc. Similar programme may also be included in unit level CD programme.

2.2.5

NTPC proposes to fill this gap through its community development policy at national level by addressing the issue of promoting economic self reliance among the physically challenged persons, covering initial risk at the feasibility study stage for the decentralized distributed generation of power, supporting conservation of national monuments and cultural heritage sites, providing relief during national calamities and any other program as deemed appropriate by the Foundation.

2.3 Community development at unit level/operating stations

2.3.1

NTPC also recognizes that it has social responsibility to continue the community and peripheral development works in the neighbourhood area of its operating stations, where the same has been closed under R&R policy.

2.3.2 This will include any other program based on the need and requirement as deemed appropriate by the new project/ operating stations.

2.3.3 The provisions and approach of addressing the issues of community and peripheral development in the neighbourhood of its operating stations, has been outlined in the fourth chapter of this policy document.

2.4

The approach of NTPC towards CSR-CD both at national and unit level may be oriented towards commitment and full involvement on

planning and implementation. Where other agencies / organizations are involved, approach may focus on collaboration and partnership rather than just funding the programme.

2.5

It should be ensured that the efforts of government were not duplicated and sustainability was maintained. The approach would be towards filling the gaps in the existing governmental programmes and the local needs.

2.6

The annual plan of action would be formulated after appropriate consultation with the local government officials of the State.

3.0

CSR-CD Programmes at national level NTPC will establish a foundation under Indian Trust Act 1882 for addressing the niche domains of social development at national level through strategic interventions. The NTPC Foundation will provide greater focus on identified issues of concern, create partnership with various stakeholders, receive funds from national and international agencies etc. The Foundation will be the nodal agency for implementing the national level programmes as per the CSR-CD policy of NTPC. The following niche domains of socio-economic development will be covered by the NTPC foundation.

a)

To promote DDGS through covering the initial risks like cost of feasibility studies for the entrepreneur/ local communities,

b)

To facilitate economic self- reliance of physically challenged persons, through establishing a development centre for physically challenged persons as national resource and development centre To organise conservation of the national monuments and cultural heritage sites on selective basis

c)

d)

To provide relief and assistance during national calamities etc.

e)

To facilitate unemployed people in and around the new projects/ old stations in self-employment through cooperatives / self-help groups

f)

Any other program/ activity related to social upliftment as deemed appropriate by he Foundation.

3.1

Aims and objectives of NTPC Foundation

3.1.1

To facilitate the entrepreneurs/ communities in formulating the project proposals and establishing the feasibility for promoting the decentralized distributed generation and supply of power (DDGS) for meeting the power and development requirement of remote and far flung places. The foundation will consider the risk mitigation by bearing the cost of such feasibility studies where the project is found unviable. The foundation will also extend the NTPCs technical

expertise in the field and provide the interface with NTPC REC joint venture for collaboration and establishing DDGS as per the need and requirement.

The foundation will promote the plantation and forestry programmes for producing biomass required for DDGS programme.

3.1.2 To facilitate the disabled persons in improving the economic and employment opportunities. For this, the foundation will establish an a development centre for physically challenged persons as national resource and development centre for enhancing the economic opportunities through strategic interventions such as

I) Extending cover for initial risks like conducting the feasibility Studies, market research etc., in case the project is found un-viable.

ii) Facilitating micro-financing and/or venture/seed capital for project of economic self reliance and mentoring.

iii) Providing requisite support from initial phase of identification Livelihood opportunity till achieving the level of self sustenance.

iv) Conducting advocacy and awareness programs for identification

of appropriate economic and employment opportunities

v) Identifying and administering the need based vocational/ Managerial training programs with clear linkage to livelihood Opportunity.

vi) Giving preference to small and medium projects covering a group of persons

3.1. To organise conservation of national monuments and cultural heritage sites on selective basis.

3.1. To provide appropriate assistance and send volunteers and resources for relief and restoration in the times of national calamities.

3.1.5

To facilitate the unemployed people in and around the new projects /old operating stations, in self-employment through cooperatives / self-help groups. The programme may include provisions for the enabling mechanism such as backward linkage like tying up the input resources and forward linkage like marketing etc.

3.1.6

To take up or support any other social upliftment programme (in addition to the programmes stated above) at national level as deemed appropriate.

3.1.7

To develop and undertake advocacy, awareness campaigns and community outreach programmes in the above areas. To interact with policy makers, regulatory bodies and responding to issues initiated by them.

3.1.8

\To organize workshops/ conferences/ symposia on the above areas and the related areas. To interact collaborate and promote partnership with other related national and international agencies/ organization and seek funds/ grants for specific programmes/ projects.

3.2

Institutional set up

3.2.1

NTPC Foundation

The NTPC Foundation will be governed by The Board of Trustees, details of which are given below:

CMD

Chairman of Board of Trustee

Dir (HR) Dir (Fin) Independent Director Professional with required experience and/ or with right aptitude and commitment on an honorary basis full

Trustee Trustee Trustee Secretary to the Trust Or Director General

3.2.2

Staffing for day to day operations

The professionals may be engaged on fixed term contract basis as program officers based on the need and requirement or volunteers from present and past NTPC employees may be deputed.

3.2.3

Development Centre for physically challenged persons

The Development Centre for physically challenged persons will be a separate entity under the Foundation. The centre will be headed by a project director, who will report to the Board of the Trustees.

3.2.3.1 The Development Centre will address the following four categories of disability.

visually challenged persons Deaf and dumb persons

physically challenged persons mentally challenged persons with mild intensity

3.2.3.2 The Development Centre will be located in its own building where, it will develop and maintain basic infrastructure facilities for providing supports like counselling, documentation centre, placement services, vocational training, market research etc. The Development Centre will also consider establishing sub-centres at regional / local level. 3.3 Implementation mechanism

3.3.1

Planning & Co-ordination

3.3.1.1 The NTPC Foundation will be responsible for the overall and coordination of CD programmes at national level.

planning

3.3.1.2 The Corporate CSR Group will coordinate with the NTPC Foundation for all related activities.

3.3.2

Monitoring and Evaluation

3.3.2.1 The monitoring of CD programme will be done by Foundation, which will submit quarterly report to NTPC management for its information.

3.3.2.2 The foundation will submit a quarterly progress report to the CSR group for apprising the management. The corporate CSR Group will review the work of Foundation and put up an exception report for appraising the management on quarterly basis. 3.3.2.3 The details will be presented to NTPC Management on regular basis.

3.3.2.4 The effectiveness of CD programme will be evaluated through external agencies for providing required feed back and inputs to formulate and improve the programmes in future.

3.3.3

Reporting

3.3.3.1 The NTPC Foundation will prepare its annual report.

3.3.3.2 The summary of the report will also be posted on the NTPC website under a dedicated section on CSR. The website will include the policy and the details of CD programmes undertaken etc.

4.0

CSR-CD Programmes at unit level operating stations

This part of policy addresses the issue of Community Development in the neighbourhood area of operating stations where

the same have been completed and closed as per the R&R policy of NTPC. The operating stations include the takeover stations. The policy will also be applicable to NTPC managed stations for which the funds will be provided under the station expenses.

4.1

Aims and Objectives

4.1.1

To undertake community development in the neighbourhood area of operating stations with particular focus on women, children, disabled persons and aged persons.

4.1.2

To create appropriate partnership with the concerned stakeholders for the effective delivery of community development programmes through consultation and participation

4.1.3

To explore and work in various domains of community development such as Health, Education, Drinking Water, peripheral development etc.

4.2

Programmes covered under unit level CSR-CD

Since, NTPCs operating stations are located all over India under varying socio-economic condition, the community development programmes have to be identified and formulated based on the

specific needs and requirement of the particular site. The suggestive list of the programmes which could be considered by the operating stations while formulating the annual plans is given below:

4.2.1

Education

4.2.1.1 To organise Skill Development / Vocational Training and other training programmes to improve the skills and employability of the people, or for enabling people to start IGS. It will include sponsoring people for vocational training, ITI training, computer training etc

4.2.1.2 Scholarships for the selected local children for studying in schools in NTPC township equivalent to fees charged by schools. Preference may be given to girl child.

4.2.1.3 Supply of Study material like bags, books, stationary etc.

4.2.1.4 Implementation of Quality Circle and 5S in schools, villages, panchayats

4.2.2

Health

4.2.2.1 To conduct health surveys, identification of health concern, awareness campaigns, publicity printed material / films etc

4.2.2.2 To organize regular immunization programme for children and medical check-up in schools

4.2.2.3 To organise regular health camps like family planning, medical check-up for eye and heart etc. with particular focus on women, children, disabled persons and old age persons.

4.2.3

Peripheral Development:

4.2.3.1 To augment basic infrastructure facilities like area electrification, community centre, panchayat ghar, water drains, roads etc. as per the need and requirement of local administration based on the need assessment survey to be carried out by the NTPC.

4.2.3.2 To facilitate the creation / upgradation of community health / educational facilities in partnership with the concerned government agencies and the local community. Priority may be given to those schools / primary health centre which are operating but do not have facilities like building, equipments etc.

4.2.3.3 The programmes for providing community infrastructure will be on the basis of bearing one time capital cost for creating such infrastructure and on the basis of written assurance that the operational and maintenance cost of such infrastructure will be borne by the concerned stakeholder like the Government Department /

Agency or the Panchayat/ local authority or the community based organizations/ nongovernmental organizations etc.

4.2.4

Others

4.2.4.1 To promote rural sports and organise annual sports meet etc. in the villages by providing the equipments and other facilities. Each station will compulsorily identify a specific day/ week for organising annual rural sports meet.

4.2.4.2 Sponsoring deserving local sportsman for training and development at national sports institutes.

4.2.4.3 To organize Veterinary camp for the cattle stock.

4.2.4.4 To promote community plantation and forestry programmes.

4.2.4.5 To facilitate the unemployed people in and around the new projects / old operating stations, in self-employment through co-operatives / self-help groups. The programme may include provisions for the enabling mechanism such as backward linkage like tying up the input resources and forward linkage like marketing etc.

4.2.4.6 In addition, any other programme will be considered under this policy as deemed appropriate by the Head of the Station.

4.3

Institutional set up

4.3.1

Corporate Centre: The Corporate CSR Group will be responsible for policy matters, and compilation of information and annual reports. The Corporate CSR Group will also be responsible for designing the training programmes for CSR-CD staff, organising annual CSR-CD meet and facilitating the processing of allocation of funds to stations.

4.3.2

Regional headquarters: A nodal officer from HR Department will coordinate and monitor the CD activities at stations under region and will compile the quarterly and annual CD report for submission to Corporate CSR Department. The region will also form an advisory committee for considering the unit level CSR CD programmes and may include the representatives of concerned State Government.

4.3.3

Operating Stations: The CSR-CD policy will be implemented through dedicated CSR Cell under the HR Department. The Head of HR will be over all responsible at Stations.

4.3.4

Volunteering by NTPC Employees & their family members: The volunteering by NTPC employees will be promoted through the NGOs created by NTPC employees at stations, which will be partner in planning and implementation of the identified CD programmes. NTPC employees will also be encouraged to mentor the needy local

population, volunteer with the NTPC Foundation and participate in the relief work in cases of national calamities.

4.4

Implementation mechanism

4.4.1

Planning & Co-ordination

4.4.1.1 The specific programmes will be identified based on the need of communities, which will change from time to time and location to location. The CD Programme will, therefore, be formulated based on Need Assessment Surveys (NAS) for identifying the specific areas of concern. Based on the survey, a detailed programme report will be prepared detailing the need for a CD programme, time frame of implementation and budget.

4.4.1.2 The HR Department at Stations will prepare annual plan for each year. Preference will be given to those activities, for which the State Government/ Local Administration/ Panchayat provides matching budget/ grant. The head of HR at operating stations will be responsible for overall planning and coordination.

4.4.2

Consultation and participation of stakeholders

4.4.2.1 The targeted communities and the local authorities will be closely involved in the process of planning and implementation of the CD

programmes to the extent possible and subject to meeting the NTPC's rules and procedures.

4.4.2.2 The Village Development Advisory Committee (VDAC) comprising of representatives from the district administration, local authorities, Panchayat / Nagar Nigam, NGOs, local community and NTPC will be formed for consultation while formulating annual plans.

4.4.2.3 The annual plan will be prepared based on the findings of need assessment surveys. The findings of the need assessment survey and the draft of the annual plan will be discussed in the VDAC. The views of VDAC will be considered subject to provisions of NTPC policy and availability of budget.

4.4.3

Monitoring and Evaluation

4.4.3.1 The Head of HR at operating stations will review the CD programme on monthly basis. The Head of stations will review progress on quarterly basis in the SMC.

4.4.3.2 At regional level, the implementation of CD programme will be regularly reviewed in the regional head of HR meeting for identification of need for specific interventions. The regional ED will review the progress of Stations in that region on six monthly basis in RMC.

4.4.3.3 At corporate level, the outcome of the meeting of regional Head of HR will be deliberated for suggesting suitable policy interventions. The Dir (HR) will review the progress on half yearly basis. The details will be presented to the NTPC management regularly.

4.4.3.4 The effectiveness of CD programme will be evaluated through external agencies for providing required feedback and inputs to formulate and improve the programmes in future.

4.4.4

Reporting

4.4.4.1 Each station will prepare an annual report of community development activities delineating the activities identified, benefits accrued to neighbouring communities and the number of people benefited.

4.4.4.2 The regional HQ will compile and prepare an annual report of CD activities carried out in the operating stations of that region.

the

4.4.4.3 The Corporate CSR Department will compile and prepare an annual report for the Corporation.

4.4.4.4 The summary of the report will be published in print and also posted on the NTPC website under a separate dedicated section on CSR. The website will include the policy, the details of CD programmes undertaken and other details.

5.0

Allocation of funds

5.1 An amount of up to Rs. 17 crores will be earmarked every year for implementation of CSR CD programs as per this policy.

5.2

The allocation of funds may vary depending on the need and requirement of NTPC operating stations, NTPC foundation and provision for the national calamity in the respective year and therefore, will be decided on year to year basis. The broad allocation will likely be as follows:

SN Allocation 1 2 3

%age funds Operating Station 50-60 NTPC Foundation 30-40 Unallocated (for foundation, 10 stations, National calamities etc.) Total 100

ofNet Value (Rs. In Cr.) 8.50-10.20 5.10-6.80 1.70

17.0

5.3 Allocation of funds for the operating stations will be based on the proposals submitted by these stations and the overall allocation of funds.