Breadcrumb

India

The role of CSR

India is widely regarded as a country in which corporate social responsibility has long played an important role. National and international nongovernmental organizations and UN agencies are involved in the public debate in the business community and the media. However, the involvement of the business community is concentrated among a few long-established family-owned companies that contribute a significant amount in the field of CSR, in both theory and practice. The Indian subsidiaries of German companies are bound by their parent companies’ guidelines for socially responsible behavior, but how these guidelines are  actually implemented is left up to each subsidiary. Their CSR activities focus on their employees (providing training and improving social security), the environment and aid efforts within India or in the region, which are currently concentrating on providing help to tsunami victims. Public policymakers are seeking to achieve inclusive  and sustainable growth, and calling on private enterprise to contribute its share.
There is no evidence of CSR activities in  the informal sector of the Indian economy, which is responsible for slightly less than half of GDP and employs some 93 percent of India’s workforce. Indeed, workers in this sector are afforded no rights or protections whatsoever, and all indications are that no efforts are being made to fight poverty, promote education or health, protect the environment or encourage employee participation in business development.

The UN Global Compact seeks to promote the CSR activities of businesses in India. However, it has not succeeded in involving important NGOs, or most importantly, the unions.  The UN Global Compact is not well known within the business sector or the NGO community. For some time now, German development organizations (GTZ, InWent) have been cooperating closely with the country’s important trade associations. The Indo-German Chamber of Commerce has developed its own approach to CSR, and provides conceptual and advisory support for German companies in India.

While CSR is not at the top of the agenda of German political foundations, some of them are starting to devote more attention to this area. The German government, represented by the  Ministry of Labor, is working to achieve greater international cooperation on CSR under the Heiligendamm Process, which includes India as one of five outreach countries. Talks have been held in the context of a formalized partnership between Germany and India. Representatives of the German business community meet with embassy officials at least once a year, during their monthly business lunches, to discuss CSR.

Source: German Embassy, New Delhi

CSR understanding

India’s socialist approach to economic policy until the late 1980s required Indian businesses to make significant contributions to society, and strict controls were put in place to that end.

This situation has changed considerably since economic reform policies were introduced; today few limits are placed on the independence of the business sector. This has largely met with approval among the populace.

The cultural and religious beliefs that shape people’s personal lives appear to  carry little weight when it comes to business activities. Religious and cultural  behavioral norms apply primarily to the individual realm (cleanliness, respect for others and for nature, etc.), but not to behavior within the larger community or the political system.

Thus CSR activities tend to be dominated by religious or philanthropically oriented minorities  such as the Parsi or Jains, which play a disproportionately influential role in private industry relative to their percentage  of the overall population.

Source: German Embassy, New Delhi

Expectations towards companies

More than anything else, policymakers and society at large expect companies to manage their affairs successfully and to produce goods to meet the existing demand. However, the relationship between NGOs and the business sector is sometimes a difficult one, as many of the large industrial firms behave paternalistically toward Indian society.

Efforts by German businesses in India to promote education and training garner a great deal of respect, but with the exception of two projects of the Indo-German Chamber of Commerce, they are limited to employee-oriented measures only. Unlike companies from English-speaking countries, German companies have not yet participated to any substantial degree in the discussion of CSR that is currently under way in the major Indian trade associations.

Source: German Embassy, New Delhi

Basic conditions

 

Implementation of international regulations and guidelines

 

Core labor standards of the International Labor Organization (ILO)


1. Freedom of association and the right to collective bargaining

Freedom of association and the right to collective bargaining are protected by law and are respected in the organized (formal) sector. Disputes can be, and are, settled in the courts, but this avenue is problematic because of the length of the proceedings. There are no unions or wage agreements in the unorganized (informal) sector. Attempts to assert rights are often brutally suppressed. There is no evidence that the government or the unions attempt to intervene; NGOs are working to raise awareness of this problem.

2. Elimination of forced labor
Forced labor is prohibited, but is nonetheless practiced in the unorganized sector. There is no evidence that the government or the unions have taken measures against it. Forced labor plays no role in the organized sector.

3. Abolition of child labor
Child labor violates the constitutional right to age-appropriate development, but it is not prohibited. Instead, it is merely regulated by law (children are not allowed to work in certain high-risk areas). Enforcement is poor. The police occasionally carry out sensational actions to free child workers, but they have no effect on the overall problem. Consent to ILO standards is not to be expected.

4. Elimination of discrimination with respect to employment and occupation
The prohibition is formally in place, but poorly enforced. Owing to the caste system and the widespread treatment of religious and ethnic minorities, discrimination is common throughout the country.
 
Industry initiatives

GLOBAL COMPACT NETWORK

On-site contact:  
Mr.  Uddesh Kohli
Global Compact Special Advisor in India/GC Society in India
Tel: +91-9811273142
E-mail: uddeshkohli (at) gmail (dot) com

Mr. Arun Maira
Global Compact Special Advisor in India/Chairman Boston Consulting Group, India
E-mail: Maira.Arun (at) bcg (dot) com

Ms. Seema Arora
Principal Counsellor & Head
CII-ITC Center of Excellence for Sustainable Development
E-mail : seema.arora (at) ciionline (dot) org

India Partnership Forum
(Collaboration between the Confederation of Indian Industry and UNDP India to promote and strengthen CSR in India.)
http://www.indiapartnershipforum.org/unglcomp_india.htm

UNDP
Momin Jaan
E-mail: momin.jaan (at) undp (dot) org

Harsh Singh
E-mail: harsh.singh (at) undp (dot) org

GC Office Country Coordinator
Ms. Melissa Powell
E-mail: Powell1 (at) un (dot) org
Tel:  +1 212-963-0566

WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

On-site network since 2002

On-site contact:
TERI-BCSD India
Mr. R. K. Narang
Convenor, TERI-BCSD India
Distinguished Fellow
The Energy and Resources Institute
Darbari Seth Block
India Habitat Place, Lodhi Road
New Delhi, 110003 India
Tel: +91 11 2468 21 00
Fax: +91 11 2468 21 45
E-mail: core (at) teri.res (dot) in
Website: http://bcsd.teri.res.in

Ms. Annapurna Vancheswaran
Associate Director Sustainable Development Outreach
The Energy and Resources Institute
E-mail: avanche (at) teri.res (dot) in and core (at) teri.res (dot) in

Areas of activity

Poverty

More than a quarter of the Indian population lives below the official poverty line, which is just under 330 rupees (INR) per month (= EUR 5.23) in rural areas and INR 455 (= EUR 7.21) in the cities. There has been an increase in the two income categories just above the poverty line – those in “marginal” and economically “at risk” circumstances. A March 2008 study of “India’s Common People” found that about two-thirds of all Indians either live in abject poverty or have barely  enough income to meet their basic needs. These people cannot afford to pay for social security or for unforeseen expenses, for example because of illness. Poverty forces millions of people to work in circumstances  in which they have absolutely no rights.

Basic information

  • Life expectancy: Total population: 69.25 years; males: 66.87 years; females:  71.9 years (2008 est.)
  • Iinfant mortality: Total: 32.31 deaths/1,000 births; males: 36.94 deaths/1,000 births; females: 27.12 deaths/1,000 births (2008 est.)
  • Malnutrition: 20% (2002/2004)
  • Access to clean water: 86% (2004)
  • Access to sanitary facilities: 33% (2004)
  • Human Poverty Index: 62nd of 108 (2007/2008)
  • Gini Index: 36.8 (2004)
  • Population below the poverty line:  25% (2007 est.)

Areas of particular concern are bonded and child labor. In most cases, children who are working in rural India are not supplementing their  family income, but simply working at jobs under worse conditions than adults and taking work that might otherwise be available to adults.

Participants

Possible participants include organizations for development cooperation (GTZ, CIM, etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation).

GTZ India
http://www.gtz.de/en/aktuell/607.htm

InWent
http://www.inwent.org/v-ez/lis/indien/index.htm

Indo-German Chamber of Commerce
http://www.indo-german.com

Konrad Adenauer Foundation, India office
http://www.kas.de/proj/home/home/38/2/index.html

Opportunities for fighting poverty

Companies might help to provide children with literacy training, improved overall education and vocational training so that they are able to get a good job.  This would also allow parents access to jobs now performed – under worse conditions – by children.

Risks in fighting poverty

German companies located in India are reluctant to talk about their involvement in this area; some have specifically asked that their involvement not be publicized.

Company examples

Bayer AG

Bayer CropScience has developed a Learning for Life program intended to help children in rural India escape the vicious circle of child labor and illiteracy. This program focuses on eliminating child labor in supplier companies and involving the  children concerned  in the CropScience program.

Randstad Deutschland GmbH & Co.KG

CSR WeltWeit case study (German): VSO – Voluntary Service Overseas

Source: German Embassy, New Delhi

Education

Vocational training is inadequate even in the formal sector of the economy; in the informal sector it is practically nonexistent.

The problem begins in the schools, where India spends little money even compared with the developing countries. There is a lack of teachers, schools and instructional materials. Half of all children leave school after no more than five years; two-thirds of those who complete primary and secondary school are not qualified for vocational training in the public system. Meanwhile, most graduates of public and private vocational schools are not employable.

Three years after completing school, half are still unemployed and the majority of those who are employed hold a job that is completely unrelated to their education.

Basic information

  • Public spending on education (share of GDP): 3.2% (2005)
  • Compulsory school attendance: ages 6 – 14
  • Rate of school enrollment: 90% of children who are required to attend school (2004)
  • Literacy (definition: those over the age of 15 who can read and write): Total population:  61%; males: 73.4%; females: 47.8% (2001 census)
  • HDI Education Index: Rank 128 out of 177 (1 = max., 0 = no education) Average years of education: Total population: 10; males: 11; females: 9 (2005)

The Indian government has recognized that this is a serious problem for the country’s development. In the area of education, India has fallen behind not only China, but also regional competitors such as Indonesia and Malaysia. In some sectors it ranks behind even Sri Lanka and Bangladesh. It has developed an array of programs to improve training opportunities and recognize informal training, but is determined to avoid any fundamental changes in the existing system.

However, India is working closely with Germany to adopt best practices aimed at improving vocational training.

Participants

Possible participants include organizations for development cooperation (GTZ, CIM, etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation).

GTZ India
http://www.gtz.de/en/aktuell/607.htm

InWent
http://www.inwent.org/v-ez/lis/indien/index.htm

Indo-German Chamber of Commerce
http://www.indo-german.com

Konrad Adenauer Foundation, India office
http://www.kas.de/proj/home/home/38/2/index.html

Opportunities and risks A general risk of providing occupational training in German companies is that trained workers may then be lured away by offers of high salaries, which is why many German companies are ambivalent about such training.

Company examples

Indo-German Chamber of Commerce, Mumbai

The Indo-German Chamber of Commerce operates Indo-German Training Centers (IGTC) that provide practical 18-month training in business administration based on the German dual system, in partnership with Berufsakademie Karlsruhe. Contact: Director IGTC, Radhieka R. Mehta

Opportunities:
Practical, high-quality training using up-to-date occupational education materials and curricula. This will further reinforce the positive public image of German companies.

Risks: Little impact on the Indian vocational education system.

Daimler India, Pune; Government Polytechnic, Pune; CIM Deutschland

Partnership between Daimler and the Polytechnic College, Pune, in developing curricula and training instructors. Daimler provides additional instructors from Germany and supplies training materials and Mercedes Benz vehicles. The goal is to provide a model of public-private partnership in education and vocational training.

Opportunities: High-quality education/training geared to the needs of the business world and the job market; an opportunity for a successful public-private partnership.

Daimler AG, Metro Group, IHK Koblenz

Active participation by private German firms and chambers of commerce in developing an ongoing Indo-German partnership in vocational education. So far this has meant being part of the German presence at a Global Skill Summit in New Delhi and participating in negotiations on formalizing Indo-German partnership. There are plans to join an Indo-German task force.

Opportunities: Demonstration of the sustained PPP character of German vocational education, introduction of important aspects of PPP to the Indian setting, and general development and broadening of the Indo-German relationship.

Risks: Problems with implementation and a lack of Indian companies willing and able to provide training.

Global Reporting Initiative

CSR WeltWeit case study (English): Transparency in the Supply Chain

Randstad Deutschland GmbH & Co.KG

CSR WeltWeit case study (German): VSO – Voluntary Service Overseas

Source: German Embassy, New Delhi

Health

Basic information

  • Public spending on health (share of GDP): 0.9% (2004)
  • Medical care: 60 physicians per 100,000 residents (2000-2004)
  • Infant mortality: Total: 32.31 deaths/1,000 births; malea: 36.94 deaths/1,000 births; females: 27.12 deaths/1,000 births (2008 est.)
  • Maternal mortality: 540 deaths/100,000 births (1990-2004)
  • Child malnutrition: 47% of children under the age of 5 (1996-2005)
  • HIV/AIDS prevalence rate (>15 years): 0.9% (2001)
  • HIV/AIDS cases: 5.1 million (2001 est.)
  • HIV/AIDS deaths: 310,000 (2001)
  • Life expectancy: Total population: 69.25 years; males: 66.87 years; females: 71.9 years (2008 est.)

Progress has clearly been made in healthcare during the 60 years since Indian independence.  Nonetheless, a relatively large share of the population suffers from easily avoidable illnesses. Child mortality and malnutrition rates are among the highest in the world. It appears likely that India will not achieve its millennial development goals in this area.

Participants

Possible participants include organizations for development cooperation (GTZ, CIM, etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation).

GTZ India
http://www.gtz.de/en/aktuell/607.htm

InWent
http://www.inwent.org/v-ez/lis/indien/index.htm

Indo-German Chamber of Commerce
http://www.indo-german.com

Konrad Adenauer Foundation, India office
http://www.kas.de/proj/home/home/38/2/index.html

The regional and class differences in the population’s health status have worsened; the situation is particularly dire in the northern Indian states. Illnesses such as AIDS, leprosy and others are highly stigmatized; those affected are ostracized. Because of the weak structures and poor quality of the public healthcare system, most of the money spent on healthcare goes to the private sector, and in rural areas often to unqualified providers. Unexpected expenses resulting from illness are among the leading causes of financial insecurity and household poverty.

Company examples

Deutsche Post/DHL with UNICEF

An integrated project to promote children’s survival and development in the Nandurbar district of the state of Maharashtra, where 60% of the population lives in abject poverty. It includes regularly scheduled health and nutrition days, child daycare groups and systematic training in infant and child care for 2,000 healthcare workers and midwives. Goals for 2010 include a 50-percent reduction in the rate of malnutrition among children under six, a reduction in infant mortality to less than 30 deaths per 1,000 live births and a 30 percent reduction in maternal mortality, as well as a 75-percent drop in the number of child marriages.

Opportunities:
Public recognition for the project

Risks: None are known; sustainability problems are possible 

Siemens AG

Nationwide AIDS Walk for Life with employee participation, accompanied by a mobile healthcare vehicle

Opportunities: Raising public awareness of AIDS and other stigmatized illnesses; public recognition for the company

Risks: Sustainability problems; short-term nature

CompWare Medical GmbH

CSR WeltWeit case study (German): Flächendeckende hochwertige Methadontherapie als Mittel der AIDS/HIV-Prävention und Versorgung

Randstad Deutschland GmbH & Co. KG

CSR WeltWeit case study (German): VSO – Voluntary Service Overseas

Source: German Embassy, New Delhi

Participation in society

Employee participation
In the formal (organized) sector of the Indian economy, sophisticated labor laws are in place to regulate workplace requirements (light, ventilation, safety, sanitary facilities, lounge areas/cafeterias, social security, minimum wages). The respective unions – which are organized at the company level – are basically responsible for representing employee interests. Beyond serving as a kind of works council, they are also able to engage in collective bargaining, so they can carry out negotiations on earnings, work hours, vacation periods and the like.  German companies  prefer to exclude the unions from their operations because they often lead to conflict, sometimes including violent confrontations and damage to property. Because of the lack of well qualified or even minimally qualified workers, German companies generally offer wages and benefits that significantly exceed what is required by law.

Basic information

  • Ethnic groups: Indo-Aryan 72%, Indo-European 25%, Mongolian and others 3% (2000)

Rights of individuals with severe disabilities
Disability policy  is still in its infancy. Fewer than 130 of the country’s more than 600 districts offer facilities for the disabled. The World Bank charges that people with disabilities are often shut out of public, cultural and social life. Households with disabled family members are significantly poorer than average. The situation of the mentally handicapped and mentally ill is especially dismal; they are particularly stigmatized, and this is true in rural areas more than in the cities. Barrier-free access appears to be practically nonexistent. There is little willingness to hire the disabled in private industry.

Participants

Possible participants include organizations for development cooperation (GTZ, CIM, etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation).

GTZ India
http://www.gtz.de/en/aktuell/607.htm

InWent
http://www.inwent.org/v-ez/lis/indien/index.htm

Indo-German Chamber of Commerce
http://www.indo-german.com

Konrad Adenauer Foundation, India office
http://www.kas.de/proj/home/home/38/2/index.html

Company examples

SAP Ltd., Bangalore

SAP offers its skilled workers wages that far exceed those required under collective bargaining agreements and large pay increases each year, along with free cafeteria meals and such benefits as family days to promote social integration. After five years with the company, employees are entitled to a company car. The company has its own bus service; after dark, women are escorted to their homes.

This improves and stabilizes the social position of employees and their families, increases their sense of responsibility and belonging, and makes them less interested in leaving the company.

Siemens Ltd. India and Gurgaon, Ability Foundation (NGO)

The Siemens companies in India make active efforts to hire disabled people who have the necessary training. They currently (as of 2007) employ 45 disabled persons, two of them with hearing impairments and the others with physical disabilities.
This is an effort to integrate the disabled into society and the working world, as well as  fulfilling statutory quotas for disabled employees.

Global Reporting Initiative

CSR WeltWeit case study (English)): Transparency in the Supply Chain

Source: German Embassy, New Delhi

Environment

Basic information

  • CO2 emissions: 4.6% of total world output (2004)
  • CO2 emissions per capita: 1.7 metric tons (2004)
  • Energy consumption: 488.5 million kWh (2005)
  • Water consumption (households/industry/agriculture): Total: 645.84 km3/year (8%/5%/86%); per capita: 585 m3/year (2000)
  • Hydropower, solar, wind, geothermal energy: 1.7 % of primary energy consumption (2005)

Large areas of India have serious environmental issues. The country’s water reserves, which are scarce in any case (4% of the world’s water supply for 17% of the world’s population), are largely polluted, and demand for groundwater is much too high, particularly in densely populated areas.

Participants

Possible participants include organizations for development cooperation (GTZ, CIM, etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation).

GTZ India
http://www.gtz.de/en/aktuell/607.htm

InWent
http://www.inwent.org/v-ez/lis/indien/index.htm

Indo-German Chamber of Commerce
http://www.indo-german.com

Konrad Adenauer Foundation, India office
http://www.kas.de/proj/home/home/38/2/index.html

Deforestation has reached an advanced stage and air pollution is a serious problem. Despite widespread religious and cultural beliefs that require respect for nature, far less importance is attached to environmental protection than to economic growth. Because it lacks domestic sources of raw materials, and because of its careless handling of energy resources (outdated production, defective distribution systems, outdated and energy-intensive consumption patterns, machines and cars), India is particularly hard hit by energy shortages. The search for other sources of energies (nuclear power, renewable energies) is a high political priority.

Company examples

Bayer AG

CSR WeltWeit case study (German): Bayer AG - Strategische Partnerschaft mit United Nations Environment Programme im Bereich Jugend und Umwelt

Daimler India

Partnership between Daimler India, Pune, the University of Hohenheim and the Council on Scientific & Industrial Research, New Delhi.

Jatropha biodiesel project to obtain biodiesel from the fruit of the jatropha plant, which grows on soil that has eroded and is no longer cultivatable. A feasibility study has been completed to determine whether it can be used in vehicle engines; an efficiency review is under way.

Opportunities: Job creation and additional income for rural areas, less use of fossil fuels and a reduction in CO² emissions, use and recultivation of eroded soil, consolidation of the vehicle market.

Risks: India’s cultivatable areas are used very intensively, so there is a risk of competition between growing food and growing renewable raw materials, and of confrontation with environmental advocacy groups.

Global Reporting Initiative

CSR WeltWeit case study (English): Transparency in the Supply Chain

Randstad Deutschland GmbH & Co.KG

CSR WeltWeit case study (German): VSO – Voluntary Service Overseas

Source: German Embassy, New Delhi

Other

Disaster aid after the tsunami
The number of deaths caused by the tsunami is unknown, but certainly far exceeds 100,000, and there have been untold injuries and property damage. The Indian government rejected aid from other countries – as always in the case of natural disasters – but agreed to accept aid from private sources.

The German business community
The German business community, led by Siemens, ThyssenKrupp, Bayer and Deutsche Bank, joined with the German embassy and general consulates to establish a foundation that has worked together with an Indian NGO (Srinivasan Services Trust, SST) to finance and organize the rebuilding of five villages in two districts of Tamil Nad. The goal is to help 80 percent of those affected to rise above the poverty line by approximately 2010. This effort includes the following projects, costing EUR 2.2 million:

  • Construction of two centers, one for first aid and the other for treating trauma, each able to treat 150 to 200 patients daily
  • Establishment of a civic center in each village
  • Fishing equipment and training programs to help secure long-term income
  • Training in the repair of damaged equipment
  • Training programs for other types of marine management (cultivation of kelp and fish farming) through cooperative self-help groups
  • Construction of 150 homes per village
  • Repair of public facilities such as roads, sewage systems, preschools and schools, as well as education and professional development for teachers

Contact: German Business Community, c/o German Consulate General, Mumbai

Opportunities and risks:
Opportunities: Restoring opportunities for those affected by the tsunami to earn a living; public recognition
Risks: Sustainability after the project is concluded

Siemens
Emergency aid in the amount of EUR 50,000 for 5,000 people in partnership with the Indian Red Cross, in the form of family kits (clothing, food, essential articles of daily use, beds, etc.), with voluntary participation by company employees. Long-term development in cooperation with the German Business Group.

Opportunities and risks:
Opportunities: Immediate aid in acute emergencies; public recognition
Risks: Sustainability problems

Data & facts

Country: Republic of India
Capital: New Delhi
Area: 3,287,000 km²
Population: 1.027 billion (2001 census)
Economic system: Market economy with a high proportion of state-owned companies
Polity: Federal republic
Unemployment rate: 7.2 % (2007 est.)
Inflation rate (CPIX): 6.4 % (2007 est.)
GDP: 1.099 trillion USD (2007 est.) = 870 billion EUR
GDP/Head: 2,800 USD (PPP, 2007 est.) = 2,000 EUR
Religions: Hindu (ca. 80.5%), Muslim (ca. 13.4%), Christian (ca. 2.3%), Sikh (ca. 1.8%) as well as Buddhist, Jain, Parsi and others
HDI: 128th of 177 (2007/2008)
CPI: 72nd of 179 (2007)
BTI: Status Index: 25th of 125; Management Index: 19th of 125 (2008)

Further studies