CORPORATE SOCIAL RESPONSIBILITY IN GOVERNMENT COMPANIES


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Good Corporate Governance includes socially responsible business practices. A socially
responsible approach to business would involve attention to social and environmental
concerns in addition to economic goals and encourage companies to balance financial
profits, economic value addition and social good.
The high level of public accountability attached to Public Sector Undertakings (PSUs) as
a result of their public ownership makes socially responsible reporting by PSUs
particularly important. The Committee of Public Undertakings (COPU) in 1992
examined the issue relating to social obligation of Central Public Sector Enterprises and
observed that “being part of the ‘State’, every Public Sector Enterprise (PSE) has a moral
responsibility to play an active role in discharging the social obligations endowed on a
welfare state, subject to the financial health of the enterprise”. Based on the
recommendation of the COPU, Department of Public Enterprises (DPE) issued general
guidelines in November 1994. These guidelines basically left it to the Board of Directors
of the PSEs to devise socially responsible business practices in accordance with their
Articles of Association, under the general guidance of their respective Administrative
Ministry/Department.
3.1 Corporate Social Responsibility
Social responsibility is the responsibility of an organisation for the impacts of its
decisions and activities on society and the environment, through transparent and ethical
behaviors that is consistent with sustainable development and the welfare of society and
takes into account the expectations of stakeholders
Corporate Social Responsibility (CSR) is one such niche area of corporate behaviour and
governance that needs to be addressed and effectively implemented in the organisation.
CSR is one of the effective tools that synergizes the efforts of corporate and the social
sector agencies towards sustainable growth and development of social objectives at
large. CSR is at heart a process of managing the costs and benefits of business activity to
both internal (employees, shareholders, investors) and external (institution of public
governance, community members, civil society groups, other enterprises) stakeholders.



3.2. CSR Policy
Out of the total 28 companies in Coal Sector, Power sector and Oil and Natural Gas
Sector selected for examination, it was observed that 19 companies (5 companies in
Power Sector, 8 companies in Coal Sector and 6 Companies in Oil and Natural Gas
Sector) had approved CSR policy during 2007-08. The list of companies having CSR
Policy and a list of companies not having CSR policy covered in the review are given in
Appendix XV and Appendix XVI.
3.3 System of Planning for CSR activities
Planning plays a vital role while implementing any policy. It was, however, observed that
North Eastern Electric Power Corporation Limited, NTPC-SAIL Power Company (P)
Limited, Bokaro Power Supply Company (P) Limited and Power Finance Corporation
Limited in the Power Sector had no system of planning for CSR activities. Other
companies planned their CSR activities as detailed below:
(A) Oil Sector
Bongaigaon Refinery & Petrochemicals Limited, Numaligarh Refinery Limited
and Oil India Limited had formed Community Development Committee/ Steering
Committee for planning CSR activities.
Hindustan Petroleum Corporation Limited planned CSR projects with the help of
operating Partner Non Government Organisations. The company signed MOUs
with the Non Government Organisations.
Bharat Petroleum Corporation Limited and Mangalore Refinery and
Petrochemicals Limited planned CSR projects based on requests from
neighbouring local self-governments like Panchayats, Municipalities &
Corporations and Non Government Organisations.