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NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
NutShell - GCNI Tri-annual Newsletter April-July 2013
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NutShell - GCNI Tri-annual Newsletter April-July 2013

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  • 1. asserting on the increasing importance of effective corporate governance in India at the 4th Subir Raha Memorial Lecture organised by Global Compact Network India on 1st July 2013. The Subir Raha Memorial Lecture is an annual event held to honour Late Mr. Subir Raha, Founder President, Global Compact Network India (GCNI) and Former CMD, ONGC. Mr. Raha set up the GCNI in November 2003 and led it till May 2006. His vision and foresight, has led GCNI to establish itself as a legal entity, the first one among the many networks initiated by the United Nations Global Compact since 2000. The event is a solemn occasion where we pay our respect and homage to a great leader and visionary, whose initiatives have led to the thinking on responsible business practices in India. In his memory, an annual lecture series was started by Global Compact Network India (GCNI) in 2010 and since then, three memorial lectures have been organised by GCNI. Mr. Sinha in his lecture on‘Expanding Paradigm of Corporate Governance’highlighted that the practice of transparency, effectiveness and ethical operations are the keys to win trust of 4th Subir Raha Memorial Lecture President’s Desk Dear Members Welcome to GCNI’s new tri-annual Newsletter, ‘NUTSHELL’. As we near completing a decade of operations, Global Compact Network India is steadily engaging with ‘Corporate India’towards adopting responsible and sustainable business practices. The progress has admittedly been rather modest; but we realise that such radical change is slow and gradual and persist with our outreach agenda of disseminating relevant information and hand – holding early believers. While we have a year – long agenda, a few prominent activities during this period are mentioned below. nutShellVol. 5 Issue 1 April-July 2013 T he G C N I n d i a T ri - annual N ewsletter “Both in social and political life demands for good governance are being made from completely unexpected quarters. You will find that questions are being raised from corners which nobody could have imagined, even 5 years earlier,” said Mr. U.K. Sinha, Chairman, SEBI in the News in focus Meetings 2nd India CEO Forum Meeting | 2 12th Working Group Meeting | 3 Launch of Bangalore Chapter | 3 Publication on Fraud and Bribery | 4 UNGC’s ALNF Meeting and Training Programme | 6 9th Annual General Body Meeting | 6 Strengthening Ethical and Transparent Corporate Governance | 6 Companies Act 2013 An Interview with Mr. Ashok Kumar Pavadia, Joint Secretary, Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises, Ministry of Industry, GoI | 7 Monthly Meetings | 11 Inthisissue Contd. on page 2... Contd. on page 2...
  • 2. 2 | Vol. 5 | Issue 1 | April-July 2013 nutShell newsin the The forum was organised in Bangalore at the Infosys Campus and was attended by CEOs/ CMDs and Senior Managerial Personnel from the leading companies such as Infosys, TCS, JSL, Mahindra and Mahindra, Elcomponics Ltd., Tata Steel, GBI, Coca Cola Ltd., IHRB, Tata Chemicals, ACC Limited, ITC, Total Oil Limited, academicians from Welingkar Institute of Management, Xavier’s Institute of Management and Entrepreneurship and O.P. Jindal Global University and UN Women. The Forum reconvened this year and based its discussions on the theme of ‘Growth with Dignity, Respect and Accountability’. The meeting was an attempt to initiate a dialogue among Indian business leaders on exploring the implementation of the United Nations ‘Protect, Respect, Remedy’ framework within the Indian context. It focused on discussing around how the companies and businesses through their commitment and action oriented strategies for promoting human rights could foresee gaining the trust of people and a competitive position in the corporate world. The meeting included presentations and sharing by the business leaders about their attempts at forwarding the human rights principles in their respective workspaces and a panel discussion facilitated by Mr. Mark Hodge, Executive Director, Global Business Initiatives on Human Rights, with Mr. Salil Tripathi, Director of Policy, IHRB, Prof. J Philip, President, XIME, Prof. Raj Kumar, Vice-Chancellor, O.P. Jindal Global University and Mr. Kris Gopalakrishnan, Executive Vice Chairman, Infosys, on Shared Responsibility – ‘Protect, Respect, Remedy’ in the Indian context. The event also witnessed the release of the year one report of the India CEO forum on Business and Human Rights. the investors. He asserted that through effectual corporate governance the company can win economic advantages in the medium to long term, which not only is rewarding to the company but also the shareholders. Mr. Sinha elaborated on the laws and guidelines that are being drafted by SEBI to provide companies with the necessary guidance to ensure that good corporate governance norms and culture is followed and that investors, especially the small investors, are provided due credit. The event also witnessed a welcome speech by Mr. Sudhir Vasudeva, President, GCNI and CMD, ONGC, theme setting 4th Subir Raha Memorial Lecture 2nd India CEO Forum Meeting “Respect for human rights in business leads to expansion of our democratic values into the realm of economics and business,” said Mr. Narayana Murthy, Chair, India CEO Forum on Business and Human Rights and Chairman Emeritus, Infosys Limited, speakingattheSecondCEOForumonBusinessandHumanRightson2ndApril2013. ...Contd. from page 1 speech by Ms. Lise Grande, UN Resident Coordinator and UNDP Resident Representative in India and vote of thanks by Dr. Uddesh Kohli, Senior Adviser, UNGC and Executive Member, GCNI. The event was well attended by CMDs and CEO and Senior Managerial Personnels like Dr. S.P.S. Bakshi, CMD, EPIL; Mr. Bharat Wakhlu, Resident Director, Tata Services - Tata Group; Mr. B.P. Tayal, CMD, Konkan Railways Corporation and Dr. A.K. Balyan, MD & CEO, Petronet LNG including 250 other participants from private and public sector companies, non-governmental organisation and academic institutions. President’s Desk ... Contd. from page 1 We had the pleasure of hosting Mr. U.K. Sinha, Chairman, SEBI at the 4th Annual Subir Raha Memorial Lecture on 1st July 2013. He addressed over 300 participants on the subject‘Expanding Paradigm of Corporate Governance’, in which he emphasised the increasing need for transparency and accountability from corporate and business houses. GCNI launched its 5th chapter in Bangalore recently to engage more effectively with companies located in the Southern States to bring them into the GCN fold. Considering India’s vast geographical spread, it will be necessary to open – up more chapters to engage effectively with Indian business houses. Collective Action Project (CAP) launched its second publication – ‘Understanding the Demand and Supply Equations of Corruption and Fraud’to help understand push and pull factors leading to fraud and to suggest practical preventive solutions. We are also pleased to report that GCNI won the Foreign and Commonwealth Office’s Prosperity Fund India Programme bid for the new project on‘Strengthening Ethical and Transparent Corporate Governance’ for a period of 18 months. The Global Compact Network India’s elections brought together a new Governing Council (GC) for the term 2013-2015. It is mix of the old guard and new incumbents and will enhance diversity in thought and perspective in implementing our ambitious strategic plan. The future holds great promise as initiatives such as the recently enacted new Companies Bill and enhanced emphasis of agencies such as SEBI toward transparency and protecting the right of minority shareholders will encourage Indian business entities toward adopting global management and compliance templates. This will surely enhance opportunities for us to engage with our partners, patrons and members on the ten principles of the compact movement. I look forward to your continued support in implementing GCNI’s agenda.
  • 3. 3 | Vol. 5 | Issue 1 | April-July 2013 nutShell Launch of Bangalore Chapter Taking place in New Delhi, India, the 12th Meeting of the UN Global Compact Working Group on the 10th Principle was held in collaboration with the Global Compact Network India on 9-10 April 2013. Approximately 125 executives of international and local businesses, high- level officials from the Government of India, representatives of business organisations, civil society, and academia were convened to discuss best ways to advance the fight against corruption through collective action, and identify challenges and opportunities for businesses to scale up existing anti-corruption corporate action. On the first day, participants reflected upon ways in which corporations can contribute to advance anti-corruption efforts. Specifically, companies, government officials, and civil society in India showcased their efforts, and discussed what incentives can be offered to further strengthen the existing efforts. Additionally, participants also reviewed the role of collective action in tackling corruption risks in various countries, and Global Compact Local Networks from Germany, India and Nigeria as well as the Egyptian Junior Business Association highlighted their efforts. The meeting also examined a crucial role that Information and Communications Technology (ICT) can play in combating corruption, and showcased how the ICT can be better used to increase access to information and transparency. Furthermore, Call to Action, a year-long global campaign, was launched during the 12th Meeting. The Call to Action invites companies to express their support of anti- corruption in relation to the UN Post-2015 Development Agenda. The Call to Action urges governments to promote incentive mechanisms for corporate anti-corruption action. 12th Working Group Meeting Mr. Amar Patnaik, Accountant General (General and Social Sector Audit) set the tone of proceedings of the day by saying “Sustainable development has to take place on the plank of good governance.” On the second day, working group participants engaged in the interactive session where they discussed some of the challenges in implementing anti- corruption compliance programmes throughout their value chain. The group also identified priorities for the Working Group to advance the anti-corruption and business agenda. The 12th meeting concluded with a joint session with the World Economic Forum’s Partnering Against Corruption Initiative – WEF PACI. The joint session provided an opportunity to update the latest developments that each initiative is focusing on, and reinforce the spirit of collaboration towards the common goal of advancing in the fight against corruption. The 13th Meeting of the UN Global Compact Working Group will be held in New York City at UN Headquarters in December 2013. Global Compact Network India launched its fifth local chapter in Bangalore on 2nd April 2013. The launch marked the expansion and extension of the Global Compact Movement in India. Mr. Narayana Murthy, Chairman Emeritus, Infosys Limited launched the chapter along with Mr. Salil Tripathi, Director Policy, IHRB; Mr. Mark Hodge, Executive Director, GBI; Prof. J. Philip, President, XIME; Prof. C Raj Kumar, Vice-Chancellor, O.P. Jindal Global University; Mr. Kris Gopalakrishnan, Executive Vice Chairman, Infosys Limited; Ms.SushmaKapoor,DeputyRepresentative,UNWomenandMr.Pooran Chandra Pandey, Executive Director, GCNI. The launch document was also signed by CMDs/CEOs and Senior Managerial Personnel from reputed corporates, business houses and academic institutes.
  • 4. 4 | Vol. 5 | Issue 1 | April-July 2013 nutShell newsin the The publication was first showcased on 20th June 2013 at the high level B20 Summit in St. Petersburg, Russia. Thereafter it had a media launch in New Delhi and was covered by 18 newspapers/magazines, with more promising to do a follow-up story in coming weeks. Some major newspapers and magazines that covered the report were The Economic Times, Business Standard, Financial Express, First Post, The Indian Express, Governance Now, Zee Biz, among others. Both qualitative information and quantitative data were considered at the data collection stage to obtain a holistic understanding of the underlying information. The overall objective of the analysis was to gain an insight into the nature of fraud, type of companies involved, the trends in corporate fraud, the underlying characteristics and techniques used, factors motivating the fraudsters etc., and to present the data and its interpretations in a meaningful manner. The report included a sample of over 100 companies indicted by the Serious Fraud Office, over a period of 15 years from April 1997 to March 2012. In the event that an investigation has been conducted by multiple agencies, all the available Publication on Fraud and Bribery CollectiveActionProjectIndiareleaseditssecondpublicationtitled‘UnderstandingtheDemandandSupply EquationsofCorruptionandFraud’inJune2013.ThispublicationwasdevelopedinpartnershipwithThought ArbitrageResearchInstitute. information from each such agency was considered. Information was obtained from charge sheets, court orders, filings with stock exchanges, specific databases supplemented by web searches, searches of newspapers and journals, Lok Sabha questions and answers etc.The report is an attempt to look at the evidence available and compile facts and nuances surrounding this complex issue. It is an attempt to move away from the emotive appeal of the anti-corruption and anti-fraud stand to explore the subject dispassionately so that a platform of dialogue and possible solutions can be created. In the words of Georg Kell, Executive Director of United Nations Global Compact, “The Indian private sector has shown immense potential to foster a transparent and sustainable economic environment. I am optimistic that we can collectively triumph against corruption and fraud by forging a collaborative relationship between government and business.” Mr. Kell emphasised that collective action is the way forward, as businesses cannot grow in isolation as well as their fight against corruption and fraud will not be impactful if they don’t work together.
  • 5. 6 | Vol. 5 | Issue 1 | April-July 2013 nutShellnutShell The 9th Annual General Body Meeting was held on 1st July 2013 at Scope Convention Centre, Scope Complex, Lodhi Road, New Delhi. The AGM witnessed the announcement of the new Governing Council headed by President, Mr. Sudhir Vasudeva, CMD, ONGC. The member companies and organisations of GCNI met to deliberate on issues with regard to the plan of action for the next 1 year including the consideration on the annual report and audited accounts. Strengthening Ethical and Transparent Corporate Governance 9th Annual General Body Meeting newsin the Mr. Pooran Chandra Pandey, Executive Director, GCNI attended Annual Local Network Forum (ANLF) and special training conducted by UNGC on Partnership during 21st -26th April, 2013. The Annual Local Network Meeting discussed various issues, in particular, about more engagement between UNGC and Local Networks including joint programmes, new ways to attract more membership for both UNGC & local networks, finding strategies and rolling out a new strategy by the UNGC for the year 2014-2016. UNGC also proposed that India Network should work closely with the UNGC both in India and outside as it is one of the fastest growing networks in the UNGC family and proposed joint projects and programme on sustainability, social enterprises, and other UNGC initiatives UNGC’s ALNF meeting and Training Programme besides proposed regional meeting in India in the first quarter of 2014. Mr. Pandey also at the ANLF meeting in Geneva interacted with senior people from the corporate, other local networks and senior members of the management at the ILO. He also met Sir Mark Moody and Mr. Georg Kell of the UNGC and discussed with them key issues and areas of mutual interest and understanding. Global Compact Network India worked on a Project Proposal titled‘Strengthen Ethical and Transparent Corporate Governance Practices and Further Responsible Development’which was submitted to the Foreign and Commonwealth Office’s Prosperity Fund India Programme disbursed by the British High Commission. We are happy to inform that Global Compact Network India won the bid for the Project and began work in earnest from July 2013. This Project is part of a wider goal of mainstreaming Anti-corruption Collective Action in the development agenda of India. At GCNI this work began with Siemens Integrity Initiative supporting the Collective Action Project from January 2011, and with this Ethical Corporate Governance project coming in, the agenda has gotten further strengthened. The purpose of this new project is to build a national collective action platform for responsible and sustainable development through informed partnerships with the business community, bureaucrats, civil society and parliamentarians. This will be done by facilitating constructive dialogue and bridging the gap in knowledge of how public and private businesses can engage with government, and set a collective agenda. Indian businesses are already witnessing a rise in ethical and transparent governance practices. The proposed Project will further strengthen this initiative by bringing together senior stakeholders, in business and bureaucracy, to take forward the collective agenda of transparency and responsible development forward. A tangible output will be that at least 8-10 companies based in India will sign the United Nations‘Call for Action: Anti- corruption and the post-2015 Development Agenda’. http://www.unglobalcompact.org/Issues/ transparency_anticorruption/call_to_ action_post2015.html
  • 6. 7 | Vol. 5 | Issue 1 | April-July 2013 nutShell focusIN Q.1 The Act is the first of its kind to make Corporate Social Responsibility (CSR) a mandatory provision. Do you see this as an effective step in ensuring that the CSR activities are actions undertaken beyond cheque book philanthropy? Ans.1 The provisions of the new Companies Act per se do not ensure that corporate enterprises would not indulge in philanthropy in the garb of discharging their corporate social responsibility. The new Companies Act only makes it mandatory for companies beyond a particular threshold of profit, net worth, or turnover, to ensure that 2% of their profits are spent on CSR activities. How the money is to be spent is not specified in the Act. This will have to be spelt out in the rules to be framed under this Act by the Ministry of Corporate Affairs. Schedule – VII of the new Companies Act gives an indicative list of activities which may be taken up under CSR by companies. The rules formulated under the Act will have to specify that the companies cannot simply donate money to charitable institutions which engage in such activities. DPE‘s present guidelines on `CSR and Sustainability’, which are effective since 1st April 2013, however, clearly advise the CPSEs not to spend CSR funds on philanthropy. The guidelines make it very clear that at least 80% of the CSR and Sustainability funds have to be spent on activities in a project mode, which entails advance planning, mobilisation of resources, allocation of budget, fixed timelines for different stages of implementation, and accountability of officials / agencies entrusted with execution of different tasks. Since CSR activities are to be implemented in a project mode by CPSEs with close involvement of their management in planning, implementation, monitoring and impact assessment stages, the chances of CSR getting relegated to cheque book philanthropy gets drastically reduced, if not completely eliminated. I would like to clarify here that DPE’s present guidelines on CSR and Sustainability would now have now to be reviewed and slightly modified in the light of the provisions of the new Companies Act and the rules framed thereunder. Q.2 How would you respond to the criticism regarding CSR being made a mandatory requirement as per the Act? Do you feel there is a difference of reaction between public and private reaction? Ans.2 Under the Companies Act, it is not mandatory for all companies to undertake CSR activities. Section 135 of the new Companies Act states that only those companies which have a net profit of over Rs. 5 crores, or a net worth of over Rs. 500 crores, or a turnover of over Rs. 1000 crores in any financial year shall ensure that at least two per cent of their average net profits of the preceding three years is spent on CSR activities. In case they are unable to spend that amount, the Companies Act 2013 “Under the Companies Act, it is not mandatory for all companies to undertake CSR activities. Section 135 of the new Companies Act states that only those companies which have a net profit of over Rs. 5 crores, or a net worth of over Rs. 500 crores, or a turnover of over Rs. 1000 crores in any financial year shall ensure that at least two per cent of their average net profits of the preceding three years is spent on CSR activities.” “Essential that the philosophy of CSR is infused in the DNA of the companies” An interview with Mr. Ashok Kumar Pavadia, Joint Secretary, Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises, Ministry of Industry, GoI reason thereof would have to be explained. Thus, all companies are not covered under the provision of mandatory spending on CSR; the coverage of companies is limited by the prescribed thresholds of profit, net worth or turnover. Moreover, even for those companies which are covered in the Act, the approach seems to be of `comply or explain’. But we will have to wait for the formulation of rules under the Act to be clear about the mandatory aspect of CSR spending by companies. Unfortunately, some Companies still perceive CSR as a drain on their resources, as something which nibbles on their profits, or which drills a hole in their pocket. Therefore, I personally feel that some private companies may not react very enthusiastically to the CSR provisions of the Companies Act, largely because they may not fully understand the concept and philosophy of CSR and its relevance and importance in the contemporary world of business. They may perhaps fail to understand that what is good for society and environment can also be good for business.
  • 7. 8 | Vol. 5 | Issue 1 | April-July 2013 nutShell Q.3 Coming back to the legal provisions, while making CSR a mandatory legal requirement, it does not establish penalties for non-compliance. Do you believe this would hamper the implementation of the clause on CSR? Ans.3 I do not subscribe to the view that the threat of penalties alone can ensure sincere compliance. I am personally not in favour of penalties. Perhaps incentives may produce better results. More importantly, we should attempt to change the mind- set of the management of the companies. Only when they realise the relevance of CSR and its enormous benefits for business, society and environment, will they take up CSR activities voluntarily, with full passion, and in right earnest. It is essential that the philosophy of CSR is infused in the DNA of the companies. Once CSR is internalised in the organisation’s culture, ethos, operations and processes, its sincere implementation by companies would be assured. Q.4 What do you envisage would be the role of Independent Directors with regards to the CSR policy of the company? Ans.4 The inclusion of an independent director as a member of the Board level committee on CSR is a welcome step. The presence of independent directors on the Board is widely acknowledged as enhancing their efficiency, enriching their deliberations, and thus, improving corporate governance. It is a general perception that at times Boards are under pressure to take up activities which are either not valid CSR activities, or are not aligned with the business policies and strategies of the company. Independent Directors can assist the Boards in resisting such pressures. Besides, they can enrich the quality of decisions taken by the Board by bringing in outsiders’vision and perspectives on CSR. DPE’s present guidelines on `CSR and Sustainability’are in consonance with the provisions of the new Companies Act in that the presence of an Independent Director on the Board level committee on CSR and Sustainability has been made mandatory for CPSEs. We have, in fact, gone a step further by stipulating that in case an Independent Director is not a member of the Board level committee on CSR and Sustainability, the entire amount allocated for such activities would be transferred to a Sustainability Fund which is contemplated to be created separately for CSR and Sustainability activities. This provision is meant to bring pressure on the CPSEs to ensure that an Independent Director is definitely inducted as a member of the Board level committee on CSR and Sustainability. Q.5 The Companies Act, currently excludes large number of Small and Medium Enterprises (SMEs) from its purview. Given that these SMEs contribute around 17 per cent of the total GDP and employ around 40 per cent workforce in India, do you think the current Act needs to include them? Ans.5 I personally think that all companies regardless of their size or profit margins have a duty to discharge their corporate social responsibility. Small and Medium Enterprises (SMEs), and even the loss making companies are expected to conduct their business in a socially, economically and environmentally sustainable manner. Companies with small or no profit may not be able to take up CSR projects and activities due to financial and resource crunch. But, surely, they can “More importantly, we should attempt to change the mind- set of the management of the companies. Only when they realise the relevance of CSR and its enormous benefits for business, society and environment, will they take up CSR activities voluntarily, with full passion, and in right earnest. It is essential that the philosophy of CSR is infused in the DNA of the companies. Once CSR is internalised in the organisation’s culture, ethos, operations and processes, its sincere implementation by companies would be assured.” The present DPE guidelines on `CSR and Sustainability’are to a very large extent in consonance with the provisions of the Companies Act in this regard. And, in my opinion, public sector enterprises in comparison to the private companies better understand the concept and philosophy of CSR. One, because for quite some time now they are used to spending a portion of their profits on CSR activities. DPE guidelines on CSR issued in 2010, and the revised guidelines issued in 2013 make it mandatory for Central Public Sector Enterprises (CPSEs) to undertake CSR activities. Of course, many CPSEs have been willingly doing a lot of commendable work under CSR even prior to the issue of DPE guidelines. More importantly, the extensive campaign carried out by DPE in the last couple of years to engage all the key stakeholders in a dialogue on CSR and Sustainability to sensitise them, especially the management of CPSEs on the relevance and importance of CSR has apparently paid rich dividends. Due to the persistent efforts of DPE, there is a widespread awareness of CSR and Sustainability in the public sector, and CSR initiatives taken by CPSEs have acquired the dimensions of a big movement in the corporate world.
  • 8. 9 | Vol. 5 | Issue 1 | April-July 2013 nutShell “I also feel that by simply confining CSR to just spending 2% of the profits of a company, we may be taking a moribund view of the scope, dimensions, and potential of CSR, and severely restricting the space in which it can operate.” imbibe the philosophy and spirit of CSR in their organisational culture, and adhere to the principles of UN Global Compact in their internal functioning. I also feel that by simply confining CSR to just spending 2% of the profits of a company, we may be taking a moribund view of the scope, dimensions, and potential of CSR, and severely restricting the space in which it can operate. According to DPE guidelines, even in their internal operations, their mainstream activities, and in their routine budgetary spending, CPSEs are expected to be conscious of their corporate social responsibility and reflect it in the goods and services which they produce. Q.6 How do you look at the leadership of the Global Compact, one of the largest CSR initiatives, with regarding to enforcing the clause of the new Companies Act? Ans.6 I think UN Global Compact principles are very pragmatic and useful for Businesses of all types. As a part of their CSR, Corporates should implement these principles in their internal organisational structure and in dealing with externalities, including all providers in the supply chain. However, this aspect will have to be mentioned in the rules which are framed under the provisions of the new Companies Act. As far as DPE’s present guidelines on CSR and Sustainability are concerned, it has been very clearly mentioned therein that CPSEs can seek guidance from the principles of UN Global Compact in formulating their CSR and Sustainability policies. Q.7 What are the major challenges that you feel would be pertinent from the point of view of the corporates and their compliance with CSR provisions of the act? Ans.7 The real challenge would be in the implementation of CSR provisions of the Act. The devil always lurks in the implementation part. The resistance which may emanate from the companies would mainly arise due to their lack of understanding of the concept and philosophy of CSR and its relevance in the business world. A lot will also depend on how the rules are framed under the provisions of the new Companies Act. Framing of rules itself would be a challenge.
  • 9. 10 | Vol. 5 | Issue 1 | April-July 2013 nutShell Secretary Mr. S. Satish Rao Additional General Manager Bharat Heavy Electricals Limited President Mr. Sudhir Vasudeva Chairman & Managing Director Oil & Natural Gas Corporation Treasurer Mr. H. D. Gandhi Chief Manager – HR Indian Oil Corporation Limited Special Invitee Mr. Chandrajit Banerjee Director General Confederation of Indian Industry Vice President Northern Region Dr. S. P. S. Bakshi Chairman-cum-Managing Director, Engineering Projects India Limited (EPIL) Co-opted Member Mr. C. S. Verma Chairman Steel Authority of India Special Invitee Dr. A. Didar Singh Secretary General Federation of Indian Chambers of Commerce and Industry Vice President Eastern Region Mr. R. Mohan Das Director - Personnel & IR, Coal India Limited Co-opted Member Dr. A. K. Balyan Managing Director & CEO Petronet LNG Special Invitee Mr. D. S. Rawat Secretary General The Associated Chambers of Commerce and Industry of India Vice President Western Region Ms. Beroz Rumie Gazdar, Sr. Vice President - Group Sustainability Mahindra & Mahindra Limited Member Dr. Uddesh Kohli Chairman Emeritus, Construction Industry Development Council Member Mr. Anoop Kumar Mittal Chairman-cum-Managing Director, National Buildings Construction Corporation Limited Member Dr. Vinod Singh Vice Chairman CCLP Worldwide India Member Brig. Rajiv Williams Corporate Head – CSR Jindal Stainless Limited Co-opted Member Dr. Joy Deshmukh Global CSR Head Tata Consultancy Services Special Invitee Ms. Rekha Sethi Director General All India Management Association Vice President Southern Region Mr. N. K. Nanda Director (Technical) NMDC Limited Special Invitee Dr. U. D. Choubey Director General, Standing Conference of Public Enterprises Governing Council of Global Compact Network India 2013-2015
  • 10. 11 | Vol. 5 | Issue 1 | April-July 2013 nutShell June 2013 Role on Affirmative Action through Corporate Action: Role of India Inc. in Inclusive Growth Global Compact Network India jointly with NACDOR organised the round table conference on‘Role on Affirmative Action through Corporate Action: Role of India Inc. in Inclusive Growth’on 28th June. The meeting witnessed a theme setting speech by Mr. Bharat Wakhlu, Resident Director, Tata Services - Tata Group and discussion on the role of corporates in affirmative action. Some key speakers at the event included Dr. Uddesh Kohli, Senior Adviser, UNGC; Mr. Ashok Bharti, Chairman, NACDOR; Dr. Serge Younes, Senior Consultant, Accenture and Mr. Pooran Chandra Pandey, Executive Director, GCNI. July 2013 The Strategic Necessity of Corporate Social Responsibility and Business Sustainability Indian Oil Corporation hosted the July Monthly Meeting on the theme‘The Strategic Necessity of Corporate Social Responsibility and Business Sustainability’on 30th July 2013. The meeting included a presentation on‘The Strategic Necessity of Corporate Social Responsibility and Business Sustainability’by Mr. Bibhuti Pradhan, CM (HR), Indian Oil Corporation Limited, and on Business Sustainability by Mr. Vinod Pandey, General Manager - Government Affairs, BMW India Pvt Ltd. The presentations focussed on the necessary importance of CSR and sustainability in business operations. Some eminent dignitaries at the event included Mr. Lee Bee Sen, Executive Director (HR & CSR), Indian Oil Corporation Limited, Dr. S .P. S. Bakshi, Vice President (Northern Region), GCNI & CMD, Engineering Project India Limited (EPIL) and Mr. Ashok Kumar Pavadia, Joint Secretary, Department of Public Enterprises, Government of India. meetingsMonthly May 2013 Advancing Social Integration and Intergenerational Solidarity Global Compact Network India jointly with SERFAC organised the book launch and panel discussion on the theme‘Advancing Social Integration and Intergenerational Solidarity’on 15th May 2013. At the event, the book titled‘Family: Heart of Humanity’was launched by Honourable Justice Leila Seth, who in her address drew the attention towards the importance of the book to scholars and development practioners. The event also included a panel discussion on the theme‘Advancing Social Integration and Intergenerational Solidarity’and was informed by dignitaries and experts such as Mr. Soli Sorabjee, Former Attorney General of India; Prof. Dr. Reeta Sonawat, Professor and Head Human Development, SNDT Women’s University; Dr. Lalit Kumar, Adviser, Voluntary Action & Youth Affairs, Planning Commission; Dr. Uddesh Kohli, Senior Adviser, UNGC; and Col. Prakash Tiwari, Head CSR, Jindal Steel & Power Ltd. April 2013 Women Empowerment Initiative in India - Gender Equality Means Business Global Compact Network India organised its April Monthly Meeting on 20th April on the theme‘Women Empowerment Initiative in India – Gender Equality Means Business’. The event witnessed a key note address by Ms. Tine Staermose, Director, ILO Decent Work Team for South Asia and Country Office for India, and presentations on‘WEPs Initiative in India’by Ms. Subhalakshmi Nandi, Women’s Economic Empowerment Specialist, UN Women, on‘Women’s Empowerment Principles’ by Ms. Rashmi Singh, Executive Director, Gender Equity and Diversity CARE India and by Dr. Manju Karla Prakash, Executive Director, FICCI Ladies Organization (FLO).
  • 11. 13 | Vol. 5 | Issue 1 | April-July 2013 nutShell eventsUpcoming Global Compact Network India jointly with Deloitte, has conceived a significant training programme on Sustainability and Corporate Governance for the member companies. The training programme has been designed to train the members on key sustainability and CSR frameworks and sharing of best practices across sustainability and CSR, value chain and its linkages with the UNGC principles. The training would also enable informing the CSR and sustainability mandate of the organisation and mapping and aligning it with the UNGC principles’ requirements. The training would be carried out in 6 Indian cities namely; Delhi, Mumbai, Kolkata, Bangalore, Hyderabad and Chennai during September and October 2013 and will be facilitated by trainers from Deloitte with considerable experience in sustainability domain. Held every three years, the Leaders Summit is the premier UN-business event – bringing together chief executives with leaders from civil society, Government and the United Nations. The largest gathering of its kind, the Leaders Summit represents a unique opportunity for Global Compact participants to discuss corporate sustainability strategy at the highest level, and produce strategic recommendations and action imperatives for the future of the initiative. The Leadership Summit for the year 2013 is scheduled to be held on 19th and 20th of September 2013 in NewYork. Chaired by UN Secretary-General Ban Ki-moon, the Leaders Summit –‘Architects of a Better World’– will link the enduring, universal values of the United Nations with a new global architecture for corporate sustainability. As the Millennium Development Goals 2015 deadline approaches, the Summit will set the stage for business to shape and advance the post- 2015 development agenda – putting forward architecture for business to contribute to global priorities at unprecedented levels. Global Compact Network India jointly with expert advisers and specialists, from the United Nations Global Compact and Pacific Institute, New York has conceptualised the India Collaboration Lab with the aim to convene social entrepreneurs, NGOs, corporations, investors and policy-makers in an action-oriented event to identify and design initiatives to scale innovations that increase the access to quality water and sanitation services in India. The collaboration lab has been designed to concentrate and deliberate on themes highlighted in India’s 2012 National Water Policy, build upon the strategies advanced at the March 2013 CEO Water Mandate Corporate Water Stewardship Conference, develop engagement strategies and demonstrate multi-stakeholder collective action. The programme to be organised in New Delhi during 22nd and 23rd October 2013, is a 1 ½ day event for Chief Executive Officers, Executive Directors, Chief Sustainability Officers, Founders, Managing Directors, policy-makers and others who are ready to align with a diverse set of stakeholders and act in collaboration to increase the effectiveness and reach of water and sanitation projects in India. The Rio+20 Conference in Rio de Janeiro, Brazil outcomes have brought in renewed focus on the imperative for the business fraternity to channelise their resources and integrate sustainability concepts across the value chain. It also offers a unique opportunity for a concerted effort in creating a sustainable future. GCNI and BMW in line with this agenda are organising the India Sustainability Dialogue on 15th November 2013 in New Delhi. The event intends to create a platform to engage key stakeholders in constructive deliberations on sustainability related challenges and recommendations to solve it. The platform will provide for sharing of good practices followed across various sectors. Sustainability and Corporate Governance Training in Partnership with Deloitte Mumbai, Bangalore, Hyderabad, Chennai, Kolkata and New Delhi UN Global Compact Leaders Summit New York, USA India Sustainability Dialogue New Delhi India Collaboration Lab New Delhi
  • 12. 14 | Vol. 5 | Issue 1 | April-July 2013 nutShell • 4th Subir Raha Memorial Lecture – Post event release • Annual Report • Yearbook on Monthly Knowledge and Sharing Meeting • A situation Paper on Strengthening Transparent and Ethical Corporate Governance to Further Responsible Development publicationsUpcoming eventsUpcoming International Symposium on ‘Business Ethics, Transparency and Compliance: Need for Responsible Management Approach’ would be organised by Collective Action Project at Global Compact Network India, in partnership with United Nations Principles of Responsible Management Education. The Symposium will be hosted by Canara Bank of Management School, Bangalore University on their campus in Bangalore on October 30, 2013. The symposium would explore following sub themes • Rethinking Business Ethics in wake of emerging regulatory framework across different contexts • Experiences in managing transparency and anti-corruption in the organisations (2008 onwards) • Small and Medium Enterprises (SME’s) in the contemporary Anti-Corruption discourse • Transparency and ethics interface with corporate strategy • The nexus between Corporate Strategy and Business Responsibility • Beyond Compliance: Expanding the canvas of business responsibility in emerging India • Conflict of interest and its’ impact on transparent management of business functions • Whistle-blowing and loyalty issues in the organisations. Global business is vastly more complex than the simple act of selling a product or service to a consumer. Business is accomplished through the elaborate networks of the supply chain – the persons, entities and infrastructure that transform materials and human capital to intermediate and finished products and services for customers and consumers. The problem of corruption affects every business in the supply chain, so all must work together to tackle this problem. As the news media regularly reports, the misdeeds of suppliers can directly affect a customer’s product and service quality. At the same time, suppliers who may themselves be large MNCs. Thus all businesses need to attune themselves to the problems of corruption in order to protect their own products, services and reputations. A National Consultation on Supply Chain Transparency and Sustainability would be held in Mumbai in November 2013 to deliberate on the above issues and come up with basic guidelines. This National Consultation would be in partnership with mJunction and run concurrently with Intermodal India, a logistics tradefair. UNGC working group on the 10th Principle against Corruption is a multi-stakeholder issue specific body which steers anti-corruption activities globally. The group on the 10th UNGC principle on anti-corruption was launched after the introduction of this principle in 2004. This Multi-Stakeholder working group facilitates a discussion amongst businesses, provides guidance to the Global Compact and most importantly it ensures alignment of various anti-corruption initiatives. The 12th Working Group Meeting was held in New Delhi on April 2013. CAP India will actively engage with the 13th Anti-Corruption Working Group Meeting to be held in New York on International Anticorruption Day i.e. December 9, 2013. International Symposium on ‘Business Ethics, Transparency and Compliance: Need for Responsible Management Approach’ Bangalore National Consultation on Supply Chain Transparency and Sustainability Mumbai 13th Working Group Meeting New York, USA
  • 13. 15 | Vol. 5 | Issue 1 | April-July 2013 nutShell Membership Benefits KEY BENEFITS OF JOINING GLOBAL COMPACT NETWORK INDIA • Global Ethical Framework: Any stakeholder joining GCNI enters into a Global Ethical Framework by embracing universal principles on Human Rights, Labour, Environment and Anti-corruption long recognised by governments all over the world but not yet universally implemented. • Induction, Training and Communication of Progress: Companies are provided by way of briefing and training activities to the key staff on what it means to be part of the UNGC and how they can contribute to their organisation’s CSR activities and other initiatives which cover broadly the ten principles of UNGC. Assistance is also provided to companies in preparing their annual Communication of Progress (COP) as part of their commitment to the principles of UNGC. • Integrated Platform: The network provides a high- impact collective action platform by way of Knowledge Sharing and Network Meetings; Regional Conclaves and National Convention in which leaders from all over the country representing various sectors meet to address and explore how collective action can create incentives for ethical business performance and on some of the most urgent social and environmental challenges of our times. It also strengthens corporate citizenship and develops partnership projects to the achievement of the Millennium Development Goals. • Publication and Communication: Create a window of opportunity for the stakeholders to share their good practices to a larger global audience by way of publishing in Annual UNGC documents and through electronic communication by means of UNGC & GCNI websites. • Participation in the Governance of the Network, including election to the Governing Council or becoming member of subject sub-committees which would bring in varied stakeholders on board and add vibrant leadership, visibility and credibility to the organisation. • Collective Action Project on Anti-corruption and Green Economy provides an enabling platform at the country level where different stakeholders address various issues related to corruption. Further, it acts like a forum to share information and experiences and find way and means to collectively fight against corruption and mitigate challenges related to environment. • Representation through State, National and International Forums: GCNI is a pan India membership driven network, state chapters bring in not only the existing but potential stakeholders to actively take part in the activities and initiatives of GCNI. Stakeholders are provided with opportunities to represent GCNI in National and International Forums. Global Compact Network India One of the key elements of the UNGC initiatives is the existence of business led multistakeholders platforms of local networks which provide an opportunity for members to share experiences, innovative practices and collaborates for furtherance of responsible business values within country specific contexts. The Global Compact Network India was formed by the UNGC participant companies from India. It was registered in New Delhi in November 2003 as a Non-Profit Society to function as the Indian Local Network of the Global Compact Programme, functioning within a globally recognised and established initiative with a pan India membership base. Global Compact Network (GCN) provides an extremely relevant vehicle for Indian Companies- Large & SME, Academic institutions and Civil Society organisations to join hands towards strengthening responsible business initiatives in India and internationally. Why Join Global Compact Network India Today when the most progressive companies are focusing on CSR, Global Compact is the right platform to demonstrate nationally and internationally the commitment to CSR and ethical working of the companies. Voluntary guidelines on CSR by Ministry of Corporate Affairs lay emphasis on almost the same core issues as advocated by UNGC. Department of Public Enterprises has also issued guidelines on CSR for CPSEs which make a reference to UNGC. There are four categories of members in the network: 1. Corporate Members (Companies / Corporations) 2. SME Members (Small & Medium Enterprises) 3. Institutional Members a) Non-Profit Making Societies b) Trusts c) Educational and Research Institutes d) Govt. Departments 4. NGO Members a) Civil Society b) Non-Government or Labour Organisations Membership fees Membership Category Entrance fees (in Rs.) Annual Fees (in Rs.) Lifetime Membership (in Rs.) 1 Corporate Members Upto ` 500 Crores in the preceding year 25,000 25000 2,50,000 2 Above ` 500 Crores 50,000 50,000 5,00,000 3 SME Members 10,000 10,000 1,00,000 4 Institutional Members 10,000 10,000 1,00,000 5 NGO Members 10,000 10,000 1,00,000 *A service tax of 12.36% would be applicable on the above mentioned fees structure.
  • 14. About Global Compact Network India The Global Compact Network India was formed in November 2003 and was registered as a non-profit society to function as the Indian local network of the UN Global Compact programme. It is the first local network in the world to be established with full legal recognition. Global Compact Network India (GCNI) is a country level platform for businesses, civil society organisations, public sector and aids in aligning stakeholders’ practices towards the Ten Universally Accepted Principles of UNGC in the areas of Human Rights, Labour, Environment and Anti – corruption. At present, the India network ranks among the top 3, out of the 101 local networks in the world, and has emerged as the largest corporate citizenship and social responsibility organisation in the country with a pan India membership of 126 organisations, who have strengthened their commitment to the UN’s Global Compact Principles by becoming proud signatories of the local network, GCNI. The Global Compact Network India Office Scope Complex, Core 5, 6th Floor (ONGC Office), 7 Institutional Area, Lodhi Road, New Delhi Email: gcnindia@gmail.com www.globalcompact.in Disclaimer: This publication is intended strictly for learning purposes. The inclusion of company names and/or examples does not constitute an endorsement of the individual companies by the Global Compact Network India Office. The material in this publication may be quoted and used provided there is proper attribution. DesignedandPrintedby:RootsAdvertising The Ten Principles of the United Nations Global Compact Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses. Labour Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation. Environment Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

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