CSR focus yields cos rich rewards in mine belt

Helps Win Confidence Of Locals, Making Project Path Smoother

THERE was a time little Arsu Tadu hated going to school. She had to walk six km every morning to reach a rundown shed, which was the local school in their neighbouring village near Rukka in mineral-rich Jharkhand. 

    While at school, Arsu sat on the floor with 70 other noisy kids and when the teacher asked her to add 4 and 3, Arsu took out four bangles from her righthand and three from her left. That may have qualified as an innovative demonstration of understanding of maths anywhere else, but her teacher then didn't think much of it and boxed her ears. 
    Arsu was scared to go back to school. Under normal circumstances, tribal children like her would have dropped out to spend their childhood collecting firewood or grazing goats. But thanks to her persistent parents and a new Low-Cost High-Quality School (LCHQ) that came up in Rukka in 2008, Arsu and many others like her are able to complete their primary education. 
    LCHQ schools are run by Krishi Gram Vikas Kendra (KGVK), an NGO set up by the Usha Martin Group in 1972 in partnership with IL&FS. It may have been smart corporate social responsibility, and prompted by altruism, but Usha Martin chairman BK Jhawar says that corporate altruism is also paying dividends. Cos step up efforts to make CSR self-sustainable 
SCHOOLS that stoke the curiosity of little Arsu are at the heart of a new churn happening in several mineral-rich provinces where Indian corporates that have invested in community-building efforts in the past are reaping benefits while billion-dollar projects announced by global behemoths struggle to take off. In the past five years, the mineral belts of Jharkhand, Orissa and Chattisgarh have witnessed dozens of multi-billion dollar projects going into deep freeze as local resistance has mounted over what is alleged as usurping of tribal land. 
    The successful CSR activities under way in these areas vary from plain-vanilla livelihood work to reskilling training at industrial training institutes with the promise that the candidates will be absorbed into the new industrial projects of the parent company. "For mid-rung companies with big aspirations, it makes sense to invest in CSR now," says Nittin Johri, CFO of Bhushan Steel. The company, with a new unit at Dhenkanal in Orissa and an upcoming unit near Asansol in West Bengal, is among few groups that have taken up community welfare programmes on their own, through an internally created, CEO-led team.
    For groups like Usha Martin, a dedicated CSR arm is a catalyst for change. The company believes that it was its dedicated work among the community that helped it win the confidence of locals and start coal mining operations in Daltongunj, a Maoist-affected area. "Ours is perhaps the only coal mine to have started operations in Jharkhand in the past few years. We also managed to start an iron ore mine at Bada Jamda in Jharkhand. These models could not have been created overnight," Mr Jhawar says. 
    Availability of land wasn't a major hurdle for India Inc even 10 years ago. But thanks to the Singur agitation that captured national headlines, the scenario has changed. Today, few companies hoping to set up projects in these areas can afford not to invest in CSR, says Bhushan Steel's Johri. He reasons that companies need to be in direct touch with the locals and work for their welfare to gain their trust. If locals see tangible benefits from a company's community welfare programmes, they are much more ready to sell land to it for new plants, he says. 
    "The process becomes even more tricky when we talk about agricultural land because there is an emotional equity attached to such land, which few things can match. Hence, the need for intense and sustained CSR," says Manoj Agarwal of steelmaker Adhunik Group. So, when Adhunik moved in to set up a 500-mw thermal power plant in Jharkhand recently, they began with a census in the villages in and around the project site to get a fix on living standards and build a sustainable model around it. 
    "Paying only market price for the land may not be enough in the long run. We had to assist them to make their livelihood more sustainable. So, we chose to concentrate on basics like health and education," says Mr Agarwal. The recently set up Usha Martin Rural Services, a rural BPO at Rukka, some 25 km from Ranchi, is powered by 150 pre-trained rural youth. "The next step is to make these efforts self-sustaining," says chairman Mr Jhawar. The BPO apart, the group also started a silk centre and a silk producers co-operative in Katotia near Palamau. The introduction of the concept of total village management, biotic insecticides or indigenously developed Krishi Usha weeders has attracted the attention of IFC, Washington, which now plans to start a full-fledged course on Usha Martin's cumulative ground experience. 
    Adhunik has tied up with Don Bosco, the premier educational and missionary institution, for talent development of women and girls in Rourkela. As part of its CSR efforts, women in and around the company's site make phenyl and detergents under the 'Smile' brand to sell it in nearby towns. The CSR work of JSW Steel is personally monitored by vice-chairman Sajjan Jindal and his wife while each CEO is responsible for an integral part of the project in his company. With plans to set up a greenfield unit at Salboni in the Maoist heartland of West Bengal's West Midnapore district, the company decided to choose four thrust areas — food for children, education, healthcare and women empowerment. 
    "Despite a slowdown in the Bengal project work in the past one year, we have been carrying on with our welfare activities. We do all out CSR jobs through an in-house team," says Biswadip Gupta, CEO of JSW Bengal Steel. In healthcare, for example, JSW chose 25,000 villages contiguous to the proposed plant boundary, where it employs three doctors who go around six days a week inside villages with an ambulance and a team of nurses. In the past three years, numerous medical camps were organised. The company also took over an industrial training institute in Jhargram and has been running it for the past two years. 
    All this seems to have built up JSW's brand equity in Maoist heartland among local villagers, layer by layer. The upshot: JSW was one of the few steel companies which managed to acquire around 4,000 acres for its steel project without a fuss. "When project work starts, we will hopefully be able to identify our requirement and employ people with the right skillsets," says Mr Gupta. 
    Big ticket projects like Posco, ArcelorMittal or Vedanta, too, have engaged in CSR activity, but have remained stuck due to a number of reasons. The location and size of land to be acquired is also a key factor. According to Abhirup Sarkar, Professor at the Indian Statistical Institute in Kolkata, small and medium firms have definite advantages over big companies on this front. "Smaller firms also have an advantage in terms of requirement of land. They can also hire a lot more locally given their level of technology," he adds.