Corporate Responsibility not negotiable

The Bhopal tragedy that led to more than 25,000 deaths in December 1984, the long and questionable process of justice and the depressing verdict delivered by the District Magistrate Court in Bhopal, Madhya Pradesh on June 7, 2010 and the public outrage have exposed the legal anachronism.

Public outrage has been uniformly vociferous, and the Federal Government has done well to appoint a ‘Group of Ministers’ to examine the verdict, public liability and other relevant issues.

Former Indian President Dr A P J Abdul Kalam said the output of law and judiciary was not proportionate to the sufferings of the people.

The tragedy has popped up the important question of Corporate Social Responsibility and its absence from many companies, notably some of the international giants including Union Carbide whose pesticide plant was the culprit in question, with its utter lack of safety systems.

Corporate social responsibility has blossomed as an idea over the past 15 years, if not as a coherent practical programme, commanding the attention of executives especially that of the managers of multinational companies headquartered in Europe and the US.

Today corporate social responsibility, if it is nothing else, is the tribute that capitalism everywhere pays to virtue.

However, a number of critics in India have accused Union Carbide (US) and its owner Dow Chemical Company of having ignored their Corporate Social Responsibility.

The situation has however changed dramatically over the years.

It would be a challenge to find a recent annual report of any big international company that justifies the firm’s existence merely in terms of profit, rather than “service to the community.” Such reports often talk proudly of efforts to improve society and safeguard the environment by restricting emissions of greenhouse gases from the staff kitchen, say, or recycling office stationery before turning hesitantly to less important matters, such as profits. Big firms nowadays are called upon to be good corporate citizens, and they all want to show that they are.

On the face of it, this marks a significant victory in the battle of ideas. The winners are the charities, non-government organisations and other elements of what is called civil society that pushed for Corporate Social Responsibility in the first place. These well-intentioned groups certainly did not invent good corporate citizenship, which goes back a long way. But they dressed the notion in its new garb and moved it higher up the corporate agenda.

In public-relations terms, their victory is total. In fact, their opponents never turned up. Unopposed, the Corporate Social Responsibility movement has distilled widespread suspicion of capitalism into a set of demands for action.

As its champions would say, they have held companies to account, by embarrassing the ones that especially offend against the principles of the movement, and by mobilising public sentiment and an almost universally sympathetic press against them. Intellectually, at least, the corporate world has surrendered and gone over to the other side.

Corporate Social Responsibility is now an industry in its own right, and a flourishing profession as well. Consultancies have sprung up to advise companies on how to discharge the responsibility and score public relations points.

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