CSR TIMES interviewed Mr Lee Bee Sen, Executive Director-HR and CSR, Indian Oil to know more about what IOC’s CSR policy is and how he sees the future of CSR in India. Here are the excerpts of the interview.
Tell us about the evolution of IOC’s CSR policy
Since inception IndianOil has been supporting large no. of social welfare and community developmental initiatives. In 1990, Community Development (CD) budget was earmarked for high priority areas like “Clean Drinking Water”, “Health & Medical Care” and “Expansion of Education”, preferably in the vicinity of IndianOil’s major installations / establishments for improving quality of life of the community, which include marginalized groups viz. SCs, STs, etc. under “Special Component Plan” and “Tribal Sub-plan”. In 1991, ceiling for annual expenditure towards donations, contributions and community development activities was set at 0.5% of Net Profit registered during the previous year. In the year 2000, this ceiling was revised to 0.75% of the Net Profit registered during the previous year. In the year 2009, this ceiling was once again revised to 2% of Retained Profit registered during the previous year.
What does IOC’s present CSR Policy tell?
At present, IndianOil has a policy of setting aside upto 2% of its Retained Profit of the previous year towards CSR, which are taken up in a planned manner, based on the local communities’ requirements. The policy on CSR states that:
- a) Expenditure not exceeding 2% of the Retained Profit of the previous year can be incurred towards donations/contributions and community development activities every year. This is inclusive of the annual contribution of Rs.10 crore towards IndianOil Foundation.
- b) LPG Schemes: IndianOil contributes 20% of 2% of Net Profit of previous year towards LPG scheme(s) of Government of India.
- c) Donations/contributions and Community Development activities are focused in specific target areas to establish a corporate culture on the subject. After allocating annual contribution towards IndianOil Foundation and LPG Scheme(s), the remaining amount would be utilized as like – A minimum of 35% towards national causes/natural calamities; Amount not exceeding 5% towards donations/contributions; 30% towards IndianOil’s scholarships, out of which 50% would be utilized towards providing scholarships to students belonging to weaker sections of society and 50% for others; 30% towards Community Development activities including Special Component Plan and Tribal Sub Plan.
- d) While utilizing the Community Development Funds, more emphasis is laid on the projects of providing Clean Drinking Water, Health & Medical Care and Education to the extent possible.
- e) Unspent amount, if any, will be carried forward to the next year.
Tell us about your CSR Team.
IOC has a dedicated CSR Cell that operates from Corporate Office in New Delhi. This CSR Cell is headed by me. In addition there are four sub divisions which are looked after by senior executive with 15-20 years of experience in the company. So, they are aware of the company policies and its vision thoroughly. There are also 30 nodal CSR cells in all the major locations across India. Each nodal cell is represented by one officer. Our team consists of those who have a bent of mind towards CSR, because it is something which cannot be imposed. Only those who are willing to or can contribute constructively towards our CSR vision are made part of this team.
How do you create awareness about CSR amongst the stakeholders of IOC?
IndianOil CSR policy has been made available on the IndianOil website as well as the intranet site. IndianOil communicates its CSR activities through a separate CSR section in its Annual Report. IndianOil also publishes a Sustainability Report every year (which meets GRI-G3 guidelines). IndianOil also communicates about its CSR activities to its employees through its in house daily e-journal, IndianOilXpress. IndianOil conducts in house workshops on CSR for its employees with faculty assistance from leading Institutes as well as participation of CSR practitioners from the leading Maharatna/Navratna PSUs in the country. The last series of workshops were held during July-2011 & June-2012 at New Delhi and June-2012 at Mumbai. Employees are often nominated for workshops and training programmes on CSR conducted by external agencies also.
How do you pick up projects for your CSR?
We allocate funds after baseline studies are conducted by our experts. Divisions based at 30 locations conduct their own baseline studies and based on the findings it is decided which projects are to be taken up. Then prioritization happens on a) what is the need of the local people, and b) availability of funds.
We would rather like to contribute meaningfully to the society than doing philanthropy. We avoid doing philanthropy, unless it is something very grave, like the recent disaster in Uttarakhand. We donated Rs.2 Crores to the CM’s Relief Fund for Uttarakhand. Apart from money, our people are already doing work to provide free meals, free shelters to the distressed people there. We are also in the process to discuss and decide if IOC can adopt few villages in Uttarakhad and resurrect them.
Please highlight some of the CSR Activities of IOC.
IndianOil has a policy of setting aside upto 2% of its Retained Profit of the previous year towards CSR activities. Health & Medical Care, Education and Clean Drinking Water are the CSR thrust areas of the Corporation. I may highlight some of the areas where we are actively involved with our CSR activities:
IndianOil Sachal Swasthya Seva in AP & UP
In Jan-2012, IndianOil launched primary mobile healthcare scheme titled “IndianOil Sachal Swasthya Seva” for running 52 Mobile Medical Units (MMUs) in AP and UP. MMUs are linked to small format rural retail outlets called Kisan Seva Kendra (KSK). MMUs travel to the villages in the vicinity of KSKs with a 4 member team headed by a Doctor (MBBS) to provide free primary healthcare and free medicines. 52 MMUs will touch lives of about 1.5 million patients every year.
Assam Oil Division Hospital, Digboi
This 200-bed hospital with modern facilities, caters to about 2 lakh population with catchment area extending to neighboring Arunachal Pradesh and other areas of the North East.
Swarna Jayanti Samudaik Hospital, Mathura
This 50-bed hospital provides medical assistance to residents near Mathura Refinery area. Two mobile dispensaries have also been set up to provide medical care to nearby villagers. The hospital provides free treatment to the destitute and offers subsidized treatment to others.
IndianOil TATA Care Centre, Kolkata
IndianOil has launched Cancer Care Initiative with development of Phase-II of TATA Medical Centre, Kolkata for addition of 250 beds, which will have well-trained professional staff and a comprehensive Cancer Care Center equipped with modern facilities.
Assam Oil School of Nursing (AOSN), DIGBOI
AOSN provides professional training and diploma courses in the field of nursing and midwifery to young girls, where all costs are born by IndianOil. So far, 317 girls have successfully completed the course with 100% placement record.
IndianOil EDUCATION Scholarship Scheme
IndianOil Education Scholarship (Rs.1000-3000/month) is awarded to 2600 poor and deserving students, which are given on merit-cum-means basis to students pursuing full-time courses in 10+/ITI, Engineering, Medical and Business Administration.
IndianOil Sports Scholarship Scheme
150 scholarships for 19 games/sports are awarded to upcoming junior players of 14-19 years of age. The scholarship amount varies from Rs.9000/- to Rs.14000/- per month for 3 years and cost of kit items is also paid by IndianOil.
IndianOil (AOD) Industrial Training Centre (ITC), Digboi
ITC, under the aegis of National Council for Vocational Training (NCVT), conducts Industrial Trade Courses in various technical disciplines. ITC has a capacity of 68 seats and offers a three year Fresher Trade course and specialization in jobs viz. Fitter, Electrician, Turner, Mechanic (Motor Vehicle, Refrigeration, Air Conditioning, etc.
Clean Drinking Water
IndianOil successfully implemented a clean drinking water project in two water-parched villages near Mathura Refinery for providing drinking water to 400 village households at doorstep.
IndianOil Foundation (IOF), a non-profit Trust, in collaboration with ASI and NCF of the Government of India have undertaken work for preservation, restoration and conservation of monuments and develop tourist friendly facilities in the monument complex, like, Sun Temple at Konark, Odisha; Vaishali, Bihar; Khajuraho, Madhya Pradesh; Warangal Fort, Andhra Pradesh
IndianOil contributes 20% of 2% previous year’s Net Profit towards release of one-time grant to Below Poverty Line (BPL) families in the rural areas for release of new LPG connection under Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY) and Rasoi Ghar (Rural LPG Kitchen).
Out of all the CSR activities that IOC is doing, which one is your personal favourite?
Assam Oil School of Nursing. It was established in the year 1986. Since then it has been offering a 4½ year diploma course in General Nursing and Midwifery, recognized by the Indian Nursing Council, where local girls are trained to be professional nurses. 20 Students per year are awarded Diploma by the Nursing School and till date over 350 girls have obtained diploma in Nursing and Midwifery courses. The entire cost of training is borne by IOC and the students are also paid a monthly stipend of Rs3000 – 6000 during their training. Now a Diploma course, but in future we plan to convert it into a Graduation/Degree course. The successful students get employed in good hospitals and there is a big demand for AOSN trained nurses. This school has been able to transfoms lives of hundreds of poor families by making these girls employable. On an average the trained nurses earn Rs. 20,000 to 25,000 every month, whereas in some cases they have been employed even at Rs. 80,000 to 1,00,000 per month.
We talk about Sustainability in the same breath while referring to CSR. How would you like to define Sustainability?
Sustainability is the survival of a company within the Eco-system of the society where it exists. A company can sustain and survive only if the society and environment, within which it operates, survive. Sustainability is the sum total of 3 Ps, which are, People, Planet, and Profit. In other words, the society, the environment and the business itself have to supplement and compliment each other constantly.
What role do NGOs play in your CSR initiatives?
Quite a large number of projects have been implemented through NGOs only. They play a major role in success of our CSR activities. Because they are more connected to the concerned issues that need our attention. They help us in a big way in conducting the baseline studies that I talked about earlier. Moreover, there is now a govt. guideline that CSR activities should happen through NGOs/Third Party subject matter experts. Almost every CSR project has some kind of intervention by these experts, which definitely helps us in carrying out our activities more fruitfully.
Your opinion on the Govt’s intention to make CSR mandatory.
Ourganisations like us, are already following the Guidelines on CSR issued by Department of Public Enterprises. According to their mandate, companies earning 500 cr of net profit, like IOC, must allocate 1-2% of their last year’s net profit into CSR activities. But this decision will barely affect larger enterprises or PSUs who are already doing CSR. Whether it will have an effect on the private sector or smaller businesses, that only time will tell. There is already some debate going around about the viability of this decision. But in my opinion making CSR compulsory will see more positive outcomes for the society.
How do you see the future of CSR in India?
Promising, provided we develop CSR professionals who will properly set the rules of the game and implement projects. Because the Companies Act Bill will be very broad and might cover the entire picture in couple of pages. But by rules of the game, I mean there has to be a clear cut guideline as to what to do, what not to do, penalty clauses, etc. need to be chalked out. Many institutions and B-schools will now start providing courses on CSR and Sustainability. The success of CSR in India will largely depend upon the quality of relationship between business entities and stakeholders which has to improve. The future of CSR will also depend on how CSR will be included as a strategic objective in the company’s vision.
Can you establish a relation between a Company’s CSR policy and it retention plans?
TATAs, ITCs etc. have been doing CSR for ages. But I have my doubts whether people join TATA and ITC to serve society rather than earn a living for themselves! CSR can definitely improve the brand image of a company and that may attract potential candidates to join. But to retain them, CSR programmes will just be one more thing. Surely, the value of the corporation improves because of the CSR policy and mission in terms of market capitalization, equity, profitability. Branding will definitely attract people.
If some projects come to your notice through CSR Times, would you like to take them up?
See, our first and foremost requirement to initiate a CSR activity is to see where do you want us to work. Our CSR policy advices us to take up projects in those areas areas which are in close proximity to our workstations / plants / offices. Second, what does our baseline study say about the need of the project? If the study results show that the project highlighted by CSR TIMES is really some worth in terms of betterment of society as a whole, then that can be considered.
Do you career opportunities for youngsters in CSR?
It has to be. CSR and Sustainablity as a package can offer a very big opportunity. Companies will surely need professionals to join their CSR team.
What is the mantra for a successful CSR?
In my opinion, to make a CSR activity successful, every employee or an organisation has to be CSR centric rather than few handful of them.
What is your Message to the SMEs in respect of how they can better their CSR activities?
They are already doing a lot of good work. They are much closer to the society than the larger organizations. Creating job opportunities, giving employment to local people, utilizing local resources etc. Although the rules of the game will remain same for SMEs and larger organsaitons, but they can surely make their CSR efforts worth it, by measuring the effectiveness of their programmes. For that they must keep a check not on how much was spent, but how much impact it has made to the society. I wish them and every organisation that is doing something good for the society, all the very best.