CHAPTER are different, Corporate Social Responsibility tries to

CHAPTER 1

KMML AND CORPORATE
SOCIAL RESPONSIBILITY

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                        Corporate Social
Responsibility, commonly known as CSR is a management concept where a company
or an organization combines their business with social and environmental
concerns. The main purpose of CSR is to indentify and improve a company’s impact
on social surroundings and indirectly using that to increase the popularity of
the company or its brand.  Through CSR, a
company strives to achieve a balance of environmental, economic and social
factors.

                        Corporate Social
Responsibility is the continuing commitment by businesses to behave ethically
and contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and society
at large. (Richard Holmes and Phil Watts, Making Good Business Sense,
Jan 2000).

                         The CSR ideology
believes that as the company or corporate takes in resources, both natural and
human from the society, it is their duty to give something back.

             
            A company or a corporation has a set of
diverse obligations to fulfill. As the interests of the company’s stakeholders
are different, Corporate Social Responsibility tries to minimize the negative
and maximize the positive effect on the stakeholder’s interests.

 

Dimensions
of CSR

                        Dr. Archie B. Carroll,
in his article ‘The Pyramid of Corporate Social Responsibility’ identifies four
areas that make up corporate social responsibility: Legal, Economic, Ethical
and Philanthropic.

·        
Legal Responsibilities

                        It should be the moral
duty of every corporation to run their businesses under the legal framework
stipulated by the governmental system. This helps to build the corporation’s
reputation and brand name.

·        
Economic
Responsibilities

                        Traditionally, the main
motto of every business is to earn profit. It is also the responsibility of the
company to be economically profitable, so that it can give something back to
the society. The other main responsibility is to undertake the most efficient
means for production.

·        
Ethical
Responsibilities

                        The
Company or corporation can go further than what the legally framework wants it
to do. The company’s policies should be backed by a moral code that, in a long
run, would be beneficial to the general public.

·        
Philanthropic
Responsibilities

                        Philanthropic
Responsibilities include the promotion of welfare of human beings and the
spread of goodwill.

 

 

India and CSR

                        Corporate Social Responsibility in India got a
huge boost after the passing of Companies Act 2013. It introduced several
provisions which changed how the Indian Corporate did business. The ideology of
CSR rests in the concept of give and take.

                        Clause 135 of New Companies Act,
2013 includes following criteria for Corporate Social Responsibility.

•       
Net worth – Rs. 500
Crore or more OR 

•       
Turnover – Rs. 1000
Crore or more OR

•       
Net Profit – Rs. 5
Crore or more

If any company during any of the
financial year fulfills, any of above conditions then it should:

•       
Constitute a CSR
committee of Board which shall consist a minimum of three directors, out of which
one shall be independent director.

•       
At least 2% of the
average net profit of the immediately preceding three financial years of the
company shall be used for spending in accordance with the CSR Policy.

•       
According to the
approach “Comply or Explain”, Board should explain the reason for not spending
such amount if it fails to do so.

•       
The company shall give
preference to its local area from where it operates, for CSR activities.

 

Benefits of CSR

                        Nowadays consumers are increasingly aware about
how a corporation can become harmful to the society and they are not willing to
tolerate unethical business practices. Careful implementation of CSR can be
beneficial to the company as its goodwill and brand value increases. Other benefits
of CSR includes

·        
Increase customer
retention

·        
Save money on energy and operating costs and manage risk

·        
Develop
and enhance relationships with customers, suppliers and networks

·        
Increase
customer retention

·        
Generate innovation and learning and enhance your influence

·        
Provide access
to investment and funding opportunities

·        
Greater ability to attract talent and retain
staff

KMML and CSR

                        Keeping this in the
background, an attempt has been made here to study on the CSR of a leading
Public Sector Undertaking in Kerala- Kerala Minerals And Metals Limited,
Chavara, Kollam. KMML is an integrated titanium dioxide manufacturing PSU which
focuses on mining, mineral separation, synthetic rutile, to name a few. The PSU
produces, grade titanium dioxide
pigment-grade titanium dioxide pigment, ilmenite, rutile, zircon, synthetic
rutile etc. KMML has a reputation of being responsive to social and
environmental causes and many of the initiatives taken up have made a positive
change to the surrounding area and its people.

                        KMML
is located amidst dense population, comprising lower and middle class families,
and the smooth functioning of the Plant demands maximum involvement in CSR
activities. The company has made it clear, that its main vision is development
of the community in all spheres. They intend to achieve their aim by increasing
the participatory and need based initiatives.

                        In
accordance to Sec.135 of the Companies Act, 2013, the Board of Directors of the company constituted a
Corporate Social Responsibility Committee consisting of 4 Directors to look
after the PSU’s CSR programs.

                        Through
the CSR activities KMML tries to generate community goodwill, create social
impact and visibility.

Focus areas

The focus areas for CSR activities
of KMML have been identified and it is the company’s aim to achieve positive
results in the same. The list prepared is flexible so as to accommodate needs
that might arise in the future.

·        
Augmenting drinking
water facility.

·        
 Education, Vocational training, Scholarship
for students belonging to SC, ST, OBC and disabled / deserving categories for
meritorious achievements .

·        
 Electrification

·        
 Promotion of Non-conventional Energy sources
like Solar lighting.

·        
 Irrigation, water & soil conservation.

·        
 Activities for preservation of the
environment/ecology.

·        
Sanitation and Public
Health.

·        
 Promotion of Yoga, Family Welfare etc.

·        
 Pollution Control and prevention.

·        
Promotion of Sports,
Games, Arts and Culture.

·        
Promotion of livelihood
of economically weaker.

·        
Supplementing
Development Programs of Government.

·        
 Construction of Community Centre, Library,
Knowledge centre.

·        
Infrastructure
development like construction and maintenance of Roads, Pathways, Drainages,
Bridges etc.

·        
 Relief to victims of natural calamities.

·        
 Disaster management activities including those
related to amelioration and mitigation.

In order to be successful in materializing
the foci areas, the company tries to make sure the works are being done accordingly.
Either the company or bodies, that are given authority, carry out the CSR
activities. 

KMML is one of the few successful PSUs
remaining in the state of Kerala. They have also identified the key problems
and started working for it. It should be noted that the main beneficiaries of
the CSR activities should be the local people and its workers. As KMML is, in
its core, a Chemical Plant the question of what it will do to restore the
environment and rehabilitate the affected people around it, is highly relevant.
KMML has the ability to be the torchbearer of CSR and also to lead the way for
young and upcoming companies.

 

 

 

 

 

 

 

 

 

 

 

 

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