There are lots of opportunities of social development created by the Center through new legislations integrating mining, industry and business sector with the process. The Corporate Social Responsibility (CSR) in the Companies Act 2013 and District Mineral Foundation (DMF) under MMDR Amendment Act, 2015 are ideal.
These provisions have made available financial resources for developmental activities in areas having mining, industry and business. It is quite relevant for States such as Odisha having mining, industry and business which need a careful planning and involvement of the concerned departments of the State Government for an effective, coordinated and plan full utilisation of available financial resources from the corporates operating in the State. This can be utilised to eradicate extreme poverty through livelihood development and to ensure basic human requirements such as drinking water, primary education and health, local employment and income generation as Odisha continues as one among the poorest States of India and lags behind human and social development index of other States. There is vertical and horizontal inequality in the State across region and among different social groups.
The resource reach regions and marginalised sections remain backward in spite of investment. The natural resources available with the State and active patronage of the Government attract corporates to set up mining, industry and business ventures. The new legislations have created scope of collective efforts involving Government, Panchayati Raj Institutions (PRIs), corporates and non-profit organisations (NPOs) in the State in the areas of social development, environment and building local infrastructure.
With new economic policy of liberalisation and privatisation by recognising the increasing role of corporates in economic development of the marginalised poor, the Government has bestowed upon non-business responsibility with corporates to intervene in social development concerns as integral part of business responsibility and to follow international standards of human rights, labour legislation, environmental concerns and best practices in dealing public finance through promoting transparency and accountability. The provision of CSR has been introduced to corporates in India through The Companies Act 2013, Clause 135, which says companies with annual turnover of Rs 1,000 crore or more or a net worth of Rs 500 crore or a net profit of Rs 5 crore or more have to spend at least 2 per cent of their average net profit in the previous three years on CSR activities from the fiscal year 2014-2015. The indicative activities have been specified under Scheduled VII of the Act and CSR Rules 2014.
The companies have to set up a CSR committee with policy and implement the activities through its own nonprofit foundations or other nonprofit organizations. Similarly, the provisions in MMDR Act on DMF says the mining companies which have executed mining lease before January 12, 2015 have to pay an amount equal to 30 per cent of the royalty paid by them to DMF and where mining lease granted after January 12, 2015 the rate of payment would be 10 per cent of the royalty to DMF for the developmental activities of the people in mining affected districts as per the model guidelines provided by the ministry.
Through these provisions the major mineral bearing mining and industrial districts such as Angul, Jajpur, Keonjhar, Sundargarh, Jharasuguda, and Koraput are getting substantial financial resources from both public sector and private corporates under CSR and DMF for the development of the districts. There are public sector companies, such as MCl, Nalco, NTPC, SAIl, RSP, OMC and private companies such as Tata steel, HIDAlCO, Vedanta, Birla, and Bhusan etc which are operating in these districts. In a recent report on CSR activities in Odisha it is revealed that there are 287 companies listed out by IPICOl and IDCO and there is a target of Rs 464 crore of spending under CSR but only Rs 344 crore was spent in the year 2014-15. The Public Sector Company MCl alone spent Rs 61.30 crore followed by Rs 59.61 crore by Tata and Rs 24.05 by Vedanta and these firms mostly spent in Angul, Jajpur and Sundargarh. The Industry Department of State Government has not yet developed any guideline as per the requirement of the State. It is required that both the Industry and Mines departments have to work together for a coordinated effort for the development of the mining and industrial areas of the State. The State Government should have proper data base about the corporate CSR spending at district and State level and regular coordination meeting should be held involving media for wider dissemination of plans and activities for larger public involvement and to promote transparency and accountability in public spending.
The parliamentary committee on public undertaking observed that the companies have not utilised over 50 per cent of their CSR fund though it is compulsory to spend on CSR activities every year as per provision of the Companies Act.
It has been calculated that by advantage of this provision, 131 central public sector enterprises together have Rs 3,683.73 crore as CSR fund. The committee examined 13 CPSE during the year 2014 -2015 and found unspent amount of previous year. It has also reported by the committee that the spent CSR allocations include ineligible activities like city beautification. It is told that CSR fund should be dedicated to serve the most marginalised poor and backward areas but unfortunately there has been huge diversion of funds violating the basic purpose of such fund utilisation. Sometimes the company officials are acting on their own in the absence of strong monitoring mechanism and guideline by the State Government.
There are also influence of ruling party and influential bureaucrats over the decision on the utilisation of the fund for vested interest and non-priority areas. It has been argued that while the companies mostly using the State resources, land, minerals, water, power and infrastructure, they should shoulder the social responsibility to spend for the marginalised poor. This is not a charity but legal and social responsibilities to be followed by the companies. Similarly the development of a mining affected area is the legal obligation of a mining company to restore the land, forest and ecosystem and livelihood of the local people but unfortunately the corporate sector many a time violates the laws. It has been very often reported about the sub human condition of the people, STs and SCs and other backward communities in mining and industrial areas where they have been struggling for basic human needs such as drinking water. Why in spite of so many varieties of funds, the basic need of the people have not been solved. Any one visiting the periphery areas of MCl, SAIl, and Nalco can have a better picture about the quality of life of the local marginalised sections. The poor women of these areas usually struggle to walk a long distance to fetch drinking water by digging small holes in river beds in hot summer.
The industry and mining companies use the surface and ground water and pollute it without developing alternative sources for the poor who have been depending on public water bodies for water consumption. The companies have built good English medium schools and hospitals for the benefits of their employees but the marginalised people in the locality who depend on Government run schools and hospitals are deprived of basic services. There has been lack of basic health and educational infrastructure and personnel in these areas but it has become no body’s concern. The huge deforestation by the companies has changed the local climatic condition and weather bringing upon high temperature and drought like conditions affecting the local poor and marginalised the most.
No substantial development work has been done to improve the ecosystem of the areas by the companies; so it is obvious that the local people have expectations over the corporates to ameliorate their socio-economic and environmental condition by implementing the provisions of law and the State Government has to monitor this for its effective implementation in the interest of the people of the State, especially people in mining and industrial areas for inclusive development.
(Email-manasbbsr15@gmail.com, Mob-09437060797)