Definitions and visions of civil society are numerous. Civil society is neither an uncontested concept nor a homogenous entity. ‘Civil society is the arena of associational life located between the state and the family, where citizens organise to regulate affairs’. The definition includes research institutes, community based organisations, voluntary membership associations, networks and campaigning organisations. In India, civil society has many diverse forms, functions, norms and values. It includes caste- and faith-based organisations that play a powerful role in defining identity and organising social relations, access to and exclusion from jobs, resources and public association. There are many different ways of looking at civil society. Feminists, for example, have described civil society as a ‘double-edged sword’ that provides a site for organising feminist issues but is, at the same time, a space where gendered norms and practices are acted out and reproduced. Some political scientists have argued that civil society in India has very specific characteristics that make it largely irrelevant to the poor. Others point out that civil society is a realm where dominant values can be contested and where agency can be claimed.

In India, Non Government Organisations (NGOs) are a major part of civil society. Numbering 1.2 million and more (John Hopkins study) and obtaining 16 billion as income, NGOs are a major part of the effort in poverty reduction in the country. More than Rs 500 millions is received through foreign agencies. Many people use NGOs as Civil Society Organisations (CSOs), but civil society is larger than the NGO sector. CSOs are autonomous membership-based organisations, cause-oriented or service-oriented organisations that share a common defining identity – social solidarity with the people in the society they serve or represent. CSOs have grown as distinct development actors different from governments and donors and are an essential feature of democracy, seeking to express people’s organised action in the public sphere for public benefit and change. Corporate social responsibility and accountability in the subject has seen a greater interest being expressed in civil society. Globalisation has changed the ways in which the issues are being debated. It has created new demands and expectations from business. These expectations, if not addressed, will pose serious problems for any business.

What, then, is the role of business and CSR? What is Corporate Citizenship and Responsibility? It is an approach where a company:

• Recognises that its activities have a wide impact on society in which it operates and that developments, in turn, impact on its ability to pursue its business successfully.
• Actively manages its economic, social, environmental and Human Rights impact of its activities basing the work on international norms and standards and reaping benefits not only for its own operations and reputation but also for the communities in which it operates.
• Seeks to achieve these benefits by working closely with other groups and organisations, local communities, CSOs, the hosts, local governments, etc. What drives CSR is the pressure by its stakeholders – investors and shareholders, its members, communities, consumers, CSOs and governments. This pressure also depends on the strength and autonomy of the civil society.

CSR, also called corporate citizenship, a responsible business, is a concept that is evolving without a clearly agreed definition as yet. It is a concept whereby a business considers the interest of the society by taking responsibility for the impact of their activities on the customers, suppliers, employers, shareholders and the environment. This obligation is seen to extend beyond the ‘statutory’ obligation to comply with legislation and voluntarily taking steps to improve the quality of life for its employees and their families, local communities and society. One of the most popular definitions is that of the ‘World Business Council on Sustainable Development’. ‘CR is based on the fundamental belief that a coherent CR strategy based on ethics and core value offers clear business benefits and rests on three fundamental pillars of economic growth, ecological balance and social progress.’

Dialogue Across all Sectors

CSR efforts initiate cross - sector partnerships but fall short of being strategic. Most partnerships are not aligned with core business strategies. The private sector is beginning to accept that prosperity, profitability and shareholders’ value alone do not represent the value of the company. The company’s ability to grow and excel in the long run is also determined by their improved performances in terms of ethically and environmentally responsible contributions to society. They further understand that without this aim, their legitimacy and ability to function properly will be questioned by civil society. Global brands such as NIKE and GAP discovered that their responsibility is spread to their supply chains and that accountability cannot be outsourced. And their initial efforts to work with the International Youth Foundation failed because the collaborating NGO was not an equal partner at the negotiating table; nor were core issues around ‘doing Business’ and pricing decisions ever addressed. Double standards practiced by transnational and multinational corporations continue to plague developing countries and emerging markets such as India, as seen in the wake of the expose on COKE and PEPSI and the callousness of companies such as Union Carbide in the Bhopal Gas tragedy.

Co-option or Partnership?

Many companies have given grants to NGOs and other civil society organisations for service delivery, especially around their factories and the communities who are their stakeholders. Many companies, after displacing thousands of acres of farmlands and lands in tribal areas, have asked NGOs to carry out welfare work with generous grants in the areas. Some call it as co-option of the NGOs by the companies so that the rights of the displaced are not taken up. There have been many NGOs in Orissa who have taken up actions against an international mining group like Vedanta. POSCO, another mining giant, has been at the receiving end from many activist groups. Civil society also uses Public Interest Litigation to get the government to act and provide rights to tribals and displaced persons. They use the space provided by the Constitution and the law to hold the government accountable for implementing the rights enshrined in the Constitution and in international covenants that India has ratified. Networks of NGOs and such organisations not only operate at a national level but also globally. NGOs have used international conventions and Diaspora civil society alliances to lobby UN human rights bodies and international development organisations to advocate on issues of discrimination. An interesting example has been the National Alliance of People’s Movements (NAPM). There has been similar activism on other issues relating to dalits and marginalised farmers.

Increasing demand for sustainable development in the previous decades has initiated action from governments, corporations and CSOs. CSOs have provided an alternate voice by pointing out threats to sustainable development caused by business actions globally. Global warming and climate change has also led the call for business partnerships in resolving environmental and social concerns. On the other hand, development-oriented CSOs are facing increasing uncertainty and reductions in financial resource flows from international donors and other bilateral donors. Pressures on civil society and the private sector to address social demands are growing in the context of declining legitimacy of governments to provide basic services. Global leaders in the development field are promoting sustainable development. For example, UNDP and several bilateral donors are convening international fora to support projects and strategies for collaboration. The former UN Secretary General Kofi Annan observed, ‘We now understand that business and society stand to benefit by working together’.

Accountability and Trust

In a weakly regulated society, corruption is likely to be very high and endemic. Both NGOs and companies argue vociferously for self-regulation. While NGOs argue for self-regulation, their own track record of accountability has not been very good, either here in India or in foreign countries. Much of public money gets spent in unproductive expenditure, conferences and seminars. While there is no measure to track accountability, it remains doubtful how self-regulation will ever work. The same applies to the private sector. Both remain suspicious of each other, often questioning each other’s integrity, sources of funds, etc.

Though no clear standards exist for performance or governance at present, civil society is prone to attack the corporate sector on similar grounds. There are efforts like Credibility Alliance in India for good governance and financial accountability, but their membership is restricted to less than 600 members. In a sector so large and close to a million organisations, 600 is just the tip of the iceberg. So much for good governance in non profits! While there is no yardstick to measure non profit performance or CSO performance, much of the rhetoric is on peoples’ participation. However, very few NGOs have divested their control and given their management to the people themselves. The ethical framework is, therefore, and will continue to remain a difficult area for both civil society and the corporate sector. Public disclosure should become mandatory for all sectors. Both the sectors need to evolve in the regime of transparency as it is in their own self-interest. This is why a uniform standard across all sectors such as the proposed future ISO 26000 may be a way forward, though it is often seen as a ‘soft standard’.

Social Responsibility or Social Contract?
 
In its comprehensive sense of social responsibility, business is expected to consider the interests of all those affected by its decisions and actions. Business and society are inter-dependent and co-exist with businesses using society’s resources and, in turn, fulfilling economic needs and changing social goals. Business and society is bound by a reciprocal social contract which is seen as the core idea of CSR. The social contract theory offers a way to define and contrast the concept of CSR with the realm of legal rights and obligations. A social contract evolves over time in line with the changing societal expectations. The social contract theory suggests that it is in the corporations’ self interest to respond voluntarily and positively to changing societal expectations before this turns into legal mandates. Merely funding a project or some ‘soft’ activities does not fulfill this contract.

In India, Mahatma Gandhi propounded ‘Trusteeship’ during the Indian freedom struggle, where companies were to be the ‘trustees’ of society and business houses in India, many merchant families followed this concept in the early days of independence. Despite the work of Industry Associations and Corporate Foundations, CR is not deep or serious enough in its engagement. The Planning Commission set up an NGO Steering Group for the 11th Five Year Plan, which included for the first time a sub - group on CSR. This had representatives from both Industry Associations (FICCI, CII) and CSOs (PIC, BCF). Recommendations included the industry contributing a 3 to 5% profits after tax into CSR work, following stringent standards of countries of origin in both host and operating markets of ethical standards, product quality, labeling and transparency expected in global markets. Respect for local sovereignty and human rights, respect for the planet in terms of natural resources and stringent environmental norms was advocated. The encroachment of people’s livelihoods and lands through ‘Special Exploitation Zones’ was condemned and working in partnership with CSOs was advocated. Four of these eight recommendations found a place in the final report of the Planning Commission then sent to other departments. Today, there are very few CSOs working in the area of CSR in India, including foundations such as the Business and Community Foundation, Sampradaan, PIC, BYST etc. There are, however, a large number of them set up and run by companies themselves such as WIPRO, INFOSYS, SATYAM, JBGVS, KC MAHINDRA TRUST, TATA TRUST, etc.

Maintaining an independent space while interacting or interfacing with the corporate sector is not an easy task and cannot happen if the CSO is fully dependent on the corporate for funding. At the end of the day, it is not the money you give away that’s critical but how the money was made. CSOs also have to be transparent and open in their functioning as it is easy to be labeled a front for western funding and subversive elements when one takes a stand. There is a need to engage in dialogue across sectors while their protest/critique is also required when laws are flouted and the planet and its people are subjected to abuse for profit. In our work over a decade, where we provide CSR advice on request, we have found a correlation of sorts between companies that are unresponsive and do not listen vis-a-vis poor CR record. Volunteering is encouraged for this purpose – that they can be a critical mass within companies that understand India’s development needs if the growing divide between India and Bharat is to be bridged. While engaging with corporates who do not have the software to work on social development, CSOs need to be equal partners and clearly spell out the non negotiables. There is need for larger alliances with consumer groups, NGOs and those working on the environment for advocacy and trying to bring about positive changes in policy and the legal frameworks with the need or stringent standards. It is only in societies where there are vibrant and vigilant civil societies that contextual Corporate Responsibility can be a positive factor in the developmental framework. A GDP growth of 9% will not be sustained if it co-exists with glaring inequities of hunger, farmers’ suicides, homelessness and unemployment. Strategies and time from businesses on how to solve these issues, affirmative action and environmental norms that can combat global warming along with creative partnerships with civil society for a more sustainable, humane and just society is the need of the hour. In the words of Mahatma Gandhi, ‘There is enough in this world for peoples’ need but not for peoples’ greed’. q
 

Amita Joseph
ajoseph@bcfindia.org
Business & Community Foundation

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