Disaster relief: A cause that connects with all companies
Firms are now looking beyond immediate relief to supporting disaster preparedness
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New Delhi: Floods in Assam, Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh and Uttarakhand have claimed hundreds of lives and displaced thousands this year. A report issued by the home ministry’s disaster management division says that at least 480 people have died in rain and flood-related incidents since the start of the monsoon in June. As many as 6,187 homes have been destroyed and 62,599 damaged.
Helping those in need in the aftermath of a natural disaster is a cause that connects with companies. Many organizations have offered cash, rescue and relief materials and voluntary services to help those hit by calamities like the floods and landslides in Uttarakhand, Jammu and Kashmir and Tamil Nadu in the last few years. Some of this corporate support has been spurred by Corporate Social Responsibility (CSR) Rules 2014.
CSR Rules, which fall under the purview of Section 135 of the Companies Act, 2013, require firms with a net worth of Rs500 crore or revenue of Rs1,000 crore or a net profit of Rs5 crore to spend 2% of their average profit of the previous three years on social development activities under Schedule VII of the Companies Act.
CSR contributions for disaster relief work or contributions qualify under various heads of Schedule VII activities like contribution to the prime minister’s relief fund, rural development, environmental sustainability and livelihood development among others.
Parul Soni, global managing partner at Think Through Consulting, a specialized social sector consulting firm, said, “Usually there is no fixed budget set aside for such activities because disasters by nature are unpredictable.”
In times of disaster, most firms work out contributions as a combination of CSR funds and philanthropy; employee donations are collected and distributed via government agencies or not-for-profit organizations, Soni added.
For instance, NTPC Ltd works in close partnership with government agencies to provide relief and help rescue affected people. “Although disaster relief is a part of CSR policy and activities, we don’t have a specific budget for disaster relief but are guided by specific requirements and requests for support,” said S.K. Jain, director, CSR at NTPC.
In the rescue efforts during the Uttarakhand floods and landslides in 2013, NTPC extended among other things, a helicopter for search and rescue missions. Jain explained that the state-owned power producer uses criteria including the vicinity of a diaster area to NTPC plants, government directives and scale of the calamity to decide on offers of help. NTPC committed Rs10 crore to the Uttarakhand relief work. Of this Rs2.9 crore came from employee contributions.
Dell India also responds to disasters based on the scale and proximity to employees or areas of operation and the global directives of its management.
It takes a three-pronged approach involving personal philanthropy by employees, some funding from global headquarters and the firm’s own CSR funds. Bhaskar Sharma, who has the title of giving manager at Dell India, explained: “While the Dell grant is part of the India CSR spend, the matching amount for employee donations is paid directly from the US and is not a part of the CSR spend.”
During the Tamil Nadu floods last year, Dell donated Rs1 crore in grants to organizations in addition to employees volunteering contributions from their pay, which came close to Rs35 lakh. Dell topped up the employee contributions with Rs20 lakh.
But disaster relief needs to go beyond money, tarpaulins, clothes and food. “Though I would not want to generalize, we feel that firms extending support is often limited to being reactive and only in the immediate aftermath,” says Fredrick D’souza, executive director at Caritas India—a Christian aid organization which has been active in disaster relief for over 50 years.
Duplication of efforts or inefficient deployment of resources is a frequent problem. Citing the example of distribution relief kits following the Nepal earthquake last year, D’Souza spoke of nearby villages that received three or more packages of relief material from different agencies or even the same agency while those in remote locations received none.
D’Souza says that many disasters are becoming repeat occurrences and companies could do well in supporting disaster preparedness “like creating provisions for storage for bank of relief material”.
This aspect of disaster relief is catching on among certain companies For example, Microsoft India is looking to form a disaster management team. Manju Dhasmana, community affairs manager at Microsoft India, explained the transition of the company’s disaster management programme to a restructured approach now called humanitarian action programme.
“We felt the need to broaden the approach in order to truly protect the vulnerable communities who become even more vulnerable in times of disasters,” Dhasmana said.
The need for rehabilitation has been growing with every disaster and in response some firms are now looking to work with survivors to help equip them with vocational skills and help set up sources of livelihood. PwC India foundation, the philanthropic arm of the professional services firm PricewaterhouseCoopers India, for example has been working in Uttarakhand, Kashmir, Manipur, Chennai and Nepal that have always been hit by diasters in recent years. Jaivir Singh, vice chairman of the foundation, says training the local population in masonry has helped them find employment and earn a livelihood.
“From building shelters and homes in Nepal, Chennai and Manipur, to rebuilding of the school infrastructure in Kashmir, we have responded to most emergencies at the first stage itself with relevant assistance to being a part of the later-stage rehabilitation process,” Singh said.