The delusion of “soft” power can mask reality. Take geopolitics. China goes about its “string of pearls” approach for extending areas of influence with massive strategic investment and strategic arm-twisting. “Soft” India typically offers limp festivals extolling Bollywood fare, tandoori chicken, tea, instant yoga, and exhortations to maintain “traditional cultural ties” that have little meaning in hard-nosed power plays. We all know China is continents ahead.
Perhaps there is a lesson in hard application of “soft” power from India’s business community. For instance, many wield the blade of corporate social responsibility (CSR) with such finesse that it often makes CSR—the acronym freshly infused with life and controversy after the government’s move towards the past year-end to mandate this activity for businesses of a certain size and record of profitability—into a cynical engine of growth. CSR has for long been a useful weapon in marketing arsenals; it is viewed through the unemotional calculus of the quickest return on investment, even as a tool to mask dubious records in corporate governance.
And so, mandating CSR in the Companies Bill, passed in the Lok Sabha last month, without greater scrutiny of corporate behaviour by shareholders, investor watchdogs, media and activists will likely prove hollow.
This has nothing to do with my personal conviction that the state has little business trying to impose CSR on corporate India when its own record in implementing development projects on account of political and administrative inefficiency and corruption is counted among the worst in the world. Indeed, when the minister of state for corporate affairs Sachin Pilot met a group of representatives from industry in early December to soften them up for the Bill in parliamentary transit, he could hardly have missed the irony. The minister spoke of the need for “visible social intervention” by business. An official dissemination of the meeting was almost schoolmarmish: “As a pointer to socially relevant activities, the minister drew attention to the need to give priority to hygiene and sanitation in rural areas particularly for provision of toilets in girls’ schools in government-run and government-aided institutions in the secondary and senior secondary sectors with water conservation technologies…” (Query: What on earth have the central and state governments been doing these past 65 years with public funds? Not just for providing sanitation in schools, but to ensure education and sanitation in general, let alone other socio-economic imperatives?)
It has also nothing to do with my personal conviction—mirroring that of many other critics—that it will, sooner than later, be too tempting for government to keep its hands away from the special purpose vehicle that seeks to aggregate such CSR funds, and turn the monitoring agency into another cash-eating government monster of deliberate ineptitude. In all likelihood, such a system will collapse with only public sector undertakings continuing to bear the cross of the government’s failures in development. My concern is more basic. It stems from the root of CSR, which grew into a form of enlightened corporate behaviour not because business leaders discovered themselves to be saints after acquiring their millions, but quite apart from philanthropy, as a legitimate, “new-age” extension of the art of public relations.
CSR remains a quick route to corporate gloss. It permits a corporation to be seen as an active ingredient in developing national sporting infrastructure—shooting, mountaineering—while suppressing news of culpability—of, say, several people killed and injured to acquire land for its projects. It permits a corporation to establish a CSR footprint in an area in which it is actively engaged in acquiring land by establishing a rural health clinic, rather than pursuing a less cynical CSR plan that would have established that clinic on account of that clinic being needed anyway. It permits a corporation to spend millions of rupees to maintain gardens—claiming it as CSR activity—at the main airport of a state in which it has ongoing and future business interests. Or plaster streets with posters and billboards that show smiling children benefiting from a handful of rural schools it funds, while at the same time attempting to curb using, say, the state’s heavy-handed police power, growing farmers’ agitations against its coal or iron ore mine, or power plant, or special economic zone, in said rural area.
The hypocrisy embedded in the practice of CSR needs to first be addressed. We need to continually expose the often noxious mix of corporate affairs, corporate governance, CSR, and public relations. Or it will remain yet another ticket to take citizens and shareholders for a ride.
Sudeep Chakravarti is the author of Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land. This column, which focuses on conflict situations in South Asia that directly affect business, runs on Fridays. Respond to this column at email@example.com