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Corporate Social Responsibility: The NTPC Model

J. Mohapatra

At the outset, I extend my heartfelt thanks to this institution—LIBA—for having selected the National Thermal Power Corporation (NTPC) as the recipient of the Mother Teresa award this year.¹ NTPC had started producing power in this country in 1982 and today we are a 27,000 megawatt power station. We have the country's 20 per cent installation capacity but we produce 28 per cent energy for the country. The Government has given us 75,000 megawatts to add on, so every day and every night, every man in this organization is so busy that we do not have the time to even breathe. We were the country's national thermal power corporation, the logo is carried in NTPC, but we are no more thermal. We are an integrated power company now. We have entered into hydel, we have entered into mining joint ventures, distribution systems, and as partners in excellence in many activities in this country. We have a greenfield station, taken over mining distribution. We have our plant in almost every state. Different states have different policies and laws, and yet we continue to promote corporate social responsibility (CSR). Our CSR policies are different with regard to the different aspects of our business. I am with NTPC since 1981 and I have got over 34 years of thermal power station experiences in this organization. I have worked in six super thermal power stations in six different states. Throughout, I have been working in the field, from project to project and recently I have taken over this responsibility in the corporate centre. Here we have made, after expanding this department, a business plan for the first time in NTPC for CSR and also the safety provisions. With this, I will go into the subject where we will find the business strategy in the beginning.

WHAT IS CSR?

In recent years, CSR has become an important term within the language of business. Financial success is no longer the sole measure to judge any organization's performance. Companies are expected to perform in the areas of human rights, business ethics, environmental policies, corporate contributions, community development, corporate governance, and workplace issues. They need to respond to rising social and environmental requirements to access the new foreign markets, and CSR for building relationships with customers, attracting and retaining talented staff, managing risk, and assuring reputation. Approximately, 75 per cent of the market capitalization of a corporation comes from intangibles such as reputation, brand, trust, credibility and the ability to interact and work in partnership with stakeholders.

These are our experiences. Analysis of CSR activities and adoption of CSR polices are meant to add social and environmental values to external stakeholders and financial value to shareholders. CSR enhances brand image and reputation, less risk of negative rare events, dramatic reduction of operating cost, increased productivity and reduced error rates maximize the benefits to the local community, resulting in minimum losses due to disruption from social unrest. Firms wishing to enter in or expand new markets may find it easier to develop local contacts, if they have first established a reputation among the local community through corporate citizenship initiatives, that is, by creating goodwill with the local government and the community. CSR does matter, and will matter in the future more than ever before.

Some Remarkable Examples

The companies which have done remarkable works in this area are many: ITC of ‘e-choupal’ Hindustan Lever Ltd. in ‘Stri Shakti, Hindustan Petroleum in community kitchen; Tata Steel in tribal development activities; BILT for contract afforestation for paper mill are some well-known examples.

What is CSR to NTPC?

NTPC as a business organization has a responsibility to the society in which it functions. NTPC strongly believes that CSR is neither philanthropy nor charity, but is an investment in our collective future. From remedial plans to rehabilitation, NTPC has a focused approach towards community empowerment. CSR is an integral part of all NTPC activities. From ensuring stakeholder engagement, need-based intervention to community participation, the NTPC CSR programmes are comprehensive and elaborate. CSR in NTPC is not a charity and welfare, but a commitment for implementation of a host of related policies. It is a global practice of triple bottom line (Economic, Environment and Social) through stakeholder engagement.

NTPC has recently modified its vision. Earlier, we were thermal power plant company, now our vision has undergone a modification, that is, ‘To be a world class integrated power major, powering India’s growth, with increasing global presence.’

We have started growing plants in other countries also, so our presence at the global level is felt now. The mission is to ‘develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society.’

NTPC's approach towards CSR is to contribute to sustainable power development by discharging CSR. To lead the sector in the areas of resettlement, rehabilitation and environment protection including effective ash-utilization, peripheral development and energy conservation practices.² To lead development efforts in the Indian power sector through efforts at policy advocacy, assisting customers in reform, disseminating best practices in the operations, management of power plants, and so on.

NTPC has adopted a visionary approach to address the issue of CSR since its inception. NTPC follows the global practice of addressing the CSR issues in an integrated multi-stakeholder approach covering the environment and social aspects. For achieving its mission and objective, NTPC has formulated specific policies to address the issue of CSR in a comprehensive and systematic manner. Instead of having one CSR policy document, NTPC approach has been slightly different in framing specific policies for addressing various facets of CSR.

Thus, NTPC today has a range of CSR policies on human resources covering recruitment, recognition, gender equity, SC/ST, physically challenged people, education, health, post superannuation social security, and safety. Other stakeholders include resettlement and rehabilitation of project affected persons, community development, environment, afforestation, converting challenges into opportunities in conceiving well-defined strategies for expansion, diversification and corporate transformation, fulfilling its commitment to high standards of corporate governance and developing mutual trust via expansive CSR initiatives, and to strengthen the social fabric giving due respect to individual and cultural differences. At NTPC, every employee is committed to create a truly healthy partnership between the society and the entire power generation process. We will see how all the individuals are involved.

Employee Involvement in CSR Activities

Creating greater self-reliance for the community has enabled us to win the trust and goodwill of millions in urban and rural India. We provide basic amenities like sanitization, clean drinking water, infrastructural support, and primary health and educational facilities in the extreme remote and underdeveloped areas around our stations.

A comprehensive CSR policy and allocated ample budget created institutional mechanism and a national level NTPC foundation. We have another NTPC foundation also, a Trust which is taking certain issues. We have Employee Volunteer Organization for Initiative on Community Empowerment (EVOICE) of our employees to spread our CSR activities. NTPC's own creativity is EVOICE. CSR is a commitment to behave ethically and contribute to economic development while improving the quality of life of the workforce, their family as well as the local community and society at large.

CSR Policies on Community Development

Well-defined policies on community development (CSR-CD) includes activities related to:

• Infrastructure
• Education
• Health
• Drinking water provision
• Support for persons with disability
• Village quality circle (this is another creativity in NTPC exclusively)
• Vocational training

All these programmes are based on need assessment survey monitored and shared at different forums including village development advisory committee (VDAC) and public information centre (PIC).

The policy is applicable to agricultural labourers, tribal, landless labourers cultivating government land and so on. Resettlement includes developing alternate free house plots, necessary infrastructure facilities with the thrust on consultation and transparency. NTPC has also established PICs, VDACs. Today's problem is different and yesterday's problem was different; and I don't think any amount of lectures that we are giving will be the permanent solution for the country. This country is vast. Things will change and the situation will change, solutions will also change. What we have applied 10 years back does not hold good today. What we have done in Singravali and Pidiachar does not hold good today. What we have done in Sipak and Simagri is not applicable to Jharkhand. People are knowledgeable, they are changing. They have understood that their local problems are different. So, whatever policy we have made is always undergoing change. Recently in 2005, we have introduced a change called the National Performance Review NPR. That also changed and I find it is a subject that always undergoes change. Policy applicable to agriculture labourers also undergoes changes. NTPC often comes up with innovative methods in CSR such as quality circles (QC) in remote villages. Already initiated in 11 out of 20 operating stations/projects, and in 22 village quality circles already formulated, QCs have a positive impact on the local people of the project affected areas.

Beneficiaries of NTPC's CSR Activities

The marginalized sections of the population are the beneficiaries of our CSR activities and include scheduled castes, scheduled tribes, economically underprivileged with special focus on women, children, disabled, and the elderly.

Environment-related CSR Activities

Harmony between man and environment is the essence of healthy life and growth. Therefore, maintenance of ecological balance and a pristine environment has been of utmost importance to NTPC. Environment protection continues to be a key area of activity in NTPC along with growth in generation of power.³ NTPC became the first public utility to have ‘NTPC Environment Policy and Environment Management System’ in 1995 with the aim to achieve and maintain a leader's role in the area of environment management in the power sector in the country; to meet different environmental requirements in all its business decisions; to adopt sound environment management practices for environment protection and environment improvement around its business units; and to aim at full compliance with the statutory norms/requirements.

Low-cost Biofuel for Rural Population

Providing low cost biofuel generated power to extreme rural areas, this is another innovative initiative we have taken: distributed generation and supply. We have made a department for this and we are generating power in varied rural remote places by biofuel. It is managed and run by the villagers themselves, one of the most successful projects in rural purview using indigenous technology.

First Pilot DG project (woody biomass) has been commissioned at Jemara village in Chhattisgarh on 13 February 2005. Second Pilot DG Project (SPV) has been commissioned at Jaraha-Chetwa village in Uttar Pradesh on 28 March 2005.

Ameliorative Measures to Help the Disabled

‘Disability is a matter of perception, if you can do just one thing well, you're needed by someone.’

Working for the physically challenged persons (PCPs) has been an integral part of the CSR initiatives of NTPC limited. We also aim to provide inclusive education. It includes arrangement of special teachers; identifying children with special needs; counselling of children and parents; and infrastructural arrangement in schools. NTPC station had also setup DDRC, that is, district disability rehabilitation cell, which is managed under the guidance of trained doctors. Our power station in UP is the pioneer in this respect.

NTPC Foundation

NTPC foundation works at creating livelihood opportunities for PCPs; schemes to provide sustainable self-employment opportunities and vocational skill for the PCPs in the category of visually challenged and hearing impaired persons.

Awards and Accolades for CSR

1. ICC-UNEP World Summit Business award 2002 for sustainable development,
2. TERI Award for CSR in 2002
3. Platts Global Energy Award 2005 for the community development programme of the year
4. Golden Peacock Award for Corporate Social Responsibility 2006 instituted by the Institute of Directors
5. Golden Peacock Global Award for Corporate Social Responsibility in Emerging Economies (Public Sector) 2007 awarded by World Council for corporate governance
6. Business for Social Responsibility Award for Best Corporate Social Responsibility Practice 2006 hosted by Bombay Stock Exchange Limited
7. ITM Business School Award, and
8. Times Group Award for the year 2006

CONCLUSION

Before I conclude, I wish to share some of my thoughts with you. Today, I see many young boys and girls sitting here. When we started our careers after college, we did not know where we would travel, how much we would travel. Now, we have already travelled in so many ways and beyond our expectations. I want to tell you that whatever we have experienced is never permanent and we are learning everyday. Today, we are facing such a peculiar problem in CSR that we never faced earlier. So, we are thinking everyday how to solve indirect taxation. There are certain things that are happening in this country, some cannot be shared openly, but they are being expressed. When we go to a very remote forest area to explore what is left in this country, we find very peculiar problems. We are now doing 15 million tonne mining. We found it is extremely difficult to acquire land in those areas. Whatever community development we are doing is insufficient because each one is thinking for himself. He is thinking what he is going to gain ultimately for his livelihood. You are doing community development work, you are doing roads, drinking water all these things, that is for the public but the individual is thinking what am I going to get? Unless you answer that individually, you are not going to solve it permanently. That is why yesterday's problem of Nandigram,⁴ you might have known if you are not able to answer a sustainable livelihood for a person, he is not going to agree with you. That is why it is a matter of thought. How will you do that? There are few problems that we face and we have not achieved our CSR goals, but we continue to proceed with our thought.

I can share some of these problems with you. We shall have to produce or bring the market to the people. Despite whatever they are doing, whatever vocational training we are giving them, they are not able to produce and market it. So, marketing is a concern, and if somebody can provide that to them, they can earn sustainable livelihood that will be better, or otherwise whatever employment we are giving, either indirectly or directly, we can guarantee the people that they will benefit from these steps then they will definitely agree for the acquisition of the land. Further, we have seen in the remote areas, like Naxal-affected regions where nobody dares to enter, that such things are giving a challenge to the NTPC. This is happening in Jharkhand, Bihar, in southern part of Orissa, other places where we have faced a lot of havocs, difficulties, turmoil, attacks by local people to out executives, still we are struggling, we are going ahead. Peculiar problems like religion and caste are provoked by other countries as well as other institutions. They too have to be engaged in a process of dialogue; and it is not only the people on the ground, but also people behind them. They also need to be handled and that way only we can solve the problem. We have managed the cold dam project in the Himachal Pradesh; it is a peculiar agreement with the Government of Himachal Pradesh. Prior to that, we have managed Sipat power station at Chhattisgarh; it is another way of agreement with the Chhattisgarh govt. Even prior to that, we have done Simhadri in Andhra Pradesh; this is also another agreement. All these agreements differ from time to time depending upon the government, the local people and the people behind them.

We have to solve these three aspects that cannot be narrated directly to you. This is an experience. You will face it and learn it but whatever we have done, I have shown to you. If this talk has given you some idea then it has achieved its purpose. The NTPC will continue to travel on this path, but it will always explore possibilities, knowledge and learning from these types of conferences. I am willing to accept some of the new ideas that we can try to apply in future and this country is vetting us for 75,000 Megawatts. We have to work day in and day out to add more power stations. Unless we solve these CSR and rehabilitation and resettlement (R&R) issues, it is extremely difficult to generate power.