Archive for February, 2011

February 25, 2011

Beer Responsibility

Saving water

February 20, 2011

Business Builds Better Cities Now…

Cisco Collaborates with Barcelona to Support ‘2020’ Vision for Sustainable Urban Management and Economic Growth. (See link below for full article)

This is huge and a vision not just for Barcelona but for Cisco. The fact that the initiative combines the brand’s core strengths with a social vision makes this endeavour almost a perfect example of social engagement and responsibility. In no way does it set out to solve all the city’s problems. What it does is to bring into urban planning and infrastructure development an element that Cisco can deliver efficiently and which can in measurable ways sustain the city’s future growth. Creating sustainable societies is what Cisco would like to leave as a memorable legacy. Thank you Mr John Chambers.

February 18, 2011

A Walk that sealed the Talk

A very interesting Reuter story on how sanofi and Genzyme finally sealed their merger deal at Davos. Given the acrimony and the hard stances it was good to read that when the two big guys  came face to face and actually “talked” they found enough to make it a winning game for both. A good lesson and a great read.

February 13, 2011

POSCO Please Speak Up!

 South Korea’s Pohang Iron and Steel Company (POSCO) has its clearance from India’s Ministry of Environment and Forests (MOEF) to invest $ 12 billion in a steel mill in Orissa. Alongside there is the benefit of getting a brand new port on the east coast of India, terrific amount of employment in the steel mill and related projects, a new township for the employees and the profitable commercial exploitation of the rich iron ore resources that have just been lying around.

This is all good for a country such as India desperate for fresh foreign investment and surging ahead economically. It is great news for the foreign investment community that had almost despaired over the recalcitrant attitude of the Minister of Environment. Short sighted they said for a country on the verge of breaking into the top ten economies to take such a rigid stance over the environment.

Internally the Environment Ministry which was for a long time criticized for doing nothing is now being criticized for doing something. The Minister who was seen as doing the right thing by civil society organizations is now seen as having sold them out. The investment community that criticised him for getting his priorities wrong now say at last he has his priorities right. Media comment is focused on which act was violated and when and whether any precedents exist. Some are asking for more political interference, some for less. Plenty of media ink and serving largely to wash the real issues away.

Business of course is resoundingly SILENT.

The Min of E has released a new guidance manual that sets out the rules and compliance details for industries before they come for environmental clearance. Perhaps the procedure now is more stringent. But one aspect stillboggles the mind: companies will be given clearance and then be penalized when they contravene the environmental regulations. If there is any danger of this, why would they be given clearance at all? And is there no way of identifying risks that are liable to result in contraventions? And whose responsibility is this anyway?

Environmental experts worry that after the POSCO approval, big investment will always take precedence over ecological and social concerns.

Opposing this biggest ever investment opportunity in India are a handful of indigenous people who through aggressive NGO support have given POSCO and Vedanta a fight to remember.

The heart of the protest is the belief of the local communities that these new projects will destroy forever their culture and way of life. Some experts suggest that if a ‘better’ way of life is offered to them they would probably agree to be displaced. And the cultural protest will fade away after they get a taste of modern civilization: better homes, better food, education for their children, health for all and toothpaste for their teeth instead of neem sticks.

The problem, opposing experts say, is more complex. The resource rich lands that business now wants, are lands that the indigenous groups have for generation considered a community resource. Even when their use of this land yielded minimal returns, they honoured the generational links which were considered sacrosanct.

Now they are told that not only is this irrelevant, but that what lies beneath the earth is so precious that they must allow access even if they see it as a violation of their cultural and social beliefs. While this is a reason that can over time be mediated, the real dishonesty of the Government and the corporates comes in compensation: a onetime payment for giving up natural wealth that for the investors will continue to pay back vast amounts way into the future. This compensatory imbalance is something no company or government has bothered to take on board so far.  

The NGOs who are supporting the local protest say that compensation for the natural resources under debate cannot be viewed as a onetime deal. The displaced ‘natural owners’ of these resources need to be given a lifelong perhaps even a generational stake in return for the exploitation of these resources.  

It is almost certain that the people who protested earlier will continue to protest. The permission from the Min of E now takes POSCO back into pending and new court battles with the local protestors. The main protagonist: The Posco Pratirodh Sangram Samiti (Posco Resistance Struggle Movement) has already issued a formal statement saying it will not back off. On its website Posco has a Code of Conduct section that says some big things. While the language is a familiar blend of a lot and very  little there is enough there for the company to actually see this as a problem that the government and its legal framework alone cannot solve.

For as far back as we look, we can find no examples of corporate brands voluntarily engaging with NGOs and local communities on sensitive social and cultural issues before finalizing investment plans. Where there is a sharp difference of opinion  they find it easier to rely on winning the regulators or getting their lawyers to work the loopholes.  

Now the time for talking has passed say the POSCO protestors. So the divide deepens and grows wider. The project remains mired in controversy, time and cost overruns build up.

The growing list of companies faced with similar problems in India and other countries suggests that business has still to recognize that a new element has entered the commercial equation. Social Negotiation and the gestation time this needs.