CSR AND CER: MINING INDUSTRY

This article has been authored by Shefali Agarwal, a fifth year student at National Law University Odisha

INTRODUCTION

Establishments interact with the environment for running their factories but this is made possible with the compromise made not only at an environmental level but also at an individual level. Therefore, it is the duty of such establishments to adopt sustainable development measures so that the harm done to the environment can be minimised as far as possible. Keeping such philanthropic ideas in mind, the Government after 2013 has mandated to dedicate some portion of a corporation’s profit towards the development of the community also called as Corporate Social Responsibility (CSR) by bringing in an Amendment to the Companies Act 2013.

The aim of any industry should be to expand its community programs by maintaining the goodwill of the company along with proliferation of sustainability. Along with significantly contributing to the economy of India, mining sectors have also increased their brand values by properly utilizing their resources in wholesome development of the community. From providing health services, for example, establishing infrastructure for hospitals, to building roads, schools which are developing the educational field, to sustainable development projects such as proving clean and safe drinking water, and reducing the economic dependence by creating employment opportunities, the mining sector has established its importance in every aspect of the society.

Mining activities have adverse effects on land, water, soil, aquatic life and air as they cause irreversible damage due to the different activities like open casting, extraction, and exhaustion of minerals from a particular area. With International Laws developing on environmental problems the corporate and the government realized the need of restoring the original properties of the polluted area.

DISCUSSION ON CSR AND CER

CSR and CER(Corporate Environmental Responsibility) has become an efficient tool for the mining industries to balance economy as well as ecology. The three pillars of CSR are Economic, Environmental, and Social Performance, commonly known as “Triple-Bottom Line Approach.” CER is similar to CSR, introduced by the government via notification in 2018, where corporates merge the environmental issues into their daily operations to reduce waste and emissions as well as maximize productivity. CER’s scope is greater as CSR applies in specific situation to corporates meeting the turnover or net profit criteria but CER applies for getting green clearance even if there’s no profit. It is calculated as a percentage on capital investment and is exclusive from the amount of environment management plan. Mining corporations have attached their goodwill and brand value to how strategically they plan their responsibilities towards the community and environment. Through CER, they sophisticate their use of resources and technologies to do minimum damage and optimum utilization.

HEALTH, ENVIRONMENTAL AND THE JUDICIARY

The OECD(Organization for Economic Cooperation and Development) with its in-depth analysis of Indian Mining Sector, has shown how mining creates an environmental unbalance and health problems to the local population and the workers. There is no aspect which remains unaffected by mining activities: from air, water and land to accidents and respiratory problems. Industries have encroached on private lands and exhausted resources without the due compliance of law. The Supreme Court in the case of Samaj Parivartana Samudaya, ordered the suspension of mining activities due to over-exploitation of environment and ordered compensation for illegal mining in the particular area. In M.C Mehta-Delhi Ridge Case, the Environmental Pollution Central Authority recommended ban on mining due to groundwater pumping. It raised concern over mining authorities abstracting water from confined acquifers which affected the source of drinking water for the local people. The Supreme Court ordered strict compliance of conditions led down by the various laws and permitted the activities only on the condition of sustainable development. if further degradation was found, it reserved the right to put a total ban in future.

SUSTAINABLE MINING

For Indian Mining Sector, it was acknowledged that mining cannot be pollution free so an urgent need for reviewing and regulating mining industries and its impact and relation to the environment was felt. A Sustainable Development Framework (SDF) was formed which imbibed the international principles and led down certain best practices and principles for mining. It provided a mining industry specific working definition of Sustainable Development: “Mining that is financially viable; socially responsible; environmentally, technically and scientifically sound; with a long term view of development; uses mineral resources optimally; and, ensures sustainable post-closure land uses. Also one based on creating long-term, genuine, mutually beneficial partnerships between government, communities and miners, based on integrity, cooperation and transparency.”

Sustainable Mining Initiative 2009 which recognizes sustainable mining for the first time in its Code of Conduct“requires integration of elements of sustainable development with corporate decision making process.” This is reflected in the 2015 Amendment to the Mines and Minerals (Development and Regulations), 1957, where section 20A has been inserted which empowers the central government to issue directions for conservation of resources and sustainable development. The aim of sustainable development is: respect environment, waste reduction, rationalised production, maintain overall balance, and optimum use of resources.

Development in the mining sector has been plagued due to several problems; threat to environmental degradation being the most prominent and pertinent one. In the past few years there have been records of several accidents from various mining establishments, not only in India but in other countries. On an average, nearly 13 miners are losing their lives in coal mines in China. Some health-related issues prolong in nature to not only affect an individual but also the future generation.

Mining is a social unit and it is the responsibility of the mining industries to redress the negative impact caused by its activities. Having realised this responsibility, they have incorporated global CSR strategies as a subset of their broader global policies. Since mining involves release of polluting agents in the environment, nothing much can be done to curb the menace. But with the awareness among the public and private sectors, public interest and environment safety is taking charge alongside economic activities.

The Corporations have devoted their CSR activities towards various programs for the upliftment of the surrounding areas of their operation. For example, In Brazil, a portion of royalty received from hydropower is reinvested towards resettlement; Canada on the other hand believes in equity sharing with its local communities.

NALCO and SAIL have been the flag bearers of how a mining industry can return what it takes from the society, by dedicating a portion of their profits under CSR and CER. Their annual reports show a well-planned strategy committed to the progress of the industry and the community creating shared-value. Inspiration from ONGC and CIL can be sought where ONGC has initiated for ‘Mokshda Green Cremation Systems’ for environment-friendly cremation and to reduce fossil fuel burning and CIL has planted “about seventy six million trees in the area of thirty three thousand hectare in the form of CSR.” Larger international companies are generally better at reporting and accounting and there is a connection between quality of governance and the amount of CER.

CONCLUSION and SUGGESTIONS

With the advent of these responsibilities, mining companies can now strike a balance between the profit making and promoting ‘shared-value.’ Profit making companies along with their economic development have now shifted their focus on the environment which is their means of sustenance. Since the companies are dependent on the ecosystem, it should be their utmost priority to do as much as possible to maintain the ecological harmony in and around their areas.

Progressing towards green and clean energy companies can adopt eco-friendly technologies and train their workers for the same. The gap between the intention of the companies and the implementation of the projects and schemes for achieving them should be minimized. Social and environmental responsibilities must be treated complementary to sustainable development. Providing alternative livelihoods to the displaced people, restoration of land after use and treatment of waste before release are some basic steps that can be taken. Better accountability and monitoring by the government authorities and punishments for non-compliance will uphold the environment.

The corporations must morally deal with the environmental issues in innovative ways rather than as a legal compulsion. There is no shying away from the fact that there shall be damage to the environment from the mining sector but if such industries realise their Socio-Environment Responsibility towards the community then such damages can be mitigated to a large extent.