The role of corporate social responsibility in regional development

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Carolijn Oudshoorn carolijn-oudshoorn@live.nl

10777962

The role of corporate social responsibility in regional

development

A case study of SIPCOT in Cuddalore District, India

Figure 1: The entrance of SIPCOT Cuddalore, sign in Tamil language

Supervisor: dhr. J.V. Rothuizen Second Assesor: dhr. dr. N.P.C. Beerepoot

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List of abbreviations and concepts

SIPCOT: State Industries Promotion Corporation of Tamil Nadu. Definition: the name for an allocated group of

companies that is gathered in certain areas in Tamil Nadu. One of these SIPCOT areas is established in Cuddalore District.

CSR: Corporate social responsibility.

Definition: In this paper, the definition comprises the responsibility a corporation has for the social

environment it operates in.

Regional development: Definition. The process, act or result of economic and social changes of mostly backward regions to a more adequate state. (OECD, 2017; IGI Global, 2017)

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Introduction

In India, industrial development at a rural level has immensely grown in the past decades. This has been triggered by the economic liberalization of 1991, which has increased the settlement of multinationals and foreign direct investment into the country. The change of a state-led economy towards a more liberal

economic landscape has also welcomed Western ideas of development into the country, for instance the concept of corporate social responsibility (CSR). CSR is said to enrich the quality of community life and has an “ever-expanding acceptance as a legitimate business practice” (Frederick, 2008, p. 1). Some academics argue that this new activity of companies can contribute to economic development (Newell & Frynas, 2007; Sharma, 2011; )more ref. Others are questioning this new role of business in society (Henderson, 2001) or the ability of CSR to bring actual development about (Frynas, 2005). The latter author has questioned the capacity of CSR to be beneficial to local communities. In Frynas’ case study, about the world oil sector, it was argued that corporate objectives stand in the way of the actual needs of communities, which prevent them from developing. Private firms might not have the capacities to do this, and seem to disturb the local governance of development countries that actually should be improved. While this study seems credible, it does not take the perception of the local community into account. According to Newell & Frynas (2007) the

developmental potential of CSR is still very unclear and claims about it are often poorly substantiated.

Also in Tamil Nadu, Southern India, the state government is aiming to improve the regional economy and started the realization of SIPCOT (State Industries Promotion Corporation of Tamil Nadu) Industrial area in 1984

(Rajarajan & Vetrivel, 2016). This SIPCOT industrial project consists of clusters of industrial plots, accommodating different companies on more than 500 acres in total (Rajarajan & Vetrivel, 2016). The factories are producing output such as acids, paint, bleached textiles, ammonia and other chemical base products (SIPCOT Area Community Environmental Monitors, 2005). Research about the realization of SIPCOT mainly concentrates on the negative impact it generates, in being polluting and being mainly disadvantageous for the local community (Indians People Tribunal On Environment and Human Rights, 2003; SIPCOT Area Community Environmental Monitors, 2005). However, some corporations also perform actions of welfare under the motive of CSR for the environment the business is operating in, potentially bringing positive effects about as well. Still, to what extent CSR is incorporated in the business plans of SIPCOT industries, needs further elaboration.

This research is contributing to the knowledge of the impact of

industrialization projects on regional development in India. The aim of this case study research is threefold. Firstly, it aims to give insight into the structure of corporate social responsibility of the industrial companies of SIPCOT Cuddalore. Secondly, it aims to add to the knowledge of how industries are contributing to

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regional development. Thirdly, it attempts to investigate what the role of corporate social responsibility in this development is.

The contrary views rising from the academic discussion whether CSR is able to contribute to development through social welfare measures requires extension of research. Therefore, this paper aims to answer the research question:

What is the role of SIPCOT Industrial area’s corporate social responsibility in regional development of

Cuddalore District, Tamil Nadu?

In the following chapter, first a literature review is presented on the topics of economic liberalization in India and CSR. After this, in the methodology the research design and methods will be explained. Subsequently, the results from the extensive case study in Cuddalore District will follow, where after the analysis is presented. Lastly, a conclusion and recommendations for further research are provided.

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Theoretical framework

1. Liberal reforms

1.1 India’s neoliberalization: reform of 1991

The role of the government and market have not always been the same in India as they are at present day. The market reform of 1991 initiated a decrease in the performance of the government as caretaker of society, and let the free market system into the country. After decolonization, a socialist model of state interventionism had taken the lead in politics (Sharma, 2011). This was

characterized by a fixed exchange rate system, high import substitution

(Kochhar, et al., 2006) and heavy industry led by the state (Sachs, et al., 1995), in order to improve the domestic economy. Next to the requirement of licenses to invest, import and produce goods, also controlled regulations about credit allocation and prices, played a role (Kochhar, et al., 2006).

Yet, after many years, this was considered unsustainable for the country, as the government was in a macroeconomic crisis in 1990 and even close to bankruptcy (Sharma, 2011). This nearly bankruptcy was triggered by a wide range of factors. In addition, years of poor productivity and a low level of efficiency followed this (Patel & Bhattacharyac, 2010). Economically, the country had been in stagnation for over a decade. This was caused by an

unsustainable macroeconomic system (source 182, paper), depraved economic policy in the 1980s and the failure of state interventionism in India (Sharma, 2011). India was growing on debt to other countries, which led to

macroeconomic imbalances (Kochhar, et al., 2006). In addition to this, rising inflation and the absence of consistent government budgets were in place (Weinraub, 1991).

Next to this, politically multiple events had occurred. The Gulf War (1990-1991) had triggered instability in the worldwide monetary system, whereas the decline of the Soviet regime and the fall of the Berlin wall created more criticism against state-led economies (Sharma, 2011). These were seen as

unsustainable in the light of development economics, and so these occurrences de-legitimized the socialist model of economic development for India (Sharma, 2011). Instead of socialist, pro-liberalization thoughts became popular and with the years a market-oriented development paradigm came in place of the former (Sharma, 2011). This new idea of economic growth was strengthened by the success of Asian countries that had liberalised their economies, such as Hong Kong, Taiwan and South Korea. This generated a substantial economic growth rate, which was also the motive behind earlier small liberalization reforms of the Indian government in the periods of 1966-68 and 1985–87 (Sharma, 2011).

Because of the former political and economic influences, economic reforms eventually were adopted in 1991, led by prime minister Rao and his minister of finance Manmohan Singh. Many negotiations with the International

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Monetary Fund (IMF) preceded this liberalization, which ended in objectives that highly stimulated the process of the 1991 reforms. Subsequently, the Indian government took an emergency loan from the IMF of $2.2 billion dollars, with an assurance of 67 tons of gold reserves as collateral security (The Hindu, 2009) to avoid a state bankruptcy. However, the IMF often provided loans that include the modification of undesired policies to their ideological stance (Weinraub, 1991). For India, this meant liberalization and facing to the West (Sharma, 2011). The partial shift of responsibilities

The primary shift from the socialist model to liberalization of the economy was that in the new system, the market system was seen as the engine of economic growth (Dash & Sahoo, 2010). Market forces would arrange international trade, foreign investment and efficiency. Not merely the economy would be driven by the free hand, also the economic development of the inhabitants of the country. With this, some responsibility of the government shifted towards the private sector, for instance in providing infrastructure (Patel & Bhattacharyac, 2010). The BJP party had earlier supported this thought, by questioning the power of the state in the economic development context (Sharma, 2011).

At last the liberalisation process, initiated by the prior Singh government (Sharma, 2011), was inevitable. The liberalizing reforms grew in

acknowledgement as they were leading to a substantial GDP growth in the next years (Dash & Sahoo, 2010). This brought increasing confidence in liberalization as the general discourse, and state authorities started to follow pro-liberalisation policies, including Tamil Nadu. The states aimed at creating an “industry

friendly” investment environment (Sharma, 2011). After 1999, India’s policies were again renewed even more towards liberalization, but this time more

focussed on inclusion. The emphasis was laid on institutions instead of policies, which should generate less income differences and hereby the policies

approached the causes of poverty. Institutions are central in development

economics in ensuring the effectiveness of the economy whereas the role of the state is to provide public goods, correct income distribution, provide

infrastructure and create a sustainable macroeconomic environment (Sharma, 2011). While reforms have continued, the Indian growth rate shifted from 6 percent to more than 8 percent in the years of 2003-07 (Panagaria, 2010 as cited in Sharma, 2011).

1.2 Liberalization as a means for economic development

Argued by Sharma in his paper on the sustainability of economic reforms, such measures are resulting in the reduction of poverty and economic growth (2011). The freedom of neoliberalism expressed itself into a considerable growth rate of India. However, against that, it also causes disparity in incomes and growth between certain states (Kochhar, et al., 2006). In addition Nayyar (2006) argues

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strategy. Normally, the welfare state is a means to fix these market failures, to provide a safety net for citizens and be the equalizer of a state (Ghosh & De, 2005). Markets may fail in producing a fair economic system, which generates equal development.

Despite the possible failure of the market system, liberalization generally means that parts of public duties shift to the private sector. In these duties are key developmental duties included, such as the arrangement of public

infrastructure, water, electricity and a decent healthcare and educational

system. While these duties are normally the responsibility of the government, in

India some of them are transferred to market actors (Newell, Scott, Rai, 2002,

as cited in Newell & Frynas, 2007).

1.3 Infrastructure as a generator for development

The importance of the process of government duties shifting to the private

sector in a neoliberal economic system is that thereby the power of development also shifts along. This is because Ghosh & De (2005) as well as many others (e.g. World Bank, 1994; Sahoo & Dash, 2009; Calderón & Servén, 2004) argue that decent infrastructure can highly contribute to the development of a state in terms of income, quality of life, increase of employment and the productivity of labour. Ghosh & De (2005) prove in their study that for the differences in the level of development between states, economic and social infrastructure is highly important. According to the World Bank (1994) the role of the government is evaluated, as it is slowly shifting to private sector provision. Investment in infrastructure is also necessary to maintain the current economic growth and stimulate the spread of it (Patel & Bhattacharyac, 2010). This is showed by the fact that at least 1.7% of the economic growth per year between 1965 and 1990

in East Asia occurred because of investments in healthcare and education (Dash

& Sahoo, 2010). Next to this, by improving the quality of life and incomes, decent infrastructure can help to reduce poverty (World Bank, 1994). Social infrastructure in particular, such as education and health, can result in the growth of services, because that needs ‘skilled and productive human power’ (Dash & Sahoo, 2010). Hence, economic growth, a better quality of life, increase in employment opportunities and productivity and a decrease in the level of poverty are key stimulators of the development of a country.

In the times before independence, India had a top-down approach

regarding the arrangement of infrastructure (Patel & Bhattacharyac, 2010). This gradually changed during the years that followed by contracting private service companies and was stimulated by the reforms of 1991. In this way, the

provision of infrastructure is shifting from the government to private sector companies (Patel & Bhattacharyac, 2010). Dash & Sahoo (2010) also bring forward the importance of this policy reforms in the infrastructure sector. It should be arranged with more private participation, deregulation of the

government, and commercialization (Dash & Sahoo, 2010), which implicates a very liberal approach instead of a state-centred one. While the Indian

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government recognizes that investment in infrastructure is necessary to enable sustainable economic growth (Dash & Sahoo, 2010), until now they have fallen short in the provision of decent basic infrastructure. This includes a lack of higher education enrolments, health of the inhabitants, education investments, and hospital needs. According to Article 246 in the Indian Constitution, health, education, sanitation, the agricultural sector and electricity are the State

Government’s responsibility (Ghosh & De, 2005). So while being responsible, the government is lacking in providing decent infrastructure, which offers good

opportunities for development as argued by many scientific authors. Some of these same authors therefore advocate deregulation of the infrastructure sector, which gives introduction to the private sector.

2. Corporate Social Responsibility (CSR)

2.1 Corporate social responsibility in the Western world

As mentioned in the introduction, CSR is a term that refers to when a company “consciously and deliberately acts to enhance the social well- being of those whose lives are affected by the firm's economic operations” (Frederick, 2008, p. 2). The executive leaders put this in position, often to humanize their economic activities, while aiming to be social responsible. Declared as the “organic linkage of business and society” (Frederick, 2008, p. 2), CSR aims at obeying laws and policies, responding to stakeholder claims and having integrity for the social and physical environment. The European Commission adds to this in their definition that companies should incorporate “social and environmental

concerns in their business operations” all voluntarily (Commission of the European Communities, 2001, as cited in Newell & Frynas, 2007, p. 673). According to Abrams (1951, as cited in Frederick, 2008) this follows the idea that the ones in power carry a responsibility to society. Thus, it is of importance to mention that companies understand corporate social responsibility in different ways, since there is no unilateral definition of the concept. To some the concept indicates being legally responsible to affected people, to others it is more about the ethical value. Further descriptions are that it is seen as charity or social consciousness (Votaw, 1972, as cited in Garriga & Melé, 2004).

The adoption of CSR into business ethics originated from the United States, which was mainly due to the liberal economy. It advanced in four stages of which the first was the approach to CSR of philanthropy (Frederick, 2008). Philanthropy is the desire to promote the welfare of others and companies executed this approach through the funding of community projects. This kind of activities were also seen in other countries, for instance in merchant’s

philanthropy in Asian countries (Das Gupta, 2007). Succeeding after and adding to the first phase, the second phase focussed on a wider social equality

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bribery and aiming for fair business standards (Frederick, 2008). At this stage, CSR became primarily a concept of business ethics as the focus was about the fairness of principles, corporate culture and strategies. While the concept

developed over the years, globalization had the greatest impact on CSR (Das Gupta, 2007). With this trend, corporations automatically obtained a larger citizenship duty (Frederick, 2008) due to the expansion and outsourcing of parts of their business. According to Frederick (2008) one of the most important issues caused by globalization that corporations are facing today is the search for long-term sustainability of economics and ecology within their enterprise, but also within national economies and the world system.

In a different way than Frederick (2008), Garriga & Melé (2004) introduce another division in categories of CSR theories. They classified CSR theories into the categories of instrumental, political, integrative and ethical. The first, the instrumental theories, are based on the idea that the social responsibility of corporations is to create wealth (Garriga & Melé, 2004). So they are only engaging in social projects if they can create wealth out of these (Garriga & Melé, 2004). This theoretic approach dominates most of businesses’ conception about social responsibility (Windsor, 2001) and aims at maximizing profits of stakeholders, while also taking their interests into account. Thereafter, the political theories focus on the place of companies in society, which brings responsibilty along (Garriga & Melé, 2004). Specifically, “this leads the corporation to accept social duties and rights or participate in certain social cooperation” (Garriga & Melé, 2004, p. 52). An important theory is the

Corporate Citizenship theory, as also mentioned by Frederick (2008). Thirdly, the integrative approach integrates and emphasizes the dependence of businesses on society, wherefore it should support it. The ethical theories stress that ethics of their business operations are important, thus they serve social obligations out of an ethical perspective (Garriga & Melé, 2004). So the instrumental and

integrative approaches are more a motive of survival, instead of doing well for society (Das Gupta, 2007).

2.2 Eastern corporate welfare

Since the concept CSR found its origin in the United States in the 1920s

(Frederick, 2008), it is a rather Western concept. Therefore, is required to extent the theory towards the East. Forms of CSR also existed in Asia, as Mohan

(2001) states there is a ‘social welfare philosophy’ entrenched in Asian corporate philanthropy (as cited in Arora & Puranik, 2004). In India particularly,

businessmen were influenced by the Gandhian philosophy of ‘trusteeship’, which advocates the idea of businesses “as a ‘trust’ held in the interest of community at large” (Arora & Puranik, 2004). This suggests a strong mutual relationship between the business sector and society. Hereby, first they made contributions for the support of public facilities such as schools and hospitals, while later for public health and rural development (Mohan, 2001, as cited in Arora & Puranik,

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2004). Thus, private sector companies were seen as performing activities, that were later named as CSR (Das Gupta, 2007). Das Gupta (2007) argues that this Eastern philantrophy coincides with the Western philantrophical ideas in a way that they both saw religion as a main motive. So in India, CSR activities grew from the already present high value of charity actions by business communities (Das Gupta, 2007). These charity actions, mainly contributions to schools, hospitals, higher education and support to cultural activities, were established by the creation of trusts and donations. This importance of trusts was earlier

emphasized in a simular way by Aurora & Puranik (2004). In the years

succeeding the independence of India, the demanded progress for the country acted as an extra motivation for businesses to invest more in social

development and reforms. Das Gupta (2007) argues that it was in their own interest to do this, as their own survival would otherwise be more vulnerable.

Singh (2016) states that currently a large part of Indian companies are involved in CSR activities, where private sector companies play the most dominant role. About 9 percent of these activities in India are concentrated in the state of Tamil Nadu. The involvement in CSR activity can largely be

attributed to globalization and liberalization, which initiated the arrival of more transnational corporations (Das Gupta, 2007). In the same way as with Western CSR, globalization and economic reforms influenced the nature of CSR in India in a great way. While in earlier days the emphasis was on philanthropical

motives and charity, Das Gupta (2007) states that at the end of the twentieth century, Indian CSR changed more to the direct engagement of corporations into development. That is why the role of CSR in the new liberalized economic system of India is highly emphasized (Das Gupta, 2007). Conversely, another view is offered by Arora & Puranik (2004), who defend that today the main drivers of CSR in India include philanthropy and image building as most significant, and ethical reasons are less important. More motives for CSR

include a broader market access, improvement in productivity and public image and the reduction of costs and risks (Das Gupta, 2007).

So in literature, a discussion still exists about the nature and motivations of CSR in the Indian corporate world. Impartial of this discussion, in 2013 a bill was passed in the country, called the ‘Companies Bill’, of which one act obliged companies to be ‘socially responsible’ (Singh & Jha, 2016). This applies to every company that has a net profit of 5 crore or more, a net worth of 500 crore or more, or a turnover of 1000 crore or more (Prasad, 2016). A crore is 10 million rupees. These companies have to put in place a CSR committee by law, that overviews, ensures and formulates its CSR policy. The companies are obliged to re-invest at least 2% of their net profits into local areas (Prasad, 2016). Nonetheless, despite the existence of a legal way to enforce CSR, the meaning of this ‘socially responsible’ remains unclear.

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CSR does not embody the same as Western CSR. In India, Indian companies are more socially responsible than multinational companies in the country, pointed out by a research conducted by TERI and New Academy of Business, UK (Das Gupta, 2007).

2.3 CSR as generator of development

The role of CSR is ever important now because of the challenges that come with liberalization and a free market (Das Gupta, 2007). This shift welcomed foreign direct investment into the country and has extended the role of the private sector, a factor that has influenced CSR in a great way. Also, it has discredited the role of the government as the main generator of development (Newell & Frynas, 2007). However, a discussion remains present in academic literature whether this ‘doing good’ philanthrophy of businesses is able to tackle the difficulties of economic development. Worldwide, organisations such as the Department for International Development (DFID), the World Bank and the United Nations are embracing CSR as a possible method to decrease poverty (Newell & Frynas, 2007). Frynas (2005) offers another view, in which he argues that the CSR executed by corporations in his study (oil multinationals) is not able to contribute to development. This deficiency would emanate from the motives for CSR of the studied oil multinationals, for aiming to be competitive

advantageous, the management of the external perception to their company and stabilizing their working environment and maintaining happy employees (Frynas, 2005). These objectives seem to hold back the developmental capacity of their CSR activity. The counter arguments are that it would only be philanthropic aid to buy a community’s support, to improve the company’s reputation, so for public relations purposes or that often the initiators are not development

specialists (Frynas, 2005). Besides this, the study argues that the CSR is more involved in short-term convenience projects for the companies instead of long-term commitment, which would better result in development. There seems to be a lot of amateurism in the process of these projects, where the help was only a symbolic effort (Frynas, 2005). These examples are all preventing a legitimate contribution to being actually valuable for socioeconomic development. Another stand Frynas (2005) brings forward as a cause for the failing CSR to be good for development is the lack of sufficient governance. The fact that CSR is needed shows a deficiency of the government in its developmental role (Frynas, 2005). Besides, as a consequence, CSR support also draws this role even further back from the government and companies might not have the appropriate

mechanisms to take a part in this role (Newell & Frynas, 2007). On the contrary, governments always create the conditions how companies should be involved in development (Newell & Frynas, 2007), so in that way they can set objectives to steer them in a direction. However, this is only possible when sufficient

governance is in place and able to supervise this.

While Newell & Frynas (2007) are more positive about the contribution CSR can have for local community development, especially in terms of

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infrastructure, a lot still remains unclear about the developmental ability of CSR. At the same time, there are no significant tools available to measure the

corporate impact on development. Still, Newell & Frynas (2007) argue that the potential of development realisation of a company is governed at a much higher level through investment and management decisions than through the provision of welfare activities at a local level.

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Methodology

In the following chapter, the research questions and all the choices made during the research will be discussed. Firstly, the research questions will be introduced, where after the methods and the phases in the fieldwork will be explained.

1.Questions

1.1 Research questions:

What is the role of SIPCOT Industrial area’s corporate social responsibility in regional development in Cuddalore District, Tamil Nadu?

1. How does the structure of CSR of SIPCOT companies in Cuddalore District look like and what is their perception of the concept?

2. What are the differences between CSR measures as how companies are justifying them and how are they perceived by local affected

communities?

3. In which way are other actors playing a role in the arrangement of CSR between companies and society?

4. What is the role of CSR measures in providing health, education and drinking water in the villages of Karaikadu and Kudikadu?

The main question in this research is what role CSR plays in the regional

development of Cuddalore District. However, in order to be able to answer this question, first a broad inquiry of the general structure of CSR in Cuddalore District was necessary. In the first sub-question, themes such as the actors, what kind of projects, what motives and choices, the perception of the concept and the outcomes of CSR are tried to be obtained. Following this question, the second sub-question two tries to discover the motive of companies and the perception of local affected communities regarding CSR activity. Subsequently, additional actors needed to be examined. Is CSR only carried out by companies, directly to the local communities, or are there any other organizations or actors in place that influence the arrangement? Lastly, the addition of the fourth sub-question has been to create more emphasis. This comparison shows a livelier image and study exposes the differences between the panchayats of Kudikadu and Karaikadu, the two primary municipalities in Cuddalore District regarding corporation’s CSR activities. In this case study, the concentration was on the main fields of CSR in this area; health, education and drinking water, which are valued indicators for regional development (Dash & Sahoo, 2010; Social

Progress Imperative, 2016; OECD, 2017).

2. Research design

This research is a descriptive case study of the corporate social responsibility of 5 companies of SIPCOT in Cuddalore District. In this way, it is focussing on a

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single organizational structure, which makes it eligible for case study research (Bryman, 2012, p. 66). It was carried out at multiple places in different villages within Cuddalore District, Tamil Nadu, during fieldwork in April 2017- May 2017. Qualitative data was generated out of 26 interviews with multiple actors in the overall structure that was present. Because of this, the research methods have differed for data collection. Next to this, it has been a process of deductive, but mainly inductive thinking as is regular in case study research with a qualitative strategy (Bryman, 2012, p. 69).

The process of this research has started with deductive reasoning from a literature review. Theory about the context of SIPCOT Cuddalore, its effects and its place in the broader theme of economic development have been helpful to direct to a certain focus. In the research questions, the aims of the research questions have already been discussed. However, these questions have

changed continually over time because of better understanding of the situation at hand. Only upon arrival in India, the context in which the process was

embedded was better understood. Consequently, sometimes questions needed to be sharpened or even changed. This could be seen as inductive reasoning, since some questions were formed out of the already gathered knowledge.

Eventually, the research has started with observations on the streets and in the villages surrounding SIPCOT Cuddalore, mainly situated near the East Coast road. From these observations and a list of all the SIPCOT companies in phase 1, phase 2 and phase 3, obtained from earlier research of translator S. Selva and professor A. Menon of the Madras Institute for Development Studies, a list of 10 key companies was made. During the next weeks, 5 of these

companies have been interviewed due to time, admission and availability of the managers. In these interviews information has been collected which could be used for the next phases. The most interesting CSR projects such as support to schools and medical facilities were selected and visited. These were selected because they were the accessible CSR activities, are important indicators of the quality of life, which contributes to development, and were therefore of value in order to answer the research question. In this way, most of the information from corporate interviews was validated and the structure of CSR was cleared. This strategy of triangulation, the use of more sources of data, resulted in a higher confidence of the findings (Bryman, 2012, p. 392). During this phase, also 4 panchayat interviews were carried out, in addition to the interview with SIPCOT Administration. In the second phase, the perception of villagers towards CSR was measured by structured interviews. This is important because the social world can best be understood from the perspective of the subjects being studied (Bryman, 2012, p. 399). These were carried out with as many respondents as possible, equally divided between man and woman and with notice of different communities.

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3. Methods

Observations

During the first days of the first week of fieldwork, observations have taken place in and around the villages close to the East Coast Road, which is south of

Cuddalore Town. From these observations, information was gathered about the context of the case study, the living areas of different communities and their distances to company plots.

Semi-structured in-depth interviews

For the information gathering of the structure of CSR, semi-structured interviews with the same questions for each company were conducted. The amount of company interviews strongly depended on their availability and our admission to the factory, causing the researchers to try repeatedly. Thus, while making use of a list of 10 companies, the sampling method herein has been convenience sampling.

After interviews with some companies, the CSR projects that were found were being validated. This was done in interviews at the prescribed places. For instance, in an interview with Strides Shasun a rural health centre in Kudikadu was mentioned. In order to validate information from the companies, the rural health centre was visited and available officials were interviewed about the existence and course of events in the centre. This was also done at three schools, where headmasters and teachers were asked about their knowledge about CSR activity at their school. This method of triangulation has already been described in the research design. Since the respondents for these interviews were gathered out of former ones, the sampling method for the public facility interviews and the interviews of the next paragraph has been snowball sampling.

Thirdly, informed by the conversations with companies, the interference of CSR activity by other actors needed attention. This was done by conducting interviews with village officials, namely panchayat presidents, a panchayat clerk and the village administration office. Besides this, the SIPCOT Association was often visited, in order to arrange one interview with the director.

Structured in-depth interviews

Lastly, to capture the perception about CSR of the local community, a structured interview list was drafted (Appendix 1). After the questions were proven to be solid in the field, twelve interviews (six each at two different villages) were conducted with respondents between 16 and 65 years old. The sampling method for the structured interviewing has been first by context, because two villages were selected. Then, the respondents were sampled in participants, because the interviews were divided equally between gender in each village. These sampling steps were purposive criterion sampling, since the respondents had to meet a particular criterion (Bryman, 2012, p. 419): a specific village or gender. In these particular criteria groups, the sampling method has been

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convenience: dependent of the availability of villagers (Bryman, 2012, p. 201). Next to this, the village of Kudikadu is divided in two communities, where in each two interviews were conducted. The criteria were chosen in order to investigate if there were any differences between age groups, gender and community. All the community interviews were held with a member of a

household. The questions in these interviews were in order to gain insight on the themes of their socio-economic status, gender, age, community, feelings towards the realization of SIPCOT, basic infrastructure in their living place, the justification of practice by SIPCOT companies, the mutual relationship, their panchayat, their opinion about CSR and responsibilities of different actors. Methods and units of analysis

Method: Units of analysis: N=…

Observation Whole villages, SIPCOT company areas,

distances from village to SIPCOT, surroundings. X

Talks Villagers, people on the street: to gain very broad insight on the village and area, people of CSR projects.

X

Semi-structured interviews

§ Manager, higher employee of a SIPCOT company

§ Employee of public service § Additional actors 5 4 5 Structured interviews

§ Adult household member. 12

4. Research area

The research was conducted at different places in the area alongside the East Coast road (Cuddalore Chidambaram highway), south from Cuddalore. In figure 3, the important villages are pictured in white, with their panchayat between brackets. The yellow names are the five researched companies: Pondicherry Alum and Chemicals Limited, Strides Shasun, ASIAN Paints, Pioneer Jellice and Chemplast Sanmar Limited, all located east of the East Coast road. In figure 4 and 5, clarifications of the surroundings are provided.

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Figure 3: Villages and companies surrounding SIPCOT Industrial area in Cuddalore District, India. Between brackets: panchayat (municipality). (Google Earth & author, 2017)

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5. Limitations

Several limitations can be noticed from this research. First of all, the data has been influenced by the translation and interpretation of the translator. Although his English was sufficient, interpretations were probably made and discussions about this followed. His opinion and knowledge about the area as a researcher himself was also of value, though a critical view remained necessary. Naturally, the aim has been to let this influence be as little as possible. Secondly it is important to emphasize that this research is based on the perceptions and opinions of all actors involved in the process of CSR: companies, villagers, village officials and organisations. The research is dependent on their

trustworthiness. An often-argued critique of qualitative research is that it is too subjective (Bryman, 2012, p. 405). Nonetheless, this influence is lowered because of the many different opinions of actors combined, which makes it more objective. Thirdly, the role of different communities was unfortunately neglected, because of the difficulty to approach people with the subject, the sentiment people experience, the lack of understanding of the researcher of caste and the lack of time. Besides this, for the provision of CSR it didn’t seem an important factor. Fourth, generally the scope of the findings is restricted in case study research, which causes the external validity to be low (Bryman, 2012, p. 47). However, this case study is not so specific for Cuddalore District, since there are more SIPCOT plots in Tamil Nadu and similar industrial clusters

available throughout India. In other cases, the mediating role of the SIPCOT Association might be absent, but the influence of multiple companies’ CSR activity on a community could still be alike. Lastly, as in every qualitative case study, this research is subjected to the choices of the researcher.

Considerations may be influenced by its view upon the subject in a small regard, despite the endeavour of being objective.

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Context

1. SIPCOT Cuddalore

The focus area of this research is SIPCOT (State Industries Promotion

Corporation of Tamil Nadu) Industrial area in Cuddalore District, Tamil Nadu. This industrial area accommodates different companies, which were established since 1984 on 518,79 acres in total (Rajarajan & Vetrivel, 2016). Most of the plots are allocated to chemical companies. The project was partially realized because of the expectation that such an industrial area would develop the backward areas around the plots (Udayakumar, 2004).

Figure 7: Map of SIPCOT Cuddalore phase 1 plots. (State Industries Promotion Corporation of Tamil Nadu (SIPCOT), 2011).

2. Impact of industrialization

In academic literature, different views are present about the impact of SIPCOT Cuddalore on its surroundings. Different researches point out the extreme pollution the chemical plots are producing (SIPCOT Area Community

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On Environment and Human Rights, 2003). For instance, a soil sample from the SIPCOT complex area was heavily polluted because of effluents and waste compared with the soil of Cuddalore Old Town (Mathivanan, et al., 2010). Next to this, the national newspaper stated in 2016 that groundwater around SIPCOT Cuddalore was extremely contaminated and not safe both for human and animal (The Hindu, 2016). The Tamil Nadu Pollution Control Board had failed their tasks in protecting the area from pollution (The Hindu, 2016).

Besides that, also positive sounds exist, however in a much lesser

amount. For instance, Udayakumar (2004) argued that the realization of SIPCOT industrial area brought improvements in infrastructure, work and benefits for the community as a whole. On the contrary of the former, a respondent in a report of the Indian People Tribunal stated that "So far, industrialization has brought us no benefits in any way, only problems” (Indians People Tribunal On Environment and Human Rights, 2003, p. 27).

3. Employment in the area

The research of Udayakumar (2004) states that the SIPCOT industrial units provide many opportunities in the region in terms of labour. And so it should, since one of the purposes of the SIPCOT area was to develop backward areas around the Industrial plots. The companies under the used questionnaire in Udayakumar’s (2004) research state that the ex-owners of the plots should be provided with employment in their organisations, and therefore that their

practices are beneficial to the surroundings. Also, the arrival of SIPCOT Industrial area should reduce regional imbalances (Udayakumar, 2004). However, in a people’s tribunal, a respondent said that the industrial plots refuse to hire local people (Indians People Tribunal On Environment and Human Rights, 2003). Thus, this short introduction to SIPCOT Cuddalore shows that there are many discussions and contradictions regarding the livelihood of the community, the amount of pollution and the developmental benefits of the industrial area.

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Results

1. CSR in Cuddalore District

1.1 Actors involved in CSR

In order to discuss the role of corporate social responsibility in rural development in Cuddalore District, it is necessary to describe the total system of CSR

activities present in the research area. In this system a few actors are present, of which the most important ones are the companies. These players carry out the CSR activities, make certain choices and are at the top of decision-making. Next to these, the local collector’s office of Cuddalore District plays a role. This is a governmental body at the level of the district that can arrange or demand CSR activities from the companies, which is often arranged by the SIPCOT Association. The CSR activity requested by the collector is for public services such as hospitals and other basic needs. The formerly mentioned SIPCOT Association is an organization created together with the realization of the SIPCOT complex, and is meant to be an independent body for collaboration, counselling and monitoring of the corporations. As the representative put it, the “role of Association is maintaining the welfare of the companies and the

relationships between them and the Association”. However, this organisation plays only a small role in the whole structure of CSR in Cuddalore District. Another less logical, but important actor is the panchayat office of villages. A panchayat could best be described as a small municipality, under which a few villages are governed. The village panchayat has duties such as tax revenue, maintenance of public roads, parks and sanitation in the village as well as some administrative duties (Government of Tamil Nadu, 2017). The people in this villages choose a panchayat president that is their controlling officer. This man has a panchayat board of around ten man that help him in decision-making processes. The importance of this actor in the system is that he is a link in the chain of villagers and companies. The panchayat president is always a village man, so the local community often supports him because he is one of them. At the other hand, he is communicating with companies and the government about the village needs and conflicts, thus he is a mediator, which later will be

explained. Village needs come from the villagers in the community themselves, making them also an actor group in the system of CSR activity in Cuddalore. 1.2 The definition of CSR

The next step in clarifying the structure of CSR activity is answering the ‘what’ question. Corporate Social Responsibility is a widely discussed concept, used by very different definitions around the world. But how do the companies in the SIPCOT area perceive this concept, and more importantly, how do they carry it

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give an image about the activity in the region. These five companies and their personal CSR activities are scheduled in table 1 (Appendix 2) for a more structured overview. All the companies were quite open about their corporate social responsibility activities, because they see it as something good performed by their company. For the investigated companies, corporate social

responsibility has a broad meaning of helping other people, responsibility of the company to assist communities and development and investment in the

surrounded society. This is shown for instance by ASIAN Paints who stated they want to “serve the people around us” or by the representative of Chemplast who told ‘I feel the responsibility of the company to assist the people’. The

companies were fine with this definition being stated in this research, because they see it as something good.

1.3 Sorts of activities under CSR

When filling in the structure of CSR in Cuddalore, most essential is what kind of projects are performed by the companies. These included a wide range of different things, among which the main focus activities in Cuddalore District are medical treatments, educational support, drinking water supply or facilities, temple donations and flood relief. Each company has its own focus, which is shown in table 1. Where Asian Paints is clearly focussing on education,

Chemplast gives its main priority to flood relief. Educational support mainly consists of providing schools with stationeries for students, small scholarships or needs for physical education or other subjects. For instance, Asian Paints provided 17 computers, two teachers, science supplies, teachers salary,

building facilities and other things to a higher secondary school in Karaikadu. As to water scarcity, companies provide water towers, RO purified water systems or drinking water itself to villages. An example of this is the company Strides

Shasun that brings five water tankers a day to the village of Kudikadu. Also Pioneer arranges drinking water to the nearest panchayats, and Pondicherry Alum mentioned a contribution to a drinking water bill arranged by the SIPCOT Association. This indicates that the SIPCOT Association is also performing CSR activities as an independent body. These activities are registered in table 2 (Appendix 3), though some of them may also be already present in table 1. The determination which projects or activity was carried out by whom was sometimes confusing. At some projects, for instance at a middle school in Karaikadu, at the walls of a supported school the name of the provider was present (here: Asian Paints, figure 8). However, not all CSR activity is directly visible; earlier financial contributions to temple festivals may not be known to villagers and they also could confuse from whom they received their rice, biscuits and bed sheet in the times of flooding. That is why it is important to emphasize that the

information in table 1 and 2 is provided by the companies and SIPCOT

Association themselves, and is therefore subjective and may not contain every single CSR activity of the companies.

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1.4 Companies’ choices for projects

One of the questions in the research has been why companies made choices for certain projects. This was to make clear if companies actively have a choice in the kind of CSR they carry out or let carry out for them. Already after a short period of time it became clear that many of the CSR activity that currently exists, was arranged by the government, the panchayat president or by the villagers after asking a company. Also some CSR activity has been in place for a longer time, making it logical to choose it again the next year, such as financial temple donations. The companies indicated that they inform themselves about the necessities in the villages around them, for instance through a survey or

requisition letters from the public and NGOs. Strides Shasun clearly mentioned that most of their CSR activities are requests that come from the villagers or the government, containing the needs and scarcities of villages. The requests from the villagers come through the panchayat president. When these are gathered, they are taken into consideration by the main office, which can then decide upon them. Another decision structure is carried out by Pioneer, who arrange a survey investigating the affected villages. Afterwards this is being checked by an inspection and ends up with the Vice President of the company. But still,

requests of villagers remain present and sometimes cannot be neglected, Chemplast explains. The company’s representatives stated that they cannot undermine the villagers’ requests for temple donations, because they are very religious. If the company would suggest moving their CSR activities to other fields of their own interest, the panchayat would refuse it and a conflict would arise. So decision-making for certain kind of projects definitely is influenced by the necessity that the villagers are supporting the company and feel pleased. In this process, interference by political parties can also sometimes happen, states Chemplast. For instance, if a political group makes promises to villagers to get their support, they can pressure a company to realize this need. Though, these promises can also easily be wiped away because of briberies from the

companies to political parties, a young man from Karaikadu stated.

‘A management strategy’ chosen by Shasun, and also mentioned by Pondicherry Alum, is the distance in providing CSR projects. They told that when ‘‘the 4th village is less affected than the 1st” the strategy is to provide to the closest village to the plots’ borders. Almost every company named projects in villages that were close, and explained the importance of a good relationship with their ‘neighbours’. A small exception to this rule is Asian Paints, who is providing lots of support to the higher secondary school in Karaikadu, which is not located next door. An explanation for this could be that it is still the closest high school in the neighbourhood, making distance not their first importance in picking the kind of projects they support. Still, distance seems an important factor that is being taking into account when picking projects to support.

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1.5 Motives

In the same way as companies have a reason for a certain kind of project, they also have different motives to be involved in CSR at all. A few companies corrected me in calling it their motive, because a ‘motive’ implied for them that it generates benefits. They rather point CSR out as a way to uplift the people around them through helping them, in order to smoothen the relationship and prevent upraises. However, when companies are involved in CSR with any

reason in mind, this research argues that thus it could be stated as their motive. Chemplast stated that they feel the responsibility to do this, since they feel that the government is not always doing it good. Pioneer said that if the relationship is not well maintained, people can cause a conflict in the future. This would eventually be disadvantageous for their profits. Another point, also brought up by Chemplast, is about aiming at long-term sustainability for the company, which they can reach by assisting people around their plot. However, 2 out of the 5 companies admitted that they mainly perform CSR activities because villagers insist on it. They answer these demands to maintain a peaceful relationship and get the villagers’ support. None of the companies said to receive any corporate benefits for providing CSR, and Pondicherry Alum stated their CSR was not even obligatory as a result of their minor profits. But as to the rest, the law, as required by the state authority, about 2% of their profits should be invested into CSR activities was in order. Thus the motive of most companies is partly philanthropic, but mainly serving the purpose of maintaining a smooth relationship with the surrounding villagers, for support of the companies’

activities.

Where flood relief is most of the times a voluntarily CSR activity, as stated in the villagers’ interviews, temple donations are mostly insisted upon by the villagers. This is a division that is interesting to point out. Some CSR activities are asked to the companies, and others are voluntarily. A third kind of CSR is when it is arranged by a third party; a government development scheme, the district collector or by the SIPCOT Association. These are sometimes hard to recognize, since companies only finance projects and name it a contribution or donation. Also activities occur where the district collector appeals to the SIPCOT Association, which then again askes a contribution from different companies for the project. In this way the structure of who is providing CSR in what way is hard to analyse, since it appears to be quite random.

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Figure 8: Sign on the canteen building of the Middle School in Karaikadu. (Author, 2017) 1.6 Cooperation between actors

The last point worth investigating in this chapter was the question whether companies collaborated for their CSR activities, and thus if there were any shared projects. Nevertheless, in the whole researched picture of CSR in

Cuddalore District, no projects where companies collaborated were found. Also the question to the companies if they worked together on certain things, was strictly answered by for instance “working together wouldn’t work, because the management is very different” (Chemplast, 2017) and that every company is involved in other things. Strides Shasun stated that contact and collaboration between companies should be arranged by the SIPCOT Association, but that this organisation is not working properly. Meetings would not be regularly conducted and the contact is poor. A second point that came up was that contact with other companies is not happening because of political interference, or that contact with the SIPCOT Association is not happening because of the same reason. This would mean that political parties hinder co-operational attempts of SIPCOT companies, also to share and carry out CSR activities together.

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Figure 9: Public toilet placed by Strides Shasun in Kudikadu. (Author, 2017)

2. Mediators: the role of SIPCOT Association and the village panchayat

As mentioned briefly before, the role of the SIPCOT Association is to maintain the welfare of all the companies and sustain the relationship between them. So most of all the Association has a coordinative role, namely to solve any issues that companies are facing. Besides this, it organises and carries out some CSR activities, which is why the organisation is of importance to this research. Most of the time the Association does so in request of the district collectors’ office. This is one of the administrational body’s at the District level, in this case of Cuddalore District (see for more info: National Informatics Centre (2017)). After a request comes in, the SIPCOT Association can judge whether to support it or not. When they do, the next step is seeking support from the companies. The representative of the Association stated that “Sometimes companies have other focusses”, so they don’t always support their projects. However, most of the times the companies are urged to support the projects because they are the members of the Association. The Association representative indicated that there is “there’s no thumb rule for that”, meaning this procedure.

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The companies are predominantly focussing on drinking water supply, health, education, social awareness and environment, according to the

Association. Also, they would “have all kinds of guidelines” for providing CSR and their focus lies upon the nearby villages. Most of the CSR activities are carried out independently and are not arranged by the SIPCOT Association. According to their spokesperson the reason for this is that the companies rather want their own corporate label on it, instead letting it implement by the

Association. Besides this, they can receive an award for providing good CSR activities from the District Collector. As already briefly mentioned, according to the representative of Strides Shasun, “this association is not working properly” and “they don’t conduct the meeting regularly”. This statement seems to illustrate the more or less vague interference of the Association.

As introduced in the structure of CSR, the panchayat is comparable with a municipality, since it governs over a group of inhabitants and a physical area (Bavinck, 2001), and is a stakeholder in the process of the provision and arrangement of CSR. Since the panchayat president has control over multiple villages, he is the mediator between the inhabitants of these villages and external authorities such as the government and powerful companies. He is there to realize people’s demands and solve conflicts if there are any. Besides being the bridge between two parties, the panchayat president can approach companies for demands from the villagers. Almost every respondent in the villagers’ interviews indicated that the panchayat is most responsible for the provision of basic infrastructure, since he is the government’s representative. It also appeared that in recent years, the panchayat presidents had realized some of this infrastructure. The view towards the panchayat president seemed good, because the inhabitants often stated that they would approach this actor in case of problems or needs. One man however, claimed that the panchayat president of Karaikadu was being bribed by the companies. “In this way he will support the companies and care for the people to remain quiet”. This statement indicates that the president is not always supported by every inhabitant.

3. Legitimization of the activities by corporations and the perception of communities

It has already become clear that the motive under which companies provide CSR activities in their surroundings is mainly to smoothen the relationship with

villagers. Besides this, they try to avoid more conflicts, or any conflicts at all. However, what companies often didn’t mention is that these conflicts regularly are about pollution of any kind. Villagers are aware of the fact that their living environment is being polluted in a small or large extent by some of the

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means to prevent conflict situations. Thus, they are legitimizing their wrongdoings by doing good as a consequence. The fact that 2% CSR is

obligatory for the companies, sounds ideal and villagers are quite supportive of this approach. A young woman from the Kudikadu Dalit area told that she feels that the companies are polluting her living environment and that sometimes even drops from the air fall down. Thereafter, she stated that the companies are supporting them with CSR to make them satisfied, and despite of the pollution, she felt that they are doing good in helping them. However, another respondent disagreed and told that the approach is not working in the village of Kudikadu. “People are still angry with the company that they didn’t do anything” was the man’s statement from the Kudikadu Vanniyar area. Next to that, he felt that the company should make amends because they are so polluting. So people

generally agree that pollution makes the companies responsible to provide things, and they feel that this is working to smoothen the relationship between them and the companies. Aside from this approval of CSR activity, they still disapprove of pollution being made by the companies.

4. A comparison: the differences between the villages of Kudikadu and Karaikadu

To put more weight into the research a comparison between the villages of Kudikadu and Karaikadu was added. These villages are interesting because of the differences in CSR activity that were notable. The description of these villages will provide a livelier understanding of the structure of CSR and objectives of the companies, panchayat president and villagers at play in Cuddalore District.

Figure 10: The villages of Kudikadu (right) and Karaikadu (left) alongside the East Coast road, Cuddalore District, Tamil Nadu. (Google maps, 2017)

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Kudikadu is a small village east of the East Coast road, which is at the same side as all the SIPCOT companies. As it is almost completely surrounded by them, it is partially excluded from connection with other villages. From the East Coast road, a small road reaches the Dalit1 community area in the village, where most of the CSR activity in the village is carried out. In this part also the

panchayat office and village administration office is situated. Active player Strides Shasun is a direct neighbour of this village part, which makes the area less appealing. When continuing on the same road, after at least 500 metres vacant lands, the Vanniyar2 community area is situated. This area is further away from industrial plots, is connected to the village of Echankadu and has a more widespread setting. The former village panchayat president is a Vanniyar male and is still widely respected, which is why he is running for a second term. The CSR activities in the village of Kudikadu are of various kinds, mainly the

provision of drinking water, temple donations, the realization of a small medical facility, two cement roads, financial assistance for education, donations for medical support, public toilets, an evening tuition centre and flood relief. These actions are arranged by companies such as DFE Pharma, Clariant, Loyal Super Fabrics and Asian Paints, but mainly by Strides Shasun. The reason for this, which also becomes clear from the interview with this particular company, is because Kudikadu is right next to the fabric’s plot and is the most affected by this company. Especially the Dalit area of Kudikadu is most affected, which is why the medical facility for first aid, the evening tuition centre and the drinking water supply are provided here. In the Vanniyar area, only sometimes medical treatment is provided and flood relief on incident. This means that the drinking water here is taken care of by the government, despite the fact that both areas receive it from the Kannaripettai Hill Station. So in one area a company is

helping to arrange decent drinking water, while in the other the government does so. The explanation that Vanniyar villagers give for this inconsistency of

providing drinking water and other CSR activities to the Dalit area, is because they feel that Dalit people always protest for it. The Vanniyar villagers don’t want to take this approach, and rather have the companies to do it themselves or let it the responsibility of the government. They do however wish for more support to their part of the village, since companies have created pollution and were involved in land grabbing3. Vanniyar people are not keen to ask, because they lost hope in receiving support from companies after years of being neglected. The Dalit people on the other hand, also feel that they have not received enough support from companies, though in comparison with the Vanniyar villagers they

1_{Dalit is a Hindu social class that formerly was named as the ‘outcastes’, falling outside the}

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did. Nonetheless, it should be emphasized that the Dalit area is much closer to factories than the Vanniyar area. So the difference which was noticeable, is that Dalit people seem to protest and ask for CSR support, and that the Vanniyar people dislike this behaviour and expect companies to take initiative. The outcome is that the Dalit people receive more CSR activity in their area of the village than in the Vanniyar area. If this can be attributed to its distance to the companies or the fact that they seem to ask for support is discussable. A factor that could relates to this inner-village conflict is the village panchayat president. As mentioned before the former panchayat president is from the Vanniyar area. Vanniyar respondents argued that their strategy to gain more from companies would be to go to the panchayat president or to one of his board members. On the contrary, Dalit people were more keen to approach the company directly or even go protest against it. Thus, being of the same community as the

panchayat president could be an important factor in being able to express the needs for the community area. The former Kudikadu panchayat president was very active in arranging CSR facilities for his village. His role for CSR is to

intermediate in conflicts and assess people’s needs. According to him, the Dalit area is more heavily polluted than the Vanniyar area, which seems the reason behind the support from the companies for this area. The case of Kudikadu gives the impression that the assertiveness of the Dalit people, their location and their more polluted environment is more important than the role of the panchayat president. Thus, this research argues that the panchayat president is an actor who could play a big role, but the companies’ will and the demands of the people are stronger.

The village centre of Karaikadu is located about 1 km away from the East Coast road and the most important companies of SIPCOT. The village is also divided into more parts: Chinna Karaikadu, Periya Karaikadu, Angalaman Karaikadu and Valli Karaikadu, of which Angalaman Karaikadu belongs to a different

panchayat. For this research there will be no distinction made between the different parts, since its communities are not as strictly divided as in Kudikadu village. The village is very spread out, so some parts are even located more fare from SIPCOT companies than the centre. In total, the village has received flood relief, educational support, temple donations and a medical camp as CSR activities from companies in the last 20 years. The main providers were the companies Strides Shasun, Clariant and Asian Paints. However, what is striking in this village is that the Government Higher Secondary School has received an abundance of support, only from Asian Paints. It is the most supported public facility in whole Cuddalore District, apart from all the support to different purposes in the village of Kudikadu.

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Figure 11: The backyard of simple loam houses in Kudikadu, the Strides Shasun company. Drinking water in Karaikadu is provided by the government and is derived from the Kannaripettai hill station. Besides the Higher Secondary School, also a Middle School in Chinna Karaikadu has received support from Asian Paints, as well as a medical treatment hour for all inhabitants. At the Higher Secondary School, a school compound, science gear, 17 computers, an RO purified water system for students, a football and a volleyball court, part of the teachers’

salary, student scholarships, the electricity bill and two teachers were granted by the company. The school director states that the help came voluntarily from the company in 2000, and after that it has been a reciprocity of arrangement. The government provides basic school needs, though if they would ask additional things to them, it would take a long time in comparison with companies. The panchayat president claims that the company undoubtedly contributed to the level of education at the school. At the Middle School, Asian Paints provided toilets, a kitchen building, two computers, a stage, furniture and a water purifier for the kids. In addition, the company Tanfac supported the school with a library

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from his company. Now, the school is in contact with the company about their needs. The school employees feel that the given support is rightly, since

companies use the resources around them and pollute their environment. Also the interviewed villagers of Karaikadu agree that pollution is the main reason why companies should be socially responsible and why they are currently providing the support they are providing. ASIAN Paints seems only to be interested in supporting education in Karaikadu, since a temple donation request was being rejected, according to the Higher Secondary School director. Besides this, the school’s representatives argued that all companies are polluting, but Asian Paints is making amends for this by supporting the village. Normally, every other day a medical hour is arranged in a school classroom by ASIAN Paints, but the panchayat president, villagers and the company itself argued that this will be changed to a mobile medical camp two weeks a day.

The panchayat president of Karaikadu is less involved in any mediation activities than the one of Kudikadu. This became apparent from the fact that he didn’t seem to know much about CSR activity in the villages, only about ASIAN Paints providing to the schools voluntarily. In contrast, the Village Administration from the same villages also knew about temple donations from more

companies. The panchayat president also supposed that companies wouldn’t want to invest in his panchayat because the distance to the plots is too big. Further asking would only led to disturbance, and would risk the provision they currently receive. Requests for drinking water from his village board members is he refusing, for the reason that Karaikadu’s groundwater is not polluted. His stand is that companies don’t consider his panchayat worthy of support, mostly because of the distance to the factories and the lack of pollution. He argues that Kudikadu has a better position for claims, because of their situation.

An important statement that came up during an interview with the Karaikadu Middle school is that Strides Shasun seemed also ready to support the village of Karaikadu. However, as the respondents argued, the villagers of Kudikadu didn’t allow this to Strides Shasun, in fear of losing their own provision of support from the company. From this example it becomes apparent that the provision of CSR is an interaction between village requests and companies’ choices, where the panchayat president could play a big part.

The role of corporate social responsibility in regional development