Question: ABC Ltd. Is a large transnational company. The company is continuously expanding the generating employment. The company, in its expansion and diversification programme, decides to establish a new plant at Vikaspuri, an area which is underdeveloped. The new plant is designed to use energy efficient technology that will help the company to save production cost by 20%. The government has also announced tax holiday for five years for the companies that invest in underdeveloped areas. The new plant may result in increased cost of living, aliens migrating to the region, disturbing the social and economic order. The company sensing the possible protest tried to educate the people of Vikaspuri region and public in general that how its Corporate Social Responsibility (CSR) policy would help overcome the likely difficulties of the residents of Vikaspuri region. In spite of this the protests begin and some of the residents decided to approach the judiciary as their plea before the Government did not yield any result.
a) Identify the issues involved in the case b) What can be suggested to satisfy the company’s goal and to address the residents’ concern?
Answer: The above mentioned case is an example of conflict between developmental propagators and traditionalists, where some sections want to bring in drastic changes to society whereas others want to maintain the status quo.
In order to solve this issue, the benefits and losses have to be weighed in and later decision should be taken regarding the need for development.
- Social impact
The biggest fear expressed by the people in the area is regarding social impact of the project. They believe that development will bring outsiders including migrants from backward regions who have potential to disturb social balance and harmony. This can further enhance conflicts between various groups based on language, religion etc.
- Crime rates
The biggest price one has to pay for development is increase in crime rates. Development will bring prosperity, which will attract both rich and poor. Poorer sections will try to capitalise on richness by involving in activities such as robbery, murders, kidnapping, extortion etc. This will be disastrous for any society.
- Industrial disasters
Industrial disasters are major risk for people staying near the plant. Any accidents can be fatal to large section of people. It is advisable to set up companies is special industrial zones that have provision to keep public away from danger.
Measures to balance opinion between company and public
- Exclusive benefits for society
The company needs to reiterate its obligations towards the society by announcing exclusive benefits to the people. This can be in form of setting up of hospitals, schools and colleges, community recreation and most importantly reservation in jobs. This may act as a peace broker between the two groups.
- Safety and security
The company needs to convince public regarding its commitment to enhance safety of the plant. This can be in form of its location safety and also its ability to respond during distress. It also has to take steps to prevent conflicts between migrants and locals by setting up separate residential colonies for migrants. It must also involve in background check before employing outsiders.
- Yearly donations
The company must take responsibility for contributing a certain part of its yearly profits towards welfare of its employees and locals other than CSR. These measures can coax the people to stop their opposition to the project.
Thus, it is necessary that society has to be convinced for setting up a project even if judicial permission has been obtained.The cooperation of people is very important for the project to succeed.