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

Future Planet Studies, major Human Geography

University of Amsterdam

Amsterdam, June 26nd 2017

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Table of contents

List of abbreviations and concepts 3

Introduction 4

Theoretical Framework 5

1. Liberal reforms 5

2. Corporate Social Responsibility (CSR) 9

Methodology 14

1. Research questions 14

2. Research design 14

3. Methods 16

4. Research area 17

5. Limitations 20

Context of SIPCOT Cuddalore 21

1. SIPCOT Cuddalore 21

2. Impact of industrialization 21

3. Employment in the area 22

Results 23

1. Structure of CSR in Cuddalore District 23

2. Mediators: the role of SIPCOT Association and the village 28

panchayat

3. Legitimization of the activities by corporations and the 29

perception of communities

4. Case study: differences between Kudikadu and Karaikadu 30

panchayat

Analysis 36

1. Analysis of the structure of CSR in Cuddalore district 36

2. The role of CSR in regional development 36

3. The contribution of industries to regional development: a 39

shift of responsibilities

4. Western CSR vs. Eastern corporate welfare 40

Conclusion 42

Recommendations for further research 44

Sources 45

Appendix 49

3

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)

4

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

7

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

that the economic growth in India did not generate development for the people.

Thus, there is an ongoing debate about neoliberalization as an inclusive growth

8

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

9

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

agenda, namely diminishing social problems such as racism and sexual

discrimination in the workforce, but also opposing industrial pollution, avoiding

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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.

Das Gupta (2007) emphasized the notability of the nature of Indian CSR,

since it was influenced by factors such as colonialism, a state-led economy and

the still existing income disparity. In this way she supports the statement that

12

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

13

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

15

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

17

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.

18

Figure 3: Villages and companies surrounding SIPCOT Industrial area in Cuddalore District, India.

Between brackets: panchayat (municipality). (Google Earth & author, 2017)

Figure 4: Main street in Karaikadu village, Sedapalayam panchayat. (Author, 2017)

19

Figure 5: Surroundings of Kudikadu village. (Author, 2017)

Figure 6: SIPCOT company alongside the East Coast road. (name unidentified). (Author, 2017).

20

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.

21

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

Environmental Monitors, 2005; Sankaran, Sonkamble, Krishnakumar, & Mondal,

2012; Mathivanan, Prabavathi, Prithabai, & Selvisabhanayakam, 2010), which

negatively affects the inhabitants of surrounding villages (Indians People Tribunal

22

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.

23

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

out? Corporate social responsibility is executed by multiple companies of

SIPCOT phase 1 and 2 in Cuddalore District. Nevertheless, since the scope of

this thesis, this research was only able to focus on five companies of it, which

24

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.

25

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.

26

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.

27

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.

28

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.

29

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

companies. Sometimes this is a reason for conflict, which can then be settled

with CSR activities. So in this way companies are declaring their CSR projects as

being assisting to the people and philanthropic, while they are also used as a

30

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)

31

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

traditional four-fold caste system (National Campaign on Dalit Human Rights, n.d.; ). For more

info: Baan Hofman (2017) thesis. 2 Vanniyar is a community that is also named as most backward class (MBC). For more info:

Murugananthan (2015). 3For more info on land grabbing, see thesis of Bongenaar (2016).

32

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.

33

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

building and books in 2008. Nonetheless, for the greatest part only Asian Paints

is a supporter of the Karaikadu schools. In the case of the Middle School, a

favoured villager who works at Asian Paints had a big influence in the provision

34

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.

35

Analysis

In this chapter, the literature will be elaborated upon in comparison with the

results from the fieldwork.

1. Analysis of the structure of CSR in Cuddalore District

From the results it becomes clear that in the structure of CSR the following

actors play a role: the village panchayat president, the local community, the

SIPCOT companies and the SIPCOT Association. CSR is consistently defined by

the companies themselves as helping other people, assisting communities and

making an investment in society. Frederick (2008, p.2) puts emphasis on the

“consciously and deliberately” acting of the companies and claims that

companies should have integrity for the social and physical environment. From

the results in this research, it appears that companies carry out some CSR

activities voluntarily, but most of them are being requested by the public sector,

panchayat president or villagers themselves. Also the integrity for mainly the

physical environment could be questioned in the case of Cuddalore, because of

the many complaints respondents expressed about pollution of SIPCOT. Thus,

the approach of CSR in Cuddalore district is bottom-up, since companies

stated that most of their requests came from the public.

The geographical location of a village seems very important in the

provision of CSR. From the data it appears that companies’ focus in providing

CSR is on the closest distance. Still, the actual importance could also be the

amount of pollution, which is in the case of Kudikadu an important factor.

Whether distance of pollution is more decisive is hard to prove from the results

of this research, since pollution generally also seems close to companies.

Another influence that became apparent from the results of the comparison

between Kudikadu and Karaikadu, is that the villagers have great power. For

instance, in Kudikadu many protests of the Dalit community against Strides

Shasun have resulted in the provision of drinking water. By doing this, the aim of

long term sustainability of the companies’ relationship with the communities is

reached, as the perception of the people confirms. Besides the people, the

panchayat president could also play a big role, by requesting the companies the

needs of the villages, and after that supervising the provision of CSR activities in

order to reach its developmental potentials. Though, the latter is a role that the

panchayat president is not fulfilling yet, but since he is a mediator the potential

for this is present. Furthermore, it is important to emphasize the local political

interference in place, which is influencing every actor in the structure of CSR.

This political interference seems to stimulate but mostly disrupt intentions of the

SIPCOT Association as well as companies to develop its CSR ability.

36

2. The role of CSR in regional development

2.1 Motives behind support Following Frynas (2005) in his claim that CSR can have the ability to develop if

the right corporate motives are present, the motives of the five companies need

further elaboration. Unsound motives were to be involved in CSR to be

competitive, for external perception management, to stabilize the working

environment and to maintain happy employees (Frynas, 2005). If the companies

of SIPCOT Cuddalore are considered in this regard, the competitiveness is a

motive that didn’t arise in the interviews. Though, it is assumed that the SIPCOT

companies are competitive, this unsound motive cannot be supported. However,

the next motives mentioned by Frynas (2005), which are external perception

management and stabilizing of the working environment, can be supported from

the data about the five companies. From the interviews it already appeared in

the former chapter that one of the central motives was to create peace in the

surroundings and get the villagers support for the companies’ existence. Also,

villagers seem to insist on the CSR activities, and companies are therefore

willing to accommodate them, which indicates a bottom-up approach. This

proves that companies are definitely trying to manage their external perceptions,

as well as stabilizing their working environment. The latter, because protests and

claims from villages and the panchayats about discontent and pollution are

common. Besides this, respondents of the villages acknowledged that by

providing CSR the companies were improving their mutual relationship, and that

this approach was working. The last motive mentioned by Frynas (2005),

maintain happy employees, might also hold for the case of Cuddalore District.

Though it was not specified in the interviews with the companies themselves, it

is necessary to accommodate the employees in the companies as well, as these

employees are often villagers from the surrounding area. Next to this, it

frequently appeared that employees argued for specific kinds of CSR in their

companies, as the case of the Karaikadu Middle School support showed.

On the other hand, companies seemed to have real ethical motives as

well. In the same way as many villagers, they recognized that they were using

village land and resources and therefore should give some support back.

Secondly they supposed that ‘people need this’ and they felt the responsibility to

help people. For instance, ASIAN Paints seems to be really involved in long-

term projects in their support for education in Karaikadu. Though, it needs to be

emphasized that this is derived from the interviews with companies themselves

and it is reasonable that they argue this. The perception of villagers was that the

main motive is to smoothen the relationship with them and keep them at ease.

Garriga & Mele (2004) also provided their distinction between CSR

theories. The results of Cuddalore show no evidence of the CSR activity

generating wealth for the SIPCOT companies, which was essential in the

instrumental theories. Rather is focus of the SIPCOT companies on the benefit

that they can bring for society and most of all, on the dependence they have on

37

the communities, matching respectively to the political and integrative theories

about CSR (Garriga & Melé, 2004). To what extent the case study of Cuddalore

fits to the ethical theories is debatable, as also indicated in the last paragraph.

Next to these, in Cuddalore there are also more institutional motives in

place. Since SIPCOT companies are realized in Tamil Nadu, they have to follow

the Indian state and federal laws. The most fundamental one is that the

companies have to invest 2% of their profits back into CSR activities (Prasad,

2016). The respondent of Strides Shasun claimed that his management is ‘very

clear on 2%’ spending on CSR. But naturally, it is not exactly clear whether this

is out of ethical reasons, because of feeling responsible or just because the law

has to be followed. Also, every company named CSR activity that was initiated

from the government through the SIPCOT Association. They all seemed to

accept these requests for government hospital needs or other investments. So

clearly, institutions are a motive for companies to be involved in CSR.

Arguing from the former reasons, the motives of five the SIPCOT

Cuddalore companies don’t seem to be as ethical and profound as they should

be in order to create development out of it. Just carrying out requests from the

government, SIPCOT Association, the panchayat or villagers themselves doesn’t

offer the healthy grounds which is required for actual development.

2.2 Competence of corporations According to Frynas (2005), the sorts of projects companies are supporting do

also determine the ability of CSR to be actually contributively to development.

What has been noticed from observation and the data from the interviews is that

the CSR in Cuddalore is still in a stage of amateurism, since the allocation of

support was mainly random. Companies particularly stated that they supported

projects that arose from village requests and not of developmental experts. For

instance, Chemplast themselves would like to invest in education, health and

drinking water but because of the villagers they are not able to undermine the

demand for temple donations. This doesn’t offer a good approach for

development.

Besides giving grants to village requests, the projects that are supported

often aren’t long term. Rather, many of them are donations or the one-time

provisioning of goods when an event happens. This is the approach when floods

occur, that families receive flood donations in the form of bed sheets, food and

basic materials. Naturally, it seems logic that this only happens in times of

flood, but this is more charity than a development project.

There are however also examples of longer investments, for instance the

evening tuition classes in Kudikadu offered by Strides Shasun, scholarships for

the five best students per class offered by ASIAN Paints and the efforts made

for healthcare in the region.

Besides the sort of projects which are realized under CSR, what seems to

be essential is good contact with the local people as a company in order to

bring about useful CSR projects (Frynas, 2008). This is lacking in the case of

38

Cuddalore, since SIPCOT companies only discuss briefly with the panchayat

president and do not engage in building bridges with the local community. Also

because currently the main approach of the companies is only to answer

separate requests for goods from the public, instead of assessing the

developmental needs together with the public.

2.3 Actual development? As the structure of CSR in the results shows, the CSR activities included temple

donations, educational support, the provision of water, healthcare facilities, a

library, flood relief, sanitation and financial donations to festivals and other

purposes. Contributions to education, health and water could be gathered under

the concept of social infrastructure. Thus following Dash & Sahoo (2010), the

elements necessary in order to create development are available in Cuddalore

District, and are partially provided by CSR. Also, the data shows that for

instance a panchayat president often asked ASIAN Paints for contributions in

infrastructure. However, a more thorough discussion is required. In order to

measure actual development, the perception of inhabitants in the provisioned

villages can be analysed. The general picture that is in place in the researched

area is that the government still provides basic needs for education, healthcare,

sanitation and drinking water. The companies are filling in the gaps where

necessary and they provide additional things. These are for instance extra chairs

or notebooks for children at the Karaikadu High School or goods as flood relief.

This has been supported by the employees of all the schools, who argued that

the support they receive is very helpful, though additional and not per se

necessary. This opinion partially seems to derive from the dissatisfaction about

pollution.

However, the researched area also showed signs of lacking government

intervention in development. For instance, regarding healthcare, the only options

for first aid or a general practitioner that were available, were the medical hours

organised by a company, the Strides Shasun medical facility or the SIPCOT

Association medical facility. The shared feeling about the general facilities is

that they offer a good quality, but still they are used little by villagers. The

reasons for this were that the facility was too far, people didn’t know of its

existence or the aid it offered was too general. Inhabitants of the SIPCOT

surroundings broadly feel that their health is being damaged by their living

environment. Many people complained about more diseases and problematic

diagnoses. The shortcoming of the health facilities provided in the area is

therefore that they only offer general aid. Though, the facilities are still of value

to the villagers. Companies are filling a gap here that the government hadn’t

arranged yet, which seems to upgrade the community’s standard of living. Also

for safe drinking water in the area there are matters for improvement. Often

villagers complained about their groundwater being polluted by the companies,

while only one case exists where drinking water is fully provided for by Shasun,

Kudikadu village. The Dalit community had protested to get this support, a thing

39

that hasn’t happened in another village in the researched area. People in the

other villages use groundwater for drinking, or water through a pipeline from

Kannarapettai arranged by the government. Some companies, such as

Chemplast, do however claim to provide villages with water trucks every now and

then. But this implies irregular water availability, which also appeared to be so in

the observations and interviews with villagers. The pollution that is purported by

the inhabitants does inquire more safe drinking water, but the government is

inadequate and companies provide irregular or low amounts. Still, in the same

way as healthcare, the provision of drinking water as a CSR activity is of

developmental value to a small group of inhabitants of Cuddalore District.

Thus, what can be noticed from the value of CSR for regional

development of Cuddalore District is that everybody agrees it is helpful in some

ways. It is argued that flood relief can be crucial, educational support is very

valuable but not crucial, medical care is essential in the area and drinking water

is only helping few. For the users of these activities the quality of life is

increasing because of this, though for the majority CSR is mainly charity, and

not of a significant impact for development of the region as a whole.

3. The contribution of industries to regional development: a shift of

responsibilities

The trend that became apparent in the theoretical framework was that some

responsibilities are shifting away from the government towards the private sector

because of many liberalisation reforms during the last 30 years in India (Patel &

Bhattacharyac, 2010). This process has also influenced the realization of

corporate social responsibility in the country in a great way. By carrying out CSR

activities, companies are investing in social infrastructure, which again can

contribute to economic development. Nonetheless, this idea doesn’t hold

entirely in the case of Cuddalore, since the motives behind CSR for the SIPCOT

companies are not able to generate actual development, as shown in the former

chapter.

3.1 The need for governance

CSR carried out alone cannot lead to drastic economic development, but needs

good governance to guide it (Frynas, 2005; Newell & Frynas, 2007). In the

whole process of CSR in Cuddalore district, no interference of any governmental

or non-governmental organisation is present, except from the panchayat office.

This research argues that the panchayat president, as well as other government

or village officials should have a bigger role in the coordination of CSR. They

could create the governance network that is essential for these CSR activities to

be of impact to the regional development. As the bridge between companies

and villagers and as a government official, the panchayat understands the local

needs and has the means to supervise and steer the CSR activity.

40

Besides the lack of governance, the companies do not cooperate with

each other, and only in a small amount with the SIPCOT Association. In this way

the efficiency, the adequacy and the value of SIPCOT’s CSR activities is limited.

Also from observation it became apparent that if companies would work

together, and for instance divide necessary support, the provision could be

arranged better in order to generate higher benefits.

The companies in this research seem to partially take over the

responsibility of the government. When providing infrastructural needs this is

useful, but it needs to be emphasized that companies cannot fulfil all

government’s tasks. Also, according to Frynas (2008) the interference of CSR

could ease the developmental role of the government. This is a process that is

already noticeable in Cuddalore district, since school personnel, villagers and

even panchayat employees rather ask goods or support to the companies than

to the government. This is because asking to the government is more

complicated and takes more time. This shift has discredited the role of the

government as the main generator of development (Newell & Frynas, 2007).

However, the supply of for instance adequate needs for education and

healthcare is still the responsibility of the government, as also argued by Ghosh

& De (2005) and Sharma (2011)

The academic world also advocates the ‘polluter pays principle’ (Tobey &

Smets, 1996; OECD, 1974). This principle states that every pollution made by a

company has to be paid for by that same company. In the case of Kudikadu,

the groundwater has been heavily polluted by industries (SIPCOT Area

Community Environmental Monitors, 2005), a fact that Strides Shasun doesn’t

acknowledge. This might be the reason why Strides Shasun was asked to

contribute to the drinking water scheme, which was also demanded from the

inhabitants, that is to say to make amends for their pollution. Thus, pollution

might be a factor which can change the normal responsibilities of government

and companies in providing certain things. However, when no pollution is

measured or if this is not the central case, for developmental issues a body

such as a private company might not have the adequate tools to generate actual

development.

4. Western CSR vs. Eastern corporate welfare

In literature, a distinction is made between Western theoretical approaches of

CSR and how the Eastern corporate welfare evolved (Das Gupta, 2007;

Frederick, 2008). Since India is liberalized and now open to foreign investment

and multinationals, it is useful to determine which kind of CSR is carried out. In

SIPCOT Cuddalore, the performed CSR is still very philanthropic, as the

companies want to do well and argue that the villagers need it. The way Western

CSR is evolved and is now executed according to Frederick (2008), by

emphasizing social problems in society and the adoption of fair business, is not

41

yet visible in Cuddalore district. The researched companies don’t feel a wide

responsibility as a global citizen (Frederick, 2008), but are only providing support

to surrounding villages. This is mainly done in order to smooth the relationship at

the same time, so the motive of feeling a true ethical responsibility doesn’t

apply. Regarding the grouping of CSR theories of Garriga & Melé (2004), the

CSR in Cuddalore can be either political or integrative of nature. Political,

because the companies of SIPCOT see the relationship between society and

business and warrant to protect this. In addition it can be integrative, because

they are mainly acknowledging their dependence on society, which also brings

the need to smoothen this dependence. Furthermore, Das Gupta (2007) has

argued that in India CSR has shifted from charity actions and donations to a

more involved CSR of direct engagement into development. However, the first is

still observed in Cuddalore district. The direct engagement in development is

absent, and is more taken care of by the panchayat president who arranges

government support than it is the role of the companies in the present structure

in Cuddalore. The main motives of companies in this district remain philanthropy

and image building, which were considered in the research of Aurora & Puranik

(2004) as the main motives in the country as a whole. The other important

motive was reputation (Das Gupta, 2007), also highly present in Cuddalore

district. For this reason, it is argued in this research that the CSR carried out in

Cuddalore district by the SIPCOT companies fits to the early description of

Eastern corporate welfare: charity actions and donations (Das Gupta, 2007),

rather than to Western CSR.

42

Conclusion

The aim of this research has been threefold. Firstly, the structure of CSR has

been explored in order to gain insight into the situation of activities in Cuddalore

district. Secondly, the role of corporate social responsibility in regional

development of Cuddalore district has been studied. And thirdly, the broader

influence of industries on regional development as well as the shift of

responsibilities from the public towards the private sector has been questioned.

CSR in Cuddalore is expressed by the companies from a philanthropic

motive to support neighbouring communities and to create a good relationship

between them. The activities mainly consist of flood relief, temple donations,

educational support, medical facilities and the supply of drinking water. The

process of provision is mostly bottom-up, while the panchayat is an important

mediator. In the allocation of CSR, distance to the factory and pollution both are

important factors. Next to this, the assertiveness of the villagers appears to be a

powerful instrument against the providing companies.

As the broad elaboration in the former chapter has shown, some CSR in

the region is contributing to an increase in the quality of life of the inhabitants.

Companies are investing in better infrastructure by supporting different schools,

general healthcare facilities and drinking water. Besides this they are donating to

temple festivals, social initiatives and government initiatives. In this way, it is

hard to contradict the valuable help that the activities are bringing for the region.

However, despite it being welcome and of value, it cannot play a major role yet

for regional development. The motives out of which the companies are involved

in CSR are requiring honesty. Mainly the researched SIPCOT companies were

carrying out CSR in order to generate peace and a good relationship with the

villagers, also seemingly to compensate for pollution. These motives lack

sincerity and are here for no promise for actual development according to

literature. Next to this, there is no adequate governance in place in Cuddalore

district to structure and guide the CSR activities, which is which is needed for

CSR in order to be valuable for regional development. Thus, this research argues

that in the achievement of adequate governance structures, the panchayat could

play a substantial role. This is argued because of the mediating role he is

already performing, and his capacity as a government official to improve the

developmental objectives of CSR.

Generally, the feeling exists that villagers are not satisfied enough about

the amount of CSR and that the government has fallen short in their area. From

fieldwork analysis it became apparent that some social infrastructure is provided

as CSR and that it is much faster via private companies than from the

government. However, the provision of infrastructure should be arranged

adequately, and when provided by companies as their CSR activities it is still

lacking a solid structure and the required knowledge for actual development. As

a result, if the shift of provision of public goods towards the private sector is

continuing, a lot of emphasis has to be laid on the capability of the private

43

sector to arrange this. Thus, more adequate governance is required in Cuddalore

district, for the CSR to be beneficial for regional development.

The CSR in Cuddalore appears to be, at least partially, for improving the

relationship with the surrounding villagers in order to make up for the pollution

that was caused. When pollution should always be compensated by the

delinqent (OECD, 1974), this is possibly shifting these responsibilities of the

governement towards the private sector.

According to literature, CSR should be the organic linkage between

society and the corporate world. This seems to indicate a mutual beneficial

relationship, however the motives behind the CSR in Cuddalore District are

disturbing this ethical honesty. Besides, corporate decision-making and

objectives at a higher level also impact local communities a lot, for instance in

employment opportunities. For the ability of CSR to be beneficial for

development, companies need a genuine sincerity and need to carry out the

activities in a valuable way, to be worth it being called ‘socially responsible’.

Next to this, companies need to understand how actual development is being

generated and how their operation is influencing society. Hence, CSR has good

potential to be beneficial for regional development, if structured and governed in

a good way.

44

Recommendations for further research

In Cuddalore district, it is clearly shown that the companies of SIPCOT bring

contributions to some extent to the social infrastructure of the area. However,

the question that hasn’t been researched due the lack of time, is whether the

government has withdrawn some support to the area as a result of this

intervention of companies. This would also fit to the shift of the government

towards private companies.

Next to this, the involvement of political parties in the structure of CSR

would be an interesting topic for follow-up research. It has been noticed in this

research that political parties are influencing different actors, but how it is

carried out remains unclear. Also, as a part of the recommendation research

about political interference or as a separate one, it would be wise to examine the

influence of briberies in CSR provision, which seem to be happening. Due to the

demarcation of this research it wasn’t possible to investigate these interesting

topics.

45

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49

Appendix

Appendix 1: Structured interview questions communities

1. Name of the village?

2. Name of respondent?

3. What is the community you belong to?

4. Age?

5. Distance to a SIPCOT factory:

- 0 – 300 m

- 300 – 500 m

> 500 m

6. Education level?

7. What CSR activities in your surroundings do you know of? (without presenting

the list below)

a. Education

b. Flood relief

c. Health

d. Drinking water

e. Temple donation

8. Which companies are helping in this village?

9. Before the start of SIPCOT industrial park, where did you get drinking water?

10. Before the start of SIPCOT industrial park, where did you get health,

education and flood relief from?

11. Have you ever benefitted from a CSR activity in your neighbourhood financed

by one of the SIPCOT companies?

12. What is your opinion about this/these service(s)?

13. Which CSR services are you still missing in your village?

14. What is your strategy for getting more CSR / How will you realize this?

(à Does the panchayat president contribute in realizing this?)

15. Who is responsible for providing basic services such as education, drinking

water and medical aid, the government or neighbouring companies?

16. The companies are generally providing corporate social responsibility as a

means to smoothen the relationship with villagers, do you think this is working?

17. Why are there CSR activities in your village?

50

Appendix 2: CSR activities of SIPCOT companies in Cuddalore District Table 1: Companies and their CSR activity in Cuddalore District

Company CSR activities

Asian Paints

Main focus

activities: Health,

education, drinking

water systems.

Main focus area:

Sedapalayam

panchayat.

1. Conducting medical camp in Rasapettai, Kudikadu,

Enchankadu and Sangolikuppam.

2. Providing stationaries, toilets and furniture for 3

schools in the Sedapalayam panchayat. (among which

is Karaikadu higher secondary school).

3. Purified water systems (Kudikadu, Karaikadu,

Enchankadu, Tiruvanthipuram and Manarapallam).

4. Basic medical support in Kudikadu, Karaikadu,

Enchankadu, Tiruvanthipuram and Manarapallam.

5. Flood relief in 2015: basic supports such as rice and

biscuits, medical assistance.

6. Water tower in Kudikadu.

7. Stormwater drainage in Karaikadu.

8. Scholarship for 3 best students in government

schools, providing these students with 3000 rupees per

year each.

9. 270 jobs.

10. Reversed Osmosis purified water plant and Sanitary

Incinerator to the Karaikadu Government Higher

Secondary School.

11. Reversed Osmosis purified water plant at

Government Elementary School at Echankadu village.

Strides Shasun

Main focus

activities: Drinking

water, health,

public facilities,

temple donations.

Main focus area:

Kudikadu

1. Monthly medical camp, conducted in Kudikadu and

Karaikadu panchayats, or villages that are until 6 km

away. These are general health check-ups for dental

care and cardiologic care. Around 700 people come

there. The eye care in the medical camp was conducted

by the Arvind eye hospital in Pondicherry.

2. Drinking water: 5 tankers a day to Kudikadu. Of

4000/5000 rupees each.

3. Scholarships: top 5 Kudikadu scholars receive

financial assistance of Shasun every year.

4. Kudikadu kids play center and library

5. Kudikadu evening tuition classes/learning centre,

which brings education to anyone who wants to go there.

6. Providing stationaries to 2 government schools in

Kudikadu.

51

7. Eye operations for 12 people, which costed 15 000

rupees each, in Kudikadu.

8. Glasses for 100 people, which costed 400 rupees

each, in Kudikadu.

9. Flood relief, in the form of rice to Kudikadu panchayat

and Karaikadu panchayat.

10. Temple festival donation

11. Help to the Kudikadu pre-primary school

(kindergarten) in the form of a tile floor, electrical needs

and knowledge posters.

12. Provided 25 outside toilets for houses without a toilet

facility in Kudikadu.

13. Kudikadu first aid centre for medical facilities.

Pondicherry Alum

Chemicals Limited

Main focus

activities: random

Main focus area:

none

1. Flood relief in 2015, providing basic materials such as

rice and vegetables.

2. 7000-rupee contribution to SIPCOT Office for drinking

water bill.

3. Donation in order to upgrade the Cuddalore

Government Hospital of 25000 rupees.

4. Temple donation of 15 000 rupees (Karaikadu,

Kudikadu, Parchayankuppam (street by street),

Enchankadu, Pillayam, both Suthukulam.

Chemplast Sanmar

Main focus

activities: temple

donations

Main focus area:

the surroundings of

the plot

1. Providing a doctor and medicines for Rural Health

Centers in Semmankuppam, Nochikadu, Chittirapettai for

nearby villages.

2. Stationaries, furniture and infrastructure for a middle

school (no location).

3, Scholarship for top 3 students in whole area, in the

nearby 6-7 villages.

4. Temple donation/contribution. (Main priority CSR for

the company)

5. Flood relief: rice, basic needs

6. Operation room equipments for the Cuddalore

Government Hospital after request from the collector of

the SIPCOT Association Office 2-3 years back.

Pioneer Jellice

India Private

Limited

Main focus

activities:

1. School supplies for two Middle schools in the villages

of Sangolikuppam and Semmankuppam.

2. Provision of drinking water to the nearest Panchayats:

Semmamkuppam, Thiyagavalli, and Sedapalayam.

Especially in Sangoli Kuppam, Semman Kuppam, Sonan

52

Education and

drinking water

Main focus area:

Sangolikuppam

and

Semmankuppam

Chavadi, Vairavan Kuppam, PoondiyanKuppam, and

Madhukarai.

This is arranged by water trucks.

3. 200 dustbins in Cuddalore in the Clean India Scheme.

This was requested by the collector office of Cuddalore

District.

4. Provided sugarcane for students for the Pongal

Festival in Tamil Nadu.

5. Gifts for students at the School Annual Day.

6. Temple donation of max. 5000 rupees per year.

(Semmankuppam, Sonan Chavadi, Nochikadu, and

Alapakkam)

7. Flood relief in 2015 the form of rice, food package,

medical facilities for nearest villages. (Sangoli Kuppam,

Semman Kuppam, Sonan Chavadi, Vairavan Kuppam,

PoondiyanKuppam, and Madhukarai)

8. Donation for the summer festival at Silver Beach. This

was requested by the collector office of Cuddalore

District.

9. 15 wheelchairs and 20 hospital beds to Cuddalore

Government Hospital. Costs were about 2 lakhs. This

was requested by the collector office of Cuddalore

District.

53

Appendix 3: CSR activities of the SIPCOT Association

Table 2: SIPCOT Association and its CSR activity

SIPCOT Association

1. First aid centre, providing one

doctor in the morning and evening

and a nurse. For medical assistance

to villagers and employees of SIPCOT

companies.

2. Ambulance service for villagers, to

go to the Cuddalore Government

Hospital.

3. Donation for providing medical

equipment for the Cuddalore

Government Hospital (35 Lakhs of all

companies together). Arranged by

SIPCOT Ass.

4. Blood donation camps (no info).

5. Construction of overhead water

tanks in Kudikadu, Sangolikuppam,

Vairankuppam Colony, Karaikadu,

Semmankuppam, Pachiyankuppam,

Ayeekuppam, Pelanthopu, Keel

Poovaanikuppam, Chithraipettai,

Nagampettai Colony,

Chinnathanakuppam,

Poondiyankuppam, Thiyagavalli.

6. Construction of school

building/class rooms in

Andarmullikuppam, Kayalpattu, C.

Kothankudi, Adivaranallur,

Chidambaranathan Pettai, Mela

Kuriyamangalam.