Csr at Ongc

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"ONGC is continuously and consciously involved and focused towards corporate social responsibility in all decisions and activities undertaken in the organization. ONGC is committed to allocate 0.75% of net profit of the year towards socio-economic development programmes."1 - Dr. Madhav Mehra, President, World Council for Corporate Governance, in May 2006. "If trade and commerce - and by extension, business and industry - is not sensitive to its social and environmental contexts, it will not be sustainable. And if it is not sustainable, it will collapse."2 - Kamal Nath, Union Minister (commerce and industry), in May 2005. -------------------------------------------------

Introduction
In May 2006, ONGC Ltd. (ONGC), a major Indian public sector company in the petroleum industry, received the 'Golden Jubilee Award for Corporate Social Responsibility in Emerging Economies - 2006', at the 7th International Conference on Corporate Governance organized by the World Council for Corporate Governance3.

Since its inception, ONGC had regularly contributed to various CSR initiatives in the areas of health, education, infrastructure, and culture. In 2003, it decided to allocate 0.75% of its net profit each year for various socio-economic developmental programs undertaken by the company. In 2004, it drafted a Corporate Citizenship Policy - a written guideline which was to provide a direction to the company's CSR initiatives.| | With growing globalization, Corporate Social Responsibility (CSR) had been increasing in importance as it helped organizations to improve their relationships with local communities, increase brand value, and build a good corporate image for themselves. Also, the socio-economic developmental activities undertaken by companies increased the purchasing power of the community, leading to an expansion in their market size. | In India, CSR began as a philanthropic activity where organizations contributed to social causes, but it was gaining in importance and becoming an essential activity for business (Refer Exhibit I to know more about CSR and Exhibit II for development of CSR in India).

Also it appeared that in the future, CSR in India would become more than a voluntary exercise. In a conference 'Implementing CSR as a Business Strategy - A Roadmap for Effective and Sustainable Penetration' organized by the Confederation of Indian Industry (CII)4 in December 2005, the possibility of a company reporting its CSR activities along with its financial reports was discussed.| "We should start putting it in the balance sheet,"5 said Kishore A. Chaukar, managing director, Tata Industries Ltd. -------------------------------------------------

Background Note
ONGC's origin can be traced to the mid-1950s. After India achieved independence, the development of the petroleum industry was an important issue for the Government of India (GoI). It was crucial not only for the industrial development of the country but also for strategic reasons. Till 1955, exploration for hydrocarbon resources within the country's boundaries was mainly undertaken by private oil companies like Assam Oil Company6, Burmah Oil Company7 (both of which operated in Assam), and the Indo-Stanvac Petroleum project8 (in West Bengal). In 1955, the GoI decided to undertake exploration and production activities for oil and natural gas resources in different regions of the country. | | In the same year, an Oil and Natural Gas Directorate was set up as a subordinate office under the then Ministry of Natural Resources and Scientific Research. In August 1956, the Directorate was elevated to the status of a commission and named the Oil and Natural Gas Commission. | In 1959, with the Oil and Natural Gas Commission Act 1959, the Commission became a statutory body. Its main objectives were "to plan, promote, organize, and implement programs for development of petroleum resources and the production and sale of petroleum and petroleum products."

In 1991,...
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