POSCO, a ‘wonderful company’ in words of Warren Buffet, is a very large multi-national steel manufacturer, ranked 4th in the world. It operates 2 of world’s biggest steel plants in South Korea. So it has excellent success experience. But one shall not forget that it is a Korean company, the nation which has ruthlessly implemented policy of ‘development at any cost’ under President Mr. Jan. So culturally, POSCO is not prepared for inclusive growth or sustainability or adversity. POSCO signed record breaking MoU of $ 12 billion with Orissa govt in yr 2005 to install a coastal Steel plant. Project is in limbo amidst local protests by farmers & environment activists. As on Jan 12, 2000 acres out of proposed 4000 acres is acquired by state government despite use of force & inception of ‘path breaking’ land acquisition policy applicable since yr 2006 and offering whooping Rs. 27 Lac/Acre. In May 2011 POSCO got forest clearance for construction from Central Govt. POSCO has already shown good flexibility & resilience by amending its plans more than 60 times to accommodate concerns of locals and taken CSR initiatives though vey late. The project is finally coming on the right path and locals are nearly convinced that it is not going to give up. India is important destination for POSCO where it plans to invest $30 billion. Justification:
Any enterprise is like a tree.
A tree growing on the soil can’t survive, grow & can’t flourish its kind unless it gives back something to the soil. A tree grows as taller & wider as deeper, wider & stronger are its roots. Roots not only collect water & minerals but they support & condition the soil, conserve water table, shelter microorganisms. This in turn helps other underground ecosystems, makes the land fertile & helps grow more trees. Similarly, any enterprise can’t flourish unless it has created & nurtured vested interests amongst all primary & secondary stakeholders like employees, suppliers, local communities, business partners, media, NGOs, government & society in general apart from share holders & investors and unless those are widespread enough to support themselves & to the enterprise. This creates corporate sustainability. An enterprise must be socially responsible. Social responsibility of an enterprise is not limited to providing employment & paying taxes. In an open market where government is losing control over key resources, responsibility of private enterprises is ever increasing to ensure equitable distribution of scarce recourses. Aiming only for profit may be in short-term profit of share holders but having corporate sustainability approach creates long-term profit for whole society including share holders. It helps in managing risks which are constantly derived out of commercial activities. An enterprise can’t exist in isolation. Like a tree needs constant support of soil on which it depends for essentials for life, an enterprise needs support of the society on which it depends for getting infrastructure, employees, funding, supplies, security, and market. Hence it is not only a responsibility but it is in best interest of an enterprise to increase capacity of its surroundings which would create future profits. So CRS is like roots of tree called organization growing on the soil called community. Reality check:
Main objections of the agitators about POSCO project are as below. 1.Land transfer which is illegal as farmers have created automatic rights over the land by cultivating it over 3 generations or 75 years as per Indian law. 2.Farmers do not have any other alternative resource to feed on. 3.Government has not considered cost of lost opportunities in terms of followings before giving nod . i.Iron ore which is being given away to foreigners on very low royalty, ii.Land & forest which has environmental importance & alternate uses, iii.Strategic location for port which is being given under control of foreigners, iv.Social effects on...