Companies need to respect laws: TN bureaucrat

Amid a raging debate over the way to treat violations of Corporate Social Responsibility (CSR) norms, a senior bureaucrat of the Tamil Nadu Government on Tuesday said companies need to “get their act together” if they want the norms to be “relatively free and unregulated.”

Dr T V Somanathan, Additional Chief Secretary, Planning, Development, and Special Initiatives Department told a public event here that he would “pass marks” to a company if it follows the law and do not do any harm to the society.

Somanathan, who had worked in the PMO under Prime Minister Narendra Modi before he came back to his parent cadre of Tamil Nadu in 2017, said his views are personal and not necessarily that of the government’s.

Delivering his keynote address at the ‘CSR Convergence 2019’ organised by the ICT Academy here, Somanathan shared his experiences with a parliamentary committee while drafting the Companies Act, 2013 during his tenure in the national capital.

“During one such meeting, parliamentarians across the political spectrum wanted CSR to be mandatory under the Companies Act. All of them wanted it be brought under the Act, though we in the ministry had some reservations,” the senior bureaucrat said.

Quoting anecdotes and speeches of several business tycoons and Mahatma Gandhi, Somanathan said if the companies want CSR to be “relatively free and unregulated”, they will have to get their act together.

“This is my personal view. The first social responsibility of any company is to obey the laws relating to several sectors including pollution. Second social responsibility is to do no harm. If you do these two things, I would consider it as a good standard,” he said.

Making a distinction between “illegal” and “harmful”, the bureaucrat said while taking a loan with the sole intention of not paying back is harmful, it is not illegal because nobody would be able to prove the intention. “If companies follow the two things – obey laws and do no harm – I would give them pass marks,” he further added.

His comments come amid a raging debate on the amendments to CSR norms. The government had last week announced that violations of CSR norms under the companies law will be treated only as civil liability and not as a criminal offense, which stoked a major controversy.

ICT Academy is an initiative of the Government of India in collaboration with the state Governments and Industries that endeavours to train teachers and students thereby exercises on developing the next generation teachers and industry-ready students.