A critical analysis of the corporate social responsibility (CSR) mechanism and initiatives at MMTC Ltd.
Student name: Ms Amrita Krishnan
Guide: Dr Umesh Gulla
Year of completion: 2012
Host Organisation: MMTC Limited, New Delhi
Supervisor (Host Organisation): Ms Venita Solomon
Abstract: The project broadly covers the CSR activities under taken by the MMTC Ltd. The study
includes the methodology adopted MMTC for fulfillment of its CSR obligation. The main
objective of the project is to study CSR Scenario in MMTC Ltd.
The scope of the project includes studying the significance of the DPE guidelines given by the
Ministry of Heavy Industry pertaining to Corporate Social Responsibility. The DPE
guidelines were given in April 2010 but the companies are doing CSR from much before. The
companies did CSR on voluntary basis or followed their own guidelines. For example MMTC
gave 1% of PAT before 2010 but followed DPE after that. The UN Global Compact Principles
for CSR and Sustainable Development are also incorporated by MMTC in its CSR policy and
way of functioning. The DPE guidelines say that the activities related to the UNGC are also
under CSR.
A separate department handles CSR unlike many PSUs where the HR department is in charge
of CSR. The company follows the DPE guidelines and its activities are based on the UN
Global Compact 9 principles. Also the company is associated with an agency called Soul-Ace
that does the impact assessment for the CSR projects done by MMTC. Primary research
included interaction with the concerned officials and a surprise physical visit for inspection at
the location of one of the NGOs. The secondary research included relevant websites, research
papers for background study and company’s annual CSR report and KALEIDOSCOPE.
As per the DPE guidelines PSUs can collaborate with external agencies to execute their CSR
activities. External agencies normally are the Non-Governmental Organizations that hold
expertise in areas that the PSUs wish to focus for their CSR activities. Usually small and
medium PSUs that lack resources like Human resource, technical expertise in a particular
area tend to collaborate with these agencies and just provide financial backing and periodical
monitoring. In this regard TISS has proposed certain guidelines as to what and how a PSU
should select an NGO. It mentions certain criteria on which the selection of an NGO by the
PSU should be based. These criteria include: Inclusiveness, Partnership, Accountability,
Empowerment Reflections and Sustainability. These are described inside.
To study the CSR methodology adopted by MMTC LTD, three MMTC LTD specific cases
have been studied. A specific case where the company collaborated an NGO called
Foundation for Change Management that works for the upliftment of women.
The company sanctioned an amount of Rs. 10 lakh for activities like legal education, selfemployment
generation and vocational training as mentioned in the MOU. Out of the amount
Rs. 5 lakh was released as the first installment. Before the release of the second installment
MMTC wanted to see if the amount that was sanctioned was indeed used for the activities
mentioned above. But it was observed that the NGO also spent on activities other than those
mentioned.
The NGO spent money on organizing events, transport, refreshments, drew administrative
costs out of the amount. Also there was misappropriation of funds by the NGO. The details of
the case and observations and inferences like the mistakes on part of the company and the
precautionary methods that should be taken are part of the report.
Another case of ISKON that sent a proposal to MMTC to buy 3 chappati makers worth 42
Lakhs as a part of its mid-day schemes for school children has also been studied to fulfill the
objective of the study.
Yet another case of Apna Ghar an NGO that works for children belonging to the poor section
of the society providing them with education and meals. Parents of the children work either as
household maids, rickshaw pullers, auto drivers etc. they have school named Apna Ghar
Basic School in Noida. MMTC has given an amount of 2 lakh for infrastructure and
recreational facility development.
