GENEVA, Nov. 17, 2016 /PRNewswire/ -- Dr. Bhaskar Chatterjee, popularly known in India as the "father of CSR," addressed the United Nations' 2016 Forum on Business and Human Rights on Nov. 15, sharing insights into India's unique law on Corporate Social Responsibility (CSR).
India is the only country in the world with legislation on CSR. "The 2 Percent Law" - as it has come to be known across the world - enjoins companies in India, above a certain threshold level of profits, to contribute 2 percent of profits each year to CSR. Joining a panel titled "State regulatory approaches: the practice in emerging markets," Chatterjee, who was instrumental in framing and issuing the CSR guidelines for Indian Public Sector Enterprises in April 2010, spoke of the relevance of the CSR legislation for a developing country such as India, whereby corporate funding can be harnessed to assist in executing programs and projects for the poor. Chatterjee described how India's legislation came to be drafted and how it was passed by both houses of the Indian parliament as a development measure, intended to complement and supplement government efforts to accelerate the pace of "inclusive development." "Our nation has found great success in regulating the legislation through the 'comply or explain' principle," Chatterjee said. "Rather than mandating a penalty, we require companies which fail to spend the mandated 2 percent of profits on CSR each year to justify, on their websites and in Director's Reports, the reasons for not doing so. Thus, the public at large is the judge to form their opinion as to how a company is discharging its responsibilities to the poorer sections."