CSR Study of HPCL

PROJECT REPORT

Submitted in Partial Fulfillment of the Requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION

ByGroup - 5

Jayanth Gunturu (A015)

Abhilasha Jain (A018)

Rashi Jalan (A021)

Harsh Jansari (A022)

Arpa Mitra (A036)

Shilpin Shah (A049)

Trimester-I

1

Narsee Monjee Institute of Management StudiesMumbai - 400056

August 2015

TABLE OF CONTENTS

1. Introduction………………………………………………………………………………………………

…………………………………….32. Products of

HPCL…………………………………………………………………………………………………………

………………..43. Triple Bottom

Line……………………………………………………………………………………………………………

…………..54. Socially Responsible Core

Operations……………………………………………………………………………………75. Stakeholder

Management……………………………………………………………………………………………

……………86. Corporate Social Responsibility

Initiatives……………………………………………………………………………97. Global

Compact……………………………………………………………………………………………………

……………………….148. Awards &

Achievements……………………………………………………………………………………………

………………169. Competitor

Analysis………………………………………………………………………………………………………

…………….1710.Controversies……………………………………………………………………………………………

……………………………………1911.The

Change………………………………………………………………………………………………………

……………………………..2112. References……………………………………………………………………

…………………………………….22

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13.

Hindustan Petroleum Corporation Limited

HPCL is an Indian state owned oil and natural gas company with its headquarters located in Mumbai, Maharashtra. It is a Navratna company and was ranked 260th in the Fortune 500 list as of 2013. Government owns 51.11% share in HPCL. Others are distributed among private investors, financial institutes and private investors. HPCL was incorporated in 1974 after the takeover and merger of Erstwhile Esso Standard and Lube India Limited.

Operations: It is mainly involved in downstream operations in Oil and gas sector. Downstream operations include all operations after oil is received as an initial product in the refineries. HPCL has two major refineries – one in Mumbai and another in Vishakapatnam. It also has stake in MRPL and a JV with HMEL for its Bhatindaoperations.HPCL also owns and operates the largest lube refinery in India producing Lube Base Oils of international standards, with a capacity of 335 TMT

Products:Its products include petrol, diesel, lubricants, LPG, ATF, bitumen and furnace oil. It has 30% market share in the lubricants sector. It is also a major player in aviation sector. It has an accomplishment of supplying ATF to US air force 1.

Ongoing Projects:It is coming up with a new refinery in Barmer, Rajashthan. HPCL is working on Rewari Kanpur pipeline project for distribution. HPCL is also working on Mangalore-Bangalore LPG pipeline and setting up a diesel hydro treating facility at its Mumbai and Vishakapatnam operations.

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PRODUCTS OF HPCL

Short term Objectives:

Self sufficiency of product which will entail expansion of refining capacity in line with marketing demand as per ‘Target Shikhar’.

To improve the marketing and refining operational efficiency by focussing on energy conservation and other innovative measures.

Renewed focus on customer delight. Ensure sound financials for supporting business growth. Develop capabilities of employees to meet the stated objectives. HR will work as a strategic partner in

sourcing and developing talent in meeting the above objectives. Technology will be leveraged in a big way. HPCL is focused on inclusive growth and takes its CSR with utmost

seriousness. Make inroads into new business lines viz. LNG, E&P, Renewables.

Long term Objectives:

To be one of the most trusted energy companies in the country To achieve sustainable growth which will entail triple bottom line growth and all-round growth of

stakeholders To be a well-established player in refinery and marketing and also in areas of petrochemicals, E&P, Gas, and

Renewables.

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TRIPLE BOTTOM LINE

HPCL has adopted the Triple Bottom Line (TBL) approach. The concept of Triple Bottom Line is that a company is responsible not only to its stakeholders but also to its shareholders. "People, Planet and Profit" describe the triple bottom line and the goal of sustainability.

People (human capital) pertain to fair and beneficial business practices towards labour and the community. Also it includes the region in which an organization conducts its business.

Planet (natural capital) refers to safe and sustainable environmental practices.

Profit is the economic gain created by the corporation after deducting the cost of all inputs.

HPCL maintains high standards of safety, health and environmental care at all the locations where it operates, ensuring that increasing scales of operation have no negative impact on the standards of safety, health and environment. It also never fails to lose sight of its long term goal of zero occupational injuries, operational incidents. HPCL is committed to conducting business with a strong focus on preserving the environment, sustainable development, safe work place and improving the quality of lives of all its stakeholders mainly employees, customers and the community. Established systems and procedures are revised constantly for continual improvement.

Planet

Environmental emissions:

Commitment of refineries to conservation of energy and minimization of losses. Participated in benchmarking studies organized by CHT

Investment of 100 MW in wind farm capacity to tap the vast wind energy potential and as a move to shift towards renewable energy sources.

The first phase of this farm has already been commissioned and it has generated over 560 lakh units of electricity in 2013-14.

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Project Utkarsh – implemented at floor level in all LPG plants across India. HPCL uses techniques like six sigma, quality circle and total productive maintenance. It has resulted in reducing the no. of low performing plants from 13 to 3.

Launch of green R&D centre at Bangaluru which has been launched to keeping in mind research laboratories for crude evaluation & fuels research, hydro processing, catalytic cracking, catalysis, process modeling& simulation, bio processes, standard testing. It will adhere to eco-friendly design norms.

People

Human Rights

At HPCL, all the stakeholders and not just the employees are given importance. HPCL has the taken the following measures towards the same:

HPCL is a signatory to the UNGC Global Compacts’ ten principles An approved policy for handling grievances of employees, shareholders and customers Mechanisms to address issues raised by various business partners Induction training of all employees to make them aware of their rights and responsibilities which

includes Company’s policy on human rights and procedure to report and address grievances All security guards receive training on human rights Avoidance of child labour Compliance to all applicable labour laws To improve customer experience HPCL has initiated project “JiHaan Samarth”. Under this program

HPCL delivery men will be trained on behavioural and technical aspects and regional languages to enhance customer experience.

It has introduced intercompany LPG portability – in 24 cities across 14 states

Employees

Working towards a more balanced male female ratio – more work to be done

Employee Category As on 31st March 2014 As on 31st March 2013 As on 31st March 2012

Male Female Male Female Male FemaleSenior Management

65 3 63 3 65 3

Middle Management

1027 41 888 28 803 27

Junior Management

3727 426 3766 421 3818 411

Non-management 5191 390 5456 396 5694 400

On deputation 6 1 5 1 5 0

Total 10016 861 10178 849 10385 841

% of Total Employees

7.92% 7.70% 7.49%

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Currently the women employees constitute only 8% of the total workforce. However, the company has been making substantial efforts keeping this in mind. 22% of the fresh recruits in the last 5 years were women.

Independent assurance conducted by Emergent Ventures India Pvt. Ltd. (EVI) to conduct an assurance of the Corporate Sustainability Report for the year 2013-14.

SOCIALLY RESPONSIBLE CORE OPERATIONS

HPCL engages with multiple stakeholders. Depending on what interests the stakeholders and also keeping in mind the business strategy, ‘material sustainability issues’ have been stated which can affect the sustainability of HPCL. Therefore, the corporation has taken due care to proactively cater to these issues.

Material Issue HPCL ResponseAvailability of raw materials

Properly reducing geo-political risks connected with sources of crude by diversification of procurement base and entering into long-term contracts.

Occupational Health and Safety

All critical jobs undergo Job Safety Analysis to ensure safety of personnel and property. HPCL actively networks with and gives training to the workforce on requirements of safety relating to the job. Emergency medical services are provided at plant locations which are available for the employees’ families as well.

Disaster Management and Preparedness

Disasters may natural disasters or fire, oil spills, explosions or release of poisonous hydrocarbon gas. HPCL’s Disaster Preparedness Plan faces emergency situations in a systematic way. An effective ‘Civil Defence Plan’ is in place for man-made activities like riots, sabotage, war etc.

Water Management HPCL ensures environmentally sustainable and responsible operations to achieve the highest standards of environmental excellence. Several measures are taken to optimally utilize the available water resources by conserving water, increasing water recycling and reuse capacity through Effluent and Sewage Treatment Plant installations. Rain water harvesting projects have also been initiated.

Awareness on sustainability

Being an Oil & Gas company with operations across the country, it is most important to address risks and opportunities arising from various aspects of sustainability. Over 700 stakeholders have been trained in the year 2013- 14 on sustainability issues.

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Stakeholder Attributes Type of Engagement

HPCL Response Impact

Management employees

Legitimacy, Power

Regular interaction Awareness Trainings

Periodic meetings (Initiative – Yuvantage)

Regular medical check ups

Regular updation of skill sets of employees (Project Akshay)

Better engagement of the work force, improved coordination and solution of issues Improved safety awareness and goodwill amongst employees Improvement in skills

Non- management employees

Legitimacy Regular interaction Awareness

Periodic meetings Consultations on safety etc

Improved labor management relationships Better morale of the workers

Dealers, suppliers

Legitimacy, Power, Urgency

Meetings on business related issues Pre bid meetings Feedback and training

Regular meetings to increase transparency Meetings to facilitate clear understanding Training programs

Enhancing suppliers’ satisfaction and efficiency in the process Improved customer satisfaction Improved safety

Contract Workers

Legitimacy Regular interactions Training programs Medical help

Formal grievance mechanism Programs on safety and operational aspects Health check ups

Improved relations and enhanced morale of workers Decline in accident rate Improved awareness about illness

Transporters Legitimacy, Urgency

Email communication Regular interactions

Updating their knowledge base Formal grievance mechanism

Increased coordination and productivity of transporters Improves relations with them

Customers Legitimacy, Urgency,Power

Formal feedback Launch of commercials

Customers are empowered to rate their respective LPG distributor Launched commercials on safe usage of LPG

Enhanced customer loyalty and satisfaction from quality product/services Improved safety and awareness among customers

Local Community

Legitimacy Regular interactions

Awareness on health and safety aspects Need based projects identified by CSR Department

Improvement in goodwill Building stronger relations thus making communities a part of the HPCL family

STAKEHOLDER MANAGEMENT

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Engagement with stakeholders at HPCL is an active and a continuous process. HPCL identifies the concerns of the stakeholders and addresses them proactively so as to create shared value. The stakeholders identified by HPCL, the medium of engagement, the concerns of the stakeholders and the response of the organization are given as follows:

CSR INITIATIVESHPCL has been receiving excellent rating based on the Memorandum of Understanding parameters assigned by the company with the Ministry of Petroleum and Natural gas in which a significant weightage is assigned to the environmental and social performances. HPCL received the highest score among PSUs under the ministry of petroleum and natural gas for the second consecutive year. HPCL has entered in to partnerships with various NGOs and other organizations in the field of education, health care, local community, livelihood etc to have a positive impact on the lives of the people in the community.

The various initiatives undertaken by HPCL are given as follows:

CSR Initiative: Livelihood

Need Assessment

The dynamic society and economic scenario around the world requires specific skill sets for employment. Each job requires a specific specialization. It becomes tough for economically weak people in urban, semi urban and rural areas to learn skills and obtain employment as the training is very costly or not available. Assessing such a need, HPCL has tied up with expert partners to provide skills training to such people, as per the industry/market requirements and ensures employment opportunities for poor people.

Skill Development

Name of the Project: Swavalamban Implementing Partner: Confederation of Indian industries (CII) Locations: Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Jammu & Kashmir, Jharkhand, Karnataka,

Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal Synergy with MDG Initiatives: PrimeMinister’s National Skill Development Program Cause: Skill Development of youth from rural areas

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Objective:To provide training and skills development to the needy candidates to enable them to earn their livelihood

Key Stakeholders: HPCL CII, Training partners, Candidates and their families, Employers Key Strategies: Identifying economically and socially needy people, Communicating with the regional

employers, Giving free professional training and capacity building in trades according to specific industry requirements, Pre and post placement help to candidates.

Impact: Easy access to professional training for socially and economically underprivileged people, New job/self-employment opportunities, Economic empowerment of candidates, Minimizing the gap between demand of local industry and supply of skilled candidates.

CSR Initiative: Child care and education

1. Children with special needs – ADAPT

Name of the Project: Adapt Need Assessment: Disability is one of the least accepted and understood conditions in our society. People

believe that anything that does not fall into their purview of being normal should be named as abnormal and should be treated differently.

Implementing Partner: Adapt, Mumbai Locations: Mumbai Synergy with MDG Initiatives: Achieve universal primary education Cause: Inclusive education, therapeutic needs and vocational training for children with special needs Objective: To support inclusive education so that the future of children with disabilities is not compromised Key Stakeholders: Candidates and their families, the organization Key Strategies: Providing for inclusive education of differently abled children along with their therapeutic

needs and vocational training to ensure equal opportunities and dignity to them in the future. The program also aims at sensitizing people towards the special needs of such people and to accept them without conditions which goes beyond addressing of their medical needs.

2. Rescue of children in distress

Name of the Project: Childline Need Assessment: India is a major point for human trafficking with 90% of trafficking done from within

borders. Trafficking of young girls from Nepal and Bangladesh for sexual exploitation and of young boys to work as bonded labour in industries is widespread. Kolkata serves as a major transit point and Delhi as a destination for such girls. According to National Human Rights Commission of India, every year, over 40,000 children are reported missing of which over 11,000 remain untraced.

Implementing Partner: Childline India Foundation Locations: Delhi, Mumbai, Kolkata Synergy with MDG Initiatives: Achieve Universal Primary Education Cause: Rescuing children in distress thru Happy Wheels -1098.Childline 1098 which has become synonymous

with the rescue of children in distress in India. Key Stakeholders: Candidates and their families, the organization Key Strategies: HPCL supports rescue vans, a project which is engaged in rescuing groups of children from

risk situations like child trafficking, child labour and other dangerous circumstances.

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3. Computer Awareness Program - Unnati

Name of the Project: Unnati Need Assessment: Computer learning is an essential skill today and is still inaccessible to majority of school

children from under-resourced communities. Implementing Partner: NIIT Locations: 23 Schools across India - Visakhapatnam, Guntur, Dharbhanga, Patna, Rajanandgaon,

Karnal,Hissar, Jammu, Bari Brahmana (2), Hazaribagh, Bhind, Chindwara, Bharampur, Ambala, Jalandhar, Jodhpur, Udaipur,Dholpur, Chandauli, Agra, Vikasnagar, Medinipur

Synergy with MDG Initiatives: Achieve Universal Primary Education Cause: Computer Education to School Children from rural /semi urban areas Key Stakeholders: Candidates, the organization Key Strategies: E-literacy today is as important as literacy itself. HPCL has partnered with organizations to

provide computer awareness and basic education. The target children will be Class VI to Class IX students in semi-urban and rural areas. The school teachers of the children are also trained so that they can help the child in case of any difficulty, thus ensuring sustainability of the program. Further, HPCL invested in installation of computers at these schools so that students could continue practicing.

4. Girl Child – Nanhi Kali

Name of the Project: Nanhi Kali Need Assessment: Gender inequality and discouragement of girl child to continue with higher education is a

major area of concern for the country Implementing Partner: KCMET Locations: Gavanpada, Mehbubnagar, Visakhapatnam, Kanker, Ratlam, Sheopur, Udaipur Synergy with MDG Initiatives: Achieve Universal Primary Education Cause: Academic and material support to girls studying in government schools in backward and tribal areas. Objective: To provide academic and social support to girl child, encourage her and her family to continue

with formal education. Also, to help her become capable to meet the challenges posed by the modern educational system.

Key Stakeholders: Candidates and their families, the organization Key Strategies: HPCL helps provide material support to first girl child learners from educationally and

economically backward communities. Through its initiatives, it aims to reduce girl drop out ratio in higher education, prevent child marriages and promote higher education.

5. Midday meal Scheme (Akshayapatra)

Name of the Project: Akshayapatra Need Assessment: Hunger and malnutrition being considered as one of the major obstacles in the way of

education of our children and development of our country. Implementing Partner: Akshaypatra Foundation Locations: Andhra Pradesh Synergy with MDG Initiatives: To eradicate extreme poverty and hunger Cause: Promotion of education and child health through school based mid-day meals Objective: To provide hygienic and nutritious food to students from rural areas through specialized agencies

to help reduce absenteeism caused because of lack of the same. Key Stakeholders: Government bodies, students and their families, the organization Key Strategies: HPCL aims to address the issue of hunger and malnutrition amongst children by providing

mid-day meals to them. This helps reduce absenteeism as one of the major reasons for drop outs is child labour because of the parents’ inability to provide food. It also helps in improved performance as the level of

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concentration increases once the basic necessities are taken care of. Thus, HPCL works with a school to reduce their burden on resources and time.

CSR Initiative: Healthcare

Dil without Bill (SathyaSai Heart Hospital):

Name of the Project: Dil Without Bill Implementing Partner: Sri SatyaSai Hospital

Locations: Rajkot

Synergy with GOI/MDG Initiatives: Government’s Midday Meal Program / Reduce Child Mortality

Cause: Free Heart Surgeries for underprivileged

Awareness on HIV among truckers – Suraksha:

Name of the Project: Suraksha Implementing Partner: TCI Foundation

Locations: Dobbaspet (Karnataka), Hosur (TN), Ravulapalem (AP), Satara (Maharashtra), Sikandara (UP)

GOI/MDG Initiatives: Combat HIV/ AIDS

Cause: HIV AIDS Awareness programs thru Khushi Clinics located in HP Retail Outlets for Long Distance Truckers

Medical Care in Rural Areas - Wockhardt:

Name of the Project: Health services in Rural Areas thru Medical Mobile Vans Implementing Partner: Wockhardt foundation

Locations: Paradip (Orissa), Patna (Bihar), Barmer (Rajasthan)

GOI/MDG Initiatives: National Rural Health Mission

Cause: Health Care in Rural Areas thru Medical Mobile Vans.

Sushrut Hospital

Name of the Project: Sushrut Hospital Implementing Partner: Chembur Hospital Project Trust, (CHPT).

Locations: Swastik Park, Chembur (E), Mumbai

Synergy with GOI/MDG Initiatives: Combat HIV/AIDS.

Cause: Affordable Health Care

CSR Initiative: Community Development

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Need Assessment

A majority of rural population and approx 31% of urban homes in India depend on fuels from traditional ways (fuel wood, animal and crop waste and charcoal) for cooking. This adversely affects humanproductivity when more time is spent on gathering diminishing fuel-wood sources and also when people, mainly rural women, are exposed to health hazards due to high concentration of particulate matter from inefficiently burnt biomass fuels.The need for more efficient cooking fuels has been increasingly gaining attention. LPG is recommended both for its higher efficiency and much less environmental impact than most other commercial alternatives.However, the use of LPG in rural areas is only 5.67% due to low purchasing power inability to pay upfront charges for cylinder deposits and onetime payment of refill charges, local availabilitywhich make LPG inaccessible to rural people.

Skill Development

Name of the Project: Rasoighar Implementing Partner: Rajiv Gandhi Gramin LPG VitranYojana Locations: Bihar, Chattishgarh, Gujarat, Jharkhand, , Rajasthan Maharashtra, Uttar Pradesh Synergy with MDG Initiatives: To ensure environmental sustainability (MDG 7) Cause: Skill Development for youth from rural areas Objective:To increase rural penetration of LPG as a cooking fuel. To improve human productivity and reduce

health hazards and environmental impacts caused from traditional fuel or other commercial alternatives Key Stakeholders: Rural Women, BPL families, direct consumers Key Strategies:

1. HPCL contributed about 15% of its CSR funds as a one time grant to Below Poverty Level families in the rural areas for release of new LPG connection through Rajiv Gandhi Gramin LPG VitranYojana (RGGLV) and 5% for Common LPG Kitchen facilities in villages.

2. It set up community kitchens at the village level equipped with gas stoves and LPG cylinder, in a space provided by the local community and accessible to all the rural women of the society.

3. HPCL also provides the stoves, utensils and a cylinder with pipeline along with Suraksha hoses.4. Safety messages and safety tips including operating instructions are displayed at all the RasoiGhars.

Benefits:1. No one-time investment on LPG connection (deposit, utensils, stove).2. Ready cooking place with affordable fuel (pay per usage)3. Savings in time otherwise spent on gathering firewood and also reduction in cooking time4. Benefits to the environment - reduce deforestation and climate change5. Better health, hygiene and safety for rural women6. Improves social relationships - RasoiGhars are places of social interaction to the women using it.

Other community development projects include:

JalTarang: Ensuring water and food security and overcome drought in areas prone to drought to achieve poverty reduction. It also aims for sustainable development by rain water harvesting.

Lighting a Billion Lives(LaBL) - The LaBL program set up solar charging stations in villages that offer certified, bright, solar lanterns for rent to the local people. The charging station consists of 50 solar lanterns and charging panels. A trained local entrepreneur manages the charging station and leases the solar lanterns every evening for very affordable fee.

CSR Initiative: Employee Engagement

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HPCL employees gave an overwhelming response by participating in all the activities conducted by HPCL during the year 2013-14. Some of the employee engagement activities carried out are:

Uttrakhand Flood relief: HPCL employees and their family members contributed basic necessities such as blankets, medicines and food items.

Toy Distribution: About 450 less privileged children of Mankhurd Children’s Home were distributed toys. Blood donation: A blood donation camp was organized by HPCL and active participation was seen by all its

employees Marathon: HPCL associated with Standard Chartered Mumbai Marathon. Some employees supported

ADAPT, an NGO working for disability rights and action, by escorting children on wheelchair for 2.5 kms. Some employees participated in other race categories to help ISHA foundation raise funds for schools in rural areas of South India.

Walkathon: HPCL employees participated in an all charity walkathon event in Mumbai held on 2 nd October 2013 at BKC, which was held by British Deputy High Commission.

With the aim of recognizing outstanding performance of the nonexecutive staff, HPCL initiated ‘HP Gaurav’ award and 79 non-executives were conferred with the award in the year 2013-14.

HPCL initiated a program called ‘Yuvantage’ to blend the energy of youth with the experience of maturity. Many events like Talking Point, balloon house, HP got talent, etcwere conducted and it saw active participation by all the employees.

Promoting Sports: An all-India annual sports meet was held and a total of 2500 employees and their family members participated in the same. As a part of their CSR, they provide scholarship to promising boys and girls who can rise to international standards by giving financial assistance. A total payment of Rs. 47 lakhs was made to these players. Besides, many cash awards and stipend are given to HPCL employees’ children.

Gardening and landscaping activities: HPCL carried out a biodiversity survey of flora and fauna and arranged identification tag for the benefit of the children residing in the colony. Their efforts were recognized by BMC and ‘The National Society of the friends of the trees’.

HPCL has taken an initiative to send e-circular instead of conventional hard copy circular. This is helping the environment and is addressing MDG of ensuring environmental sustainability.

The key stakeholders involved in the above employee engagement activities are employees, families of employees, local community and NGOs like ADAPT and Isha Foundation.

GLOBAL COMPACT

The United Nations Global Compact is an initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. It is a principle based framework for businesses stating 10 principles related to human rights, labour, the environment and anti-corruption. Various global compact principles are addressed in HPCL’s mission statement.

The principles involved in global compact are as given below:

Principles Statements

Principle 1: Human Rights Businesses should support and respect the protection of internationally proclaimed human rights

Principle 2: Human Rights Make sure that they are not complicit in human rights abuses

Principle 3: Labour Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining

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Principle 4: Labour The elimination of all forms of forced and compulsory labour

Principle 5: Labour The effective abolition of child labour

Principle 6: LabourThe elimination of discrimination in respect of employment and occupation.

Principle 7: Environment Businesses should support a precautionary approach to environmental challenges

Principle 8: Environment Undertake initiatives to promote greater environmental responsibility

Principle 9: Environment Encourage the development and diffusion of environmentally friendly technologies

Principle 10: Anti-CorruptionBusinesses should work against corruption in all its forms, including extortion and bribery

HPCL has taken following actions to adhere to the principles of global compact:

1) Businesses should support and respect the protection of internationally proclaimed human rightsAction taken: The organization supports and ensures that there are no violations of internationally proclaimed human rights.

2) Make sure that they are not complicit in human rights abusesAction taken: HPCL’s conduct, discipline and appeal rules which are applicable to management employees and standing orders applicable to non-management employees are designed in a manner to take care of the human rights compliance. HPCL has an approved policy in place for handling grievances of employees, stakeholders and customers.

3) Businesses should uphold the freedom of association and the effective recognition of the right to collective bargainingAction taken: HPCL has established practices and policies which allow the employees to exercise the freedom of collective bargaining on the common issues. The issues are resolved through signing of long term settlements between unions and the management. HPCL strongly believes that it is a right of an employee to know about the organization. Thus organization performance, growth strategies and future plans of the organization are shared with everyone from time to time.

4) The elimination of all forms of forced and compulsory labourAction taken: HPCL has some protocols such as wages are paid only in presence of location in-charge. Additionally ‘Public Grievance Redressal Mechanism’ is there in the organization where senior management needs to be present for resolving issues. None of HPCL’s operations have been assessed for forced labour. For FY 2012-13, no complaints were received regarding forced labour.

5) The effective abolition of child labourAction taken: HPCL adheres to the constitutional law on child labour (Prohibition and Regulation) Act of 1986 and it hires only employees above 18 years of age. Certificates of all the employees are checked and security personals are trained to check all the employees entering the plant. Regular audits are also carried out for checking the same. None of HPCL’s operations have been assessed for a risk of child labour.

6) The elimination of discrimination in respect of employment and occupation.

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Action taken: Being a PSU, it follows presidential directives and government instructions for its recruitment policies and it provides equal opportunity to all Indians.

7) Businesses should support a precautionary approach to environmental challengesAction taken: HPCL constantly ensures that its increasing scales of production are not having any harmful effect on the environment. HPCL regularly checks that its emissions are within prescribed limits of central and state pollution boards. HPCL’s major installations are ISO 14001 certified. HPCL refineries are committed towards conservation of energy and minimizing losses. In 2012-13 HPCL saved 42157 standard refinery fuel tonnages per year which translates to Rs.169 crores/year.

8) Undertake initiatives to promote greater environmental responsibilityAction taken: HPCL has formulated a sustainable development policy and has asked all its employees to work towards achieving these years’ goals. HPCL has taken up many projects constituting of rain water harvesting, ground water quality monitoring, Green Visakh program, etc to promote greater environmental sustainability.

9) Encourage the development and diffusion of environmentally friendly technologiesAction taken: HPCL has taken several initiatives in the areas of renewable energy, climate change policy, waste disposal, tree plantation, green belt, carbon foot printing, etc. HPCL is looking for production of bio-diesel from jatropha keeping in mind the rising fossil fuel prices.It has an e-waste policy in place where the waste generated is brought back to the manufacturer. It has a ‘Climate Change Policy’ with objectives to reduce carbon foot print.

10) Businesses should work against corruption in all its forms, including extortion and briberyAction taken: HPCL has an independent vigilance department which is under the jurisdiction of Chief Vigilance Commissioner which can carry out investigations on any corruption issues. Apart from this, Chief Technical Examiner, a wing under Central Vigilance Commission can also carry out investigations. HPCL also has a ‘Whistle Blower Policy’ in place wherein employees who report corruption are provided safeguards against victimization.

AWARDS & ACHIEVEMENTS

HPCL has its ranking of 284th position during 2013-14 in the prestigious list of Fortune Global 500.

HPCL has been awarded with the Golden Peacock 'Special ' Award for Corporate Social Responsibility during the 8th International Conference on Corporate Social Responsibility.

The most prestigious award recognizing the commitments of Corporates for the development of Society) was conferred to HPCL on 7th March 2014. HPCL is the only winner in the PSU category.

C&MD, Ms Nishi Vasudeva has been awarded the FICCI FLO Exceptional Women Achievers (EWA) Award 2014, the achievements of women who have excelled in their own field and are icons of inspirations for the society.

HPCL Director V. Viziasaradhi has been awarded with the ‘HR Leadership Award' ,2011 in the Asia's best employer brand awards, World HRD Congress and Stars of the Industry Group with CMO Asia as a strategic partner.

Received prestigious Green Tech GOLD Award for 2008 for sixth consecutive year under the ‘Environment Excellence Category’., New Delhi recognizes the

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corporation's excellent recognizes the corporation's excellent track record in implementing innovative ideas for environmental protection.

Visakh refinery won the first prize of National Energy Conservation award in Refineries Sector for best Energy performance for the year 2006-07 from Bureau of President of India. Visakh Refinery is the only refinery awarded first prize in this category so far.

COMPETITOR ANALYSIS

Major competitors for HPCL in India:

• B P C L• Bharat Oman• Bharat Petro JPD• Bharat Petrores• Black Gold Refinery• Bongaigaon Refinery• C P C L• Essar Oil• I O C L• M R P L• Nagar.Oil Refinery.• Nagarjuna Oil• Nandan Petrochem• Numaligarh Refinery• ONGC• Raj Lubricants• Raj Petroleum • Reliance Industries• Reliance Petro.• Southern Refinery• Trinity Tradeli.• Valvoline Cummin

We will concentrate on the following major 3 competitors for our analysis:

IOCL ONGC BPCL

The table broadly tells us about broad verticals where HPCL & competitors are active:

Initiative

Child Care

Education

Health Care

Skill Development

Sports

Environment & community development

Heritage & Culture

Global Compact

ONGCX X X X X

IOCLX X

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HPCL X X X X

BPCLX X X X

The table below provides a comprehensive database of major CSR activities and the vertical they are undertaken in:

Inititative

Child

Care

Education

Health Care

Skill Development

Sports

Environment & community

development

Heritage &

Culture

ONGC NO NO NO

ONGC-GICEIT Computer

Centre; Project Utkarsh

ONGC

sports

Varisthajana Swasthya Sewa Abhiyan;Harit

Moksha;ONGC-NSTFDC Hathkargha Prashikshan;ONGC-

Eastern Swamp Deer Conservation

Project in Kaziranga National Park

NO

IOCL NOScholors

hip Scheme

Sachal Swasthya

Seva, Hospitals

ITC,Digboi;Nursing

School,Digboi;IndianOil Multi-Skill

Development Institute, Digboi;

Shikshak Dakshyata Vikas

Abhiyan

NOSwachh Vidyalaya

Abhiyan IOF

HPCL

Akshay Patra,ADAPT,U

nnati,Nanhi Kali

Dil without bill,

Suraksha, Wockhardt

SwavalambanHPCL sport

sNO NO

BPCL NO

Rajiv Gandhi Institute

of petroleu

m

No BPCL-SEWA NOCounselling, Project

Boondh,Swach Bharat

NO

While we have a list of sectors and initiatives that this companies have taken, it becomes very important to know what results have come out from genuine concern and not out of mandatory requirements. As such a concern is very ambiguous to evaluate, we have taken a parameter which we thought will best bring out the desired result.

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We collated a table of data prior to the law that forces companies above 500 crores revenue to spend on CSR activities and got following results:

Sr.No.

Company

CSR Spending %

Total profits(PAT)

1 ONGC 121.080.639822

448 18924

2 IOCL 82.731.111215

581 7445

3 HPCL 26.541.724496

426 1539

4 BPCL 7.760.501616

031 1547

The table point out a very important fact that while ONGC & IOCL both belittle HPCL in absolute terms of CSR spending, when it comes to % of PAT,HPCL had of trend of spending 2% even in 2011-12 when a law was not in force.

A Broader Context

Following are top 10 CSR companies:

1. Tata Steel2. Tata Chemicals3. Mahindra Group4. Maruti Suzuki5. Tata Motors6. Siemens7. L&T8. Coco-cola

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9. SAIL10.Infosys

A noteworthy fact is that none of the oil companies feature in the list, while only one PSU cuts through the competition and so is the state of service sector companies. The trend generally points out to the fact that traditional companies are strong spenders in CSR vis-a-vis service companies. Also the list points out to the fact that CSR spending traditionally has been highly dependent on company’s culture which is very evident in the fact that 3 companies from the same group figure out in top 10.

CONTROVERSIES

1. Issues involved in the HPCL/BPCL disinvestment :

The major controversy with the HPCL, BPCL disinvestment is that, these units running profitably but they belong to the oil sector which is a sector of strategic importance to the country.

The government had taken the advice of the Advocate General and said disinvestment of government equity in the two entities did not require parliamentary sanction. The government proceeded to disinvest the two companies. This decision to sell the oil majors was challenged and petitions were filed in public interest directly before the Supreme Court under article 32.

The court accepted the contention of the petitioners that the two oil companies cannot be privatized through an order, overriding a Parliamentary legislation creating HPCL and BPCL in 1974. The Supreme Court verdict, making it mandatory to get a parliamentary approval had come at a time when Reliance group had already made its intentions of purchasing HPCL shares more than clear.

2. Rajasthan Oil Plant :

Surrounded by a controversy over its decision to relocate a proposed Rs 37,229 crore oil refinery, the Rajasthan government now faces the challenge of meeting the 9 million tonne unit's huge water requirements.  

Processing of crude oil requires large volumes of water, most of which is recycled, while the rest is contaminated, requiring additional treatment. For a desert state, providing such a large quantity of water from the Indira Gandhi canal will not be an easy task. 

While almost all new refineries have come up on the coast for the ease of importing crude oil, the Rajasthan refinery will need a cross-country pipeline to be built to carry oil from the west coast, which will shrink margins. 

The Rajasthan refinery was initially to be set up at Leelala in Barmer. With farmers there seeking more compensation, the state government recently changed the location to Pachpadara, evoking sharp protests and the resignation of state Revenue Minister HemaramChaudhary.  

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A change we want to see in us & all around us

We all understand the fact that our ecosystem is fragile, but it’s only since last few years that we understand that the time to act is now. That, it may be too late, but it is now or never. The future of humanity and hence the business is together and not in isolation, it will perish or foster together. Issues of inequality, poverty, conflict, environment & excessive consumerism are what will decide the future of humanity and its time business be a part of the change, the change that was long due. For long enough time have we been consuming without returning back,The change has to begin at home. It started small and it has to grow, but the challenge is not in growing it nor is it in making profits but the challenge is in making the change profitable. Challenge is to sustain in times of change, competition and excellence. Challenge is in collaborating with competitors to strengthen society and lead by example .This change is happening all around us, people do want to be part of something that is good for the society and such steps are what the activities of HPCL depict, it may be small to begin with but then all good things start small.The success of this change can only be measured when business is seen as an enabler of humanity, when we strive for the world that is beneficial for everyone. Most importantly to the future that we are indebted to.

We saw that in HPCL, they have a number of initiatives in the field of local community issues; there is still a long way to go:

HPCL does not conduct any activities which focus on preservation of heritage and culture whereas its competitor IOCL does.

The no. of female employees is hardly 8% of total employee strength. The figure can be improved with focused measures in recruitments and retention of employees.

Many of the programs like Adapt in Mumbai (for disabled children), Childline in Delhi, Mumbai, Kolkata (to curb human trafficking and child labour), Nanhi Kali in 7 cities (gender equality issues) and other programs have only been launched at a few places a of now. These should be emulated to the other cities too to have a scalable, overall impact.

HPCL has the Childline project in Delhi and Kolkata but not on gender equality (Nanhi Kali), miid day meals (Akshayapatra), etc which also are issues that need to be dealt with. HPCL having the backing of being PSU can leverage that reach and power and should provide for more schools in more areas.

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References:

http://www.hindustanpetroleum.com/

http://www.hindustanpetroleum.com/CSRHomeLand

http://www.hindustanpetroleum.com/CSRGCCommitment

http://www.hindustanpetroleum.com/employeeengagement http://www.hindustanpetroleum.com/employeeengagement http://www.hindustanpetroleum.com/documents/pdf/HPCL_Sustainability_report_2014.pdf

http://www.hindustanpetroleum.com/documents/pdf/COP_2012-13.pdf

https://en.wikipedia.org/wiki/Hindustan_Petroleum

http://articles.economictimes.indiatimes.com/2012-10-18/news/34557383_1_oil-psus-public-sector-oil-companies-iocl

http://articles.economictimes.indiatimes.com/2014-11-28/news/56540328_1_csr-tata-motors-tata-chemicals

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