csr 2012.pdf - Norway - the official site in India

CSR COUNTRY BRIEFINDIA 2012

Executive SummaryThis CSR Country Brief for India focuses onspecific factors relevant for Norwegiancompanies wishing to implement CSRsuccessfully in their India operations. Theconditions for business operations in Indiavary from Norway in many areas, andconsequently, so will the way CSR is perceivedand implemented.The main focus of this report is on countryspecific and cultural differences betweenNorway and India and their impact onpartnerships, transparency and corruption, and on the informal business sector and its impact on commerce.Moreover, we have provided an overview of the initiatives from the Indian government for improving conditionsfor corporate social responsibility in India before we conclude by giving some advice on how to further develop oradapt your own CSR policy.We have also done our best to provide you with useful links, an overview of the voluntary guidelines resulting fromthe Global Compact initiative in India and the World Bank doing business report for India. Information on relevantlaws and guidelines that may be of interest for you when doing business in India has also been included.We advise Norwegian companies operating in India to prioritize due diligence when selecting partners, staff andlocal agents, and to verify and follow up their sourcing, logistics and production value chain. Health, Safety andEnvironmental measures may be more challenging to implement in India than in Norway. We recommend you toset aside enough time to learn to know your Indian partners, meaning how they operate as well as in regards totheir perception of CSR. Furthermore, being aware of the relevant laws and CSR-related institutions relevant foryour company may improve your ease of doing business in India as well as ensuring that your CSR policy is in linewith the recent trends in India.The implementation of CSR in your business operations will be more challenging in India than in Norway. However,please have in mind the large potential you have for making a significant and positive contribution to the localenvironment in India, and your ability to improve the conditions for your employees, your suppliers and yourpartner's performance through implementing proper CSR in their daily operations.

IntroductionWhat steps has your company taken to ensure that your company andyour suppliers do not use child labour? Does your company have apolicy against corruption, and how do you implement it in practice?Are the health and safety standards of your company and of yoursuppliers in accordance with international HSE standards? As aNorwegian company operating in India, your stakeholders expect youto be able to answer these questions.Doing business responsibly in India is challenging and requires constantattention from management. Norwegian companies cannot expect the samelevel of public regulation and monitoring of their activities in India as they do in Norway, and must therefore ensure forthemselves that social and environmental practices meet Norwegian and international norms and expectations. Failing tomeet these expectations may negatively impact your company's reputation and harm your relations with employees,customers, investors, partners, media and the local community. In this country brief on Corporate Social Responsibility (CSR)in India, Innovation Norway therefore provides Norwegian companies with information and advice on how to practice CSR inan Indian business context.What is Corporate Social Responsibility (As defined in the Norwegian government white paper on CSR)Over the years there have been different views of the role and responsibilities of business in society. Some have argued that«the business of business is business», and that the private sector benefits society best by concentrating on increasing itsprofitability within a clear legal framework. The rationale here is that companies operating in a well-functioning marketcontribute to achieving broader social goals such as employment, general development and welfare, thereby making theircontribution to society.In recent years, CSR has come to encompass more. This relates to the increasing influence of the private sector as a result ofglobalisation, and the opportunities and challenges associated with this. Corporate social responsibility, with its attendantnorms and standards, is evolving constantly as new knowledge is acquired.At the core of the concept lies the responsibility of companies towards people, society and the environment that are affectedby their activities.Companies that deal with their social responsibility in a forward-looking manner ensure that becomes an integral aspect oftheir corporate governance. CSR must be clearly established as a line management responsibility, and followed up on anongoing basis by the company's senior management and board.There are various strategic approaches to CSR. Some emphasise risk management, for instance through reputationmanagement. Others advocate a more proactive approach to CSR, where finding solutions to social problems becomes partof the company's business strategy, thereby providing access to important markets. Quite apart from the company'scontribution to society through job creation, taxation and generating economic spillover effects, the company can developproducts, services, production methods and business practices that promote development. Examples of this include microcredit, mobile telecommunications, solar power and water supply.

The substance and understanding of the concept of CSR are dynamic. The focal issues vary according to the area of activity inquestion, and change over time. Philanthropy, or donating to good causes, has traditionally been perceived as an expressionof a company's commitment to corporate social responsibility. Many companies continue to view CSR in terms of charity andsupport to the local community. However, there is a growing tendency to see the core area for practising social responsibilityas the company's own operations and supply chain.CSR in IndiaAs a nation, India faces paradoxes and polarities. On the, Human Development Index 2011 India ranks at the lower end, at ath134 of 187countries.Inequality between genders is strong, more than 30 per cent of the Indian population is illiterate andmore than one third of the population lives on less than a dollar and a quarter a day. At the same time India takes pride in thefact that she has made a mark on the scientific world map. India boasts of the world's third largest educated and technicalmanpower, and is reckoned as an economic power house. It is a progressive country, and inclusive growth is at the centre ofIndia's national agenda.Corporate Social Responsibility (CSR) has been on the agenda in India for a considerable period of time, and most big Indiancorporations are engaged in CSR activities. However, among the many SMEs there are scarce resources available and CSRmay be considered too costly. Being exporters, these SMEs will frequently do business with Norwegian companies. If yourcompany chose to do business with Indian companies with poor social and environmental standards, it can attract negativeattention from media, customers, investors, employees and the authorities.Furthermore, employer's organisations can have different roles and attitudes than we are used to from Norway. The Indianmanagement style is considered to be more authoritarian than the Norwegian one, and it might be considered bothunnecessary and improper to ask employees about their opinions. However, Indian managers are considered extremelyprofessional, and Indian companies have a hierarchical organisational structure, with many levels of management.The Indian society has a long-term perspective, and is based on informal and predictable relations, in which trust plays animportant role.Cultural differences may also impact how CSR is perceived from the Indian side in a partnership, and how CSR is implementedand communicated. How agreements are followed up and interpreted is another area where cultural differences may have astrong impact. CSR often takes the form of philanthropy among Indian agents, but this does not necessarily mean that thereis little potential for implementing CSR in your business practices in India.Take time to know your Indian partner and how the company operates.A potential area for synergies lies in the meeting between the measurement and communication skills found in Norwegiancompanies and the more relationship-focused business practices of their Indian partners.Both the Norwegian and the Indian government are pushing for stronger policies in relation to corporate responsibility. Witha strong CSR profile, Norwegian businesses operating in India have the potential to be at the forefront of this development,and to increase their ability to tackle market specific challenges while strengthening their triple bottom line – theenvironmental, social and economic dimensions of the business.

Supply Chain ManagementThe implementation of CSR in your business operations ismore challenging in India than in Norway. Only about 10% ofthe total Indian workforce is employed in formal (organized)companies. A number of companies within these 10%,especially the largest ones, have already implemented a fairlygood level of CSR, particularly related to Health, Safety andEnvironment (HSE). The rest of the workforce is employed byinformal (unorganized) companies, or are home-based workersbelonging to the vast “peoples' sector”.The workforce in the informal sector is used as sub-contractors, and a substantial amount of the Indian productionis being put out to this sector through contractual and sub-contractual arrangements. This vast workforce found inthe informal economy is not covered by Indian protective legislation, and it has generally a low level of education.Moreover, these workers operate in working environments with scarcely implemented CSR systems, including HSEsystems. The people's sector is also where you find a high amount of child labour, an area in which India tops theworld statistics. We advise Norwegian companies operating in India to prioritize due diligence when selectingpartners, staff and local agents, and to verify and follow up their sourcing, logistics and production value chain.Norwegian companies operating in India should therefore use time and resources to understand and follow uptheir production value-chain.For practical advice on supply chain management, please see the Ethical Trading Initiative's guide on supply chainmanagement, available at www.etiskhandel.noThe UN Global CompactThe United Nations Global Compact is a strategic policy initiative for businesses that arecommitted to aligning their operations and strategies with ten universally acceptedprinciples in the areas of human rights, labour, environment and anti-corruption(www.unglobalcompact.org).The Global Compact provides strategic advice and practical tools for companies working withCSR, and has local networks both in the Nordic region and in India.For more information, please see the website for the Nordic Global Compact networkwww.gcnordic.net and the Indian Network: www.globalcompactindia.org.

The International Organization ofStandardization (ISO) has alsodeveloped a comprehensive guideline toassist companies in the implementationof CSR: ISO 26000 Guidance on SocialResponsibility, available at www.iso.org.A Norwegian version (NS-ISO 26000) isavailable from Standard Norge(www.standard.no).CSR Initiatives in IndiaSeveral major CSR initiatives have beenlaunched in India since the mid-1990s. Among the first is the voluntary code of corporate governance, “DesirableCorporate Governance: A Code”, established in April 1998. This was an initiative by the Confederation of IndianIndustry (CII), India's largest industry and business association.The FICCI - Aditya Birla CSR Centre for Excellence in New Delhi was launched on February 17, 2010. This is one ofseveral initiatives that will motivate CSR to be an even more integral part of the Indian corporate culture in theyears to come. FICCI (Federation of India Chamber on Commerce and Industry) has cooperation agreements withboth NHO (The Confederation of Norwegian Business and Industry) and Innovation Norway.On March 16, 2010 The Global Compact Local Network India hosted “The Asia - Pacific Regional Conclave” in NewDelhi on the topic of “Enhancing Enterprise Value through the Global Compact” attracting over 500 delegates from21 countries, including dozens of top leaders from Government, business and civil society. The strong Governmentsupport to this Conclave is in line with recent steps by the Government of India to advance sustainability in thecountry.National Foundation for Corporate Governance (NFCG) is a body which promotes CSR and raises the standards ofcorporate governance practices in India. The Ministry of Corporate Affairs has released the second version of theNational Voluntary Guidelines on Social, Environmental and Economic Responsibilities in line with the GlobalCompact Network India (See Summary of Guidelines and Principles or Attachment 2, and National VoluntaryGuidelines 2011 for the full report).

Human RightsHuman rights violations are a crucial CSR concern for companies, and Norwegiancompanies should support and respect human rights and ensure that they are notcomplicit in human rights abuses in India. Amnesty International is an independentorganisation promoting human rights, and provides updated information on thehuman rights situations in individual countries: www.amnestyinternational.org.The UN Global Compact also offers practical advice and programmes for “Businessand Human Rights”: www.unglobalcompact.orgHuman rights in India are covered under “The Protection of Human Rights Act, 1993 (As amended by theProtection of Human Rights (Amendment) Act, 2006-No. 43 of 2006)”. This is handled by the “National HumanRights Commission” see (http://nhrc.nic.in/ ). In this webpage you will also find a copy of the above mentionedHuman Rights Act. Continuous attempts are being made by the Commission to address various Human Rightsissues, and some of these are being monitored as Programmes under the directions of the Supreme Court.Child LabourIndia is a member of the International Labour Organization, and has ratified 40 of the ILO conventions. However,India has not ratified the ILO core conventions relating to child labour:o 138 Minimum Age Convention (1973)o 182 Elimination of the Worst Forms of Child Labour (1999)India's domestic law on child labour, Child Labour (Prohibition and Regulation) Act (1986), bans employment ofchildren in some dangerous occupations, such as factories and mines, and regulates the working conditions inothers. According to this law, anyone above the age of 14 will be regarded as an adult and will not be protected bythe child labour regulations.According to UNICEF, insufficient attention has been given in India to eliminate the worst forms of child labour. The1986 child labour law does not cover children in all sectors. India has the world'shighest number of child labourers less than 14 years of age.The prevalence of child labour increases the need for firms to pay close attention tothe suppliers and clusters in the value chain. Your company needs to take measuresto prevent and reduce the risk of child labour, for instance including a code ofconduct as a part of the firm's agreement with suppliers. Your company should alsohave an action plan for situations where child labour is uncovered in your supplychain, for instance by providing alternatives to the families in question, such assupport for education/training, micro credit loans to parents. The InternationalLabour Organization provides information and practical advice on how companiesshould approach child labour: www.ilo.org

Labour Laws and Right of OrganizationIndia has altogether ratified at least 333 labour laws, but not the ILO core conventions related to the right ofOrganization:o 087 Freedom of Association and Protection of the Right to Organize (1948)o 098 Right to Organize and Collective Bargaining (1949)Furthermore, the way Indian labour laws are supervised and implemented varies. The country was in 1976 the firstcountry in the South Asian region to enact legislation against bonded labour, a form of slavery in which a personpledges him/herself to work to pay off a loan. Such contracts can be passed on through generations. Contractlabour, e.g. workers that are not employed by the organization but hired for a specific task or project, is anothercomplex area, and sub-contracting is especially common in India. These contract workers do not get the sameprotection and benefits as the permanent workers, and many work as contract labour for longer periods of time.The fact that, as mentioned, 90% of the Indian labour is in the informal sector, they will have weak protection bylabour regulations.Although the ILO Conventions related to forced labour have been ratified, certain forms of bonded labour stillpersists, especially in the informal sector. Most Indian states have enforced an act for minimum wages forlabourers in scheduled employment, as stipulated in the Minimum Wage Act from 1948. However, the minimumwage is often not paid. According to ILO, labour under minimum wage is considered a form of bonded labour, andthey claim that there is a staggering amount of bonded labourers in India, particularly in the southern part. Manyof these are children.In April 2010, the central government raised the wage ceiling for coverage under the national health insurancescheme for industrial workers to Rs15,000 per month from Rs10,000 (http://country.eiu.com).India has enacted legislation that prohibits discrimination due to gender, religion, ethnicity or caste. Again, therecord of implementation varies. ILO has observed some violations in India's implementation of theDiscrimination (Employment and Occupation) Convention, (No 111, from 1958). This convention obligates thestate parties to hinder discrimination due to e.g. caste or gender, such as different salary scales and labourconditions.Legislation authority in India is shared between the Central Government and the State Governments. Some laws,such as those regulating minimum wages, differ from state to state. Likewise, the implementation and supervisionmechanisms may vary between states.The EnvironmentIndia is the 8th largest investor in renewable energy in theworld, and according to Ernst & Young's Renewable EnergythCountry Attractiveness Indices, India is the 4 most attractivecountry for investments in renewable energy. The Indiangovernment is currently investing heavily in renewable energy

as well as in the implementation of measures such as differential pricing, renewable purchase obligations andrenewable energy certificates tradable at the Indian Energy exchange.The responsibility for environmental governance is shared between the corporations and the government. ManyIndian institutions have come up with voluntary guidelines on environmental friendly practice. Among these is apartnership on voluntary pollution control, developed by the Indian Ministry of Environment and Forests togetherwith the industrial sector. Other initiatives include the Energy Efficient Initiative by the Indian Chamber ofCommerce, the Indian Ecomark and the Clean Technology initiative by the Confederation of Indian Industry andothers.The main environmental law related to production is The Environment (Protection) Act (1986). This law gives thecentral government the authority to protect and improve environmental quality, as well as control and reducepollution from all sources.Another development is the E-Waste Management & Handling Rules which will come into effect from May, 2012.They concern the producers' liability for recycling and reducing e-waste, meaning discarded electronic devices andequipment, in the country.With regard to the implementation of environmental laws, a challenge has been lack of knowledge on how to fulfilthe laws in practice. There are also weaknesses in the implementation and control mechanisms. The budget andinfrastructure for control has not been sufficient, although greatly improved over the last years.Transparency and corruptionIn the Transparency International Corruption Perceptions Index in 2010 India was ranked as number 87 out of 178countries. Lack of transparency and excessive "red tape" in the Indian public sector is the main challenge. Decisionprocesses takes time, and final decisions may be delayed again and again.A 2005 study done by Transparency International in India found that more than 50 per cent of the people hadfirsthand experience of paying bribe or peddling influence to get a job done in a public office. Taxes and bribeswere also common between state borders. 84 per cent of the companies asked in a survey performed by Kroll andEconomist Intelligence Unit reported increasing exposure to fraud.Corruption and bribery, fraud related to vendors, suppliers or procurement, as well as information theft, loss orattack were reported as the most common types of fraud. A major factor spurring this growth is the high staffturnover. However, the report also highlights that less than 50 per cent of therespondents invested in anti-fraud measures such as background screeningsand third party due diligence, although inside jobs claimed 59 per cent of theincidences of frauds (Kroll's Annual Global Fraud Report 2011/12).http://www.krollconsulting.com/fraud-report/2011-12/press-only/India has a Business Anti-Corruption Portal (www.business-anticorruption.com/en/country-profiles/south-asia/india):under the GlobalAdvice Network. According to them, risks of corruption in India may include:

• Public servants using their wide discretionary powers to extort payments from companies and ordinarycitizens.• The numerous bodies charged with combating corruption have conflicting mandates, and they suffer froma lack of qualified staff and funding.• The awarding of public contracts, which are notoriously corrupted, especially at the state level. Scandalsinvolving high-level politicians have highlighted the payment of bribes in the healthcare, IT and militarysectors.According to a UN Global Compact report, there are low levels of government capacity for law enforcement andimplementation in India, again causing relatively high levels of corruption.Anti-Corruption EffortsAs stated by the Enterprise Surveys (2006) of the World Bank Group,corruption represent one of the top three constraints on firm investmentin India. There is a growing focus on corruption in both India governmentand society in general. The government has implemented harsh penaltiesagainst companies involved in corruption scandals, in order to make Indiaa more attractive country to invest in. For instance, the Lokpal Bill in Indiais set to strengthen the legal support in the fight against corruption bycreating an ombudsman that will deal specifically with matters related tocorruption. The government is now in the process of reviewing the LokpalBill, but there is still much uncertainty concerning the time frame of thisprocess and the strength of the final bill.A snapshot from the Anti-Corruption Portal states:"India is one of the most attractive investment places in the world thanks to its low cost labour and the stablepolitical climate. India has liberalised the economy during the last 20 years and the government has a businessfriendlypolicy. The business climate is on the other hand hampered by a cumbersome bureaucracy and pervasivecorruption at all levels of government. The political system is characterised by deep-rooted patronage systems andpublic officials have vested interests in their positions. Corporate integrity is also very low, as scandals regularlyhighlight Indian companies' payment of kickbacks both when operating inland and abroad. The federal structureof government means that huge differences in the level of corruption and the responses to it exist between onestate and the other."Consequently, Norwegian companies deciding to do business in India will benefit from preparing a strategy onhow to deal with corruption. Transparency International Norway has developed a "Handbook of anti-corruptionfor Norwegian companies", where you will find more information on the causes and consequences of corruption,

as well as practical advice on how to address corruption in your business operations: visit www.transparency.nofor more information. The Business Anti-Corruption Portal is another place to seek practical advice and tools inthe fight against corruption: www.business-anti-corruption.comA CSR company Policy Document for India OperationsNorwegian companies established in India and companies considering establishing in India are recommended todevelop individual CSR company policies for their business in India. This "CSR Country Brief - India" provides someguidelines in this regards. There are no reasons to compromise on the level of CSR in India compared to what ispractised in Norway. Even though business ethics and business climate are different, the focus, commitment andobjectives should be similar. When developing the document, it might be beneficial to include subjects such as;• Climate change: Focus on operating within a low carbon framework.• Water: A limited resource in many parts of India. Manage it with care. Consider recycling.• Poverty: Support the government in its strategy of inclusive growth. Without including the vast majorityof less privileged people, no business can aspire to succeed in the long run. Projects supporting skills andemployability will be well in line with this.• Education: Support grass root education. India needs to educate its inhabitants and aim for total literacy.• Bribery and Corruption: The CSR policy document should be explicit in its guidance to the employees onhow to deal with bribery and corruption. Nothing should be left to personal interpretations.• CSR policy documents should refer to a separate code of conduct, whistle blowing procedures anddilemma training.Further InquiriesInnovation Norway, New Delhi offers advice and a training course on cultural matters related to Indo-Norwegianbusiness situations. Moreover, Innovation Norway, New Delhi and theNorwegian Embassy are assisting and opening doors for establishingNorwegian businesses in the country.The Norwegian Embassy and Innovation Norway New Delhi haveestablished a CSR Forum for Norwegian businesses in India, called the"NPR/CSR Advisory Board". This Forum comprises representatives frommajor Norwegian businesses established in India. The Forum may offerexamples of Best practice and information sharing, and InnovationNorway, New Delhi is planning to implement a CSR-seminar in India for2012.

Attachment 1:Useful Links and Contact InformationAttachment 2:i) Doing Business in India 2012ii) Subnational Doing Business in India 2009Attachment 3:Voluntary Guidelines for CSR in IndiaAttachment 4:Relevant Laws and RegulationsAttachment 5:Appendix- Some positive developments

Attachment 1: Useful Links and Contact InformationRelevant organizationsEmbassy address:http://www.norwayemb.org.in/FICCI, Federation of India Chamber on Commerce and Industry:http://www.ficci.com/NICCI, Norsk Indisk Handelskammer:http: //www.nicci.no/Innovation Norway, India:http://www.innovasjonnorge.no/Internasjonale-markeder/Kontorer-iutlandet/India/Indo-Norwegian Business Match Making Programme (BMMP):http://www.innovasjonnorge.no/Internasjonale-markeder/Kontorer-iutlandet/India/Match-Making-Program/TERI-BCSD (Business Council for Sustainable Development):http://bcsd.teri.res.in/ILO, India:http://www.ilo.org/public/english/region/asro/newdelhi/index.htmICCR, Indian Council for Cultural Relations:http://www.iccrindia.org/National Foundation for Corporate Governance (NFCG):http://www.nfcgindia.org/home.htmlGlobal Compact Network India:http://www.globalcompactindia.org/Norad:www.norad.noNorfund:www.norfund.noGIEK:www.giek.noCouncil on Ethics for the Government Pension Fund – Global:http://www.regjeringen.no/nb/sub/Styrerradutvalg/etikkradet.html?id=434879Ethical Trading Initiative Extractive Industries Transparency Initiative:www.eitransparency.orgEquator Principles:www.equator-principles.comGlobal Reporting Initiative:www.globalreporting.orgCarbon Disclosure Project:www.cdproject.netHuman rights and business:www.business-humanrights.orgWorld Business Council for Sustainable Development (WBCSD):www.wbcsd.orgCSR Europe:www.csreurope.orgThe National Commission for Protection of Child Rights (NCPCR):http://www.ncpcr.gov.in/index.htmlTranparency, anti-corruptionhttp://www.unglobalcompact.org/Issues/transparency_anticorruption/Transparency International Indiahttp://www.transparencyindia.org/Kroll's Annual Global Fraud Report 2011/12http://www.krollconsulting.com/fraud-report/2011-12/press-only/Anti-corruption business portal:www.business-anti-corruption.orgFAFO Red Flags:www.redflags.infoHuman Rights Compliance Assessment:www.humanrights business.org/040_hrca.htmGuidelinesCode of Conduct Concerning Corporate Responsibility (InnovationNorway's expectations for customers and partners)On regulations foremployment:http://www.doingbusiness.org/data/exploreeconomies/india/employing-workers/OECD Guidelines for Multinational Enterprises:www.oecd.orgUN Global Compact:www.unglobalcompact.orgUN Principles for Responsible Investments:www.unpri.orgUN Development Programme:www.undp.orgVoluntary Principles on Security and Human Rights:www.voluntaryprinciples.orgInternational Organization for Standardization (ISO):www.iso.org

Attachment 2: i) Doing Business in India 2012The publications Doing Business 2012 and Doing Business in India 2009 are both co-publications of the World Bank, IFC &Palgrave MacMillan.India is ranked as 132 of 183 economies in regard to ease of doing business. Even though this ranking is not directly related toCSR we have still included this input, since the low ranking is related to cumbersome procedures, lack of transparency, highamount of red tape (including numerous procedures and complicated manual rules & routines), judiciary and corruption.Doing Business 2012 is comparing regulations in 183 economies, and provides a quantitative measure of regulationsfor starting a business, dealing with construction permits, employing workers, registering property, getting credit,protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business-as they apply todomestic small & medium-size enterprises see (http://www.doingbusiness.org/data/exploreeconomies/india)A fundamental premise of Doing Business is that economic activity requires good rules. These include rules that establishand clarify property rights and reduce the costs of resolving disputes, rules that increase the predictability of economicinteractions and rules that provide contractual partners with core protections against abuse.INDIA, 2012 South Asia GNI per capita (US$) 1,340.00Ease of doing business (rank) 132 Lower middle income Population (m) 1,171Starting a business (rank) 166 Registering property (rank) 97 Trading across borders (rank) 109Procedures (number) 12 Procedures (number) 5 Documents to export (number) 8Time (days) 29 Time (days) 44 Time to export (days) 16Cost (% of income per capita) 46,8 Cost (% of property value) 7.3 Cost to export (US$ per container) 1095Minimum capital (% of income per capita) 149,6 Documents to import (number) 9Time to import (days) 20Cost to import (US$ per container) 1070Dealing with construction permits (rank) 181 Getting credit (rank) 40 Enforcing contracts (rank) 182Procedures (number) 34 Strength of legal rights index (0-10) 8 Procedures (number) 46Time (days) 227 Depth of credit information index (0-6) 4 Time (days) 1,420Cost (% of income per capita) 1,631.4 Public registry coverage (% of adults) 0.0 Cost (% of claim) 39.6Private bureau coverage (% of adults) 15,1Getting Electricity (rank): 98 Protecting investors (rank) 46 Resolving Insolvency 128Procedures (number) 7 Extent of disclosure index (0-10) 7 Time (years) 7Time (days) 67 Extent of director liability index (0-10) 4 Costs (% of estate) 9Cost (% of income per capita) 216,2 Ease of shareholder suits index (0-10) 7 Recovery rate (cents on the dollar) 20,1Strength of investor protection index (0-10) 6.0Paying taxes (rank) 147Payments (number per year) 33Time (hours per year) 254Profit tax (%) 24,7Labour tax and contributions (%) 18,2Other taxes 19,Total tax rate (% of profit) 61,8

ii) Subnational Doing Business in India 2009Doing Business in India 2009 was produced at the request of the Department of the Industrial Policy andPromotion at India's Ministry of Commerce and Industry focusing on how reforms are promotingcompetitiveness and growth in Indian cities. The report covers regulations that affect seven stages in thelife of a small to midsize domestic enterprise see ( http://www.doingbusiness.org/reports/subnational-reports/india)The report finds that it is easier to start and operate a business now than it was three years ago in manylarge Indian cities, and shows how government regulations and practices ease or constrain businessactivity. In 14 of the 17 locations it benchmarks, the report records significant business reforms at thenational, state, and municipal levels. These include computerizing records, putting tax registration online,and setting up single-window systems for permit applications-all making it easier for businesses to complywith rules and regulations.While all cities in India have a similar legal and institutional framework, local regulations and theimplementation of national laws vary. The report finds it is easiest to start and operate a business inLudhiana, Hyderabad, and Bhubaneshwar. Starting a business is fastest in Mumbai and Noida, at 30 days,while it takes 41 in Kochi. Business start-up is least expensive in Patna. Resolving a commercial disputetakes about two years in Bhubaneshwar, Hyderabad, and Kochi, but almost four years in Mumbai.Compared with economies worldwide, cities in India lag most in the ease of closing a business and payingtaxes. In India, where more than 90 percent of jobs are in the informal sector, regulatory reforms can helpbusinesses operate efficiently in the formal sector.

Attachment 3: National Voluntary Guidelines on Social,Environmental & Economic Responsibilities of Business inIndiaGlobal Compact NetworkIndiaThis is a summary of the National Voluntary Guidelines on Social, Environmental & EconomicResponsibilities of BusinessThe National Voluntary guideline on Social, Environmental and economic responsibilities ofbusiness is a unique piece of guidelines directed towards Corporate Social Responsibilitypractice by corporations - both public and private. These guidelines have been developedthrough an extensive consultative process by a Guidelines Drafting Committee (GDC) comprisingof experienced professionals representing different stakeholder groups. These guidelines havebeen released by Ministry of Corporate Affairs on July 8, 2011 and can be accessed at:http://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdfThe GDC was appointed by Indian Institute of Corporate Affairs (IICA) with an aim to provide adistinctively 'Indian' approach, which will enable businesses to balance and work through manyunique requirements of India. The guidelines provide a basic framework for responsiblebusiness action for Indian corporate and multi-national corporations.The guidelines are intended to be adopted comprehensively to raise the bar in a manner thatmakes value creating operations of corporations sustainable. The guidelines are based onpractices and precepts and urges businesses to embrace the 'triple bottom line' approach toharmonize its financial performance.

The guidelines have been articulated in the form of 9 principles which are as follows:1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.2: Businesses should provide goods and services that are safe and contribute to sustainability throughouttheir life cycle.3: Businesses should promote well-being of all employees4: Businesses should respect interests of, and be responsive towards all stakeholders, especially those whoare disadvantaged, vulnerable and marginalized.5: Businesses should respect and promote human rights.6: Business should respect, protect , and make efforts to restore the environment7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsiblemanner.8: Businesses should support inclusive growth and equitable development9: Businesses should engage with and provide value to their customers and consumers in a responsiblemanner.All the nine principles enshrined in the voluntary guidelines endorse the ethos and spirit of the Global Compactprogramme and would be instrumental in the Indian corporate sector evolving into a global leader in responsiblebusiness.GCN India welcomes the guidelines and endorses its application both in public and private sector for cohesive andinclusive growth of society, environment and economy.Source:http://www.globalcompactasiapacific.org/GcAsia/LinkClick.askpx?fileticket=RsdBSBxVP3Q%3d&tabid=73

Attachment 4: Relevant Laws and RegulationsIndustrial Disputes Act 1947Factories Act 1948Companies Act 1956Trade Union Act 1956Equal Remuneration Act 1976Bureau of Indian Standards Act 1986Consumer Protection Act 1986Environment Protection Act 1986Prevention of Corruption Act 1988Public Liability Insurance Act 1991National Commission for Backward Classes Act 1993Persons With Disabilities (Equal opportunities, protectionof rights and full participation) Act 1995Trade Marks Act 1999Juvenile Justice (Care and Protection of Children) Act 2000Designs Act 2000New Competition Act 2002Prevention of Money Laundering Act 2002National Commission for Minority Educational InstitutionsAct 2004Commission for Protection of Child Rights Act 2005National Rural Employment Guarantee Act 2005Right to Information Act 2005Protection of Women from Domestic Violence Act 2005Micro Small and Medium Enterprises Development Act2006The Scheduled Tribes and Other Traditional ForestDwellers(recognition of forest rights) Act 2006Protection of Human Rights(amendment) Act 2006Rehabilitation and Resettlement Bill 2007Land Acquisition (amendment) Bill 2007Hazardous Waste (management, handling and transboundary movement) Rule 2008The Information Technology (Amendment) Act 2008Workmen's Compensation Act 1923Children (pledging of labor) Act 1933Payment of Wages Act 1936Industrial Employment (standing orders) Act 1946Employees State Insurance Act 1948Minimum Wages Act 1948Employees Provident Fund and Miscellaneous Provisions Act 1952Maternity Benefits Act 1961Payment of Bonus Act 1965Contract Labor (regulation and abolition) Act 1970Payment of Gratuity Act 1972Bonded Labor System (abolition) Act 1976Inter -State Migrant Workmen (regulation of employmentand conditions of service) Act 1979Child Labor (prohibition and regulation) Act 1986Building and Other Construction Workers (regulation ofemployment and conditions of service) Act 1996Wildlife protection act 1972Water (prevention and control of pollution) Act 1974Water (prevention and control of pollution) Cess Act 1977Air (prevention and control of pollution) Act 1981Forest (conversation) Act 1980 and Amendments 1988National Environment Tribunal Act 1995National Environmental Appellate Authority Act 1997Energy Conservation Act 2001Coastal Aquaculture Authority Act 2005Special Economic Zones Act 2005Essential Commodities Act 1955Union Duties of Excise ( distribution) Act 1979Central Excise Tariff Act 1985Customs (amendment) Act 1985Taxation Laws (amendment & miscellaneous provisions)Act 1986Direct Tax Laws (amendment) Act 1988Foreign Trade(development and regulation) Act 1992Securities and Exchange Board of India Act 1992Customs and Central Excise Laws (repeal) Act 2004National Tax Tribunal Act 2005National Manufacturing Policy 2011

Attachment 5: Appendix- some positive developmentsBe aware that a number of positive developments in relation to corruption and investments are beingdone in India today, including:• The RTI Act. The Right to information act 2005 (RTI Act) has worked as a powerful instrument toenhance governance transparency, and has led to changes in the transparency regardingestablishment and implementation of strategies, programmes and laws. The RTI Act grants accessto administrative documents within 30 days and has been actively used to hold public officialsaccountable for their decisions and to monitor public spending. The RTI Act is additionally animportant tool in regards to environmental management• The Supreme Court has taken some bold steps by upholding corruption charges in cases involvingpoliticians and high-ranking government officials.• The Government has striven to simplify administrative procedures and to reduce physicalencounters with public officials that could open the way for facilitating payments. The nationalportal of India see (http://india.gov.in/) is a good example of these simplification efforts.

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