Corporate Social Responsibility Report On Oil and Natural Gas Corporation Ltd (ONGC)

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IILM INSTITUTE for HIGHER EDUCATION, GURGAON

INTRODUCTION
ONGC was incorporated as a commssion on 14 August 1956.It is the flagship energy company of India, accounting for a majority of countrys domestic oil and gas production. Since its inception 54 years ago, it has created a rich legacy of knowledge and experience, translating into pursuit of excellence and forging lasting relationships. It owe its success to the profound vision of Pandit Jawaharlal Nehru, the first Prime Minister of India and Sri Keshava Dev Malaviya, the then Minister of Natural Resources and Scientific research, who had faith in the potential of domestic oil and gas industry. As a company, it was established to achieve the vision of achieving energy security for India. It indeed has been an extremely enriching, inspiring and transformational journey for us. From the very first oil discovery at Cambay in Gujarat in 1958, it has been evolving into a premier oil and gas exploration and production company globally.As ONGC, it is an integrated petroleum company in India, operating along the entire hydrocarbon value chainexploration and production (E & P), refining, liquefied natural gas, power, petrochemicals and new sources of energy and having the largest share of hydrocarbon acreages in India and contributing to over 79% of countrys oil and 54% of countrys gas production. It has been a reliable energy solution provider for the country for more than five decades now. ONGC Videsh Limited (OVL), its wholly own subsidiary, has 40 projects spread over 15 countries with 9 producing assets in 7 countries namely Russia, Vietnam, Syria, Sudan, Brazil, Columbia and Venezuela. OVL produced 8.87 Million tonnes of Oil and Oil equivalent (MTOE) in 2009-10. Its refining subsidiary, Mangalore Refinery & Petrochemicals Limited (MRPL), refined 12.5millionmetric tons crude oil with a capacity utilization of 129%which is the highest among Indian refineries in FY 2009-10. ONGCians working 24 X 7 through out the year. Keeping the rotary table moving to keep the wheels of the country moving.

Primary products
ONGC's primary products are crude oil, natural gas and value added products such as naphtha, aviation turbine fuel (ATF),liquefied petroleum gas (LPG), superior kerosene oil (SKO) and others. For the reporting year 2009-10, it recorded a production level of 47.78 MTOE. 74% of its turnover was derived from the sale of crude oil, 12% from the sale of natural gas and 14% from the sale of value added products.

Operational structure
ONGC has been selected to be a Maharatna public sector organization in India. The President of India holds 74.14% of the total equity share, followed by the Indian Oil Corporation Limited with 7.69%, Gas Authority of India with 2.40%, Life Insurance Company of India with 3.17%, banks and financial institutions with 8.0% as major shareholders. Its headquarter is located in Dehradun, the place from where its organisation commenced this ambitious journey of being at the forefront

in meeting Indias energy security needs.Company is repositioning itself today to foster the principle of relational enterprise through partnerships, strategic alliances, joint ventures with preferred partners and is adopting a business strategy that relies on company skills and positional assets with focus on core business areas and opportunity specific diversification.

Scale of the reporting organization

As on 1 April 2010, it has 32826 employees on its rolls which include employees in executive and non-executive positions. For the reporting year 2009-10, it had a turnover of INR 619.83 billion and net worth of INR 864.41 billion. It started its journey as Flagship Oil Public Sector Undertaking (PSU) and has been selected as Maharatna PSU allowing it to have greater autonomy in decision making capabilities for a range of activities such as equity investment in subsidiaries, joint ventures and merger and acquisition up to a limit of INR 50000 million. It is ranked 3rd E&P Company in the world and 26th among leading global energy majors as per Platt's Top 250 Global Energy company rankings of 2009; based on assets, revenues, profits and Return on Invested Capital (ROIC) (November 2009). For the reporting year 2009-10.

Corporate Social Responsibility(CSR) :

CSR is the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large.

CSR at ONGC
The mission of ONGC stated that the company would have an "abiding commitment to health, safety, and environment to enrich quality of community life."And this mission was reflected in its CSR activities. CSR at ONGC began as a philanthropic activity where the company contributed to several socio-economic developmental programs like building schools and hospitals, developing agriculture and cottage industry, building infrastructure facilities, etc., around its areas of operation on an ad hoc basis...

Corporate level programs

ONGC's CSR programs at the corporate level focused on disaster relief management and water management projects. When disasters struck India, ONGC provided relief and helped state and central governments in rehabilitating those affected. For example, when a heavy cyclone hit the eastern state of Orissa in 1999, the company provided immediate relief

like food, drinking water, temporary shelters, medicine, clothing, etc. ONGC doctors provided medical treatment round the clock. The company also contributed Rs. 80 million toward the Prime Minister's relief fund and took steps to rehabilitate the cyclone victims...

Work Center Level & Community Development Programs

ONGC was involved in various community development programs like promoting literacy and higher education by providing grants or scholarships to the economically disadvantaged, donating money for the construction and renovation of schools, promoting healthcare by organizing medical camps, eye camps, through mobile dispensaries, etc...

Education
Provided support for education to 1000 girl children Launched a CSR project to provide educational support to 1000 Hemophilia afflicted children Tamana special school for computer centre for disabled children Braille machines for blind students of north-eastern states Vocational educational centres for women in southern regions.

Health
ONGC providing comprehensive healthcare support through 20 Mobile Medicare Units to two lakhs elderly persons. ONGC supported a project by Shraddha Rehabilitation Foundation, by providing 100 beds to the mentally ill road-side destitutes Cancer detection unit in Assam.ONGC started a Polio eradication programmes in ASSAM region.they also Support to Bharatiya Kushtha Niwarak Sangha to tackle sickle cell anaemia and malnutrition.

Entrepreneurship schemes
Establishing a coir industry through self help groups in various districts of TamilNadu in this ONGC give funds to this industry to promote the coir industry. Rickshaw Bank Project and Project Yuva Samridhi for promotion of self help groups.In this project ONGC give work to poor youth people who are having good skill but due to not getting opportunity they are unemployed.Support for Milk Cooperative society in Assam.Also they provide support to milk society in the region. Support to Rajiv Gandhi Foundation for tri-wheelers for disabled people .ONGC provide triwheelers for disabled people who dont have money to buy this things.

ONGC-PURA
In 2003, Dr. A. P. J Abdul Kalam, President of India, put forth the concept of PURA - 'Providing Urban Amenities in Rural Areas'. This aimed to bridge the urban-rural gap through a balanced socio-economic development program. The main idea was to provide four major connectivities -physical (transportation and power), electronic (communication network through telecom, the Internet, and IT services), knowledge (institutions and vocational training centers), and economic empowerment (through overall socio-economic development) - to rural communities...

Environment Protection Programs

ONGC took several measures to reduce pollution and support conservation of resources through the utilization of waste. The company formulated its Environment Policy as early as 1983 and adopted environment protection as one of its objectives in 1988. It even created a separate department called the Department of Environment (DoE) to ensure that environmental safeguards were in place. The environment policy of the company made it mandatory to submit an "environmental impact assessment report"to the DoE at the time of project formulation...

SAFETY
ONGC set up the Institute of Petroleum Safety, Health and Environment management (IPSHEM) in 1989 with the objective of improving the safety, health, and environment standards in the Indian petroleum industry. The institute offered training courses in safety and environment management and a special training program for off-shore personnel.

Other CSR Initiatives

ONGC also participated in promoting sports and games like cricket, football, hockey, athletics, basketball, chess, golf, billiards, and volleyball in India. In 2004, it received the "Best Corporate Initiative in Sports"award from the Federation of Indian Chambers of Commerce and Industry (FICCI). In May 2006, ONGC Ltd. (ONGC), a major Indian public sector company in the petroleum industry, received the 'Golden Jubilee Award for Corporate Social Responsibility in Emerging Economies - 2006', at the 7th International Conference on Corporate Governance organized by the World Council for Corporate Governance.

Since its inception, ONGC had regularly contributed to various CSR initiatives in the areas of health, education, infrastructure, and culture. In 2003, it decided to allocate 0.75% of its net profit each year for various socio-economic developmental programs undertaken by the company. In 2004, it drafted a Corporate Citizenship Policy - a written guideline which was to provide a direction to the company's CSR initiatives. With growing globalization, Corporate Social Responsibility (CSR) had been increasing in importance as it helped organizations to improve their relationships with local communities, increase brand value, and build a good corporate image for themselves. Also, the socio-economic developmental activities undertaken by companies increased the purchasing power of the community, leading to an expansion in their market size. In India, CSR began as a philanthropic activity where organizations contributed to social causes, but it was gaining in importance and becoming an essential activity for business (Refer Exhibit I to know more about CSR and Exhibit II for development of CSR in India). Also it appeared that in the future, CSR in India would become more than a voluntary exercise. In a conference 'Implementing CSR as a Business Strategy - A Roadmap for Effective and Sustainable Penetration' organized by the Confederation of Indian Industry (CII)in December 2005, the possibility of a company reporting its CSR activities along with its financial reports was discussed.

CSR: The Way to Go?

The importance of CSR has increased with globalization, as both investors and customers have become highly sensitive to societal and environment issues. According to Dr. Madhav Mehra (Mehra), President of the UK-based World Environment Foundation and the World Council for Corporate Governance, the importance of CSR would further increase as the future market would be driven by a younger population (around 54% of India's population is below 25) for whom social, ethical, and environmental issues were very important and who liked to be "informed"about the organizations they were buying from or investing in...