Ashapura Minechem Ltd.

, Trivandrum

Business Ethics

Project done by:

Under guidance of:

TKM Institute of Management

Company Profile
Ashapura means, hopes realized. Ashapura group of companies was established in 1960 is Indias largest multi-mineral solutions provider. Ashapura Minechem Ltd is listed on Indias premier exchanges. It is a part of BSE Midcap and BSE 500 indices. The group has mining and mineral processing facilities in Gujarat, Maharashtra, Karnataka, Kerala, Andhra Pradesh, and Orissa. Today Ashapura Group has attained global status with projects in Belgium, Nigeria, Oman, and Malaysia. Ashapura Group is one of the significant global players in bauxite and is amongst the worlds top five bentonite companies. Ashapura also dominates the value added segments in the country for Bleaching Clay, Geosynthetic Clay Liners, Clay Catalysts, calcined Bauxite, etc.

Ashapuras Kaolin Project

For several decades, Ashapura has been mining, processing, and supplying kaolin products, from its reserves in Gujarat. On recognizing the high demand for this multi-usage mineral and also the shortages of high quality kaolin, the company has increased acquired new mine reserves of about 2.5 to 3 million tons in the state of Kerala. Ashapura Minechem Ltd has set up a Kaolin plant at Trivandrum, Kerala, India with an installed capacity of 180,000 TPA. This plant is the largest Kaolin processing facility in South East Asian region. The clay deposits at Trivandrum are among the best in the world with 96 % kaolinite content. Ashapura has decades of experience in processing and value addition of Kaolin, thus making it a dependable and trusted partner for Kaolin supplies.

Mission
We will live up to our name. We will consistently work to realize hopes, ours and those of our stake holders - customers, business associates, shareholders, employees, community, and governments. Hopes fulfilled give rise to new hopes resulting in continuous improvement in the pursuit of excellence.

Vision
To emerge as a world class company and preferred partner to diverse industries through proactive customer support, innovation and cutting edge technology. Our standards of integrity, reliability, and social responsibility will become benchmarks for other companies to emulate. The commitment, zeal, and team spirit of our human resources will enable us to transform this vision to reality.

Core Values
In times of constant change our values will remain constant. The core values which constitute the work culture of the company are; integrity innovation partnership respect responsibility stability transparency zeal All these will create more value for the company and customers.

Products
Ashapura Minechem Ltd is specialists in industrial minerals. Bentonite, the multi-tasking mineral, continues to be a core product with diverse applications in industries that range from agriculture to environment and foundry to edible oils and cosmetics to medicine. They are among the key players of bauxite in India. Their mineral portfolio consists of Kaolin, Attapulgite, Barites, Feldspar, and many other allied minerals to their product portfolio. The company has also some value added products like Bleaching Clay, Clay Catalysts, Geosynthetic Clay Liners (GCL), and Calcined Bauxite and very soon it will be alumina. All their products came with a promise of no compromise on quality.

Services
Ashapura is among the few mining companies that offers

comprehensive facilities under a single roof. Their proximity to ports and the fact that they own their own port and fleet of ships gave them the competitive edge in todays market place where costs and time are of the essence.

Objective of the Project

To understand the business ethics and code of conduct of an organization and to know to what extent the organization is following business ethics.

Methodology adopted
We conducted direct interview with the managers and also provided them with a questionnaire to answer. The secondary data was collected from company documentation, website etc.

Questions Asked
What do ethics mean to you? Ethics is doing whatever you find right. If you find something wrong, please spend time in identifying what is wrong and try to correct it. The managers are not ready to share more information and said that they are not authorized to say more.

Ethical philosophy and Ethical code of conduct Company is having a business code of conduct and ethics and adheres to what is stated in the code. All the ethical employee issues are handled with the above said code and whenever the issues cannot be resolved with the code, the decision of management is final.

Regulatory agencies of the firm Kerala State Pollution Control Board, Kerala State Health Services, Labor Welfare Board are the regulatory agencies which keep an eye on firms functioning. Ashapura strictly follow the guidelines set by these regulatory bodies. Kerala State Pollution Control Board is looking after the rules and regulations for controlling the pollution within limits. KSPCB officials visit the company and check the machinery, effluents and discuss with employees and local residents with regard to pollution. Kerala State Health Services also conducts visit once in a while to keep a check on the health of employees.

Is business ethics formally addressed in the organization and how it is handled? Business ethics is formally addressed in the organization and documented. The document Code of business conduct and ethics addresses all the ethical and business conduct aspect related to management, employees and other stake holders of the business. Ashapura is committed to continuously reviewing and updating policies and procedures. Code of Business Conduct and Ethics is subject to modification and may be updated from time to time. Some words and phrases in a code of conduct and ethics document are subject to varying interpretations and that any ethical principle may conflict with other ethical principles in specific situations. Questions related to ethical conflicts can best be answered by thoughtful consideration of fundamental principles rather than reliance on detailed regulations. In case of conflict, the decision of the Board shall be final.

The kind of ethical dilemma that you have come across Managers reply for the question was Respecting Honor Confidentiality in business code of conduct, until I am authorized to say about this, I prefer not to comment.

Future Steps in promoting ethics in the company Company ensures and will ensure in the coming years that business ethics is maintained in all respects. New steps will be taken according to the situations coming up in future and as of now; company is not expecting any change in near future.

Managers General Viewpoint

All managers working in Ashapura share a general viewpoint of all the aspects related to the work and ethics. Few views are too sensitive that we chose not to put in the report. The views are; If there is development, there is pollution. Without polluting the environment you cannot bring in development. So we would like to inform people as if you want development, better adjust with pollution As company manager of Ashapura, we will not reply to the queries with regard to company until we get the sanction from the top management and the concerned department No person is allowed to visit the plant as there are confidentiality and security issues

Ashapura Ethical issues

There are various incidents which were in news for a while related to Ashapura. Most of the incidents was either due to the unethical practices of the company or due to issues happened with the company or its management. Few instances are listed out as follows;

Incident # 1 - Illegal mining along the Konkan Coast Ashapura has been extracting at least 10 times more bauxite ore than it is allowed to from a village in Ratnagiri and continues mining though its lease ran out in November 2009. Ashapura Minechem was given permission to mine 4,000 tonnes of bauxite ore every month. The company records show it mined

more than 10 times the limit, often going up to 62,000 tonnes a month, for more than five years. This has resulted in a revenue loss running into crores of rupees for the government and damage to a fragile ecosystem along the Konkan coast. Source: http://www.hindustantimes.com

Incident # 2 - Pollution from the company results in vandalizing of company by local residents Pollution from Ashapura Kazhakkuttam plant caused severe issues in the neighborhood of the company and several people were hospitalized. This has created an issue among the local residents resulting in vandalizing and torching of the companys plant. When the issues were brought to the notice of District Collector, the companys operations was shut down temporarily. Company claimed a total loss of Rs.40 crores after the miscreants have completely destroyed and torched most of the office furniture, computers and other machineries in plant. The companys total investment in Kazhakkuttam plant is Rs.100 crores. Company alleged that the vandalizing was a carefully planned operation and the miscreants specifically targeted equipments and control machinery so that the company shall not resume operations easily. Source: http://epaper.thehindu.com

Incident # 3 - Two killed in blast at Clay Factory Two people got killed and one person was injured when a blast took place in Ashapura Kazhakkuttam unit. The accident looked like a mechanical defect while the company officials claimed it to be sabotage and stated it could have been caused by an explosive carefully planted inside the company by

the people who dont want the company to run. The company was running its trial production process at that time. Source: http://expressbuzz.com

Incident # 4 - Employee lost his hand An employee has lost his hand during his work in the company. The employee was working as a technical person and during the production process, his hand accidentally got into the machine and ultimately he lost his hand. We interviewed the person and collected all the details regarding the accident and post accident steps taken by the company. Mr. Issac has been working in Ashapura Minechem Ltd for past five years. He joined the company as a machine operator and now he is a supervisor in the company. He is loyal worker who never blamed his company for the loss that he had. The Disaster On May 6 2011, during the normal company working hours, one of the employees heard a loud cry and stopped the machine suddenly. It was after few minutes the employees could identify the cause of cry. They saw Issac standing with one of his hand lodged in the machine. Machine swallowed 90% of his right hand. Causes for the accident in Issac's point of view Issac says that carelessness from his part is one of the causes. But there was no disaster handling facilities in the company at that time. Machine was stopped only when one of the employees saw that incident. No alarm was sounded.

Causes Identified o There was no proper alarming system o Lack of training (technical and safety) o No safety measures were adopted by the company

Post Accident As compensation company and government gave 3 lakh rupees. As Isaac was no more able to work as a machine operator, the company gave a promotion as supervisor. o New safety measures were adopted o Proper alarm system was put in place o Adequate training is given to employees The company closes the chapter of accidents by giving compensation very quickly and ensures no person is talking about this matter anywhere anytime.

CSR Activities of Ashapura Minechem Ltd

The company actively seeks opportunities to share its success with the communities in areas where it operates. They have a long way to go in this area and they are determined to make a difference in the lives of the less fortunate. Glimpse of Activities of Kutch Navnirman Trust in Kutch The Kutch region of Gujarat has been divested by an unprecedented earthquake on 26th Jan 2001and therefore with noble vision to help the disaster affected people and with various other objects of general public utility,

this Trust has been established. The activities are performed under direction of Mrs. Dinaben C. Shah Director, Ashapura Group. Activities Being Carried Out KNT Housing Colony Ashapura have constructed and donated 110 houses free of charge to the people who had lost their houses in the devasted earthquake. Ashapura Primary School was started where the children of KNT and nearby area are getting education with many curriculum activities. ITI Project With the partnership of Industrial Training Institute and Ashapura Group, free technical training with stipulated stipend is provided to the students in different trades like: Motor Mechanic / Turner / Fitter / Electrician / Wireman / Welder / Computer / Tailoring / Irrigation etc. Total 1207 students are trained. Airport Beautification Company beautified an area of nearly 2 acres at Bhuj Airport with garden development maintenance and landscaping. Restoration of Historical Monuments The trust has restored historical place Nani Ba Vaav at Madhapar which was totally collapsed during the earth quake. Ashapura Womens Academy (AWA) The woman, who is the spinal code of the family, this project is dedicated to all women of the society with an aim of women empowerment and women education. Till date total 144 women trained.

Conclusion
Ashapura Minechem Ltd themselves put in the category of ethical company, but the nature of their work and the work culture force us to think otherwise. Most of the company matters are put under Confidentiality category and Managers prefer not to share trivial information also. Most of the employees in the company are a part of temporary workforce who are severely underpaid and are not provided with even the basic facilities. We found that the employees sitting in the office is also wearing masks because of the dust issue and company is distributing masks free of cost to all employees instead of taking any action to control the dust. In most cases, we were informed company looks for a cheap option than an efficient one.