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CSR Study of HPCL

PROJECT REPORT
Submitted in Partial Fulfillment of the Requirements
for the Degree of

MASTER OF BUSINESS ADMINISTRATION


By
Group - 5
Jayanth Gunturu (A015)
Abhilasha Jain (A018)
Rashi Jalan (A021)
Harsh Jansari (A022)
Arpa Mitra (A036)
Shilpin Shah (A049)
Trimester-I

Narsee Monjee Institute of Management Studies


Mumbai - 400056
August 2015

TABLE OF CONTENTS
1. Introduction
.3
2. Products of
HPCL
..4
3. Triple Bottom
Line
..5
4. Socially Responsible Core
Operations7
5. Stakeholder
Management
8
6. Corporate Social Responsibility
Initiatives9
7. Global
Compact
.14
8. Awards &
Achievements
16
9. Competitor
Analysis
.17
10.
Controversies
19
11.
The
Change
..21
12.
References
.22

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 260 th 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 MangaloreBangalore LPG pipeline and setting up a diesel hydro treating facility at its Mumbai and
Vishakapatnam operations.

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.

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.
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 Companys 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
Senior
Management
Middle
Management
Junior
Management
Nonmanagement
On deputation
Total

As on 31st March
2014
Male
Female
65
3

As on 31st March
2013
Male
Female
63
3

As on 31st March 2012


Male
65

Female
3

1027

41

888

28

803

27

3727

426

3766

421

3818

411

5191

390

5456

396

5694

400

10016

861

10178

849

10385

841
6

% of Total
Employees

7.92%

7.70%

7.49%

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
Availability of raw
materials

HPCL Response
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. HPCLs 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.

Stakeholde
r

Attribut
es

Manageme
nt
employees

Legitima
cy,
Power

Nonmanagemen
t employees

Legitima
cy

Dealers,
suppliers

Legitima
cy,
Power,
Urgency

Contract
Workers

Legitima
cy

Type of
HPCL
Engageme
Response
nt
Regular
Periodic
interaction
meetings
Awareness
(Initiative
Trainings
Yuvantage)
Regular
medical check
ups
Regular
updation of
skill sets of
employees
(Project
Akshay)
Regular
Periodic
interaction
meetings
Awareness Consultations
on safety etc
Meetings
Regular
on business meetings to
related
increase
issues
transparency
Pre bid
Meetings to
meetings
facilitate clear
Feedback
understanding
and training Training
programs
Regular
interactions
Training
programs
Medical
help

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

Impact

Better engagement of the work


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

Improved labor management


relationships
Better morale of the workers
Enhancing suppliers satisfaction
and efficiency in the process
Improved customer satisfaction
Improved safety

Improved relations and enhanced


morale of workers
Decline in accident rate
Improved awareness about illness

Transporters

Legitima
cy,
Urgency

Customers

Legitima
cy,
Urgency,
Power

Email
communicat
ion
Regular
interactions
Formal
feedback
Launch of
commercials

Local
Community

Legitima
cy

Regular
interactions

Updating their
knowledge base
Formal
grievance
mechanism
Customers are
empowered to
rate their
respective LPG
distributor
Launched
commercials on
safe usage of
LPG
Awareness on
health and
safety aspects
Need based
projects
identified by
CSR Department

Increased coordination and


productivity of transporters
Improves relations with them

Enhanced customer loyalty and


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

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

STAKEHOLDER MANAGEMENT
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 INITIATIVES
HPCL 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: PrimeMinisters National Skill Development Program
Cause: Skill Development of youth from rural areas
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.

10

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.

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

12

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: Governments 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


Need Assessment

13

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
time
4. Benefits to the environment - reduce deforestation and climate change
5. Better health, hygiene and safety for rural women
6. 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.
14

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


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 Childrens 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 2nd 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
15

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 HPCLs 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


Principle 3: Labour
Principle 4: Labour

Make sure that they are not complicit in human


rights abuses
Businesses should uphold the freedom of association
and the effective recognition of the right to collective
bargaining
The elimination of all forms of forced and compulsory
labour

Principle 5: Labour

The effective abolition of child labour

Principle 6: Labour

The 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
environmental responsibility

Principle 9: Environment

Encourage the development and


environmentally friendly technologies

Principle 10: Anti-Corruption

Businesses should work against corruption in all its


forms, including extortion and bribery

promote

greater

diffusion

of

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 rights
Action 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 abuses
Action taken: HPCLs 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 bargaining
Action 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.
16

4) The elimination of all forms of forced and compulsory labour


Action 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 HPCLs operations have been assessed for forced labour. For FY 2012-13, no
complaints were received regarding forced labour.
5) The effective abolition of child labour
Action 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 HPCLs operations have been assessed for a risk of child labour.
6) The elimination of discrimination in respect of employment and occupation.
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 challenges
Action 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. HPCLs 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 responsibility
Action 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 technologies
Action 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 bribery
Action 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


17

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 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:

BPCL
Bharat Oman
Bharat Petro JPD
Bharat Petrores
Black Gold Refinery
Bongaigaon Refinery
CPCL
Essar Oil
IOCL
MRPL
Nagar.Oil Refinery.
Nagarjuna Oil
Nandan Petrochem
Numaligarh Refinery
ONGC
Raj Lubricants
Raj Petroleum
Reliance Industries
Reliance Petro.
Southern Refinery
Trinity Tradeli.
Valvoline Cummin
18

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:

Initiati
ve

ONGC
IOCL
HPCL
BPCL

Sport
s

Environme
nt &
community
developme
nt

Heritag
e&
Culture

Global
Comp
act

Chil
d
Car
e

Educat
ion

Health
Care

Skill
Develop
ment

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

Inititat
ive

ONGC

Chil
d
Car
e

NO

Educati
on

NO

Health
Care

NO

Skill
Development

ONGC-GICEIT
Computer
Centre; Project
Utkarsh

Spor
ts

Environment &
community
development

Herita
ge &
Cultur
e

ONG
C
sport
s

Varisthajana
Swasthya Sewa
Abhiyan;Harit
Moksha;ONGCNSTFDC Hathkargha
Prashikshan;ONGCEastern Swamp
Deer Conservation
Project in Kaziranga
National Park

NO

19

IOCL

HPCL

BPCL

NO

Scholors
hip
Scheme

Akshay
Patra,ADAPT,U
nnati,Nanhi
Kali
Rajiv
Gandhi
Institute
NO
of
petroleu
m

Sachal
Swasthya
Seva,
Hospitals

ITC,Digboi;Nursin
g
School,Digboi;Ind
ianOil Multi-Skill
Development
Institute, Digboi;
Shikshak
Dakshyata Vikas
Abhiyan

NO

Swachh Vidyalaya
Abhiyan

IOF

Dil without
bill,
Suraksha,
Wockhardt

Swavalamban

HPCL
sport
s

NO

NO

No

BPCL-SEWA

NO

Counselling, 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.
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.

Comp
any

1 ONGC

CSR
Spendin
g
121.08

2 IOCL

82.73

3 HPCL

26.54

4 BPCL

7.76

Total
%
profits(PAT)
0.639822
448
18924
1.111215
581
7445
1.724496
426
1539
0.501616
031
1547

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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 Steel
2. Tata Chemicals
3. Mahindra Group
4. Maruti Suzuki
5. Tata Motors
6. Siemens
7. L&T
8. Coco-cola
9. SAIL
10.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 companys culture which is very evident in the fact that 3 companies from the
same group figure out in top 10.

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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 its 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_r
eport_2014.pdf
http://www.hindustanpetroleum.com/documents/pdf/COP_2012-13.pdf
https://en.wikipedia.org/wiki/Hindustan_Petroleum
http://articles.economictimes.indiatimes.com/2012-1018/news/34557383_1_oil-psus-public-sector-oil-companies-iocl
http://articles.economictimes.indiatimes.com/2014-1128/news/56540328_1_csr-tata-motors-tata-chemicals

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