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The Land Acquisition Ultimatum: Communication Pangs and Betrayal of CSR Legacy*

CASE STUDY, CORPORATE SOCIAL RESPONSIBILITY
ET Cases - GSMC, 14 Pages

Case Preview

The Land Acquisition Ultimatum: Communication Pangs and Betrayal of CSR Legacy

 

It was a scorching summer day and Naveen Phogat (Phogat), Manager (Security), was in the office of his senior Prem Umang (Umang), General Manager (Mining Project). “Are you kidding?” said Phogat, adding, “Do you really mean that we will publicly announce the commencement of our mining operations at Pakri- Bairat without really settling the outstanding issues?” He was breathless because he felt it was pre-mature and could escalate the situation to cause a blood-bath in the area. He was taken by surprise. Umang had anticipated such a reaction, but he knew that he had to bring his Security Manager on board for successful implementation of the project. He had already been briefed by his seniors at the corporate office: the CEO-cum-Chairman desired that a strong message of commitment towards the project must be made. He wanted Phogat to begin liasoning with Administration and Police for making necessary arrangements to keep trouble-makers at bay. However, Umang was apprehensive about his proposed plan and thought, “Should we really proceed ahead with a mining program without successful land acquisition?”

Phogat was uneasy at the prospect of a bloody confrontation that was building right under his nose. With 30 years in the Police service he knew that public protest under such provocation could deteriorate as tempers would run high and the occasion could be marred by Police firing. He realized that he was helpless in shooting down the preposterous idea as the top leadership wanted desperately to show to the Ministry of Power something concrete about land acquisition and commencement of the project. In his opinion it was a brazen act akin to disturbing a hornet’s nest. The Company had sunk about INR 300 crore till date with no concrete result in sight. The stakeholders, mainly the affected displaced population, were against the commencement of mining operations...................

 

 

Teaching Note Preview

The Land Acquisition Ultimatum: Communication Pangs and Betrayal of CSR Legacy

 

Synopsis

RUVVN Limited, a public sector unit (PSU) of Government of India, is headed by a Chairmancum-Managing Director and assisted by a Board of Directors. It is in the business of power generation, transmission and consultancy and is categorized as a company with huge profits, with a turnover of INR One lakh crore. It had diversified into hydel and non-conventional electricity generation. RUVVN also won several awards at national and international levels for its various Corporate Social Responsibility (CSR) initiatives. It was also a signatory of the United Nations’, “Global Compact for Sustainable Environment”. Due to its proactive CSR orientation it had done a commendable job in and around its power station. However their maiden foray into captive coal mining saw their CSR programme floundering initially. CSR and sustainability issues were far more complex in the context of mining. There were serious public protests against land acquisition, compensation and resettlement and rehabilitation policies. The company soon gathered its act together and gave a structured shape to its CSR initiative for different stakeholder groups, viz. youth, the landless and women.

CSR initiatives included vocational training, distribution of goods, construction of roads, providing school infrastructure, sponsoring sports tournaments, sponsoring students to Industrial Training Institutes and running a mobile health service. Although some of its initiatives were well-received, there was trenchant criticism against its lack of communication. There were severe violent attacks on the company’s employees and the project office based at the site..............

Context of the Case

The region of North Manpura Valley, Madhya Pradesh had seen many mining projects coming up. The region was likely to see massive degradation of environment due to forest destruction, high pollution by existing mining activities, illegal coal mining by coal mafia and abuse of local community. Despite being a public sector company, its CSR activities in the region had not been documented officially and made available to public. Of the three coal blocks-Pakri-Bairat Coal Mining Project (PBCMP), Chatti-Bairat Coal Mining Project (CBCMP), and Kajrari Coal Mining Project (KCMP) – allocated to RUUVN, the latter two were de-allocated due to exceeding the time frame for land acquisition.

The case study deals not only with its relation to various stakeholder groups, but also focuses on communication dilemma as to what made the company to go ahead with its mining commencement despite public protest. The central government, after the failure of RUUVN company to acquire the land in the two coal-block areas in the legally designated time period, had no option but to officially announce the lapse of the coal-block allocation (referred here as de-allocation). Therefore the company lost its license to mine coal in the de-allocated area......................

Expected Learning Objectives

The case explores the organization’s strategic approach to CSR, the consequences of hurried, ill-conceived approach of leadership to mining commencement and the political fall-out of coal-block de-allocation on the organization’s effort to kick-start mining operations without winning public cooperation.

A few of the learning objectives are as follows:

  • • To identify the importance of CSR in the context of land acquisition
  • • To understand the consequences of short-sighted approach of leadership in commencing mining operations without public support
  • • To understand the importance of CSR Communication in averting the conflict due to ill-advised planning and strategy

 

Case Positioning and Setting

The case study illustrates the nature and concept of CSR, role of values and leadership in the activities undertaken by the organization. It amplifies the dos and don’ts in land acquisition. It can be used in courses related to CSR, corporate citizenship, ethical leadership, general management, strategic management and public sector business. The case is relevant for MBA class and executive development programs.

Assignment Questions

  • I. What are the difficulties of land acquisition in India?
  • II. Does RUUVN’s CSR have an impact on local community? Why should the company engage in CSR?
  • III. What is the role of RUUVN’s top leadership in the conception and implementation of CSR agenda? What was their prime motivation?
  • IV. ............

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Abstract

This case study brings out the challenges of implementing land acquisition for a new mining project in India, and how corporate social responsibility and corporate communication dilemma provoke stakeholders' resistance. Using land acquisition context, the case explains how corporate identity is metamorphosed posing communication challenges of integrating multiple identities of the corporation. A mapping exercise by Washington-based think tank Rights and Resources Initiative in collaboration with Delhi based Society for Promotion of Wasteland Development revealed 250 land acquisition conflicts in 165 of India's 664 districts. Stakeholders' resistance has increasingly intensified creating legitimacy gaps for corporations because of communication failure. Could the conflict between corporations and civil society based on identity, and value be managed through a program of acceptable action?




Pedagogical Objectives

The case explores the organisation’s strategic approach to CSR, the consequences of hurried, illconceived approach of leadership to commence mining operations without the support of the public.

Few of the learning objectives are as follows:


  • To identify the importance of CSR in the context of land acquisition

  • To understand the consequences of short-sightedness approach of the leadership commencing mining operations without public support

  • To understand the importance of CSR Communication in averting the conflict due to illadvised planning and strategy



Case Positioning and Setting

The case illustrates the nature and concept of CSR, role of values, corporate identity, corporate communication and leadership in the activities undertaken by the organisation. This case amplifies the dos and don’ts in land acquisition. It can be used in courses related to CSR, Corporate Citizenship, Ethical Leadership, General Management, Strategic Management and Public Sector Business. The case is relevant for MBA class and Executive Development Programs.




* GSMC 2016, IIM Raipur


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- Teaching Note (**ONLY for Academicians)
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