Strategies for change - 3. Tata

Posted: 18 July 2001

Author: Darryl D'Monte

Following Fabian footstepsMost of India's old industrial groups began as trading concerns and they tend to be quite mercenary in their approach to business. Green issues are considered an indulgence. The exception are the Tatas, one of India's biggest and oldest. Its turnover in 1997-98 was over US$9 billion. Darryl D'Monte reports on its effort to go green.

Tata Steel believes that Industry and the environment are irrevocably linked, and one cannot progress without the other. We are therefore totally committed to improving the environment.'

Early this century, Jamsetji N. Tata set up India's first steel plant in a village in Bihar state in the face of scepticism of Raj officials. It is now known as the steel town of Jamshedpur, the country's best planned city. It is certainly the only one where water can be drunk from the tap. What is more, Tata Steel has since 1980 formed a social audit committee to scrutinise its affairs.

Tata steel works© Vivek Das/Tata SteelSocial responsibilities

The idea is to see whether the company has fulfilled its objectives regarding "its social and moral responsibilities to the consumers, employees, shareholders, society and the local community". This was inspired by the health scheme that Sidney and Beatrice Webb, the Fabians who founded the London School of Economics, formulated in 1912 for the original village at the behest of Sir Dorab Tata.

Tata Steel, which had a turnover of US$1.5 billion in 1997-98, has been concerned about pollution control, rural development and providing relief in natural disasters like floods and earthquakes, of which Bihar has more than its fair share. There are tribal (aboriginal) inhabitants living around the town and Tata Steel's Community & Social Welfare department, the Adivasi (Tribal) and Harijan (Untouchable) Welfare Cell and Rural Development Society have improved the quality of life for 400,000 people in Jamshedpur and its environs.

There have been very cordial relations between Tata Steel's workers and the management. Amazingly, there have been only three strikes in its entire history - all in the 1920s. J.R.D. Tata, who until his death earlier this decade, was widely acclaimed as the doyen of Indian industry, instituted an elaborate three-tier system to attend to workers' grievances.

Tata Steel has been concerned about the nuisance caused by slag and the smoke and noxious gases spewed out from chimneys in the steel plant. Despite installing electrostatic precipitators in the first sinter plant, there is still evidence of dust and grime, while pollutants from the second have been eliminated totally. After the first Social Audit Commission report passed strictures, an environmental management division was set up in 1986 and has spent $6.4 million so far. The Confederation of Indian Industry awarded Tata Steel a prize for environment and pollution control a decade ago.

Community development

Because it was the first heavy engineering project in the group and created an entire township in the process, Tata Steel has pioneered such social concerns. Other Tata companies have taken their cue from it. Tata Engineering and Locomotive Co., Telco, based in Pune, which manufactures heavy vehicles in collaboration with Mercedes Benz, diversified into Mercedes automobiles and recently designed its own small car, has integrated community development as part of its business plans. Using its organisational strength, it has transformed 800 acres of waste land into what it calls "an urban Arcadia", along with a bird sanctuary. It recently unveiled a diesel truck which conforms to the Euro-I emission norms, a year ahead of their introduction in India. The company had a turnover of US$2.4 billion in 1997-98.

However, in a recent knee-jerk reaction to an article against the use of diesel in automobiles by Anil Agarwal and Sunita Narain, respected environmentalists who head the Centre for Science and Environment (CSE) in New Delhi, Telco has asked the authors along with the financial daily to clarify that they did not intend to malign the company by publishing a picture of two of its diesel vehicles, failing which it would claim US$23.5 million in damages. This has led an open confrontation with the CSE, which challenged Telco to file a case against it, and has undermined much of the reputation that the Tatas have shown for their sensitivity to environmental issues. Ultimately, common sense prevailed adn the Tatas withdrew their case.

The three Tata power companies, which collectively are known as Tata Electric, have undertaken a range of environmental schemes, including the planting of trees and the provision of drinking water and fish fingerlings to village governing councils free of cost. Considering the rejection of most conventional power producers in India of renewable forms of energy, it is heartening to see solar cells on top of a dam erected by Tata Hydro-Electric at Lonavla, on the road between Mumbai and Pune. However, this company was responsible for the displacement of several villages when it built the Mulshi hydel dam in the 1920s, which saw the baptism of many illustrious social activists in what was then Bombay state.

Other initiatives include Tata Tea's use of renewable energy in its 9,000-hectare fuel plantations in south India, while waste heat recovery in its north Indian plants have reduced energy use by a fifth. Instant tea waste is recycled through vermiculture and the company encourages the use of organic manures to reduce dependence on inorganic chemicals. It is now planning to harness wind and solar energy.

It also manages a national park at Eravikulam, in the western ghats (hills), which run parallel to the west coast. The sanctuary is famous for the Nilgiri tahr, a rare mountain goat. An NGO formed to protect these high ranges is manned by Tata Tea officials. In Assam, in the eastern corner of the country, the company is engaged in saving the rhino with the World Wildlife Fund.

Darryl D'Monte is a freelance journalist and author specialising in environmental issues, based in Mumbai (Bombay).