International Journal of Human Resource Management and Research (IJHRMR) ISSN 2249-6874 Vol.

2 Issue 3 Sep 2012 1-12 TJPRC Pvt. Ltd.,

CSR: MAKING GOOD BUSINESS SENSE IN INDIA WITH SPECIAL REFERENCE TO VEDANTA LANJIGARH
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SATYA SIDHARTHA PANDA & 2AMIT KANJILAL

Research Guide Einstein International University USA, HOD-Bangalore City College, Bangalore, Visiting Faculty (Organizational Behavior) -Christ University, Bangalore Senior Professor, Department of Management, International Institute of Business Studies, Bangalore

ABSTRACT
As economic liberalization has widened economic disparity in India, there is a need for Corporates to create a favorable image among the public. This leads them to adopt the practice of Corporate Social Responsibility (CSR), taking up social initiatives. Satisfaction drives the engines for business to invest and reap benefits. Most of all satisfaction brings life and business much closer towards moments of worthiness of the time spent. This paper attempts to persuade to understand how Vedanta Lanjigarh As a Group, is

committed to undertake social and community based initiatives to contribute to the socio economic well being and provide an opportunity for empowerment of communities in Kalahandi district in a short span of time. How they are Building the people, proactively engaging them and giving an opportunity to grow and lead their life in a better way.VAL has used the Finance which has been earned from the Society, take their Manpower originated and developed by the Society and Goods/Services supplied by the Corporates will be utilized by the Society.

KEYWORDS: CSR, Philanthropic responsibility, BPO, socio economic, corporate citizen & social
mobilization.

INTRODUCTION
The nature and scope of Corporate Social Responsibility has changed over time. The concept of CSR is a relatively new onethe phrase has only been in wide use since the 1960s. But, while the economic, legal, ethical, and discretionary expectations placed on organizations may differ, it is probably accurate to say that all Societies at all points in time have had some degree of expectation that Organizations would act responsibly, by some definition. In the Eighteenth Century, the great economist and philosopher Adam Smith expressed the traditional or classical economic model of business. In essence, this model suggested that the needs and desires of Society could best be met by the unfettered interaction of individuals and organizations in the marketplace. By acting in a self-interested manner, individuals would produce and deliver the goods and services that would earn them a profit, but also meet the needs of others. The viewpoint expressed by

Satya Sidhartha Panda & Amit Kanjilal

Adam Smith over 200 years ago still forms the basis for free-market economies in the twenty-first century. However, even Smith recognized that the free market did not always perform perfectly and he stated that marketplace participants must act honestly and justly toward each other if the ideals of the free market are to be achieved. In the century after Adam Smith, the Industrial Revolution contributed to radical change, especially in Europe and the United States. Many of the principles espoused by Smith were borne out as the introduction of new technologies allowed for more efficient production of goods and services. Millions of people obtained jobs that paid more than they had ever made before and the standard of living greatly improved. Large organizations developed and acquired great power, and their founders and owners became some of the richest and most powerful men in the world. In the late nineteenth century, many of these individuals believed in and practiced a philosophy that came to be called "Social Darwinism," which, in simple form, is the idea that the principles of natural selection and survival of the fittest are applicable to business and social policy. This type of philosophy justified cutthroat, even brutal, competitive strategies and did not allow for much concern about the impact of the successful Corporation on Employees, the Community, or the larger Society. Around the beginning of the twentieth century, a backlash against the large Corporations began to gain momentum. Big business was criticized as being too powerful and for practicing anti-social and anti-competitive practices. Laws and regulations, such as the Sherman Antitrust Act, were enacted to rein in the large Corporations and to protect Employees, Consumers, and Society. An associated movement sometimes called the "Social Gospel," advocated greater attention to the working class and the poor. The labor movement also called for greater social responsiveness on the part of business. Between 1900 and 1960 the business world gradually began to accept additional responsibilities other than making a profit and obeying the law. In the 1960s and 1970s the Civil Rights Movement, Consumerism, and Environmentalism affected Society's expectations of Business. Based on the general idea that those with great power have great responsibility, many called for the business world to be more proactive in (1) ceasing to cause societal problems and (2) Starting to participate in solving societal problems. The sections that follow provide additional details related to the corporate social responsibility construct. First, arguments for and against the CSR concept are reviewed. Then, the stakeholder concept, which is central to the CSR construct, is discussed. Finally, several of the major social issues with which organizations must deal are reviewed.

ABBREVIATIONS
1. BPO VAL CSR: Building the people, proactively engaging them & giving an opportunity to grow

CSR: Making Good Business Sense in India with Special Reference to Vedanta Lanjigarh

2. 3. 4. 5. 6. 7. 8. 9.

CSR Group: CSR and its subsidiaries from time to time CSP: Corporate social performance LC: Local communities KBK: Kalahandi, Bolangir and Koraput CDI: composite development index LSE: London Stock Exchange VAL: Vedanta Aluminum Ltd (MHU): Mobile Health Unit

10. SHG: Small Help group 11. AISD: Asian Institute for Sustainable Development 12. SSA: Shashya Shilpa Abhiyan 13. CA Project: Chetna Anganwadi Project 14. (KPIs): key performance indicators 15. (CDI): composite development index

LET US NOW HAVE A LOOK AT THE WAY THE CONCEPT IS UNDERSTOOD IN INDIA
On action alone be thy interest, never on its fruits. Let not the fruits of action be thy motive, nor be thy attachment to inaction. hagavad-Gita, Ch: 2 Spirituality and Corporate Social Responsibility have had a deep-rooted connection in India. A phenomenon that has preceded the coining of the term CSR, the link between the karma as espoused by sacred Indian texts and initiatives anchoring Corporates as responsible citizens has been amply evident in India since the early days. This is widely divergent from the perspective of Corporate Social Responsibility in Western economies as reflected in the observation by Arthur Page, vice president of public relations at AT&T for around 20 years and former advisor to the US President: all business in a democratic country begins with public permission and exists by public approval . Is CSR new to India? Certainly not! Companies such as those of the Tata and Birla groups have been carrying on activities in this regard long before the concept became a popular one. Despite all this, we find that CSR in India remains in a very nascent stage. A few public sector companies and some in the private sector follow this.

Satya Sidhartha Panda & Amit Kanjilal

A lack of understanding personnel and inadequately trained staff, non-availability of authentic data and specific information on the kinds of CSR activities, coverage, policy etc. further adds to the hopelessness of the situation. However, CSR is presently coming out of the purview of doing social good and fast becoming a business necessity. Corporates have begun realizing that anything benefiting workers - their community, health and environment is also good for business. Nearly all leading corporate in India are involved in corporate social responsibility (CSR) programmes in areas such as education, health, skill development and empowerment of weaker sections of the society. We find noteworthy contributions from the Tata Group, Infosys, Pepsico, among others. Four Indians, including Sunil Mittal, Chairman and Managing Director of the Bharti Group and non government organization (NGO) activist Rohini Nilekani were featured in the Forbes list of '48 Heroes of Philanthropy' It is also praiseworthy that India has been named among the top 10 Asian countries that have been paying increasing importance to Corporate Social Responsibility (CSR) disclosure norms. About 36% of activities under CSR have been concentrated in Maharashtra while 12% is being carried out in Gujarat. According to ASSOC Hams 'Eco Pulse Study' on CSR for 2009-10, some 300 Corporate Houses, on an aggregate, have identified 26 different themes for their CSR initiatives. Of them, community welfare is on top of the list, followed by education, environment, health and rural development. One of the most frequently asked questions at this site - and probably for all those individuals and organizations dealing with CSR issues is the obvious - just what does "Corporate Social Responsibility" mean anyway? Is it a stalking horse for an anti-corporate agenda? Something which, like original sin, you can never escape? Or what? Different organizations have framed different definitions - although there is considerable common ground between them. My own definition is that CSR is about how companies manage the business processes to produce an overall positive impact on society.

OTHER DEFINITION
The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts used the following definition. "Corporate Social Responsibility 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" For each business, different measures are taken in consideration to classify a business as "socially responsible". Each business attempts to reach different goals. There are four areas that should be measured regardless of the outcome needed: Economic function, Quality of life, Social investment and Problem solving. That are trying to be achieved should be measured to see if it meets with the cost guidelines that the business is willing to contribute. Vedanta at Lanjigarh measures are taken in consideration to classify a business as "socially responsible" as BPO. Generally BPO Stands for Business process out sourcing to any educated person. But my dear friend after my in depth study about the CSR activities in Vedanta Lanjigarh; I found their approaches towards CSR as BPO.

CSR: Making Good Business Sense in India with Special Reference to Vedanta Lanjigarh

CSR BPO STANDS AT VEDANTA 1. 2. 3. B Stand with Building the people P stand with proactively engaging

O stand with Opportunity to grow Dr. Mukesh Kumar, President and COO -VAL Lanjigarh, reiterated Vedanta's vision for the

overall development of the peripheral areas of Kalahandi, where it is already operating an alumina refinery. He said, "Vedanta will continuously support such endeavor to make the tribal community selfsustainable. Culture is as important to us as socio-economic development, which has been our top priority." said 19-10-2010 in a press meet

SOCIO-ECONOMIC PROFILE OF KBK DISTRICTS

In a poor and backward State showing highest incidence of rural poverty the development of hardcore backward districts requires special attention. It is found that the socio-economic conditions of people in the undivided Kalahandi, Bolangir and Koraput districts, popularly known as the KBK districts, have worsened over the years. Thanks to deforestation and erratic rainfall causing recurring droughts and famine like situation, these districts having more than 80 per cent of agricultural dependent population show bulk of the poor and destitute in Orissa. Interestingly, during 1970-90 periods, although the inter district level of development disparities among the 13 old and undivided districts of Orissa could marginally be reduced from 42.62 per cent to 40.24 per cent in the early 1990s according to the coefficient of variation values of composite development index (CDI) formed on the basis of relative deprivation method, the CDI values of all the three undivided KBK districts have markedly diminished over the years. There has also been a marked fall in the rank positions of these three districts vis-a-vis the other districts of the State. This shows that these three districts have been affected by the backwash effects of development, which may probably be due to their inherent disadvantageous factors like poor quality of human capital, backward and unsustainable agriculture coupled with reckless exploitation of forest resources. Vedanta Aluminium Limited is a subsidiary of Vedanta Resources Plc, a London Stock Exchange listed, FTSE 100 Global Metals & Mining Group, having interests in aluminum, copper, zinc, lead and recently, iron & steel. The group has operations in India, Australia, and Zambia. Vedanta Aluminium Limited (VAL) has set up a Greenfield Alumina Refinery in Orissa with a capacity of 1 Million tons per annum. It is also setting up a 0.5 MTPA Aluminum Smelter, 1215 MW Captive Power Plant. The Group Company Sterlite Energy Limted is also setting up a 2400 MW Independent Power Plants at Jharsuguda. VAL is one of the worlds premier alumina refining complex in terms of its technology, human resources and high quality infrastructure. VAL has built a high caliber team who are passionately contributing to the growth and efficiency of the organization. Vedanta Aluminium Ltd. is involved in the business of this fundamental metal. The Vedanta Alumina Refinery at Lanjigarh is

Satya Sidhartha Panda & Amit Kanjilal

operative in the state of Orissa in India. It is the first Alumina Refinery in India to adopt the Zero Discharge System. Indian billionaire Anil Agarwal led Vedanta Resources plc is a global diversified and integrated metals and mining group. The company is not only ambitious about its business but also vigorously committed to its social responsibilities. Metal czar Anil Agarwal's aggression is not limited to only business. With a mission to impact the lives of over 2.5 million under-privileged children; Vedanta Resources group has already strengthened its corporate social responsibility (CSR) programmes across all operating states in India. With an investment of Rs 186.50 crore in CSR in the last 4 years, the Group is ready to spend another Rs. 125 crore in 2009-10. Mr. Agarwal said that 'Kalahandi is one of the most underdeveloped districts in India, suffering from child malnutrition, high infant mortality rates and lack of schooling and healthcare. We are committed and sensitive to the social and cultural aspects of the region and would do whatever is required to meet the needs of local people,' .We believe with an understanding of each others needs and challenges, we the company, government and civil society, are increasing opportunity for collaboration, innovation and sustainable results. We are striving collectively to bring long-term qualitative developments in the communities in kalahandi district by: Building the people, proactively engaging them and give an opportunity to the people to lead and leave their life in a better way. VAL has provided rehabilitation and resettlement package for 119 project displaced families of the Kutia Kandha & Dongria Kandha tribes of Lanjigarh, Kalahandi. VAL has built a rehabilitation colony called Niyamgiri Vedanta Nagar. Impact on Society: Education Literacy School Dropout Students attendance Child care Mid Day meal Adoption of Anganwadi Health & Sanitation Infant mortality rate Child malnutrition Immunization Maternal mortality Malarial death Till 2005 35% 70% 42% None No provision Nil 200/1000 birth 58% 35% 1.10% 80/1000 live 75/1000 live birth 31% 71% 0.80% 20/1000 in 2008 51% 20% 85% 34 child care centre run by VAL 14120 children covered with help of Gov.t. 400 No.

(Source : Asian Institute of Sustainable Development (AISD) Report)

CSR: Making Good Business Sense in India with Special Reference to Vedanta Lanjigarh

Table showing the impact on society through different CSR VAL Projects in education & health & sanitation Building the people: Built the people to encourage fellow community members for education and other development initiatives VAL successfully engaging them as a Role model at Dongria Kondh Community:

Dongria Kondh Community wants development and mining from Niyamgiri will bring a lot socio-economic development opportunity for the tribals, says Jitu Jakasika, one of the few English Speaking youths in the Kondh Community. However, few days before, He was well known for his hardcore and stiff opposition for Vedanta and its mining project. He had visited almost all Dongria Kondh villages to organize people to oppose the mining plan. Continuous feeding of misleading facts and systematic brainwash made him to believe that industrialization and development would dilute the originality and culture of Dongria Kondh tribe. He left his education mid-way to join activists and vehemently opposed industrialization and associated development in the locality. He explored more on industry and development. He visited other industrial sites in the locality and mainly the ongoing bauxite mining sites. He saw for himself that neither Bauxite mining is ecologically hostile, nor it dries the spring and underground water. He also realized that industrialization and development do not dilute tribal culture or lifestyle.

PROACTIVELY ENGAGING
To Encourage Economic Empowerment Val Successfully Engaging Them For Economic Empowerment Through Csr This is a story of Katli and 497 women like her across 16 villages of Kalahandi district. With a smile, Katli Majhi says, I had never seen a hundred rupee note in my life. We did not know how to use money in the market. It is Vedanta who taught us to generate income, meet our day to day needs

Satya Sidhartha Panda & Amit Kanjilal

and look at the world outside. The area has Siali leaves in abundance. Earlier the women were engaged in plucking and collection of the leaves. These non timber forest produce collected by them were purchased by middle men who used to pay them a meagre amount of 25 paisa for every 100 leaves collected. To encourage economic empowerment of the women of the area, the Jeebika Project was launched in collaboration with Shakti, a local NGO, who trained the women on leaf plate stitching. Further 100 sewing machines and 4 pressing machines were distributed among 498 women. Post the training the women got together and started a new venture of producing pressed siali leaf plates. This enterprise today fetches those `40 for every 100 leaves Today Katli earns`2,700 per month. The leaf plates produced by them have found an assured market through formation of federations and one point procurement points in the villages of Balabhadrapur, Trilochanpur and Phuldumer.

OPPORTUNITY TO GROW
Opportunity for Benefit of commercially viable sustainable agriculture and motivated them and reaffirmed peoples faith with agriculture. VAL successfully gave an opportunity to Grow (Vedanta increases farmers income by 200%) Farmers in Lanjigarh area has proved that agriculture and industry can grow hand in hand. Unlike other farmers in their neighboring area, Farmers in Lanjigarh area have enhanced their household income by more than 200%. Thanks to the Shashya Shilpa Abhiyan, a sustainable livelihood promotion program, spearheaded by Vedanta Aluminium Limited, Lanjigarh in the areas. A. Janak Sahu from Harekrushnapur village in Lanjigarh Block is one such farmer, who speaks the success of Shashya Shilpa Abhiyan. Prior to Vedanta, he, with his limited knowledge was practicing single crop (paddy) farming. The five acres of land, he owns, remained green for 120 to 140 days, in the Kharif season. Rest of the days in the year his land was left fallow and he has to go for daily labour to manage his family. His earning from agriculture was a paltry amount of Rs. 25,000/- a year. Same was case for most of the farmers in the locality. It was a challenge for the CSR wing of Vedanta to ensure year round livelihood for average farming households and enhance their quality of life. The company adopted multifarious approaches, including training of farmers on benefit of commercially viable sustainable agriculture, organic farming, and managing irrigation by diverting the streams or by using water lift method, and integrated pest management. All agriculture guidance were provided free of cost. Materials help in terms seed, bio fertilizer and pesticides were also provided to the farmers. Janak took advantage of the agriculture and livelihood promotion program by Vedanta. He participated in Training Sessions; Workshops organized by Vedanta and started practicing the modern and best agricultural techniques bringing into use quality seeds, organic fertilizers and other support. His irrigated land has increased from 0.75 acres to 5 acres. Regular monitoring, technical support rendered by VAL has helped him to increase the productivity of the land. This support by the Company motivated

CSR: Making Good Business Sense in India with Special Reference to Vedanta Lanjigarh

him and reaffirmed his faith with agriculture. Unlike previous days, he started practicing double cropping along with vegetable cultivation in a large scale. His land remains green throughout the year. Now he earns about Rs. 80000/- a year. Increased income has also enhanced his quality of life. He stresses on education of his young son and sends him to school regularly. He also owns a number of assets like electric connection, television, radio, etc in his house. He gives all the credit to Vedanta for the improved life. Vedantas intervention has helped not only me but also other farmers in the area. Besides one youth from each displaced family has been trained and given a job in the refinery, adding that a total of 2,500 local people have found employment in the refinery project till date. While about 2000 people had got direct employment at the refinery in Lanjigarh, over 2000 others were getting indirect income generating opportunities, Vedanta has also started the Sasya Silpa Abhijan an initiative of vegetable cultivation, run in collaboration with the Asian Institute of Sustainable Development to give a boost to agriculture in the area. On an area of 550 acres of land, nearly 500 farmers are participating in the project as partners, Source: report in the Statesman on July 16th. 2008

CONCLUSIONS
Now is the time to analyze what we have gained from the study. We have gained an insight into Corporate Governance, Corporate Social Responsibility of VAL. However, CSR is presently coming out of the purview of doing social good and fast becoming a business necessity. This is a positive sign as Corporates have begun realizing that anything benefiting workers - their community, health and environment is also good for business.It would be very helpful if the Centre explored possibilities of facilitating CSR by companies, by making policies CSR friendly. Let there be humble beginning. The time has come that Corporates have awake take these works voluntarily. The times have changed and demands are being made to make these as responsibilities. But the Managements without waiting for the statute to be formed, they have to rise to occasion. The humble beginning of Social Responsibility can be made in a very simple way. Though the same has been discussed in details above, briefly it can be made in the following ways; 1. 2. 3. 4. 5. Use of water resources Use of creation of waste Use of energy Employee welfare Community development

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Today is the right time. Before I close, let me put beautiful example I have come across in a book. There are so many tourists who visit Himalayas. On one of the Occasion, a child with her family was one of the team. The beauty of the Mount Everest naturally took her. She being the child, she asked the mother with an innocent voice, Mummy can we take that mountain home anybody would have laughed at her wish. If the mother were to be normal, either she would have laughed or scolded the child. But that mother was special. Her reply was something extra-ordinary and very intelligent. She replied with all the love Child that is not possible, if we take the mountain home, what will another child who comes here tomorrow will see The moral of this story is very touching, If we destroy the natural resources by way of abusing, over-using, or nor using properly. What we are going to leave to the next generation. We take great pain and difficulty in making our wards comfortable by making them assets, cash etc. But we will not take care in protecting the natural resources. This is the time for all to wake-up. Measure The Effectiveness Of Your Corporate Social Responsibility Corporate social responsibility (CSR) can help you cut costs and boost sales. However, there are other significant benefits, which businesses sometime forget about, as they are slightly harder to measure. Benefits such as improved reputation, stronger customer loyalty and motivated employees should not be overlooked, and can in fact be measured. For example, improved motivation could lead to reduced absenteeism and reduced staff turnover. Similarly, customer loyalty could increase levels of repeat purchasing... Identifying and Measuring Indicators of Success 1. 2. 3. 4. You can benchmark your business against others. Some of the UK's largest Companies publish CSR reports online... You can use key performance indicators (KPIs) to measure your environmental performance. . The Community Mark Standard lets you measure Community Involvement...

It's worth remembering that measurements will probably only show the immediate impact of CSR. The biggest benefit can be the long-term improvement in your reputation. Benefit from Corporate Social Responsibility Make the most of your Corporate Social Responsibility (CSR) activities by publicizing them. Ensure that Customers, Suppliers and the Local Community know what you are doing. CSR lends itself to good news stories. Publicity like this can be a key part of using CSR to win contracts. People want to buy from businesses they respect. CSR can be particularly effective for targeting ethical Companies, the Public Sector and not-for-profit Organizations.

CSR: Making Good Business Sense in India with Special Reference to Vedanta Lanjigarh

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At the same time, you should see CSR as part of a continuing process of building long-term value. Everything you do should help improve your reputation and encourage customers and other stakeholders to stay involved with you. A business that buys recycled paper - but exploits its Customers and ignores the Community - has missed the point. Effective CSR like this helps you continue to differentiate yourself. Even with dozens of competitors, a real commitment to CSR lets you stand out. As an example, John Lewis department stores are well known as a business owned by its employees. Its commitment to CSR feeds through into customer service, sales and profits. As well as affecting the way you behave, CSR can lead to new products and services that reflect your values and those of your stakeholders. Over time, it can all add up to a powerful brand - and a winning business Getting involved with your community is good for business. You CAN enhance your business performance, profitability and reputation by working with your local community. 1. There is a clear connection between a healthy and profitable business and the well being of the community in which it does business. 2. 3. 4. 5. 6. 7. It will help you to recruit, motivate and retain your employees. You can use your community programme as part of staff training and development. It will help to improve your business reputation and profile. Being in touch with the local community can lead to new business opportunities. Community involvement boosts networking opportunities with suppliers and customers. Helping to tackle social issues in your local area such as crime can help the bottom line of your business. We conclude that this enterprise of VAL is one more step towards its endeavor in creating a healthy and self-sufficient community around its plant. VAL has always been surging ahead with innumerable social development initiatives, which has greatly impacted the lives of the people of Kalahandi District. VAL is playing a very important role and can set an example for others, as quality food and health is of great importance and will result in improving the mental faculty of children CSR at VAL bringing a sea changes on social and community based initiatives to contribute to the socio economic well being and provide an opportunity for empowerment ( BPO: Building the people, proactively engaging them and giving an opportunity to grow and lead their life in a better way) in Kalahandi district in a short span of time. Employee awareness and engagement is helping to instill the right values and sentiments, urging them to take the reins of the future in their hands.

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Satya Sidhartha Panda & Amit Kanjilal

CSR: LET ACTIONS SPEAK LOUDER THAN WORDS

The time has come for us as citizens of the country, to rise up to our bigger responsibilities. Every drop can make an ocean!

REFERENCES
1. 2. 3. Business ethics", The Economist, November 15, 2001. (Sub req'd.) "Corporate social responsibility", The Economist, November 21, 2002. (Sub req'd.) Behind the mask: The real face of corporate social responsibility, Christian Aid, January 21, 2004. 4. 5. 6. 7. 8. 9. "The future of corporate social responsibility", The Economist, January 22 2004. (Sub req'd.) "The burdens of responsibility", The Economist, June 25th 2004. (Sub req'd.) "The good company", The Economist, January 20th 2005. (Sub. req'd.) "The ethics of business", The Economist, January 20, 2005. (Sub. req'd.) Steve Hemsley, "Whos responsible? PR Week, August 12, 2005. (Sub req'd.) Swanson, Diane (1999) toward an integrative theory of business and society: A research strategy for corporate social performance, Academy of Management Review, 24(3), 506-521. Wood, Donna (1991) Corporate social performance revisited, Academy of Management Review, 16(4), 691-718. 10. Meta world April 2009 11. Yagna Vol.3 June 2010 12. Vedanta Press release July 2011 13. Vedanta report 2009 14. Peter Crush, "CSR: Let actions speak louder than words", PR Week, September 16, 2005. (Sub req'd). 15. Ross Kendall, "Dont promote CSR, just do it! Hugh Mackay", Ethical Investor, March 2, 2006.