India's corporate espionage wake-up call

A fast developing espionage scandal in India has exposed a shocking nexus between corrupt government officials, middlemen and some of the most powerful local corporations. The organised racket of espionage shows how domestic companies owned by influential business families may have gained competitive advantage through illegal means.
The growing list of companies allegedly involved in the scandal now includes India’s top energy companies Reliance Industries, Essar Group, ADAG Reliance and Jubilant Energy, Cairn India - the oil exploration division of billionaire Anil Agarwal’s London-listed Vedanta Resources, infrastructure developer GMR Group and accounting and consulting giant PricewaterhouseCoopers and a bunch of local consulting firms.  At least twelve people have been arrested that include senior executives from the suspect companies. More arrests are expected, investigators have indicated.
Investigators have revealed chilling details of the modus operandi. Local consulting firms would pay bribes to government employees in various ministries to get commercially sensitive secret information about government decisions and proposals. The final recipients of the information were some of the largest domestic companies. The information could be used for lobbying, playing stock markets, gain competitive advantage and even defraud the government by manipulating bids for infrastructure projects.
Government employees involved had fake identity cards and duplicate keys to the offices of ministers and senior bureaucrats. They would re-enter the ministry premises after office hours, make copies of the documents and leave, all this while security cameras would be turned off. They will then pass on the documents to consultants, lobbyists and companies for money.
The investigations started in October last year after the new central government’s newly appointed national security advisor noticed frequent reporting of highly classified details of government meetings by media. He then asked the Research & Analysis Wing (RAW), India’s little known elite intelligence agency, to investigate. A highly secret investigation that involved taping phones of the suspects and monitoring their movements resulted in several arrests in February this year.
Investigators say they have more than 100 hours of taped phone conversations that indicate senior executives of some of the top energy companies in India were actively involved in the espionage. The CEO of Metis Business Solutions, a top energy consultancy in India with an office in Melbourne, is among those arrested. The company’s website, no more accessible, claimed more than 250 clients worldwide in the oil, gas, power and coal industries.
Examples of documents stolen include sensitive information about the national gas grid, national budget input, market sensitive data, confidential plans and minutes of high-level government meetings, government plans for foreign collaborations, planned projects with other countries, foreign investment proposals by multinational companies and disinvestment decisions relating to public sector companies.
Started with the petroleum ministry, the investigations have so far discovered stealing of commercially sensitive classified information from the ministries of finance, commerce, coal, power, defence.

Action promised

The federal government, headed by prime minister Narendra Modi who came to power last year with unprecedented majority by promising that he will fight corruption,  has promised a strict action saying that no guilty will be spared. Reacting to the arrests, Reliance Industries and the Essar Group have said that they have launched internal probes and have promised action.
Prosecutors are, however, going to face likely difficulty in effectively charging the culprits as India does not have a proper corporate espionage law. The Official Secrets Act, India’s anti-spying law dating back to 1923, can be applied only if “obtained or attempted to obtain information which is calculated to be or might be, or is intended to be, directly or indirectly, useful to an enemy.” Prosecutors are therefore charging those arrested under other laws covering “house trespass or house-breaking by night” and “forgery”.
“India Inc is not surprised with the corporate espionage scandal now rocking the petroleum ministry, with many chief executive officers (CEOs) saying documents are regularly leaked from the ministries, tax authorities, banks, and regulators – thus giving competitive advantage to corporates with deep pockets,” Business Standard, a leading local newspaper published from Mumbai, said in a report based on interviews with unnamed CEOs in February.
The government estimates that $1 trillion of investment would be needed to develop India’s infrastructure in the next five years, much of this will have to come from private investors, mostly from foreign investors. There are more than 600 mega infrastructure projects presenting huge business opportunity for local and multinational companies. Ports, oil & gas, telecom, power, railways and airports together account for 69% of the required investment, according to the Planning Commission, India’s central planning body.
The current scandal may unsettle foreign investors already frustrated with India’s antiquated laws, rampant corruption and spectacularly slow and inefficient bureaucracy. India ranks at number 85 in Transparency International’s Corruption Perception Index 2014, and is at number 142 on the World Bank’s Ease of Doing Business 2015 list.
Multinational companies eying investment opportunities often find themselves at a disadvantage compared with domestic companies when it comes to bribery. Multinational companies, particularly the ones from the UK and USA, are often bound by tough anti-bribery and corporate espionage laws at home. In India, they have to compete with large domestic companies helmed by influential families who may find bribery and espionage a fair game. The scandal has only reaffirmed their suspicion that India does not offer a fair level playing field.
It’s time to act tough by the government to win foreign investors’ confidence. For Indian companies, it’s time for introspection. Illegal means to gain competitive advantage may dent their reputation, increase regulatory risks and make them a target for international stakeholder action.

Contributed by Rajesh Chhabara, founder of CSRWorks International (www.csrworks.com)

(This article first appeared in Ethical Corporation, April 2015 issue)

Measuring and Reporting Organizational Carbon Footprint

Training Course

Measuring and Reporting Organizational Carbon Footprint

28 April 2015

Singapore

Introduction

This program is designed to offer a foundation course in carbon emissions footprinting (measurement). Participants at this course will learn the essentials of GHG management and carbon performance.   This course will provide the attendees with an excellent knowledge and understanding of the GHG Protocol to facilitate quantification and management of your carbon footprint and greenhouse gas (GHG) emissions. They will learn how to measure their organization’s carbon footprint using the GHG Protocol. 

Topics covered

• An understanding of greenhouse gas emissions and their effect on climate change.
• Introduction to the GHG protocol for corporate accounting and the GHG protocol for project accounting.
• GHG Reporting Indicators contained in the GRI G4 Reporting Framework and how they relate to the GHG Protocol standards.
• Introduction to GHG inventories (Scope-1, Scope-2 and Scope-3).
• GHG protocol for measuring and reporting corporate carbon emissions.
• Establishing a GHG information management system.
• Creating a user-friendly tool to monthly measure and monitor GHG emissions from the facility/office operations.

Who Should Attend?
This course will be very useful to those in the following functions: GRI Reporting team members, CSR/Sustainability, EHS, energy management and facilities management.

Trainer

This workshop is facilitated by Rajesh Chhabara, founder and managing consultant of CSRWorks International, one of the earliest sustainability consulting firms in Singapore. Rajesh has helped more than 50 organisations across the region to measure and manage their carbon footprint.

Training Style

Training is delivered in a highly interactive and fun style through case studies, activities and real examples.

Date & Time

28 April 2015, Tuesday
9 am – 5 pm (Registration starts at 8.45 am)

Cost

$300 per person for Singapore Compact and SBF-SDBG members
$380 per person for non Singapore Compact and SBF-SDBG members
*Course fees are inclusive of course notes and tea breaks

Venue
Singapore Business Federation
10 Hoe Chiang Road
Keppel Towers, #22-01
S089315

Please contact Diana Chng at diana@csrsingapore.org or (65) 6827 6825 for more details.

(This training is organised by Singapore Compact and Singapore Business Federation (SBF), and facilitated by CSRWorks International)

 

Responsible Business in ASEAN

The Association of Southeast Asian Nations (ASEAN), a grouping of 10 nations, aims to become a single market in 2015 what will be known as ASEAN Economic Community. The economic integration will see free flow of goods, services, investment, capital and skilled labour among the member states to achieve a single market and  production base. With 600 million consumers and $3 trillion in combined GDP, the new economic block will need a strong framework for responsible business to ensure the initiative results in a sustainable growth for weaker member nations and the communities living there.
ASEAN has several challenges to deal with. To start with, ASEAN is a grouping of very uneven economies. Singapore and Brunei, the two smallest member states in ASEAN are also the wealthiest. ASEAN also includes Cambodia, Lao and Myanmar which are the least developed countries in the world. In between fall the remaining countries that include Indonesia, Malaysia, Thailand, the Philippines and Vietnam.
It’s obvious that the capital will flow from the wealthy members to the poor nations in search for growth and expansion as their home markets are very small. While this is a welcome news for the host economies, the key concern is whether the investors will ensure high standards of ethics, human rights and environmental protection.
Singaporean companies perhaps will benefit the most from ASEAN becoming a single market. However, only 20 out of nearly 800 publicly listed companies published a sustainability report in 2014. Singaporean companies have failed in disclosing their economic, social and environmental impacts even though the Singapore Exchange, the local stock exchange, had issued voluntary sustainability reporting guidelines in 2010. Malaysia, where sustainability reporting has been mandatory for the listed companies since 2008, saw only about 20 companies’ report meeting the GRI guidelines.
Singapore has consistently ranked high on Transparency International’s Corruption Perceptions Index while Brunei also enjoys a reputation for low tolerance for corruption. In contrast, almost all other countries in ASEAN are notorious for rampant corruption. The question is whether Singapore companies will follow the same anti-bribery standards in other countries that they follow in Singapore. Early this year, two large Singapore companies, Keppel FELS and Sembcorp Marine, were accused of bribery in a major corruption scandal in Brazil involving the state-run oil company Petrobras. Though both companies have denied any wrongdoing, the incident should be a wake-up call for Singapore companies venturing overseas.
Singapore, Brunei, Malaysia and Thailand have significant number of migrant workers. There are ongoing concerns about abusive working conditions for migrant workers and human trafficking in some of these countries. Economic integration will speed up migration. Investments without respect for a firm commitment to protecting human rights will be red flags for activists.
Indonesia, already at the centre of rainforest destruction by palm oil and paper pulp companies, is an environmental hot-spot. More investment flowing into the country by companies without environmental integrity will result in continued deforestation, and displacement of local communities. Several of the palm oil and pulp companies accused of forest destruction in Indonesia are based in Singapore and Malaysia.
The good thing is that ASEAN leaders seem to be aware of the risks of ignoring corporate responsibility. The ASEAN Intergovermental Commission  on Human Rights (AICHR) was established in 2010 and ASEAN Human Rights Declaration was issued in 2013. A study by AICHR has recommended ASEAN Member States to adopt rules and regulations to deal with adverse impacts of business practices and encourage businesses to implement and internalize corporate social responsibility values, including respect for human rights.
Human Development, Social Welfare and Protection, Social Justice and Rights, Ensuring
Environmental Sustainability and Narrowing the Development Gap between member countries have been included as goals in the ASEAN Socio Cultural Community Blueprint.
The most important initiative however is the establishment of ASEAN CSR Network in 2011, modelled on CSR Europe, to promote corporate social responsibility within the region. The Network recently organized ASEAN Next Gen CSR Forum in Bali  attended by about 250 delegates including business leaders. Addressing the forum, the ASEAN Secretary-General, Le Luong Minh said there were many opportunities for businesses to contribute positively through sincere corporate values and principles.
There is work ahead for the ASEAN CSR Network. Brunei, Cambodia and Lao have not yet joined the ASEAN CSR Network and they don’t have any signatories to the United Nations Global Compact Principles.
Without an aggressive responsible business agenda, ASEAN Economic Community will find it hard to deliver on goals included in ASEAN Socio Cultural Community Blueprint.

-by Rajesh Chhabara,

Founder of CSRWorks International (www.csrworks.com)

 (This article first appeared in Ethical Corporation, March 2015 issue)