Human Rights Commission orders Punjab Chief Secy to secure corporate CSR for flood relief

Holding that failure of companies to contribute their mandatory Corporate Social Responsibility (CSR) share during the recent devastating floods in Punjab amounted to a violation of human rights, the Punjab State and Chandigarh (UT) Human Rights Commission has directed the Chief Secretary, Punjab, to ensure compliance with CSR provisions by all companies registered in the state.

The Bench comprising Chairperson Justice Sant Parkash and Member Justice Gurbir Singh passed the order while dealing with a complaint filed by Dr Punditrao Dharenavar, a resident of Chandigarh. The complainant had alleged that despite widespread loss of life, crops, livestock and property due to floods, “no registered company within the State of Punjab has taken steps to extend financial assistance to the victims.”

He had prayed that directions be issued to companies and corporate houses to contribute at least one per cent of their net income to the Punjab Chief Minister’s Flood Relief Fund as part of their CSR obligations. The complainant had also annexed photographs of damaged houses, destroyed crops and affected livestock to highlight the urgency of the situation.

The Commission, after perusing the material, observed that Section 135 of the Companies Act, 2013, mandated eligible companies to spend at least two per cent of their average net profits of the preceding three financial years on CSR activities. Disaster management, including relief, rehabilitation and reconstruction, is one of the activities specified under Schedule VII of the Act.

“Corporate Social Responsibility is a legal and ethical obligation that aims to align corporate activities with societal welfare, especially during times of crisis. By failing to contribute their mandatory CSR shares towards disaster relief, companies not only violate the law but also undermine the human rights of disaster victims, who are entitled to timely aid and rehabilitation,” the Commission observed.

Concluding that non-compliance with CSR obligations in the present situation constituted a serious violation of human rights, the Commission directed the Chief Secretary, Punjab, to immediately examine the matter, take it up with competent authorities and ensure compliance by all registered companies and corporate houses in Punjab.

The matter has been adjourned to October 1 for awaiting the report of the Chief Secretary. Copies of the order have also been forwarded to the Registrar of Companies, Chandigarh, besides other authorities.