Updated on: March 28th, 2019 2:37 AM

National Guidelines on Responsible Business Conduct

The Ministry of Corporate Affairs (MCA), Government of India, has established a set of guidelines and principles called the National Guidelines on Responsible Business Conduct (NGRBC). The NGBRC has designed to assist businesses to perform the requirements of the regulatory compliance.

Applicability of NGRBC

The NGRBC is designed for all businesses, not taking into consideration their ownership, size, sector, structure or location. It is expected that all companies that are invested or operating in India, including foreign multinational corporation (MNCs), has to abide by these guidelines. The NGRBC also provides a useful framework for guiding the Indian MNCs in their overseas operation, by aligning with the applicable local, national standards and norms that are governing the responsible business conduct.

Principles of NGRBC

The National Guidelines on Responsible Business Conduct comprises nine thematic pillars of business responsibility that are known Principles. These principles are interdependent, interrelated and non-divisible and all business are urged to address them holistically. Annexure 1 of the guidelines guide all companies on the adoption and implementation of the Principles. Principle 1: Businesses should conduct and govern themselves with integrity and in a manner that is ethical, transparent and accountable. The principle ensures ethical behaviour in all operation, functions and processes, is the basic of businesses that are guiding their governance of economic, social and environmental responsibilities. It considers that businesses are an integral part of society and they will hold themselves accountable for the effective adoption, the implementation and the making of disclosures on their performance. Principle 2: Businesses should provide goods and service in a manner that is sustainable and safe. The principle emphasises that businesses have to focus on safety and resource-efficiency in the design and manufacture of their products. These products have to be manufactured in such a way, by which it creates value by minimising and mitigating its adverse impacts in the environment and society through all stages of its life cycle, from design to final disposal. This principle encourages businesses to understand every material sustainability issues across their product life cycle and value chain. Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains. The principle encloses all policies and practises that are about the equity, dignity and well-being and the provision of decent work, for every employee that who are engaged within a business or in its value chain, without any discrimination and in a way that contributes to the diversity. The principle identifies the well-being of an employee and the welfare of his/ her family. Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders. This principle recognises the businesses operate in an eco-system that consists of some stakeholders, being shareholders and investors and their activities affect natural resources, habitats, communities and the environment. The principle brings into light that businesses have a responsibility to maximise the positive effects and minimise and mitigate the negative impacts of the products, operations and operations and practises on their stakeholders. Principle 5: Businesses should respect and promote human rights. This principle identifies the human rights are rights that have to be inherent to all human beings and these guidelines are applied without discrimination. These human rights are considered to be inherent, inalienable, interrelated, interdependent and indivisible. This principle is inspired, informed and guided by the Consitution of India and the International Bill of Rights, and recognises the primacy of the State's duty to protect and fulfil human rights. Principle 6: Businesses should respect and make efforts to protect and restore the environment. This principle gives preference to environmental issues that are interconnected at the local, regional and global levels doing businesses to address the problems like pollution, biodiversity conservation, sustainable use of natural resources and climate change in a comprehensive and systematic manner. The principle encourages firms to adopt environmental practises and processes that minimise or eliminates the harmful effects of their operations across the value chain. Moreover, it also persuades businesses to follow the Precautionary Principle in all its actions. Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent. This principle concedes that businesses operate within a specified national and international legislative and policy frameworks that guide their growth and also provides specific restrictions and boundaries. The principle recognises the legitimacy of businesses to engage with governments for redressal of a grievance or for influencing public policy. In addition to this, the law demands that public policy advocacy has to expand public good. Principle 8: Businesses should promote inclusive growth and equitable development. The principle identifies the challenges of the social and economic development that are faced by the country and enhances the national and development agenda according to the government policies and priorities. This is significant in zones that are affected by social disharmony and low human development. The principle mentioned the need for collaboration amongst businesses, government agencies and civil society in this development agenda. This principle reiterates that business success, inclusive growth and equitable development are interdependent. Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner. The principle is based on the fact that the primary aim of a business entity is to supply goods and services to its consumers that are safe to use, creating value for both. It recognises consumers having freedom of choice for the usage of goods and services, and the enterprises strive to provide the products that are safe, competitively priced, easy to use and safe to dispose of, for the benefit of their consumers. The businesses play a significant role with other relevant stakeholders, in mitigating the adverse effects from excessive consumption of its products that have overall well-being of individuals and society.