Multiway Stakeholder Partnerships

Creating pathways for Responsible Business & Inclusive Forest Economy

There is growing evidence that CFR titles to Adivasis and other traditional forest dwellers under the Forest Rights Act, 2006, helps not just the communities but protects the environment and is even profitable for businesses. In spite of the mounting evidence, only about 60% of all community claims filed under FRA have been issued until September 2021, with close to 70,000 claims yet to be processed. ISB recently organized a panel discussion with senior representatives from the private sector to talk about the role and potential advantages of partnerships with strong communities for business.

Mr. Ashish Saraf (Manorama Industries), Ms. Kanika Pal (Hindustan Unilever), and Mr. Kunal Shekhar (Ballarpur Industries Limited) participated in the panel as part of the India and Sustainability Standards conference organized by Centre for Responsible Business. All three panellists strongly supported CFR titles to the forest-dwelling communities as better for forests, livelihoods, and business. Recounting first-hand industry experience, each of the industry stalwarts spoke about how profitable value-chains are being created through partnerships between multiple stakeholders like industry, forest communities, civil society organizations, and government. They concurred that such partnerships will go a long-way in creating jobs and livelihoods for over 200 million people in India dependent on forests for seasonal income, while also conserving forests, mitigating climate change, and creating value for businesses.

A collective decision…

All the panellists agreed that after the recognition of local communities as the legitimate stewards of forests, wage-earners became owners and rules of their relationship with business changed. However, communities continued to respect their long-standing relationship with industry because they understood the value of regular flow of income and financial autonomy. Based on his experience, Mr. Shekhar said that CFR communities in Gadchiroli, Maharashtra, prefer and trust to sell their bamboo to Ballarpur Industries Limited instead of intermediary traders, who quickly abandon them foreseeing a slight price-fluctuation in the markets. Mr. Saraf similarly admitted that they receive regular requests from communities across the country to purchase and market many other Seasonal Forest Products, reflecting a willingness to trade directly with industry partners.

Panellists eagerly demanded a better coordination mechanism among existing and potential partners to help create knowledge of forest inventory, existing value-chains, and simple technologies through shared experiences. Ms. Pal suggested that industry can use such knowledge to improve the value-chains. Citing Unilever’s experience of working with women who collect Mahua in Chhindwara, Madhya Pradesh, she shared that in order “…to create sustainable livelihoods, CSR efforts of corporations can provide the collectors with simple technology for increasing efficiency of collection, assist them with value-addition locally, and tap into the potential nutritional value of the mahua flower.” Furthermore, private corporations should publish reports on their Environmental, Social and Governance impacts to improve visibility on sourcing. This will help organizations to identify the contributions of Adivasis, Dalits and other forest dwellers in their supply chain, thereby devising measures to make it more inclusive and equitable. In Unilever’s experience, creating such value chains reaps a return on investment anywhere between 325% to a 3000%.

So, what other benefits can industry accrue from the recognition of CFR rights? Industry experts unanimously admitted that in the present framework where communities are empowered with secure collective tenure, decision-making between the stakeholders is smoother, faster, and transparent, as transaction costs are greatly reduced. Greater visibility of the first mile of the forest-based supply-chain can stabilise the procurement process. There is also a higher assurance of supply based on increased local incomes and mutual trust. Most importantly, transferring decision-making powers into the hands of community-owned enterprises will initiate and accelerate positive social change, enabling industry to create much greater social impact.