Q.1) The Companies (Amendment) Bill, 2017 recently passed by the Parliament will ensure better corporate governance. Discuss (GS-3)
The term ‘Corporate governance’ is the mechanisms, processes and relations by which corporations are controlled and directed. It includes rules and procedures for making decisions in corporate affairs. Corporate governance includes the processes through which corporations objectives are set and pursued in the context of the social, regulatory and market environment.
The Parliament has passed Companies (Amendment) Bill, 2017 to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country.
The Bill will ensure better corporate governance through the following ways.
- Group company structure and compliance procedures: The bill has changed definitions relating to ‘holding company’, ‘subsidiary company’ and ‘associate company’. It will have impact on group company structure and compliance procedures.
- Compliance procedures and approval mechanism: It enhances scope of compliance procedures and approval mechanism of Related Party Transaction of related parties.
- Shares on private placement basis: It amends this provision in parent Act. It will have impact on both – private companies and public companies.
- Maintenance of Register of significant beneficial owners in a company: The bill adds this new provision. Besides, changes provisions relating to board meetings and shareholders’ meetings, based on operational and compliance issues faced by the corporate.
- Corporate Social Responsibility (CSR): The amendment to CSR provisions are particularly related to its applicability and constitution of CSR. It takes into account the interpretational and operational issues.
- Resident Director and Independent Director: It provides for clarity in applicability and role of Resident Director and Independent Director. Further it elaborated ‘Pecuniary relationship’ in relation to independent directors.
- Loans to Directors: The bill substitutes entire section relating to ‘Loans to Directors’ under the Companies Act, 2013. It introduces certain checks and balances by way of approval process and for enabling ‘loans to directors’, in certain cases.
- Managerial Remuneration: It liberalises provision related to Managerial Remuneration. It replaces requirement of Central Government approval by requirement of approval of shareholders, secured creditors and non-convertible debenture holders, as the case maybe.
- Auditors Report: It mandates requirement that Statutory Auditor of company to report in its Auditors Report on compliance of provisions of managerial remuneration and whether remuneration paid to any director is in excess of prescribed limits.
Q.2) The Union Cabinet has recently approved the establishment of International Training Centre for Operational Oceanography in Hyderabad. In this context discuss the meaning of the Operational Oceanography . How this move will help India to emerge as a leading country in the Indian Ocean? (GS-2)
The Union Cabinet has approved the establishment of International Training Centre for Operational Oceanography, as a Category-2 Centre (C2C) of UNESCO, in Hyderabad. The purpose of this Agreement is to establish a training centre towards development of capacity for the countries on the Indian Ocean Rim (IOR), African countries bordering the Indian and Atlantic Oceans, small island countries under the framework of UNESCO.
What is operational oceanography?
perational oceanography is an activity of conducting systematic oceanographic studies towards providing information services to various sectors viz. fisherman, disaster management, shipping, ports, coastal states, navy, coast guard, environment, offshore industries for conducting their day-to- day operations.
- The establishment of UNESCO Category-2 Centre will provide an opportunity for India to emerge as a leading country in the Indian Ocean.
- This will also help India to forge cooperation and improve engagement among the counties of the Indian Ocean, including South Asian and African states bordering the Indian Ocean.
- The establishment of the centre would respond to the worldwide increasing need to build technical and management capacity to address marine and coastal sustainability issues and prepare the region for and react efficiently to marine natural hazards.
- The Centre could contribute to achieving Sustainable Development Goal-14 (SDG 14) related to building marine scientific research capacity in geographical area of the Centre responsibility which will also fulfill the commitments to support Small Island Developing States, Least Developed Countries.
- The establishment of C2C is also expected to increase ancillary development leading to employment generation in India.
Q.3) Recently, the UN in its Global E-waste Monitor 2017 report, has warned about the health and environmental dangers from the processing of e-waste. In this context, highlight the observations made by the UN report. Why it is difficult to manage e waste in India? (GS-3)
The UN, in its latest report- Global E-waste Monitor 2017, has warned about the health and environmental dangers from the processing of e-waste — the discarded electronic and electrical material — by the informal sector in India without proper safeguards.
The UN has made the following observations in its report:
- Over 1 million poor people in India are involved in manual recycling operations, but “most of these people have very low literacy levels with little awareness of the dangers of the operations.
- Severe health impacts and environmental damage are widespread in India, due to the final step of the e-waste processing by the informal sector. The dangers come from “improper and unsafe treatment and disposal through open burning or in dumpsites.
- The value of recoverable precious materials like gold, silver, copper, platinum and palladium contained in last year’s e-waste was $55 billion and much of it was going to waste.
Why it is difficult to manage e waste in India?
- The producers/manufacturers do not have adequate information on their website regarding e waste management.
- Customer care representatives do not have inkling about any take back or recycling programme and even if they have set up collection centres, they are simply not enough for a geographically vast country like India.
- India being a vast country, setting up collection mechanism is a big challenge. If any of the brands try individually to reach out to all corners of the country, it will economically not be sustainable or feasible.
- Improper enforcement of the existing laws is another hurdle.
There is need for developing systems to safely handle the e-waste and recycle it.