Ever since the Supreme Court announced guidelines for dealing with sexual harassment following a landmark case in 1997, just two more such instances have come to light. Does that mean corporate India has since been on its best behaviour? Hardly. As the recent case against McCann Erickson India's Chairman and CEO Sorab Mistry by the agency's former Vice-President (Creative), Clarinda D'Souza, shows, sexual harassment is an issue that very much lives. The problem seems to be that most companies do not have any policy on sexual harassment. ''Most of the organisations do not even acknowledge that such a problem exists,'' says Lakshmi Murthy, Spokesperson for Saheli, a non-government organisation (NGO) that works on women-related issues, and tabled a report on the subject in 1998.

Some statistics that are available do paint an alarming picture. For instance, of the 150 organisations that another NGO, Sakshi, surveyed as part of its project (called Disha) on sexual harassment, 80 per cent denied having had to deal with any such problem. In stark contrast, though, 70 per cent of the 2,500 respondents from the 150 organisations categorically stated that they had faced such a situation at least once. And anybody who's seen the movie Disclosure would realise that this is not a women-specific issue.

Part of the problem stems from a lack of understanding of what sexual harassment actually means. Opinions are divided, but broadly it can be categorised into two types: one, a quid pro quo situation, where the victim is forced to offer sexual favours in return for, say, either a promotion, a posting, or a raise. This is a straightforward situation, where it is easy to establish the guilt or the lack of it. But a more complex scenario is of hostile work environment. The word 'hostile' can mean a variety of things: from obscene remarks (like calling somebody a dumb blonde) to gender-based discrimination to making physical advances. The effect, however, should be that it interferes with the concerned employee's performance at work.

For instance, Ford Motor Company-which follows a zero-tolerance policy-got sued by some women workers because their male colleagues had put up posters of nude and semi-nude women in the work area. In 1998, Ford fired four managers at its stamping plant in Chicago because they took part in off-plant parties where prostitutes and exotic dancers featured. A big reason why foreign companies have global policies on sexual harassment is the crippling financial penalty they need to pay if found guilty.

In India, the legal system itself is not equipped to deal with such cases. Consider: complaints of sexual harassment are dealt under section 354 of the Indian Penal Code. The same section is applied to rape cases too. Therefore, instead of going to court and drawing attention to themselves, companies prefer 'settling' the issue within their own four walls. But the casualty, of course, is fair play. Says Ganesh Shermon, Head (People Enablement Team), Arthur Andersen: ''They either ask both the parties concerned to quit or try to 'discreetly' advice the person against whom the complaint has been made. In fact, office affairs concern the organisation more than this.''

Critics of hard-and-fast policy on sexual harassment point to its possible misuse by employees firedpurely for work-related reasons. But those in favour of it don't think its abuse as a second-strike weapon should be such a big concern Says Brinda Karat, General Secretary, All India Democratic Women's Association: ''The point is that no one is dealing with the issue. No single corporate has set up a complaint committee headed by a woman.''

While that may be an exaggeration, the fact remains that few companies look at sexual harassment as a serious issue. The only way victims will get heard is when they speak up. While McCann Erickon's D'Souza may or not be the victim, she's put the spotlight back on the topic.

-Shamni Pande

E C O N O M Y 
Whither The GDP?

With just another quarter to go before the fiscal ends, there's uncertainty over the Gross Domestic Product (GDP) growth rate. Taking cue from the slowdown of the past six months, the Reserve Bank of India (RBI) has already lowered its growth estimates from 7 per cent to between 6 and 6.5 per cent. The Centre for Monitoring Indian Economy (CMIE) has followed suit by shaving 1.2 per cent off its previous projection of 7 per cent. And the National Council of Applied Economic Research (NCAER) is also talking of a lower 6.1 per cent growth. Who is right? BT asked four eminent economists to make the call. 

-Ashish Gupta

C Y B E R - L A W S 
In Defence of Rediff

Abhinav Bhatt is a strange young man. What other adjective can you use to describe a male in the prime of his life, his hormones in full swing and all that, who behaves like no other full-blooded 22- year-old would. The man visits the Rediff site, types in 'animal sex' in the search facility, chews on his nails and stares at the screen until the results appear, heaves a sigh of relief, and then goes and slaps a suit on six directors of Rediff. Letters that went out from the Asian School of Cyber Laws, a self-styled ''non-profit organisation that has launched a mission to combat cyber crime'', explained that the six faced charges under Sections 292 (circulation and publication of pornographic material) and 109 (abetment).

Whether the Rediff-Bhatt thingamajig is an instance of a socially-aware young man challenging a wrong-doing corporate, or one of four publicity-seeking entities-Bhatt, the Asian School of Cyber Law, Rohas Nagpal, the President of the school, and the complainant's representative, and S.Y. Bhosle, the magistrate who agreed that there was enough evidence the try the six directors-is open to conjecture. But it does seem sort of unfair to prosecute a search engine for doing its job. This may seem like stretching things a bit far, but filing a suit against Rediff because porn sites show up on its search utility is akin to suing the Delhi Transport Corporation because its buses stop on G.B. Road. And why stop at Rediff? Why not sue two other companies whose search utility throws up similar results, Altavista and Yahoo!? Or for that matter the India Today Group (which publishes this magazine) on whose site a Google search utility does the same? Only 123india.com, held up as a paragon of virtue by the magistrate (''If 123India.com has been able to separate obscene material, then why not accused No.1 company") in his November 27 ruling, blocks any site that could have any adult content. But 123India doesn't really have a search utility; it's more of a directory. Irrespective of whether the Rediff-six end up in jail or not, India really needs to establish a legal framework that displays some basic understanding of technology. Around the same time that Bhosle was ruling, a lawyer in Delhi was arguing that Microsoft was indulging in unfair trade practices by insisting that small enterprises "which couldn't afford it" secure multiple licences to use Office 2000 on more than one machine. More instances like this, and the IT ministry will have to hire a pr agency to convince the world that India is a software super-power.

- R. Sukumar

A D V E R T I S I N G 
Just Like Them

When advertisers start substituting their coloured brethren with Caucasian gals and dudes, you know for a fact that global competition has well and truly arrived in your country. You also know what marketers are trying to do: match up to the transnational Joneses. In corporate India, that phenomenon is sweeping across industries. Consider: consumer durables giant BPL's new television spot for its high-end Quadra colour television shows two white teenagers leaping out of their seats in reaction to the television's crystal-clear sound and picture quality. The message: the Quadra is good enough even to make the hard-to-please firang teens freak out. Says Anand Narasimha, Head (Corporate Brand Management), BPL: ''Using international faces was relevant because we needed to communicate that (the Quadra) technology was world class.''

That's again the objective when the Chennai-based TVS Suzuki builds a James Bond movie-like theme around its new four-stroke motorcycle, Fiero. Or suitings brands J. Hampstead and Reid & Taylor use international models to establish their legitimacy as the globe-trotting executive's preferred outfitters. Points out Shailendra Singh, Joint Managing Director, Precept, which handles the two brands: ''Increasingly, you will find brands using powerful Indian or international icons depending on what status they wish to communicate.''

Interestingly enough, some foreign brands are doing just the opposite. For instance, the HSBC advertisement on television uses a familiar Indian character (a station master) to drive home its association with the Indian consumer. Similarly, Dockers' campaign uses a mix of Indian and foreign models to come across as a brand that assimilates the locals with their international peers. Quips Cyrus Oshidar, Creative Head, MTV: ''This just proves that ads have to be relevant to the target audience.''

Of course, the choice of models and the construct of campaigns are subject to the brand's unique needs. When Maruti Udyog launched its luxury sedan Baleno, it had to focus on the car's two strengths: the Japanese fuel efficiency and its stylish European design and safety. Ergo, in the TV commercial, it decided to have a Japanese and a European get into a friendly tiff over the car's lineage. Notes, Pavan Varshnei, General Manager, Lintas: ''Baleno happens to be an international product from Suzuki's stable, hence, the need for an international image.''

The problem with brands, as with people in real life, is that they are always trying to be the other brand. 

-Shamni Pande

I N V E S T I G A T I O N 
Coincidence Or Cartel?

Cement may be an unglamorous product, but it's hardly an unglamorous industry. Having just undergone a long period of consolidation, it is now in the thick of a cartelisation scandal. Early November this year, the Monopolies and Restrictive Trade Practices Commission (MRTPC) launched an investigation into the recent hike in cement prices. In just over a fortnight, cement prices in Mumbai have jumped from Rs 152 to Rs 172 per 50 kg. In fact, even as the MRTPC began its probe, prices were hiked by Rs 5 on December 11, 2000-for the second time in a fortnight. Says Ramnath Subramaniam, Research Analyst, Taib Securities: ''Since mid-November, the cartel has been working across the country. Most big manufacturers are sticking to it.''

In the South, for instance, prices have moved up from Rs 145/150 to Rs 175/180 per 50 kg in the last two months. Manufacturers, of course, deny any attempt at cartelisation. Says N. Srinivasan, CEO, India Cements, the largest cement group in South India: ''It's far from true. It has become fashionable to make the industry a scapegoat. With anywhere between 30 and 35 brands and a price range of Rs 150-180, how can cartelisation work?''

Maybe the price hikes are purely coincidental, but all the key incentives for cartelisation are there. Demand in the first half of this fiscal was down to 4 per cent from 15 per cent in the same period last year. Prices were stagnant or lower than last year's, thanks to drought in Western Maharashtra, Gujarat, and Madhya Pradesh, all of which are key markets for cement majors like Gujarat Ambuja and Larsen & Toubro. To make matters worse, there has been an average 12-14 per cent increase in input costs, primarily because of higher fuel costs (cement is both transport and power intensive). All that has pummelled the industry's profitability.

Apparently, sometime around mid-November, the industry agreed to cut back on production to boost prices. Accordingly, the average capacity utilisation was lowered from 90-92 per cent to 70-72 per cent. The logic was that a 15 per cent hike in prices would partly cushion the impact of lower demand. D.D. Rathi, CFO of Grasim Industries, says that's baloney. ''There's no cartel. If I can't sell, I don't produce. The industry can only produce what it can sell,'' he says.

Some buyers, however, aren't waiting for the MRTPC to decide whether or not a cartel exists. Leading builders in Mumbai-some 450 of them form the Maharashtra Chamber of Housing Industry-are planning a protest on or around December 25, 2000. One of the action plans includes stopping or postponing all cement purchases. Says Mohan Deshmukh, CEO, Deshmukh Builders: ''The small builders have been severely affected.'' Others like the Delhi-based Ansal Group, which maintains a week-long inventory, are planning to buy from cement companies that are not part of the cartel. Says Sushil Ansal, CEO, Ansal Group: ''Such unfair trade practices have to be quashed.''

The housing sector, which accounts for 60 per cent of cement consumption, can inflict some severe damage. And that could effectively hasten the end of the cartel. Says Subramaniam: ''I don't expect (the cartel) too last for long.'' While a more efficient player like Gujarat Ambuja (capacity seven million tonnes), with lower fixed costs, can probably afford to cut production and force prices up, others like Larsen & Toubro, with a huge capacity of 13.5 million tonnes, will find it difficult to play along. ''Market dynamics have to propel demand growth; you can't keep on influencing prices,'' adds Subramaniam.

While the short-term scenario looks bleak, the outlook for cement should improve in the long run. With no major capacity additions in the pipeline, the demand-supply situation-currently, estimated at 102 million tonnes against a supply of 110 million tonnes-is likely to improve. May be then the cartel, if indeed it exists, will die a natural death. 

-Ranju Sarkar

T E L E C O M M U N I C A T I O N S 
A Question Of Ownership

It's a war of attrition. Voices are never raised and the veneer of civility is always maintained, but all is not well between Indian TELCOs and their foreign partners. The rift in the lute has to do with the government's decision to re-open the debate on the 49 per cent ceiling on foreign ownership in Indian telecom ventures. The Indian promoters, predictably, are all for keeping the ceiling put at 49 per cent. And industry associations like the CII believe that since the WTO calls for allowing transnationals to have at least a 24 per cent stake in sectors like telecom, there's no reason to change the way things stand. That's sound reasoning. Only it fails to factor in an animal called the Special Purpose Vehicle (SPV).

The SPV isn't a new concept. Once the GOI realised that most Indian companies didn't have either the technical or the financial wherewithal (or both) to run a TELCO, it decided to allow the 51 per cent stake held by the Indian company to, in turn, be held by another company as long as the foreign partner's stake in that didn't exceed 49 per cent. In one master-stroke, the SPV managed to separate management control from economic ownership.

The foreign partner, by virtue of owning a 49 per cent stake directly, and a further 49 per cent stake in the holding company that held the Indian partner's 51 per cent stake, effectively owned 74 per cent of the TELCO. But with the majority in both entities, the reins were firmly with the Indian company, even though it effectively owned just over 26 per cent of the TELCO (enough to block a special resolution).

Transnationals initially welcomed the SPV: it seemed to suit their purpose. Over time, though, even the most benign transnational began to wonder why the management had to be in the hands of the Indian company. For, in the absence of management control, economic ownership means little. And that's exactly why Indian promoters are keen to see the 49 per cent ceiling stay. It's a GOI-sanctioned way of having your cake and eating it too. 

-Ashutosh Sinha

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