Honey Adulteration and Corporate Irresponsibility in India: Visualizing Corporate Sustainability

Introduction

The sustainability of a corporate or business depends on how they strategically fulfil its economic, environmental and social goals (Baumgartner & Rauter, 2017; Rana, 2019). In achieving these goals, they have to take responsibility in their policy and practices (Utting, 2000) since responsibility is considered a crucial component of current business practices and sustainability (Jacob-John et al., 2020). In order to achieve business sustainability, they need to perform their ethical, economic and legal responsibility (Schwartz & Carroll, 2003) in their operational, embedded, associative and peripheral activities (Sinkovics et al., 2020). The failure or deviation in non-compliance with laws and ethical values in business activities is considered as irresponsible corporate practice (Küberling-Jost, 2021). Corporate irresponsibility refers to organizations’ actions that negatively affect their stakeholders (Chiu & Sharfman, 2018; Küberling-Jost, 2021; Mena et al., 2016) and violate the ethical standards and norms of the society (Küberling-Jost, 2021). The present society has been experiencing several irresponsible practices of corporations and their impacts on wider stakeholders. One such a corporate irresponsibility practice is honey adulteration in India.

In an investigation, the Centre for Science and Environment (CSE) revealed honey adulteration in India. The report elucidated how honey is adulterated, and the Food Safety and Standards Authority of India (FSSAI) guidelines are bypassed by corporations. The centre selected 13 honey brands ¹ that people consume, and the samples were tested both at Indian and German laboratories for adulteration, quality, NMR ² profiling and TMR. ³ Among 13 brands, seven only passed the Indian laboratory test for Indian standards, and others were found adulterated with C4 ⁴ sugar and did not find any C3 ⁵ sugar adulteration. In contrast, laboratory tests in German revealed that 10 brands failed NMR tests and indicated adulteration with sugar syrup. The samples passed by the Indian laboratory on TMR, failed in the German laboratory. The report concludes that much of the branded honey we consume in India is adulterated with sugar syrup. This adulteration not only bypasses FSSAI standards but, more importantly, is harmful for health. It also adversely affects beekeepers’ livelihood and ultimately loss of productivity of honey due to the decline in beekeeping (CSE, 2020; Khurana et al., 2020; Narain, 2020). The investigation raised the issue of honey standards and adulteration in front of the government and adulterated corporations. At the same time, it questions their accountability and responsibilities towards stakeholders and society. So, the issue is not only restricted to honey fraud or trap; rather, it is a larger issue of the irresponsible and unsustainable practice of corporations across the globe which has been highlighted and discussed by scholars such as Rahman et al. (2015), Ritten et al. (2019), Jacob-John et al. (2020), Everstine et al. (2013) and Chachan et al. (2021) in their respective research articles. In this context, it raises the following questions: how such a practice is an irresponsible and unsustainable corporate practice; how it is against corporate social responsibility (CSR) and sustainable business; and how it can be prevented. All the answers to the above questions lie with the CSR policies and practices of the corporate.

CSR is a value-loaded and contested concept with no single accepted standard definition. However, the broader scope of CSR can be well understood by Carroll’s CSR definition because he encompassed various perspectives of thinkers in one framework (Mohapatra, 2021), where he showed the intention of corporate to endorse societal goals by fulfilling not only corporate interests but also its shareholders and required laws (Yadav & Sinha, 2021). He defined ‘CSR encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point of time’ (Carroll, 2016, p. 2). The above four factors highlighted by Carroll are conceptually independent and empirically interrelated features of CSR (Schwartz & Carroll, 2003). However, in three domain models of responsibility, Schwartz and Carroll (2003) submerged voluntary or philanthropic domains under ethical and economic responsibility. So, business entities need to include economic, legal and ethical responsibilities in their business practices to be responsible corporate in society. While delivering these responsibilities, companies should maintain transparency and accountability for sustainable corporate governance (Bergman et al., 2019). If there is no accountability, responsibility takes the shape of voluntary practice and is subsequently delegated from the core responsibilities (Tamvada, 2020). Before analysing the objective and design of the present research, let us look at the history and development of CSR in business society relationships and how it leads us to think that honey adulteration is against the core responsibilities of corporate.

Journey of Corporate Social Responsibility in Business Society Relationship

Society and business are considered independent (Chandler 2014, p. 3) as well as inseparable components (Beal, 2013, p. 25; Chandler, 2014, p. 3) since both are benefited, and juxtaposing from each other (Chandler, 2014, p. 3) in a complex web of relationship. Chandler (2014) wrote that the conflict in the structure arises when the interests, horizons, or outcomes of the business and society clash and overlap with each other in contrast to the constructive outcomes. In this context, the societal role and the social contract between business and society (Carroll, 2016, p. 21) are destroyed due to business entities’ pursuit of their self-interest (Dubbink, 2004) against the public interest and ethics. When these business entities fail to bring desired expectations towards societal goals, society has the power to change or alter the behaviour of business actions (Beal, 2013). This is well explained in the license to operate (Wilburn & Wilburn, 2011) and also in the iron law of responsibility (Davis & Blomstrom, 1975), where society and the community have the power to control the business entities for their unethical behaviour. The social control of business entities towards optimistic outcomes started with criticisms and movements against their unethical practices worldwide. The criticisms and social movements over unethical practices of business entities force them to behave responsibly in society (Georgallis, 2017; Jenkins, 2005) and help in giving rise to conscious capitalism (Carroll, 2016). Now, business entities consider social responsibility as an opportunity and necessity to function in society and a reasonable answer to their critics (Kazmi et al., 2012). To avoid the criticisms, corporations tried to re-establish their control through deregulation (Jenkins, 2005). They started giving new moral justification (Shamir, 2011) to their business practices through the CSR efforts to bridge the negative impacts of their business (Mitra, 2011). In the paradigm of world capitalism, it is believed that CSR neutralizes the pressure of counter-hegemonic social forces and legitimizes them as responsible business entities (Shamir, 2011). In the contemporary globalized world, states have begun framing policy guidelines, regulations and new management systems to incentivize and regulate corporations to act responsibly (Shamir, 2011). So, whether it is social and market pressure, government legal sanctions or corporate self-interest actions to engage in CSR activities, being responsible business entities, they have the power to maintain the balance and bring order in society. In the context of business society relationships and CSR, we revisit and examine why the honey adulteration process is an unethical and irresponsible corporate practice and why corporates need to stay away from such practices.

Objective and Methodology

The prime objective of this article is to determine why honey adulteration is an irresponsible corporate practice in society and against sustainable business practices. Particularly, the study explores corporations’ economic, legal and ethical irresponsibilities associated with honey adulteration. The article also tries to understand the impact of honey adulteration on various associated stakeholders within the process.

As the present study is a non-empirical one, with a lack of a commonly accepted methodological framework (Rana et al., 2020a, 2020b), this study followed the templates or approaches recommended by Hulland (2020) and Jaakkola (2020) for writing conceptual articles. The present study and its methodology approaches can be considered and discussed under the typology and model templates for conceptual articles suggested by Jaakkola (2020). Because the study not only identifies, understands and accumulates knowledge on an important issue—like honey adulteration, but also highlights major dimensions, its variability and relationship, as well as provides logical explanations. Thus, the study focused on the descriptive review of the literature on CSR, business sustainability, core responsibilities as well as irresponsibilities of business and identified three core areas of business responsibilities on which the sustainability of business and its stakeholders depends upon. On the basis of this descriptive review, the study conceptualizes how adulteration is an irresponsible business practice in the core areas of business responsibility.

The present study is inductive as well as descriptive one. In order to find the answer to the objectives, the present article uses thematic analysis (Aggerholm & Trapp, 2014; Figgou & Pavlopoulos, 2015; Mohapatra, 2021) through the descriptive research design method. It followed three steps approach. First, the study identified three core thematic areas of corporate responsibility from the available literature that has been frequently and widely used in describing CSR and sustainable business across the globe. However, only pyramid of CSR and Schwartz and Carroll’s (2003) three-domain approach of CSR have been taken to analyse the economic, legal and ethical responsibility of corporations, as it has been widely used and analysed in various literature. As suggested by the literature, the study adopted the conceptual framework (economic, legal and ethical responsibility) to understand the irresponsibility of corporate practice. Second, these chosen thematic indicators are employed and analysed to understand how honey adulteration is an irresponsible corporate practice in various forms. Lastly, based on study findings and chosen thematic indicators, the article evaluated the current CSR practices and suggested what should be the future perspective of CSR in India.

Thus, the article is divided into five parts. The first section attempts to highlight the issue of honey adulteration of the CSR report and tries to link it with CSR; the second section maps the journey of CSR in business society relationship from the literature; the third section conceptualizes the three core areas of business responsibility and how these areas are associated with each other; the fourth section explains honey adulteration is an irresponsible and unsustainable practice in three core business responsible areas, and in fifth section, the study highlights the implications of the findings and avenues of future research.

Economic, Legal and Ethical Responsibilities of Corporate

Honey Adulteration and Irresponsible Corporate Practices

The honey adulteration business is a befitting example of irresponsible corporate practices in different core aspects of CSR and sustainable business. Based on corporations’ economic, legal and ethical responsibilities, the following section discusses five major ways of irresponsible practices of honey-adulterated corporations.

First, adulterating honey with sugar syrups is harmful for health and not a safe product to consume (Ayza & Belete, 2015; Fakhlaei et al., 2020; Narain, 2020). Adulteration is against the country’s food safety standards and is morally wrong, since it can harm the consumer’s health (Ayza & Belete, 2015). So, it is a deviation from producing a ‘safe product’, which is an illegal and unethical corporate practice. This practice ignores the protection of the stakeholders, that is, consumers’ (human) rights to get safe products, and it breaks the trust between stakeholders and businesses. Since a safe product is legally required and ethically desired by the consumer, honey adulteration is an irresponsible and unsustainable practice of corporations from both legal and ethical ends.

Second, in the honey production process, input and output, corporations neither obeyed the laws nor showed any morality. Here corporate houses bypassed government regulations and tests to sell their adulterated honey for profit making. This is called economic adulteration (Fairchild et al., 2003). So, for corporate, adulteration brings opportunities to boost profit with input cost reduction (Fakhlaei et al., 2020) by adding substitute syrups. In this case, substitutes of syrups are illegally brought by corporations to bypass the standard tests and technology deliberately. These substitute syrups are openly and illegally sold by Chinese companies and Indian sellers that can bypass the Indian tests for honey (Khurana et al., 2020). In selling their final products of honey, anyone can find that corporations provide misinformation to customers in the advertisement that this is natural honey, raw honey, pure honey, no added sugar, certified by FSSAI and others that suit to attract customers towards their brand, which is also a part of economic adulteration. So, making a profit by deviating law is illegal, and economic irresponsibility practices are unethical. Therefore, economically, legally and ethically, they practice irresponsible activities in business input, process and output (from making products to selling their products, getting profits and obtaining brand values).

Third, honey adulteration affects consumers as a stakeholder and somewhat adversely affects producers/farmers (Ayza & Belete, 2015), particularly the beekeepers’ life and livelihood (Khurana et al., 2020; Narain, 2020). Though the sale of honey increased due to the threat of COVID-19 and to bust immunity, but due to adulteration, the beekeepers’ business has turned unprofitable as raw honey’s price dropped drastically (Narain, 2020). The CSE report suggests that companies are making a considerable profit by mixing little raw honey with sugar syrup. As a result, companies are less interested in buying raw honey due to its huge market cost; instead, they go for sugar syrup which is cheaply available in the market. In this alternative syrup structure, when demand for raw honey decreases from companies, production increases and sale decreases; hence, the beekeepers are ultimately negatively impacted by getting a lower profit margin, which is not remunerative. The loss of livelihood by beekeepers puts them in distress. Indirectly, the corporations have been forcing its stakeholder to be out of business. Making the loss of stakeholder—beekeepers, is a deviation from economic responsibilities. This is morally and ethically unacceptable because these companies’ existence is based on beekeepers’ existence, not by ‘all passed’ syrups. Instead of minimizing beekeepers’ risks and maximizing cooperation between stakeholders, companies have been engaged in maximizing beekeepers’ economic risk. To put it simply, there will be no raw honey production if there are no beekeepers, and ultimately no companies will sell processed honey. So, these companies have deviated from their actual duties and responsibilities towards their stakeholders. Therefore, it is an ethically as well as economically irresponsible and unsustainable corporate practice.

Fourth, in the present case, companies are less accountable and transparent in their business process. A company is morally or ethically obliged when they are accountable through the regulations (Green, 1989; Sparkes, 2003; Tamvada, 2020). Here, companies neither obey the authority regulation nor are self-regulated by ethical values. Even the companies have not shown accountability to be transparent in the advertisement or publicity of their product. These activities are attached to core functions of the business that are directly linked to legal obligations and accountability. Even if they do not comply or disclose the truth about their product and its ingredients. Since there is no transparency in sharing information, there is no accountability, and no accountability means there are no responsibilities (Cipriani, 2010). Therefore, these self-regulated corporate practices dilute the obligatory nature of responsibilities and its governance system, subsequently deviating from their core responsibilities.

Fifth, questions arise about the monitoring mechanisms and standards when companies adulterate honey by passing tests, technology and standards. Predominantly monitoring mechanisms are mediated by the state to check the final product and its standards, based on already established guidelines. Though FSSAI standards for purity in honey have been revised from time to time in the recent decade by adopting multiple guidelines, a recent amendment in July 2020 excluded TMR tests and reduced the pollen count to 25,000 to 5,000 only (Khurana et al., 2020). Instead of standardizing the norms for purity checks, the state has reduced the standards. Although there is a provision for regular inspections and FSSAI has informed the state food commissioners about the adulterations, no action is being taken against the unfair practices. Hence, companies have adopted opportunist practices looking into the bottlenecks in the standards and monitoring process. These opportunistic practices of corporations significantly contradict corporate governance and market efficiency (Arnold & De Lange, 2004). Though the corporate follows the law in letter but not in the actual spirit of the law. Therefore, these corporations are involved in misconduct and corruption, which are against the corporation’s ethical and legal responsibilities.

Discussion, Implications and Conclusion

In the above context of corporate irresponsible practice, it can be argued that these honey-adulterated corporations have played with their stakeholders and within the whole business input, process and output. In particular, corporations violate the consumer’s right to get a safe product, mislead the product’s publicity, bypass government guidelines, engage in opportunistic practices, lack of transparency and accountability, illicit profit and finally, adversely affect the life and livelihood of farmers. Engagement in any of such activities is considered as corporate irresponsibility (Friedman, 2007; Jones et al., 2009; Küberling-Jost, 2021; Popa & Salanta, 2014; Riera & Iborra, 2017) and against sustainable business, as suggested by Dyllick and Muff (2016) and Bansal and Desjardine (2014). These irresponsible practices have occurred at the core areas of CSR, that is, the ethical, legal and economic responsibilities of corporate. While interpreting Schwartz and Carroll’s (2003) three-domain approach, this type of practice deviates from corporations’ economically ethical, economically legal and legally ethical activities, leading to irresponsible practices. So this can also be called as corporate social irresponsibility (CSI) practice, as suggested by Jones et al. (2009) and Popa and Salanta (2014). Therefore, honey adulteration by corporations is no more just remaining as a fraud suggested by the CSE investigation; rather, it is a civil offence, an unsustainable and irresponsible practice by corporations. This type of corporate practice is neither negotiable nor compensable in any form, and what they do in terms of CSR practices has no meaning at all. Because CSR is not only about engagement in social development programs or donations, as prescribed by the government, but has a broader scope.

The review and findings show that these three thematic responsibilities are core to CSR, and the deviation from core responsibilities is an unsustainable and irresponsible practice. Understanding the importance of the core responsibilities of corporations and before suggesting any implications, the study critically looks into India’s CSR policy and practice from the perspective of core responsibilities. It is found that corporations have carried out CSR activities in India according to Schedule VII of Section 135 of the Companies Act 2013 and have subsequent amendments (GoI, 2013, 2019, 2020). This act mandated selected corporations ⁶ to spend 2% of their profit on CSR activities, particularly on social welfare and development programs. According to Carroll’s (2016) CSR pyramid, these are the voluntary or philanthropic practices expected and desired by society. These activities are not corporations’ actual responsibilities; rather, they are voluntarily guided by corporations. Further, these practices can be merged into economic and ethical responsibilities, as Schwartz and Carroll (2003) suggested. So these activities must be voluntary but not the sole responsibilities of corporations under CSR. Therefore, besides voluntary engagement, corporations need to engage in economic, legal and ethical responsibilities. This is mostly lacking in present Indian CSR practices and contradicts international normative business practices (Bergman et al., 2019; Mitra & Warshay, 2017). Instead of institutionalizing actual CSR practices in its core areas of business operation, India just mandated voluntary practices. Looking into the present case of honey adulteration and corporate irresponsibilities, now it is time to internalize the importance of core responsibilities by corporations. It is not about only honey; other products in the market are also produced by adulterated honey companies. Moreover, there are other companies that may be adulterating products with different substitutes to bypass government guidelines.

In the context of findings and discussions, the study proposes policy implications for corporations as well as for the government to prevent such irresponsible corporate practices in the future. The study considered that India’s mandated CSR policy and practices focus on other areas of development such as community development, rural infrastructure and women empowerment. However, in the mandate, there is no mention of addressing the core responsibilities of the corporations. To stop honey-adulterated corporations’ misconduct and irresponsible practices, the government needs to extend its CSR mandate to the core responsible areas of corporate functioning. Particularly, government CSR policy needs to integrate both in-house and out-house corporate strategy so that the irresponsibility of corporate practice can be prevented. Above all, the government needs to strengthen and update the FSSAI food standard guidelines according to international principles with changing technology to stop irresponsible business practices like honey adulteration. Further, the government must develop a framework for a regular or quarterly check-up of these corporate in-house practices and their product quality and standard through independent and external agencies. The government must develop strict guidelines (in the form of both punishment and reward) for any such deviation from or proper compilation of FSSAI standards by companies.

In the corporate context, they first need to adopt and act according to the CSR rules and regulations imposed by the government and international agencies and their own guidelines. While doing their business, they must stay away from misconduct and corruption practices, which are against their core responsibilities. Further, they must extend their CSR practices from out-house strategy to in-house responsibilities, particularly towards economic, legal and ethical responsibilities in their business operation, which is essential for their business sustainability. They must practice their business ethically beyond the letter of laws enacted by the government and stay within the rule of law as self-regulated ethical corporate. Further, corporations need to act responsibly in their whole business functioning—input, process and output. In present case, the corporation must obey and follow the FSSAI standard while producing a food product, packaging, advertising and communication and selling for consumption. Mainly they should not harm their stakeholders, like in the case of the impact of honey adulteration on farmers and consumers. According to the Iron Law of Responsibilities, if a corporation does not behave responsibly, it will lose its power and existence in the long run (Beal, 2013), which indicates unsustainability. For their long-term existence and function, they must address the stakeholders’ interests with changing norms of society and institutions. Corporations must internalize, comply with and institutionalize the ethos of CSR in their business functions as responsible citizens.

Besides government and corporate, the stakeholders and civil society organizations also have a greater role in identifying corporations’ ideal roles, responsibilities and accountability in society (Banerjee & Bonnefous, 2011; Kaymak & Bektas, 2017; Singh & Misra, 2021). They should act as a gateway to check irresponsible practices and highlight the issue in front of the government and corporations to regulate their behaviour and stay out of irresponsible practices, as CSE did in the present honey adulteration case. Because it is the anti-corporate movement by media, civil society, voluntary sectors and local communities over irresponsible corporate practices, which always reminds corporations to act responsibly in society and help in mainstream CSR practice (Burchell & Cook, 2013; Mohapatra, 2021; Sadler, 2004). Therefore, corporate must comply with the government guidelines, core responsibilities and societal expectations to safeguard their license and affairs in society; because, from license to operate perspective, failure leads to suspension of license to operate or may lead to forced legal actions over their business in society. Hence, corporate, government and stakeholders must play their independent roles in maintaining a sustainable relationship between business and society. The future of India’s CSR lies in the sustainable business–society relationship; it will happen when corporations at first place prioritize and act in their core areas of responsibility within the business operation.

Limitations and Future Research

The major limitation of this research is that it has been based on only one report on honey adulteration by CSE. As a result, the findings are limited and based on secondary sources of information than empirical ones. Further, as their report focused only on 13 honey brands in India, the findings and results of the present research cannot be generalized to other corporations engaging in honey production or other activities. The analyses of honey adulteration as corporate irresponsibility practices have also been limited to only three core thematic areas of CSR, that is, economic, legal and ethical. These limitations mentioned above extend the scope of future research in terms of empirical investigations of honey adulteration by corporate and their impact on society and business sustainability. In particular, how it has negatively affected various stakeholders such as consumers and farmers can be studied. However, the present study suggests five future research areas:

To study the impact of adulteration on the farmers: Research can include the effect of adulteration on the farmers. Here researchers can explore and analyse how honey adulteration negatively impacted the bee farmers economy and their livelihood.

Therefore, this study can be considered a reference point for researchers who would like to empirically and conceptually explore how (honey) adulteration by corporations can be referred to as irresponsible practices in their core areas of CSR and business sustainability.