Looking at corporate social responsibility<\/p>\n
Dan Kingsley, Jakarta<\/p>\n
Private enterprise funded development programs are becoming
\nmore widespread in the business world as more and more
\nenterprises are becoming concerned with the social implications
\nof their activities.<\/p>\n
This concern is reflected in voluntary business initiatives
\nthat some international firms have made to varying degrees of
\nsuccess in the Indonesian extraction industry. These may comprise
\nemployee and volunteer programs, training and education
\nactivities for local communities, micro credit schemes, supplying
\nschools and small businesses with equipment.<\/p>\n
The Corporate Social Responsibility (CSR) programs in
\nIndonesia are run out of corporate headquarters with department
\nnames such as "community development", "business development",
\ncommunity relations" or just the basic "public relations".<\/p>\n
Although well intentioned, these operations usually have a
\ngreater impact as public relations vehicles benefiting the
\ncorporation than they do as implementers of projects that have
\nmeasurable development benefits to the communities affected by
\ntheir corporate operations.<\/p>\n
Although the well-intentioned purpose of the operations in to
\nassist the local communities surrounding the extraction
\noperations, the programs are usually implemented from the office,
\nand by nature of this are not usually successful. It is my
\ncontention that if the programs initiated are public-private
\ninitiatives they would be much more effective, both in securing
\nsustainable objectives through government "buy in" and through a
\ngenuine community-corporate collaboration.<\/p>\n
It is certain that private sector funded CSR operations may
\nhave some benefit in assisting social development, but I am sure
\nthat all stakeholders will agree that the benefits relative to
\nthe costs are very minimal. This is certainly well known to the
\nfinancial controllers who calculate the per capita cost of such
\nprograms.<\/p>\n
Having been involved with both public and private sector
\nfunded projects, I have seen no correlation between the funds
\nspent on the specific project and the level of successful
\nsustainable development. The greatest successes have always been
\nthose that have the intimate participation of both the local
\ncommunity and the local corporate operations- especially the
\nemployees.<\/p>\n
This inefficiency would not be permitted if the goal were
\nrevenue; something the NGO's, corporations and government
\nunderstand. Given that impact is very difficult to quantify,
\nthese two stakeholders tend to work separately, with a great deal
\nof disconnect from the communities they are tasked with
\nassisting.<\/p>\n
The first major problem is the lack of commitment from the
\nIndonesian government to impose rule of law to ensure development
\nin the communities. Given that effective implementation of CSR
\nprograms requires the machinery of an effective democratic
\ngovernment and civil society, this is something that the
\ncorporations cannot count on in the short term.<\/p>\n
It is still premature to expect this from the current
\ngovernment given the lack of good governance and the structural
\nchanges required to develop accountable civil programs.
\nIndonesian government stakeholders can only be expected to
\nsupport CSR programs in Indonesia when the tools of civil society
\nbecome stronger and legislatively sound.<\/p>\n
The second is the lack of interaction with each other or with
\nthe community. Very little impact in terms of sustainable
\ndevelopment can be achieved if politicians, corporate boards,
\nspecial interest funded NGO's and shareholders are interacting
\ntogether and alone, without the proper input for the affected
\ncommunities.<\/p>\n
Public-private sector interaction is vital for success, and
\nit must come at the very beginning of program design and
\nimplementation. Each community has different needs, social and
\neconomic, and without understanding them individually, effective
\ndevelopment will not result.<\/p>\n
Corporate community involvement is specific to each
\nindividual enterprise, but through partnership between company
\nemployees and the community, with financial support from the
\ncorporations, programs are often successful.<\/p>\n
There is a two-pronged approach to successful implementation
\nof community development programs: partnerships involving the
\ncorporation and community actors, and employee driven initiatives
\ncarried out by the corporation. The key is to implement these
\nprograms such that they are market driven with accountability and
\nthat they rely on some sort of return on investment made by the
\ncommunity and the corporation. Those returns may be in the form
\nof improved education and healthcare that affects all
\nstakeholders including the government, or may be in the form of
\nimproved local private sector enterprise that will benefit the
\nlocal communities economy and the corporate operations' supply
\nchain.<\/p>\n
Based on the input I have received from the extraction
\nindustry and some of the local communities affected by that
\nindustry, it seems that a simple formula exists for initiating
\nsustainable community development that can have a positive
\nimpact. In most cases it is a matter of focusing on the simple
\ntasks, but through sincere involvement from the corporate
\nmanagement side.<\/p>\n
It also requires corporate commitment to development of
\nimportant market systems such as micro finance and distribution
\ninstitutions, and it requires the direct participation of the
\nemployees in the community. This last factor is important in any
\ndevelopment activity, as the employees are the stakeholders that
\nhave the most interaction with the community, and share the same
\nbasic cultural and social understanding of how to develop the
\nlocal economy. The community will attend to its social needs once
\nthe local economy can be integrated into local operations and is
\nable to survive on its own through basic market forces.<\/p>\n
Productive results can come from effectively implemented CSR
\nprojects, and can have great benefits to corporations in terms of
\nleveraging costs of risk management, however it is important to
\nkeep it simple.<\/p>\n
The writer is managing Director of Trade Management and
\nDevelopment Services Ltd. and is involved in projects within
\nIndonesia and other SE Asian countries. He can be reached at
\ndkingsley@tmiconsulting.com<\/p>",
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