'Corporate Social Responsibility still a mere PR tool'
The Jakarta Post, Jakarta
The current application of Corporate Social Responsibility (CSR) principles in Indonesia is still far from ideal as many firms still engage in exploitative practices that threaten the environment and social surroundings.
"To lure foreign direct investment, countries are disregarding their environmental laws and the protection of natural resources," said Henry Heyneardhi, managing director of The Business Watch Indonesia, quoting environmentalist Maude Barlow.
Speaking at a recent seminar titled "Corporate Social Responsibility: A new business mainstream toward sustainable development" -- held by a non-profit organization Leadership for Environmental and Development (LEAD) Indonesia -- Henry said Indonesia was among the countries that set lower standards for investors regarding social and environmental responsibilities.
"The facilities for investors include easing various social- related regulations, such as those that are supposed to guarantee the rights of workers and sustainability of the environment," he said.
Henry said weak regulations allowed corporations, multinational and local, to exploit natural resources on a massive scale and at such a pace that it made it impossible for environmental preservation and rehabilitation efforts to bear fruit.
Consequently, such practices had triggered stakeholders to demand the companies to be held responsible for their exploitative conduct.
The firms had answered with an initiative widely known as Corporate Social Responsibility (CSR), where companies committed themselves to integrating social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis.
The stakeholders included their workers, suppliers, local communities, the government, non-profit organizations and customers.
However, Henry said, in many cases companies claimed they had implemented CSR but at the same time looked the other way when violations of labor laws and rights occurred in their subsidiary firms or suppliers.
"Since it is on a voluntary basis, CSR tends to be a mere public relations tool. People can see that CSR adoption by companies does not stop their violations as regards their social and environmental surroundings," he stressed.
Henry gave as an example the alleged pollution caused by PT Newmont Minahasa Raya in Buyat Bay, North Sulawesi.
Since the case came to public attention, the mining firm has placed numerous advertisements in the media to show that it has been adopting CSR by, among other things, providing clean water and a community health center (Puskesmas) for residents near Buyat.
Henry said such actions had been common in the implementation of CSR globally.
Many firms worldwide prefer the CSR framework of community development programs such as providing free health services, scholarships, assistance to small and medium enterprises and donations to disaster victims.
Henry named PT Freeport Indonesia, state oil and gas company Pertamina, cigarette maker PT HM Sampoerna, PT Coca Cola Bottling Indonesia, PT Bank Central Asia Tbk, PT Microsoft Indonesia, Nokia Mobile Phone Indonesia, PT Timah and Astra Group as companies that had implemented community development programs.
They contributed enormously to the local community, he said, but many other firms were still not interested in adopting CSR and it had to be admitted that the development of CSR in the country was still far from ideal.
Therefore, he suggested that CSR implementation here needed a standard, a reporting mechanism and verification processes, which would serve as guidelines to determine which activities were really socially and environmentally responsible.
Furthermore, he said, the government should make regulations to encourage the emergence of an ethical investment environment such as providing tax incentives to firms that adopted CSR and prioritizing such companies in government projects.