'Corporate Social Responsibility still a mere PR tool'

'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.