Govt urged to help make firms 'socially responsible'
Govt urged to help make firms 'socially responsible'
The Jakarta Post, Jakarta
When people living around the Tangguh oil and gas block in Papua
asked David Clarkson, the executive vice president of the BP-led
Tangguh LNG Plant, about what his firm could do for their
children, he replied "we decided that we needed to educate them".
Apart from education, he said, the firm had conducted several
community development programs -- part of its corporate social
responsibility (CSR) -- such as providing clean water, public
health services, housing programs for locals and supporting the
conservation of mangrove swamps.
Clarkson's firm is only one of the many companies that say
they apply the principles of CSR, including 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 the Astra Group.
However, Business Watch Indonesia managing director Henry
Heyneardhi said that in many cases the firms that claimed they
applied CSR looked the other way when violations of labor
legislation and rights were perpetrated by their subsidiaries 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 violations as regards their social and
environmental surroundings," he said on Tuesday during a seminar
held by a non-profit organization, Leadership for Environmental
and Development (LEAD) Indonesia.
Many firms worldwide preferred the CSR framework of community
development programs, such as providing free health services,
scholarships, assistance to small and medium enterprises, and
providing assistance to the victims of disaster.
Furthermore, Henry said, the government should enact
legislation to encourage the emergence of an ethical investment
environment, such as providing tax incentives to firms that
adopted CSR and prioritizing such companies for government
projects.
Senior economist-environmentalist Emil Salim urged the
government to intervene so as to encourage the private sector to
implement CSR to balance economic development with the public
interest, including cultural and environmental conservation.
He said the government could intervene in CSR implementation
by providing incentives, imposing penalties and allocating
resources to less-profitable areas of public interest.
"I am not against development, but I'm against development
that damages our environment and culture," he told The Jakarta
Post on the sidelines of the seminar.
He suggested that foreign and local firms were not interested
in investing in the country's public needs, such as public health
services, housing, transportation, inter-regency roads, and parks
as these were simply not profitable.
He called it a market failure, which the government could
actually correct through intervention.
Such intervention could take the form of tax incentives or
subsidies for companies that conserved forests, or the imposition
of harsher penalties on firms prospecting in protected forest or
polluting their surroundings, he said.
Furthermore, he added, if sports and culture were not
profitable, the government should allocated state resources so as
to encourage the private sector to support these areas.
"The government is allowing mining firms to exploit protected
forests at the expense of our social and environmental interests.
What is to become of us, say, in 2025? Is this the sort of
development we want?" he asked.