RI response to global campaign for good corporate governance

RI response to global campaign for good corporate governance

Budiono Kusumohamidjojo, Jakarta

The United Nations launched the operational phase of the
Global Compact on July 26, 2000. The UN Secretary-General Kofi
Annan proposed the Global Compact at The World Economic Forum in
January 1999. The Global Compact challenged business leaders to
join an international initiative with the UN agencies, labor and
civil society to work on nine principles (which have since grown
to 10) to work toward better conditions in the fields of human
rights, labor and environment.

The concept aims at managing global growth in a responsible
manner for the interest of a broad spectrum of stakeholders that,
in the end, would involve all peoples of the world. In essence,
the ten principles focus on business practices that should lead
to better respect for human rights, make labor circumstances more
humane and deal with the environment more responsibly.

The Global Compact is a mechanism that works through the
Global Compact Office at the UN in cooperation with the United
Nations High Commissioner for Human Rights (UNHCR), the United
Nations Environment Program (UNEP), the International Labor
Organization (ILO) and the United Nations Development Program
(UNDP).

Besides relying on the UN, the Global Compact seeks to involve
governments, companies, labor and civil society organizations to
work toward the objective whereby "business can be part of the
solution to the challenges of globalization".

Although the concept is an effort to amplify the reasoning
that doing business responsibly is the right thing in a business
perspective, it apparently attempts to "drag" the business
community into endeavors to solve daunting problems emanating
from the inevitable process of globalization.

There is no doubt that globalization has its benefits. The
problem is, only a few fortunate ones are enjoying the fruits,
mostly those working in the business field. This fact has
contributed to the continuously widening gap between the powerful
and the haves of the world on the one hand and the desperate
masses on the other hand.

No wonder responsible Indonesian leaders are scrambling to
find the best ways and means to cope with the effect of
globalization. Therefore, the Global Compact should be conceived
in this respect as an attempt to revitalize social ethics in the
business realm and to remind the business community that they
have a set of ethical responsibilities vis-a-vis people and the
environment in a global perspective.

Albeit rather slow, leaders of the most affluent countries
have come to recognize that their societies cannot exist
peacefully side by side with countries suffering under poverty.

This was underlined when an African leader put it in a
straightforward manner while responding to the G-8 summit at
Gleneagles in Scotland recently: you cannot build a firewall to
isolate Africa and its problems from the rest of the world. The
global trend of urbanization has proven that perennial suffering
in many parts of the world would somehow eventually spill over to
territories that are more prosperous.

Although it is an accepted truism that poverty is as old as
human history, the same holds for aspirations and ventures toward
overcoming human sufferings. Mankind has always been striving
toward better achievements in medicine and food production in
order to quell human sufferings and poverty.

Unfortunately, these endeavors are not always in line with the
drive for economic power and wealth that have always been
instrumental in achieving political power and regional or even
global dominance. Nonetheless, businesspeople have rarely been
involved in institutionalized efforts to overcome crises where
political actors have failed. This situation seems to have
commenced a change, however, and this change should not sideline
Indonesia as an exception.

Although the UN is infamous for producing numerous resolutions
via the General Assembly that mostly have failed to sell in a
world that becomes more and more troubled, the Global Compact
might fit into a new strategic setting in world history. To date
about 1,000 world-class companies along with numerous labor and
civil society organizations have joined the Global Compact
network, and the rate of participation tends to be increasing.

Being a network, it relies on the inescapable demand for
public accountability, transparency and the enlightened self-
interests of companies, as well as of labor and civil societies.
Sooner or later, Indonesia's business community will be compelled
to abide by this pattern of doing business as well.

It is indeed high time that we now also get businesspeople
involved in institutionalized endeavors toward coping with poor
conditions in respect of human rights, labor and depletion of the
environment. This is particularly relevant for Indonesia as we do
not avail over a good record in all these three sectors of
governance.

There is no doubt that Indonesia's business community cannot
escape its obligation to take part in this movement, particularly
as business practices in Indonesia still fall short of
reasonable, let alone, best practices.

It is true that resonance of the Global Compact in Indonesia
is still in its embryonic level. Though, large companies have
indeed started to give more attention to the need for improving
standards on human rights, labor and environment. Not all do so
necessarily in respect of the Global Compact, however. While
companies with international networks have started to implement
business standards commensurate with requirements of the Global
Compact, others do so mostly because they simply cannot escape
stakeholders' demands.

As businesspeople know best how to work efficiently and
effectively towards accumulating wealth, we cannot expect that
they also know the best way to increase prosperity and distribute
wealth more evenly. It is indeed a field where political leaders
and army generals have apparently failed to perform.

As involvement of business actors in the Global Compact is
increasing, perhaps the Indonesian Chamber of Commerce and
Industry (Kadin) can take the lead in the initiative for the
Indonesian business community to share its part in this global
mission. If Kadin does not take the lead to make "business part
of the solution to the poverty that Indonesia has to cope with",
who else can?