Shifting to a newer paradigm a must

Shifting to a newer paradigm a must

Febriana Damayanti, Contributor, Jakarta

Two international environmental institutions, the World
Wildlife Fund and the Swedish Society of Nature Conservation,
recently pointed their fingers at two of the country's major
paper manufacturers: Indah Kiat Pulp & Paper owned by Asia Pulp &
Paper, and PT Riau Andalan Pulp & Paper belonging to Asia Pacific
Resources International Limited (APRIL).

Both companies were accused of damaging some of Indonesia's
tropical forests by turning thousands of hectares of
irreplaceable natural treasure into eucalyptus and acacia
plantations to grow the raw material for their mills.

The pulp and paper industry has for years now been strongly
criticized for destroying nature. Communities surrounding plant
sites are not only extremely angry, but totally reject the
presence of these plants.

One of the reasons behind the problems experienced by many
paper and pulp manufacturers is their inability to build
competitiveness, especially in the area of creating a positive
corporate image. With their huge investments it is surprising
that these giant-sized entities fail to comprehend recent
developments in regard to people's concern and attitude toward
the environment.

Some analysts lament that while these companies have a wide
range of almost unlimited resources and all the necessary means
to "make amends", to date they have not done anything
substantial. Perhaps they think that being just a few in number,
as this type of business is not a "small amount" game due to the
massive investment required, they can afford the current
leisurely pace in responding to the constant outcries.

Another reason why these companies fail to grasp the current
situation is they are still firmly entrenched in their antiquated
beliefs. They wrongly believe that much of competitiveness lies
in cutting down costs, like paying low wages, increasing tonnage
and above all securing government protection to keep their
business "safe and sound".

Their old beliefs and outdated mind-set have created a myriad
of problems that affect the entire pulp and paper industry.
Treating themselves as merely commodity producers in today's
world of branded products, they have not been able to do much
about modern marketing.

Tragically, oversupply also often occurs due to a lack of
capability in proper estimates and forecasts. The archaic
"weapon" -- price -- is still seen as the only effective tool in
their fight in the market. Their biggest weakness is the
ineffective communication of their "vision and mission
statement", which should have been translated into their actual
activities to acquire public empathy or at least cool down the
heat with real sympathetic action.

It is high time that the country's pulp and paper industry
leave the old paradigm behind and turn to a total concept of
competitiveness that nowadays incorporates a positive corporate
citizen philosophy. In today's world, to last a lifetime or even
more, companies have no choice but to be contributing members of
society. It is now recognized that their competitive edge and
competency should include not only the high values of products
and services they deliver, but, most importantly, the inherent as
well as concrete "spirit of participating" like providing
reasonable wages, benefits and care for employees as well as the
surrounding community and environment.

A revamping of internal mind-set, especially from the top
level executives down to those who carry out the day-to-day work,
is obviously instantly needed.

The "Cluster Model", as recommended by Michael Porter in his
best-seller On Competition, can be helpful. This model describes
the success stories of numerous world-class companies in building
up their competitiveness that comprises a spirit of active
participation and togetherness. The cluster is an integrated
cooperation and mutually supporting action among various
institutions, such as research agencies, companies' association,
academics, colleges and universities, NGOs, respected figures and
related government offices. Not only discussions are conducted
but implementable solutions are actually found by this cluster.
The essential aim and ultimate purpose is saving both the company
and the whole society. In fact, a harmonious fusion is created.

Quality of the national business environment is also crucial.
This means, as a regulator, the government, through its well
thought-out regulations, should be able to create a conducive
climate for the business world, including the pulp and paper
industry in the country. This way the competitiveness and
productivity of these companies should not be looked at partially
or only from the macro-economic point of view. For effective
results, for the good of both pulp and paper companies as well as
the environment, an integrated and solidly interrelated activity
among institutions is called for.

Several years ago, one of the country's leading research
institutions found that Enceng gondok (a kind of water hyacinth)
or hibiscus cannabinus in Latin, which is abundant in most parts
of Indonesia, is suitable as the raw material for making pulp.
However, due to lack of coordination as the cluster referred to
above is not in existence or dormant, this piece of valuable
information is simply lying in a drawer somewhere.

With a new paradigm, probably resorting to a close
cooperation, as reflected in the cluster model, the country's
pulp and paper companies will be able to overcome most of their
current problems. This way these large corporations will be
performing better, both in increasing their profits as well as
highly contributing corporate citizens.

Next to the vital role of the pulp and paper industry for the
country's revenue, it will be another plus when you can say that
the paper you write on is produced by a company who cares about
your environment. And that day seems to be not too far away.