[Kabar-indonesia] SBY to inaugurate national Corporate Responsibility Conference

[Joyo at aol.com]

also: Is CSR a business cost or strategy?

The Jakarta Post 
Sunday, September 3, 2006

President to inaugurate national CSR Conference

President Susilo Bambang Yudhoyono is expected to open a two-day National 
Conference on Corporate Responsibility (CSR) in Jakarta. The conference, to be 
held Sept. 7-8, will be attended by 250 CEOs, managers and supervisors from 
Indonesia and overseas.

Themed "Responsible Business is Good Business", the conference will allow 
participants to share experiences in the implementation of CSR programs, as well 
as raising people's awareness about CSR.

"The need to promote responsible business practices has become increasingly 
urgent due to the growing challenges confronting our business community," says 
Noke Kiroyan, founder of Indonesian Business Links (IBL), which is organizing 
the conference.

IBL is a non-profit organization focusing on promoting CSR among 
corporations. Commenting on the implementation of CSR programs in Indonesia's corporate 
community, Kiroyan said companies here had begun to understand the importance of 
good CSR programs.

"There has been a growing awareness of CSR among companies in Indonesia. That 
is why we think it is time to hold the conference to get a clearer 
understanding of CSR, which is not just community development as commonly understood 
here," says Kiroyan.

Acknowledging that in Indonesia CSR is mainly associated with community 
development work, he stressed a good CSR program took into account economic, social 
and environmental aspects.

To be able to carry out CSR programs, Kiroyan said corporations needed to 
fulfill their economic mission, namely making a profit. In other words, he said, 
CSR has a close relationship with the business bottom line, namely 
profitability.

"Companies that do not have good management and, therefore, do not make a 
profit, have closed down long ago. Thus, CSR is for well-managed businesses and 
should be carried out efficiently," says Kiroyan.

The IBL's conference director and member of the board of management, Pradakso 
Hadiwidjojo, says that CSR constitutes an important part of corporate 
strategy in carrying out business in a responsible manner.

Aside from community development, Pradakso says that CSR is closely related 
with how companies comply with business ethics and the law, for instance by not 
getting involved in corruption, collusion and nepotism.

In addition, CSR is also linked with how companies protect the environment 
and assure the well-being of their employees. Seen in this way, Pradakso said 
CSR is more than a community development program.

"The speakers at the seminar will include Coordinating Minister for the 
Economy Budiono, Erna Witoelar in her capacity as Ambassador for the 2015 
Millennium Development Goals and Emil Salim, environmental expert and NGO 
representative," says Pradakso.

To enable full participation in the conference, he said there would be three 
plenary sessions and several break-out sessions, with three speakers scheduled 
to address each break-out session. All of the sessions will be moderated to 
ensure everyone has a chance to speak.

The IBL is also organizing an exhibition to accompany the conference. The 
exhibition will show the various aspects and issues surrounding CSR 
implementation.

"Currently, we have prepared around 50 booths in the exhibition area. Most of 
the exhibition participants are from corporations that have CSR programs, as 
well as from non-governmental organizations," says Hadiwidjojo.

Several companies and institutions, including PT Newmont Pacific Nusantara 
and PT Kaltim Prima Coal, have confirmed their participation as main sponsors of 
the conference, while Riau Andalan Pulp and Paper, IFC and Unilever will 
serve as supporting sponsors. Acting as associate sponsors are the British Council 
and Ritz Carlton.

"We are proud to be able to organize and host a national conference on CSR in 
Indonesia. Since the conference is organized by the private sector, we expect 
that companies and those who have concerns about CSR will be able to learn 
about the latest trends and approaches in implementing CSR programs," says 
Pradakso. 

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The Jakarta Post 
Sunday, September 3, 2006

Is CSR a business cost or strategy?

Rudijanto, Contributor, Jakarta

The still uncontrollable mudflow at a gas drilling site operated by PT 
Lapindo Brantas in East Java's Sidoarjo regency serves as a strong warning for all 
businesses to start adhering to responsible business practices.

The hot mud gushing up from deep beneath the earth's surface has not only 
caused suffering to thousands of affected villagers, but also has inflicted huge 
losses on Lapindo.

Witnessing what could be the biggest gas exploration disaster in history, the 
corporate sector cannot but feel the need to start doing business in a more 
responsible way, as corporate responsibility is closely linked to 
profitability. Here, Corporate Social Responsibility (CSR) starts to be viewed as a 
solution.

CSR has been increasingly viewed as a business strategy and, even, risk 
management by some proponents. While CSR was previously considered to be a cost 
element, many corporations have started to see it as an investment and an 
important part of their business operations.

Multinational corporations operating in Indonesia understand the importance 
of CSR in their business operations. Based mainly in Western countries, these 
companies have had more exposure to CSR concepts and practices.

France-based cement producer Lafarge, for instance, which owns PT Semen 
Andalas Indonesia (SAI), was quick to implement the CSR concept as part and parcel 
of the company's reconstruction and rehabilitation work at its heavily damaged 
production facilities in Nanggroe Aceh Darussalam.

Having their production facilities ruined and 182 employees killed or missing 
after the tsunami that devastated Aceh on December 26, 2004, Lafarge was well 
aware that reconstructing and rebuilding its own facilities without 
participating in the reconstruction and rehabilitation of the province was out of the 
question.

That is why aside from allocating US$90 million for the reconstruction of the 
company's damaged cement plant, Lafarge also allocated approximately 3.5 
million euros to rebuild 274 homes, along with mosques and schools, as well as to 
provide vocational training for community members.

"We are committed to providing 274 permanent, earthquake-resistant houses in 
Lamkruet village, a neighboring village of our factory. The new houses will be 
given as a grant to the families in this village and are expected to be 
completed as soon as possible," says SAI president director Marcel C. Cobuz.

In spite of still struggling to resume operations, Lafarge's Semen Andalas 
Indonesia has already set up a CSR program that includes educational support, 
health and medical support, and economic development for locals.

The company's commitment to Aceh's reconstruction and rehabilitation 
certainly has a clear link to its own profitability, as the recovery of the people's 
purchasing power and the reconstruction of the province itself will increase 
demand for cement.

The existence of a direct link between a company's line of business with the 
form of CSR undertaken is often viewed positively and endorsed by some CSR 
proponents.

One of the founders of CSR proponent Indonesia Business Links, Noke Kiroyan, 
even emphasized the close link between CSR and profitability. He said that CSR 
is like implementing a business strategy, which essentially aims at creating 
profit.

The UK-based charity organization Training For Life, for instance, believes 
that in implementing CSR programs, the skills that have built successful and 
sustainable businesses can be just as relevant in transforming the lives of 
individuals who have been socially excluded.

Another noteworthy example of CSR implementation is shown by Unilever Peduli 
Foundation (UPF), which conducts the Surabaya Environment Program, Empowering 
the Community for a Better Environment in the East Java provincial capital 
Surabaya.

Under this program UPF initiated a community-based environmental program in 
Jambangan subdistrict, focusing on waste management and waste-plastic recycling 
in 2001. UPF started by identifying informal leaders within the community, 
who would then be trained as members of the program.

The program succeeded in encouraging the community to improve the environment 
by supporting the establishment of sanitation facilities. Currently, the 
program has been replicated in 14 districts in Surabaya.

The success of the program strengthened UPF's image as a company that cares 
about the environment, and the Energy Globe Award received by UPF recognizes 
its achievements in environmental projects.

And when one looks at UPF's products, which include Rinso detergent, 
Pepsodent toothpaste and Lux and Lifebuoy soaps, it is clear the company has used not 
only its resources but expertise in its CSR implementation. So who can deny 
the link, though indirect, between CSR and profitability in this case?

Still another example of CSR in Indonesia is shown by L'Oreal, the big 
cosmetics producer, that has been conducting The L'Oreal Indonesia Fellowships for 
Women in Science since 2004. The program aims to support and encourage young 
Indonesian women researchers with promising research projects at the start of 
their scientific careers.

In partnership with the Indonesian National Commission for UNESCO, L'Oreal 
has supported six Indonesian women researchers with Rp 50 million (about 
US$5,500) each. The awards are given based on the decision of a board that consists 
of five eminent scientists.

On August 31, L'Oreal announced to the media this year's award recipients: 
Fenny M.Dwivany from Bandung Institute of Technology (ITB) and Fatma Sri Wahyuni 
from Andalas University (UNAND).

"The L'Oreal Indonesia Fellowships for Women in Science is a chance for the 
company to give back to a community that we hare very strong ties with and we 
remain committed to its sustainable development," says L'Oreal Indonesia 
president director Richard Matalon.

The close connection between L'Oreal's program to promote women scientists 
and the company's products, which exclusively target women, is clear. By 
strengthening its relationship with and image among the company's customers, L'Oreal 
has promoted its image as a socially responsible company to its target market.

CSR programs may take different forms as corporations have their own 
respective areas of expertise and sources. However, CSR is more than simply a 
community development program, but rather is a total business strategy that touches on 
economic, social, ethical and environmental aspects.

"CSR has something to do with how companies comply with business ethics and 
the law by, for instance, not practicing collusion, and how they protect the 
environment and provide for the well being of their employees," says Pradakso 
Hadiwidjoyo, a member of the IBL's board of management.

Amid some NGOs accusations that CSR is simply corporate camouflage to hide 
certain ill-intentioned practices, CSR proponents have not shown any doubt about 
the direct link between CSR and the corporate bottom line, i.e. making a 
profit.

However, they continue to emphasize that maximizing profit is only possible 
if they do business in a responsible manner. Here, CSR proponents are able to 
convey the idea of CSR in a language understood by CEOs and shareholders. 

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Joyo Indonesia News Service
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