Weighing the social content of CSR

ID Nugroho, The Jakarta Post, Surabaya, Thu, 12/18/2008 11:15 AM, Supplement

Corporate social responsibility (CSR) programs are often seen as magical cures for people's difficulties. However, a company may not fully comprehend the real needs of the concerned community and consequently all the good intentions may end up being for naught.

In the beginning of June, residents of Tuban, East Java, found themselves in the news. The people, who lived close to a well-known cement factory, rejected the company's CSR efforts there. They said the CSR program had been created by a number of NGOs in Tuban to make a profit from the company by "selling" the sufferings of the people of Tuban.

Their action, which was reported by several East Java newspapers and a website, fortunately did not make news nationwide. It also did not affect or halt the cement factory's production. However, it did demonstrate that CSR programs could be abused, and that it could happen anywhere.

CSR is nothing new. Initially, a number of companies ran community development programs in their efforts to help local administrations develop communities living close to their operation sites. However, as the issues addressed are more varied, the companies conduct community development activities under a CSR scheme.

In Indonesia, CSR became more intense after Law no. 40/2007 was enacted, making it compulsory for companies to conduct them. Article 74 of the law states that companies involved in natural resources are obliged to be environmentally and socially responsible and bear the costs.

State-owned companies, likewise, have to implement CSR programs based on Law No. 19/2003 pertaining to state-owned companies. CSR here is place in a respectable positioned as there are clear budgets and guidance for their execution through the state minister of state enterprises. All this is interpreted as the Environment Preservation and Partnership Program (PKBL) to be conducted by all state-owned companies.

What was implemented by PT Semen Gresik in mid-August can be considered an achievement in the history of state-owned companies' CSR activities. The Indonesian Museum of Records (MURI) awarded the company as the initiator of certifying 1,000 masons.

"Today is a historic day for Semen Gresik. In its 51 years it has succeeded in producing 1,000 Friends in Developing the Nation from various cities in Java and Bali," said Semen Gresik president director Dwi Soetjipto.

The program of 1,000 masons as the Friends in Developing the Nation is a continuing program to create communities of highly skilled masons in every regency in the country. The masons are no ordinary masons. They have to be aged between 30 and 56 with work experience of at least 10 years and domiciled in the related regency. Their certificates are nationally recognized and are issued by the Skills Certification Agency as well as accredited by the Construction Development Agency (LPJK) in East Java.

To date, Semen Gresik's certification of highly skilled masons has covered 28 regencies in three provinces, namely East and Central Java and Bali. "All these masons are recognized as highly skilled professionals. They are available for employment at any time, while their value is quite high," said Dwi Soetjipto.

Under its CRS program, state electricity company PT PLN donated a Suzuki APV Home Care vehicle valued at Rp 136.8 million to the Palliative and Pain Center at Dr Soetomo Hospital in Surabaya. The company also provided a soft loan of Rp 100 million via its partnership program to the Seloliman-Mojokerto Micro Hydroelectric Power Generator.

Besides donating to the health sector, PT PLN has stated its concern about education, local culture, preservation of the environment and global warming. To date it has donated school books, tables, chairs and book shelves to the Pacitan Smart House Library, gamelan instruments, drums and six motorcycles as well as planted one million trees.

In the world of telecommunications, PT Telkom has made major strides. In May, the company provided aid amounting to Rp 416 million to the Food Resilience Program in East Java, which was earmarked for Surabaya and Madura island.

For its CSR programs, PT Telkom has allocated Rp 26.9 billion, which is a significant increase from the 2007 budget of Rp 20 billion. Out of this amount, Rp 8.9 billion is for environmental preservation covering related education, training, disaster relief, public facilities, health centers and places of worship.

From aforementioned examples it is clear that laws covering CSR have been effective. Today, almost every major company has CSR or community development (CD) programs. However, in the absence of standard procedures in implementation, CSR and CD programs have become nothing more than mere charity. What's worse, they very often become a company's image building program.

In one study on CSR, social policy analyst and CSR consultant Edi Suharto noted that many companies were implementing programs on a copy-and-paste basis and merely spending the allocated budget. As most of the communities' aspirations and needs are neglected, many CSR programs of various companies become similar and often overlap. As a result, a program does not empower communities but turns into three ills: dependency, as the communities become highly dependent on the aid; blackmail, as members of communities often force their will upon a company; and poison, which simply damages both the company and the public.

However, Edi Suharto said, a number of CSR programs are varied based on a needs assessment. The variety of programs can be seen from the following examples: development of education and health facilities, providing loans to small and medium enterprises, social forestry, breeding of butterflies, scholarships, information on HIV/AIDS, enhancing knowledge, development of society protection conducted by members of communities and many others. So CSR is no longer only a matter of "do good and look good", but also "create and make good" in the sense of improving the communities' welfare.

"The question is whether cooperation between a major company and small enterprises is economically beneficial for both sides or merely exploitation of the small entity by the giant corporation? Can this then be categorized as positive CSR?" wrote Edi in the study. This cutting question has indeed restated or redefined CSR, which remains varied. "In my opinion, the definition of CSR is the company's concern in allocating part of its profit for the good of the people and the environment in a sustainable way and based on accurate and professional procedures," wrote Edi further.

The director of the East Java Forum for the Environment (Walhi), Bambang Catur Nusantara, has a different opinion. The director said that in reality CSR only maintains a company's capital and other resources, while actually CSR means a company's responsibility in respecting the communities' rights from the very start of the company's establishment through to the production process and final production.