“The goal of corporate social responsibility in the Indonesian upstream oil and gas business is to satisfy human needs in our surrounding areas, an in doing so, we generate profit for investors and for the government,” Priyono said at the 32nd IPA Convention and Exhibition from May 27 through 29 at the Jakarta Convention Center.
The president of Total Indonesia, Philippe Armand, also expressed his company’s willingness to continue its engagement in corporate social responsibility, saying that it was related with sustainable business.
“Our first corporate social responsibility is to continue to make the oil and gas industry sustainable. In front of new stakeholders’ expectations, oil and gas companies are putting at risk their actual license to operate, and their capacity to grow in the medium and long term,” he said.
“We need, therefore, a change in our practices to enhance our acceptability. We need to better control and reduce our operational impacts, create value for all the stakeholders, not only for the shareholders, and better prepare the future challenge on energy supply and demand,” he added.
Noke Kiroyan, the chairman of CSR Consortium and Indonesian Business Links, said that CSR is enhancing long-term profitability for companies. It is also a way to become a legitimate and accepted member of society.
He said that CSR had been evolving over the last 50 years. Previously, it was merely personal philanthropy and corporate philanthropy. Then it evolved into an opinion that businesses should contribute toward resolving complex social problems. Recently, it has developed into a theory that CSR should cover the issue of sustainable development and what it calls the triple bottom line concepts, namely, social bottom line, economic bottom line and environmental bottom line.
“The current mainstream definition of CSR is the commitment of businesses to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for businesses, the sustainable development agenda, and society at large,” he said.
But he said that different societies define the relationship between business and society in different ways. “Wealthy societies have greater resources and more demanding expectations that emerge from the greater options wealth brings,” he said.
As societies advance, expectations change and the general social well-being is redefined, this ongoing redefinition and evolution of societal expectations causes the CSR response also to evolve.
In developed countries, therefore, CSR is more related to the issues of ethical business behavior, human rights, labor rights, anti-corruption and environmental concerns.
He pointed out that in poor societies, general social well-being is focused on necessities of life, such as food, shelter, transportation, education, medicine, social order and employment. That is why in developing countries CSR is synonymous with community development.
He noted that international pressure from communities and nongovernmental organizations has been mounting for companies to recognize CSR.
In Indonesia, said Minister of State Enterprises Sofjan Djalil, the pressure for companies to carry out CSR programs was also increasing. “Indonesia is now a democratic country that requires different way of doing business,” he said.
According to him, during the New Order administration, doing business was relatively easy due to its security approach. “If companies had any problems, they could just call the military or the police and all problems would be solved quickly. But now they can no longer do it that way,” he said.
He said that it was fortunate that Indonesia had become a democratic country. The members of the public are now more aware of their rights and are easily agitated. But on the other side, it had opened a Pandora’s box, which has released many social problems.
“Therefore, companies, besides needing a legal license, also need a social license. That is why they need to carry out CSR programs,” he said, adding that, “The best way of doing this is for the companies to develop entrepreneurship among members of local communities. The multinationals should think of creating local heroes from their domestic business partners,” he said.
He cited the example of state oil company Pertamina in Aceh. The company chose a number of local suppliers as its partners there. They have become like local heroes, who have had a multiplier effect on the local economies.
During the IPA Convention and Exhibition, which is themed “Meeting Energy Challenges Through Cooperation”, oil and gas companies such as Chevron, ExxonMobil, BPMigas and Total Indonesia have shown that they are engaged in CSR programs, such as building health and education facilities and infrastructure, and by contributing to the economic and social development of their external stakeholders.
“We’re very proud with the excellent CSR record for PSCs and its results for our stakeholders,” said Priyono, who also underlined that oil and gas companies contribute about 25 percent of government revenue and 7 percent of the country’s GDP.
Source : The Jakarta Post (04 June 2080)