Amol Titus, Contributor, Jakarta
The year 2006 has been bad for Indonesia as far as the environment is concerned. Forest fires have raged through parts of Riau and Kalimantan, protected species such as tigers, elephants, orangutans, gibbons and rare birds have come under threat, there have been protracted controversy regarding the impact of mining tailings, deforestation and illegal logging remain alarming issues, the biodiversity rich ""heart of Borneo"" continues to shrink and the mudflow disaster caused by Lapindo Brantas in Sidoarjo, East Java, continues to dominate headlines.
As if all this is not enough, the country is now ranked third in the world in terms of greenhouse emissions (a shocking rise from 21st) and there are real concerns related to future emissions being caused not just from development pressure but also from the burning of peatland as commercial logging and plantations continue to develop.
Clearly, the government needs to get its act together on an urgent and comprehensive basis. But that is a different debate. This article focuses on the responsibilities of companies operating in a resource-rich country like Indonesia related to the principle of sustainability. When a country is endowed with practically every natural resource -- oil and gas, minerals, agricultural commodities, fisheries and a rich variety of flora and fauna -- there is an obligation on each generation to tap these resources responsibly.
And this should be in a manner that does not leave behind a legacy of overexploitation, land degradation and erosion, chemical pollution or water table contamination for succeeding generations. Resource-rich countries will always have a corporate sector that is eager to take advantage of the bounty-on-tap and the motive of profit will drive them harder, deeper and farther. Sadly, there have been players that have adopted an exploitative, reckless and short-term approach.
If companies are to operate as ""growing concerns"", or entities that will be viable over a long period of time, they must embrace the sustainability principle. This principle begins with an acceptance of the obligation of responsibility when dealing with the environment. Though this applies more substantively to companies utilizing resources, in a broader sense it applies to practically all companies.
For example, companies that use chemicals in their processes (several of these are hazardous), textile companies that use dyes, retailers who use plastic, car and motorcycle manufacturers whose engine designs impact emission standards, electricity turbine manufacturers whose products are energy intensive and even banks and financial institutions who have the power to question and influence the environmental impacts of the projects they finance.
This responsibility covers all aspects of a company's operation -- purchases, raw material sourcing and stockholding, the manufacturing process, energy consumption, finished goods packaging, transportation and logistics, treatment of wastage and pollution and capital expenditure. The sustainability principle requires that in each of these processes the company incorporates environmentally friendly practices. It can buy recycled paper, biodegradable plastic, legally verified timber for construction, control energy consumption, manage water effectively, look at alternative sources of energy like wind and solar power and clean up any mess the process generates. There might be a cost but often such practices also provide tangible financial benefits -- ""reduced impact"" logging techniques, for example, ultimately enhance productivity in forestry operations and more than compensate for investments in machinery or training.
Another aspect is the willingness to move to a higher standard of compliance. There are several environment compliance regulations and international protocols already in place. In Indonesia, for example there is the Environmental Impact Analysis (Amdal) regulation, laws related to burning for land clearance (clearly prohibited), legality requirements for logs, pollution and effluent standards and so on. But there are also internationally accepted standards that are sector specific and in many cases adopted through international treaties or conventions.
For example, the Rotterdam and Stockholm conventions related to hazardous chemicals, the Forest Stewardship Council (FSC) standards for forestry and associated products, sustainability parameters for commodities like oil palm, coffee, cocoa or soy, certification programs for fisheries or food processing and protocols such as CITES that list endangered species.
Stakeholders like banks and multilateral institutions like the World Bank, IFC or ADB too have developed environment compliance criteria and there are guidelines such as The Equator Principles to look at project finance, for example.
Stakeholder awareness and engagement is another key component of the sustainability principle. Like the requirements of buyers on legality or chain of custody. NGO concerns about land rights or indigenous people (a growing issue as the democratic spotlight starts to examine certain past practices). Equally an understanding of regulator concerns.
Sustainability requires the ability to study and catch up with trends. A decade ago unleaded fuel was a luxury, today it is a reality. In the 1980s, Brazil's innovations with molasses-based bio fuels were considered eccentric, today it is being replicated. New Delhi was one of the world's most polluted cities until the courts decreed a shift of all public transportation to compressed natural gas, a move that is now regarded as a model for other polluted capitals including Jakarta. Likewise, China's launch of ""sustainable' cities or European preferences for ""green electricity"" might appear experimental but they embody the search for long-term solutions.
Indonesia is at an important crossroads of the sustainability debate. For the movement to succeed globally it must have a successful impact in this country. The environment laws might be unclear, enforcement weak and the temptation for quick profits large. But a beginning can and is being made by some companies that have understood that CSR is not just an acronym for corporate social responsibility. To them it now also implies corporate ""sustainability"" responsibility. Is your company one of these? If not, it's time to start embracing this all-important principle.
The writer is based in Jakarta and works for HSBC where his responsibilities include environment compliance. The views expressed in the article are his own.
