Firms urged to empower people in CSR programs

The Jakarta Post ,  Jakarta   |  Wed, 03/21/2007 4:18 PM

The Jakarta Post, Jakarta

The government wants corporations to apply corporate social responsibility (CSR) programs that empower poor communities throughout the country, rather than simply contributing to charities.

""There's a potential fund worth Rp 60 trillion (US$6.6 billion) annually, that can be earmarked by Indonesia's private and state-owned businesses for their CSR purposes,"" deputy for poverty alleviation at the Coordinating Ministry for People's Welfare Sujana Royat said Tuesday.

He added that the government was very concerned that CSR be implemented accurately.

Sujana said that to alleviate poverty, Indonesia should not depend on conventional funding sources like the annual state budget and foreign loans.

The government has allocated Rp 51 trillion from this year's national budget to handling poverty nation-wide.

He added that there should be a change from project-based activities to community-partnerships among stakeholders, which would include the government, corporations and the community.

Meanwhile, the secretary general of Corporate Forums for Community Development, Iskandar Sembiring, said that corporations had ample potential to contribute to the government's poverty alleviation plans.

""At the very least in relation to the communities surrounding their companies,"" he said.

Sujana and Iskandar were speaking at a media conference ahead of a series of events, including a conference, a CEO forum and an expo, on CSR Implementations for Poverty Alleviation, to be held from April 24 to 29.

Unlike charity-based projects, community development activities that empower their beneficiaries are benchmarked by several indicators, including integrated implementation, the beneficiaries' participation and independence, as well as an emphasis on basic human rights to express views and earn income.

""Many state-owned firms, particularly local firms, have yet to apply this kind of CSR,"" said Iskandar.

However, he said that last year most CFCD members hard started using 70 percent of their CSR funds to empower community development programs instead donating straight to charity projects. This was considered progress from 2002, when up to 70 percent of corporate CSR funds went to charities.

The forum currently has 120 private and state-owned corporations as members, from fields including telecommunications, mining, agriculture and plantations, as well as tourism.

There are more than 25,000 medium- and large-scale businesses in Indonesia. Around 200 are considered ""giant"" firms.

""Three priorities must be set in order to ensure the successful implementation of CSR. A correct understanding of CSR activities; capacity-building training provided by the government and civil society organizations; and the government's facilitation of the infrastructure needed in CSR activities,"" said Sujana.

Iskandar added, ""We need the government to make regulations on CSR implementation for alleviating poverty."" Currently, only a ministerial decree regulates state-owned firms' obligations to spare 1 to 3 percent of their company profits for social obligations.

According to the Central Statistics Agency, in September 2006, 39.05 million people, or 17.75 percent of Indonesia's population of 220 million earned less than $17 a month, putting them well below the poverty line. (07)

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.