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CSR as a support mechanism for national COVID-19 response

Businesses that have done well during the pandemic should step up and employ CSR as a means of supporting the national COVID-19 response while fulfilling its triple bottom line of people, profit and planet.  

Rio Christiawan (The Jakarta Post)
Jakarta
Thu, July 29, 2021

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CSR as a support mechanism for national COVID-19 response

C

orporate social and environmental responsibility is stipulated in Law No. 40/2007 on Limited Liability Companies. Article 1, paragraph 3 of the law defines social and environmental responsibility as “the company’s commitment to participate in sustainable economic development in order to enhance the quality of life and environment to benefit the company, local communities, or the general public”.

In practice, corporate social and environmental responsibility is interchangeably used with corporate social responsibility (CSR). The Constitutional Court also considers the two to be synonymous as stated in decision No. 53/PUU-VI/2008.

The concept of CSR that is accommodated in national law was born from a shift in the initial concept of a single bottom line (profit-oriented) into a triple bottom line (people, profit and planet).

The concept has been internationally recognized since the 1992 Earth Summit in Rio de Janeiro, Brazil, and the 2002 Johannesburg Convention. Indonesia later adopted the rules on CSR were as corporate social and environmental responsibility in Article 74 of the 2007 law.

In the time of the COVID-19 pandemic, CSR can be used as a tool to control community transmission of the disease.

In this second year since the pandemic emerged, the largest clusters have formed at industries, offices and households – all of which are closely intertwined – accelerating the spread of the disease. As a form of ethical and moral responsibility, businesses should help the government suppress the contagion through CSR programs and other efforts. Good examples would be running a contact tracing program and facilitating treatment for the surrounding community.

Francis Fukuyama (2006) stated that CSR was born from the culture of mutual assistance that is identified with the East, which was then adopted as a means for businesses to gain social capital. From another perspective, Robert Putman (1999) viewed CSR as a concept born out of an appreciation for the rights and lives of all living beings around a business.

The similarity between these two concepts is businesses actively caring for their surrounding environment (both people and the planet). In the present context, as the pandemic continues to rage, the public cannot rely solely on the government to prevent and control COVID-19. The fight against COVID-19, ranging from strict implementation of the health protocols to the mass vaccination program, requires the participation of all stakeholders.

CSR as a corporate initiative to support the government’s COVID-19 response should be done under a public-private partnership. This applies especially to industries that continue to accumulate profits during the pandemic. Large-scale national and multinational corporations that enjoy profits, which have eluded most industries, should prioritize CSR programs dedicated to the nationwide fight against COVID-19.

The government must therefore devise implementing regulations on a CSR-driven pandemic response. Such an effort will not add to corporations’ economic burdens. Rather, it will be strategic and impactful to use CSR to control the spread of COVID-19. In the end, it will contribute positively to the economy.

An example of a potential COVID-19 CSR program is to use the micro-scale social restrictions, which has proven to work well in West Java. The “micro” here refers to small-scale monitoring of surrounding communities, including providing the basic needs of certain groups in the community, such as neighborhoods, hamlets and subdistricts, and coordinating with health authorities in case residents test positive for COVID-19.

The ultimate goal of this CSR model is to help the government get COVID-19 under control, so that the people can return to their normal lives and stop depending on government assistance for too long. This means that the essence of such CSR programs is to restore independence to the public.

Aside from health and related programs, CSR can aim to empower the public, especially people who have been affected by layoffs.

Cooperating with private entities will ease the burden on the state budget. Even so, a public-private partnership scheme will not alleviate the government’s responsibility.

For now, the government should establish a legal basis for involving the private sector as a partner to the government in monitoring and helping communities through CSR programs. Ideally, the regulation should also stipulate the scale of these businesses as well as the size of the targeted community. It is also necessary to mention the program’s mechanism, the facilities and the infrastructure that a company must prepare, and how to manage public-private coordination in COVID-19 control efforts, since this is the absolute responsibility of the government.

CSR as an approach to controlling COVID-19 correlates with fulfilling the triple bottom line of people, profit and the planet as a business goal. In the end, it will have a positive impact on business, because businesses will recover only if the people are healthy.

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The writer is a business law lecturer at Prasetiya Mulya University. The views expressed are his own.

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