CSR is a game changer for business. In developing countries such as Indonesia, it became both strategic and ethical decision to ensure business sustainability.
2. DRRIIVVEERRSS FFOORR SSOOCCIIAALL RREESSPPOONNSSIIBBIILLIITTYY
Economic
Drivers
Social Drivers
Political
Drivers
• Company image and
reputation as
competitive
• Social license
• Social inequalities
lead to social
• New legal and
regulatory
framework
10/11/2014 Riza Primahendra
advantage
• Improved risk
management
• Pressure from new
breed of customers
and investors
tensions in certain
areas
• Environmental
destruction & climate
change
• Demographic change
• Political pressure
both domestically
and globally
• More standards and
requirement
2
3. INNDDOONNEESSIIAANN COONNTTEEXXTT
Uncontrolled decentralization (more than 490
districts/cities)
Lack of capacity of government officials decision makers
Lack of institutional set up lead to unaccountable
development practices
Low government spending lead to unfavorable business
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climate
High cost political process contribute to higher cost
economy
Regulatory Framework
Law 25/2007 on Investment
Law 40/2007 on Limited Company
Law 4/2009 on Coal Minerals 3
4. TRRAANNSSAACCTTIIOONN COOSSTT
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15
20
25
30
0
5
10
NTT
Kalimantan Timur
NTB
Bali
Jawa Timur
DI Yogyakarta
Jawa Tengah
Jawa Barat
Kep Riau
Riau
Sumaterra Selatan
Sumatera Utara
Polisi Aparat Militer PEMDA Organisasi Kemasyarakatan Preman
4
5. COONNTTRRIIBBUUTTIIOONN OF COOMMPPAANNYY
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Tax, Royalty, National Budget
Retribution
Local Tax,
Allocations
Riza Primahendra
5
Company Local Budget
Community
Royalty,
Retribution
CSR
National
Program
Public Service,
Development
6. CCSSRR DDEEFFIINNIITTIIOONN
Corporate social responsibility is a commitment
to improve community well-being through
discretionary business practices and
contributions of corporate resources (Kotler)
Operating a business in a manner that meets
or exceeds the ethical, legal, commercial, and
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public expectations that society has of business
(Business for Social Responsibility)
The willingness of an organization to incorporate
social and environmental considerations in its
decision making and be accountable for the
impacts of its decisions and activities on
society and environment. (ISO 26000).
6
7. CCSSRR DDEEFFIINNIITTIIOONN:: KKEEYYWOORRDDSS
Commitment
The way of
doing
business
Responsibility
of the
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Stakeholders
Environment
decision
making
decision
activities
7
8. MAAIINN ELLEEMMEENNTTSS OF SOOCCIIAALL
REESSPPOONNSSIIBBIILLIITTYY DEEFFIINNIITTIIOONN
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Sustainable
development
welfare of
society
Expectations
of
stakeholders
Compliance
with law and
international
norms
Integrated
throughout
organization
8
9. 44 LLAAYYEERRSS OOFF SOOCCIIAALL REESSPPOONNSSIIBBIILLIITTYY
1. Social responsibility as
philanthropy activities
2. Social responsibility as risk
management
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3. Social responsibility as mutual
business development
4. Social responsibility as
strategic business practices 9
10. CCSSRR CCOORREE ISSSSUUEESS
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Generic
Social Issues
Social issues that are
not significantly
impacted by the
Value Chain Impacts
Social issues that are
significantly impacted
by the company’s
Competitive
Context
Social issues in the
company’s external
environment that
10
company’s
operations, nor
materially affect its
long term
competitiveness
activities in the
ordinary course of
business
affect the underlying
drivers of
competitiveness in
the locations where
the company
operates
11. Strategic CSR
Human Resource Management
(e.g. Recruiting, Training, Compensation System)
(e.g. Product Design, Testing, Process Design, Material Research, Market Research)
Inbound
Logistics
(e.g. Incoming
Technology Development
Operations Outbound
Logistics
Marketing
Sales
After-Sales
Service
M
a
r
g
i
n
Support
Activities
Firm Infrastructure
(e.g. Financing, Planning, Investor Relations)
Procurement
(e.g. Components, Machinery, Advertising, Services)
Value
What
buyers are
willing to
pay
• Financial reporting practices
• Governance transparency
• Lobbying for policy change
• Stakeholder engagement
• Relationships with
universities
• Ethical research practices
(e.g. animal testing, GMOs)
• Procurement supply
chain practices
(e.g. bribery, child labor,
conflict diamonds, pricing
to farmers)
• Education job training
• Safe working conditions
• Diversity discrimination
• Health care other benefits
• Compensation
• Layoffs
• Product safety
• Conservation
of raw
materials
• Recycling
10/11/2014 11
Material
Storage, Data
Collection,
Service,
Customer
Access)
(e.g. Assembly,
Component
Fabrication,
Branch
Operations)
(e.g. Order
Processing,
Warehousing,
Report
Preparation)
(e.g. Sales Force,
Promotion,
Advertising,
Proposal
Writing, Web
site)
(e.g. Installation,
Customer
Support,
Complaint
Resolution,
Repair)
Primary Activities
• Use of particular inputs
(e.g. fur)
• Utilization of natural
resources
• Transportation impacts
(e.g. greenhouse gases,
congestion, logging roads)
• Emissions waste
• Biodiversity
ecological impacts
• Energy water usage
•Worker safety
labor relations
• Hazardous materials
• Packaging disposal
(e.g. McDonalds
Clamshell)
• Transportation
impacts
• Disposal of obsolete
products
• Handling of consumables
(e.g. motor oil, printing ink)
• Customer privacy
• Marketing advertising
(e.g. truthful advertising,
advertising to children)
• Pricing practices
(e.g. antitrust practices, pricing to
the poor)
• Consumer information
• Privacy
12. CCSSRR FFIIEELLDD GGUUIIDDAANNCCEE
Development for community
development with
community development by
community
Activity based output based
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outcome based
Problem based VS Asset based;
Want VS Need;
Individual family
community society including
government 12
13. GOOD PRROOCCEESSSS LEEAADDTTOO GOOD CCSSRR
Choosing the right implementing
partner
Sharing roles and responsibilities
among key stakeholders: company,
implementing partner, government,
community
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Participatory planning
Participatory and transparent
monitoring-evaluation
Joint resources
Collective action
Reporting on activities 13
14. 1100 PPRRIINNCCIIPPLLEESS FFOORR GOOD CCSSRR
(EEXXTTRRAACCTTIIVVEE IINNDDUUSSTTRRIIEESS)
1. Implement and maintain ethical business practices and
sound systems of corporate governance
2. Integrate sustainable development considerations
within the corporate decision-making process
3. Uphold fundamental human rights and respect cultures,
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customs and values in dealings with employees and
others who are affected by company activities
4. Implement risk management strategies based on valid
data and sound analysis
5. Seek continual improvement of health and safety
performance
14
15. 1100 PPRRIINNCCIIPPLLEESS FFOORR GOOD CCSSRR
(EEXXTTRRAACCTTIIVVEE IINNDDUUSSTTRRIIEESS)
6. Seek continual improvement of environmental
performance
7. Contribute to conservation of biodiversity and
integrated approaches to land use planning
8. Facilitate and encourage responsible product design,
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use, re-use, recycling and disposal of our products
9. Contribute to the social, economic and institutional
development of the communities in which company
operate
10. Implement effective and transparent engagement,
communication and independently verified reporting
arrangements with company’s stakeholders
15
17. TTTTHHHHAAAANNNNKKKK YYYYOOOOUUUU
Riza Primahendra
Jl. Pulo Asem Utara A20 Rawamangun Jakarta 13220
Fax: 021-4719005
Cell: 0816865164
email: rizaprimahendra@yahoo.com, rizaprimahendra@gmail.com
