Ethical Performance
inside intelligence for responsible business


Indonesia ‘slack’ on CSR

April 2005

CSR observance is still slack in Indonesia, delegates were told at a seminar held by the non-profit group Leadership for Environment and Development Indonesia.

Countries are ignoring their own environmental laws and the protection of natural resources so as to attract foreign direct investment, said Henry Heyneardhi, managing director of The Business Watch Indonesia. Among these countries Indonesia was setting lower social and environmental standards for investors. Heyneardhi said: ‘The facilities for investors include easing various social-related regulations, such as those that are supposed to guarantee the rights of workers and sustainability of the environment.’ The result, he said, was widespread and rapid exploitation of natural resources, making environmental preservation impossible.

Stakeholders then demanded that the companies be held responsible for their exploitation. In their turn companies produced an initiative binding them to social and environmental responsibility but, said Heyneardhi, many ignored violations by their subsidiaries or suppliers while claiming to observe ethical principles.

He suggested Indonesia needed a reporting and verification system and said the government should legislate to encourage an ethical climate. The government could offer tax incentives to responsible companies and give them priority for public contracts.

Heyneardhi, addressing the seminar in Jakarta, also praised nine companies that had contributed enormously to their communities through development programmes – PT Freeport Indonesia; the state oil and gas company Pertamina; the cigarette maker PT HM Sampoerna; PT Coca-Cola Bottling Indonesia; PT Bank Central Asia Tbk; PT Microsoft Indonesia; Nokia Mobile Phone Indonesia; PT Timah; and Astra Group.

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