‘It’s Not a Thing The Finance Department Can Measure’

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Over the next 10 years, advances in corporate social responsibility may redefine Indonesia. Just ask Maria Nindita Radyati, the program director for the Master of Management for CSR at Trisakti University.

As the head of one of two CSR master’s programs in Southeast Asia, Maria believes companies like Toyota, Astra International and Coca-Cola have finally seen the light. They no longer just dish out checks to NGOs and walk away.

Maria tells My Jakarta about the importance of collaborating on social programs to ensure that companies, nonprofits and government are getting the biggest bang for their buck.

People tend to view corporate social responsibility as something noble or altruistic. Is it that simple?

In CSR, people always talk about the number of activities, the amount of money they spend and then the number of people affected. It is all about quantity, but not the quality they have created. In North Sumatra, there’s a ‘successful’ CSR program that focused on women’s empowerment, building their own small and medium businesses. As a result, many husbands divorced their wives because of their egos; they weren’t able to have wives more successful than they were. How can you call that an improvement to the well-being of the society?

Is that why you helped create the CSR master’s program at Trisakti?

Yes. Here we teach students how to develop indicators for aspects of sustainability, well-being and impact. Another reason was because I was challenged by the Ford Foundation to address sustainability and social responsibility. In 2008, when we established the program, the tuition for one semester was only Rp 6 million [$670]. In the program we also have ongoing dialogue among people who work for big mining companies, the government and NGOs. We actually had a carbon trading transaction finalized in class.

Any prime examples of CSR programs by companies in Jakarta?

The Astra Group, more specifically their motor division. One example is what they’re doing with Karang Taruna [an East Jakarta-based youth organization]. Astra is training young adults to build their own motorcycle workshops. It’s also helping the community in Sunter [North Jakarta] by providing them with a showroom. Astra also helps to clean the canal in the often flooded area there, and has provided trees and street lighting to make it look beautiful. It’s one of the case studies in my book about CSR for economic empowerment.

What about those who say that CSR is just a way for companies to whitewash their sins?

It’s true that a lot of companies are trying to wash over their sins. But at least they’re doing something right, so it’s a good start. It’s better than nothing. Look at what Sinar Mas is doing now. Back then they were doing nothing. Now look at all the CSR projects they have.

Will CSR eventually eliminate the need for NGOs?

What we need is collaboration. Companies have the financial capital, but don’t have social capital. So they can’t do it alone. Those with social capital are third-sector organizations, such as nonprofit organizations, NGOs, volunteer organizations, foundations, koperasi [cooperatives] and trade unions. They have the network and trust of the community, which is very difficult for companies to get.

Lately, it has been difficult for NGOs to get financial support from international donor agencies. As a result, they need to collaborate with the private sector for their survival. It actually makes third-sector organizations healthier, because now they have to compete with other NGOs. If they don’t have good, professional management, they cannot gain trust from the community and companies.

Proponents of CSR say it’s important to change the internal perception of those activities. What exactly does that mean?

We have to change the perception of those who perceive CSR as an expense for the company and make them see it as an investment. Investment means we have to think about the return. But companies must understand that this is a long-term investment. And it’s not something that the finance department can measure, because it is something intangible. For example, a good company image and the impact and values they can implant into the community.

And what is the role for government in all of this?

In Indonesia, CSR is very important to achieve principle No. 5 of Pancasila, that is, social justice. So the government has to work with the private sector because government doesn’t always have the money to provide public services. But it’s not enough to rely only on companies; the government must also actively participate in supporting CSR.

The Indonesian government has made this a priority. You know our private sector law, No. 40/2007 ? That’s the key. Indonesia is the only country in the world where CSR is mandatory for the private sector. Government must not force its agenda on companies, but they must have dialogue and collaborations with companies and third-sector organizations to maximize the help for the community.

Maria Nindita Radyati was talking to Zack Petersen.

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