CSR Bill and the inanity of the arguments surrounding it


You have to wonder about the quality of debate about the (Corporate Social Responsibility (CSR) Bill the House of Representatives is trying to pass into law tomorrow. The Bill seeks to make it mandatory for mining companies to allocate 5% of their profits to CSR activities.

Businesses have, rightly opposed the passage of the Bill. But the quality of their arguments is somewhat wanting.

Take, for example, Apindo chairman Sofyan Wanandi’s statement below. He seems to suggest that what’s wrong with the Bill is that it makes CSR compulsory and that’s not OK. CSR is OK, he is then implying, if it is carried out voluntarily.

This is a diversion from the real issues surrounding CSR and the government’s role in its development.

CSR exists in part because of government inefficiency and its limitations. If Government can take care of the social, environmental and welfare issues in society, as it is supposed to do, there would be no need for businesses to get into the CSR act.

Businesses, on the other hand, can count as their strengths a fast decision-making process, implementation skills, customer insights, money, manpower and expertise to affect positive social change. They now do so because of the realization of their obligation to society to fill in the gap left open by Government and civil society.

Any government that wants to compel businesses to conduct CSR must therefore first justify why it has failed.

The argument that must be advanced is that most CSR programs are failures because they are feel-good or public relations exercises for businesses. The motivation behind some programs are to stoke the ego of its managers or owners, to cynically buy themselves some goodwill or to try to innoculate themselves against attacks by others.

Such programs are ultimately unsustainable, have very little effect or have negative side effects as they build a dependency culture instead.

The best CSR programs are those that arise when businesses realize that businesses must have a higher meaning other than making money. It is when they realize this higher meaning and channel their energies into using their business assets – a fast decision-making process, money, manpower, customer insights and efficient implementation – to affect change that CSR programs become useful to society.

Now you can’t regulate that.

clipped from thejakartapost.com

The inclusion of the CSR requirement at the initiative of the House has been heavily criticized by many as violating the philosophical basis of CSR.

“CSR programs should be voluntarily. They should not be made a corporate responsibility,” Indonesian Employers Association (Apindo) chairman Sofyan Wanandi told the Post.

Sofyan argued that CSR, by its very nature, was a voluntary measure instituted by firms in order to help achieve sustainable development through various types of program that benefited all stakeholders.

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