Adaptions to Indonesian expectations                      Tarje I. Wanvik
“Anything can be located anywhere”
“Every firm, every economic function is –quite literally, grounded in specific locations”
Motivation             Access to (cheap) semi             skilled / skilled labour             Access to cheap unskilled  ...
“Localised” risks identified                            0%   20 %   40 %   60 %   80 %   100 %   120 %            Corrupti...
“Localised” risks identified                            0%   20 %   40 %   60 %   80 %   100 %   120 %            Corrupti...
Talking pointsž  The   CSR law – Law 40/2007 and its    implicationsž  Attitudes towards CSR among    Norwegian companie...
Responsibility triangleBe a good corporate                       Do as the stakeholderscitizen               Philanthropic...
Law 40 / 2007, article 741.    Limited liability companies in natural resource sectors (or      connected with natural res...
“Sleepwalking” Lawž  No   regulation yet, but…  —  Long tradition of social expectations  —  Tender processes  —  Stan...
“Sleepwalking Law”ž  No   regulation yet  —  Long tradition of social expectations  —  Tender processes  —  Standard O...
“Sleepwalking Law”ž  No   regulation yet  —  Long tradition of social expectations  —  Tender processes  —  Standard O...
“We do CSR projects, and we like to seeour name on the project. This isdocumented in our tenders, and that isvery importan...
“Sleepwalking Law”ž  No   regulation yet  —  Long tradition of social expectations  —  Tender processes  —  Standard O...
“Sleepwalking Law”ž  No   regulation yet  —  Long tradition of social expectations  —  Tender processes  —  Standard O...
“The Mayor constantly refers to ourcompany as the best operator in the area” (CSR adviser Company B)
Blinded by the rightž  The   recognisable Norwegian  —  Looking good  —  Doing good  —  Being good
Blinded by the rightž  The   recognisable Other  —  Looking poor  —  Doing poor  —  Being poor
”CSR? Isn’t that only a result of the naïveNorwegian regime of goodness” (Employee, Company B)
“A presentation of CSR components andother social and environmental issues issuperfluous, because the bigger narrativeabou...
Stakeholder identificationž  Who   are our primary stakeholders  —  Strong state  —  Corruption issues  —  Weak NGOs  ...
Stakeholders identified                                   0%   20 %   40 %   60 %   80 %   100 %                         O...
Stakeholders identified                                   0%   20 %   40 %   60 %   80 %   100 %                         O...
“It is not easy to do business in Indonesianow. Before, Suharto and his inner circleswere the only real stakeholders. Toda...
“Local government bodies are very worriedabout community impact. Unrest is the lastthing they want. There is a strong pres...
“We have very little contact with theIndonesian authorities, and quite franklywe try to avoid it as much as possible” (CEO...
Stakeholders identified                                   0%   20 %   40 %   60 %   80 %   100 %                         O...
“NGOs have a profit seeking motive, andserve as catalysts of generating problems.We do our (CSR) work primarily throughloc...
Stakeholders identified                                   0%   20 %   40 %   60 %   80 %   100 %                         O...
Actual CSR activities       Do your company engage in CSR activities?                                                   Ye...
CSR Activities              0%   10 %   20 %   30 %   40 %   50 %   60 %   70 %   80 %   90 %       Rights promotionLabour...
“It is only the local people and the localcommunities that are the target groups ofour CSR work. Local government is not a...
“Sub district head and local governmentgive positive feedback on projects, andrefers to our company as “best practice” inm...
Stakeholder management                  Company B                   National      Local      BP Migas                  gov...
Stakeholder management                  Company B                 Common                                             inter...
Stakeholder management                  Company B                   National      Local      BP Migas                  gov...
Triangulation Company B   Local Government                     BP Migas              Local Local                    Commun...
Stakeholder management                              Common             Company           interest                C        ...
“ Our workers are by far the mostimportant stakeholder of this company,together with the surroundingcommunities. Our proac...
Stages of Corporate Citizenship               Elementary                     Engaged                    Innovative        ...
“ A culture of “the charitable corporation”definitely seems to exist in Indonesiatoday. If you are rich or influential, yo...
Integrated           Carefully selected                Carefully selected           programs in order to              prog...
Integrated           Carefully selected                  Carefully selected           programs in order to                ...
Responsibility triangle revisited                                              Do as stakeholdersBe profitable            ...
Thank you for your attention!Tarje I. Wanviktarje@hotmail.com+62 (0)812 8659 0724 (Indonesia)+47 97070987 (Norway)
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Norwegian experiences in indonesia

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Presentation for Seminar on Indonesia and CSR, held by the University of Oslo, Institute of human rights, and ETI Norway

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Norwegian experiences in indonesia

  1. 1. Adaptions to Indonesian expectations Tarje I. Wanvik
  2. 2. “Anything can be located anywhere”
  3. 3. “Every firm, every economic function is –quite literally, grounded in specific locations”
  4. 4. Motivation Access to (cheap) semi skilled / skilled labour Access to cheap unskilled labour Access to Indonesian / South East Asian consumer market Access to natural resources Profitable regulatory framework
  5. 5. “Localised” risks identified 0% 20 % 40 % 60 % 80 % 100 % 120 % Corruption Bureaucracy Political instability Economic instability Regulatory issues Safety issuesEnvironmental issuesWorkers rights issues Competition issues Other
  6. 6. “Localised” risks identified 0% 20 % 40 % 60 % 80 % 100 % 120 % Corruption Bureaucracy Political instability Economic instability Regulatory issues Safety issuesEnvironmental issuesWorkers rights issues Competition issues Other
  7. 7. Talking pointsž  The CSR law – Law 40/2007 and its implicationsž  Attitudes towards CSR among Norwegian companies in Indonesiaž  Stakeholder identificationž  Actual Corporate Social Responsibility activitiesž  Concluding remarks
  8. 8. Responsibility triangleBe a good corporate Do as the stakeholderscitizen Philanthropic   desireBe ethical Do as the stakeholders Ethical   expectBe legal Do as the stakeholders Legal   requiresBe profitable Do as the stakeholders Economic   requiresCarroll (2004)
  9. 9. Law 40 / 2007, article 741.  Limited liability companies in natural resource sectors (or connected with natural resources) are obliged to implement Corporate Social and Environmental Responsibility.2.  Corporate Social and Environmental Responsibility, represents a responsibility of a limited liability company that is budgeted for and calculated as an expense of that company,3.  Limited liability companies that do not implement their obligation will incur sanctions in accordance with the provisions of legislative regulation.4.  Further provisions will be laid down in a Government Regulation (Peraturan Pemerintah).
  10. 10. “Sleepwalking” Lawž  No regulation yet, but… —  Long tradition of social expectations —  Tender processes —  Standard Operational Procedures —  Licence to Operate
  11. 11. “Sleepwalking Law”ž  No regulation yet —  Long tradition of social expectations —  Tender processes —  Standard Operational Procedures —  Licence to Operate
  12. 12. “Sleepwalking Law”ž  No regulation yet —  Long tradition of social expectations —  Tender processes —  Standard Operational Procedures —  Licence to Operate
  13. 13. “We do CSR projects, and we like to seeour name on the project. This isdocumented in our tenders, and that isvery important. CSR is part of the tenderselection of the government”(CEO, Company A)
  14. 14. “Sleepwalking Law”ž  No regulation yet —  Long tradition of social expectations —  Tender processes —  Standard Operational Procedures —  Licence to Operate
  15. 15. “Sleepwalking Law”ž  No regulation yet —  Long tradition of social expectations —  Tender processes —  Standard Operational Procedures —  Licence to Operate
  16. 16. “The Mayor constantly refers to ourcompany as the best operator in the area” (CSR adviser Company B)
  17. 17. Blinded by the rightž  The recognisable Norwegian —  Looking good —  Doing good —  Being good
  18. 18. Blinded by the rightž  The recognisable Other —  Looking poor —  Doing poor —  Being poor
  19. 19. ”CSR? Isn’t that only a result of the naïveNorwegian regime of goodness” (Employee, Company B)
  20. 20. “A presentation of CSR components andother social and environmental issues issuperfluous, because the bigger narrativeabout the “Norwegian way of doingthings”, also involves strong social andenvironmental implications” (CEO, Company B)
  21. 21. Stakeholder identificationž  Who are our primary stakeholders —  Strong state —  Corruption issues —  Weak NGOs —  Lack of experience of negative attention
  22. 22. Stakeholders identified 0% 20 % 40 % 60 % 80 % 100 % Owners Workers Shareholders Subsidiaries Under-subsidiaries Indonesian media International media Norwegian media Local NGOs International NGOs Norwegian NGOs Primary Local government stakeholders Regional government All National government stakeholdersNorwegian authorities, including Customers Indonesian consumer market International consumermarket Norwegian consumer market Other
  23. 23. Stakeholders identified 0% 20 % 40 % 60 % 80 % 100 % Owners Workers Shareholders Subsidiaries Under-subsidiaries Indonesian media Government International media Norwegian media Local NGOs International NGOs Norwegian NGOs Primary Local government stakeholders Regional government All National government stakeholdersNorwegian authorities, including Customers Indonesian consumer market International consumermarket Norwegian consumer market Other
  24. 24. “It is not easy to do business in Indonesianow. Before, Suharto and his inner circleswere the only real stakeholders. Today,there are so many more stakeholders, andthey are not easy to please. But you needtheir signature”.(Publish What You Pay Indonesia)
  25. 25. “Local government bodies are very worriedabout community impact. Unrest is the lastthing they want. There is a strong pressurethat we conduct various levels ofsocialisation”(CEO, Company F)
  26. 26. “We have very little contact with theIndonesian authorities, and quite franklywe try to avoid it as much as possible” (CEO, Company H)
  27. 27. Stakeholders identified 0% 20 % 40 % 60 % 80 % 100 % Owners Workers Shareholders Subsidiaries Under-subsidiaries Indonesian media NGOs International media Norwegian media Local NGOs International NGOs Norwegian NGOs Primary Local government stakeholders Regional government All National government stakeholdersNorwegian authorities, including Customers Indonesian consumer market International consumermarket Norwegian consumer market Other
  28. 28. “NGOs have a profit seeking motive, andserve as catalysts of generating problems.We do our (CSR) work primarily throughlocal government”(CEO, Company G)
  29. 29. Stakeholders identified 0% 20 % 40 % 60 % 80 % 100 % Owners Workers Subsidiaries Shareholders Subsidiaries Under-subsidiaries Indonesian media International media Norwegian media Local NGOs International NGOs Norwegian NGOs Primary Local government stakeholders Regional government All National government stakeholdersNorwegian authorities, including Customers Indonesian consumer market International consumermarket Consumer Norwegian consumer market markets Other
  30. 30. Actual CSR activities Do your company engage in CSR activities? Yes No
  31. 31. CSR Activities 0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % Rights promotionLabour union facilitationEnvironmental projects Educational projects Health projects Other social projects Other
  32. 32. “It is only the local people and the localcommunities that are the target groups ofour CSR work. Local government is not atarget”.“Concerning stakeholders, we are lookingfor the ones that are the needy. In ourarea, these are children, local fisher andfarmer communities and small-scalebusiness”(CEO, Company B)
  33. 33. “Sub district head and local governmentgive positive feedback on projects, andrefers to our company as “best practice” inmeeting with both the local communitiesand other stakeholders in the area”(CSR adviser, Company B)
  34. 34. Stakeholder management Company B National Local BP Migas government Government Local Local Local government Government community Local Local community community
  35. 35. Stakeholder management Company B Common interest National Local BP Migas government Government Local Local Local government Government community Local Local community community
  36. 36. Stakeholder management Company B National Local BP Migas government Government Common denominator Local Local Local government Government community Local Local community community
  37. 37. Triangulation Company B Local Government BP Migas Local Local Community community National Government
  38. 38. Stakeholder management Common Company interest C Local Workers community Local community
  39. 39. “ Our workers are by far the mostimportant stakeholder of this company,together with the surroundingcommunities. Our proactive relation to ourworkers and their communities gives usleverage in the re-occurringdemonstrations towards this industrialestate. Protests have made us proactive”(CEO, Company C)
  40. 40. Stages of Corporate Citizenship Elementary Engaged Innovative Integrated Transforming B C A E G H D I F(“The Paradoxes in Communicating Corporate Social Responsibility,” Sandra Waddock and Bradley K. Googins in “The Handbook of Communication and CorporateSocial Responsibiliy” – Øivind Ihnen, Jennifer L. Bartlett and Steve May [eds.], 2011)
  41. 41. “ A culture of “the charitable corporation”definitely seems to exist in Indonesiatoday. If you are rich or influential, you areexpected to give (back) more to the localcommunity than others”(CEO, Company C)
  42. 42. Integrated Carefully selected Carefully selected programs in order to programs in line with contribute in the most core activities in order to efficient way for the manage relevant benefactors stakeholdersPassive Active Self-Altruism interest Randomly selected Randomly selected projects or partners to projects in order to avoid attention, often please close international NGOs. stakeholders Elementary
  43. 43. Integrated Carefully selected Carefully selected programs in order to programs in line with contribute in the most core activities in order to efficient way for the manage relevant benefactors stakeholders BPassive Active Self- AAltruism C interest Randomly selected Randomly selected projects or partners to projects in order to avoid attention, often E please close international NGOs. stakeholders G H I D F Elementary
  44. 44. Responsibility triangle revisited Do as stakeholdersBe profitable Economic   demandBe a good corporate Do as stakeholderscitizen Philanthropic   desire Do as stakeholdersBe ethical Ethical   expect Do as stakeholdersBe legal Legal   requireBased on Carroll (2004)
  45. 45. Thank you for your attention!Tarje I. Wanviktarje@hotmail.com+62 (0)812 8659 0724 (Indonesia)+47 97070987 (Norway)
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