SYSTEM AND INSTRUMENTATION

FOR
PRACTISING EFFECTIVE CSR
By,

FRANCISCUS WELIRANG
Director of PT. Indofood Sukses Makmur, Tbk

Presented at,

3rd IBL Conference on CSR 2010

Wednesday, 29 September 2010 Time 15.20 s/d 16.30 PM
Balai Kartini Exhibition & Convention Center
Jakarta - Indonesia
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DAFTAR ISI
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.

FUNDAMENTAL OF CSR
WHY CSR IS IMPORTANT ?
THE BASIC AND SCOPE OF CSR IN GENERAL
ROOM FOR CSR IMPROVEMENT
COMPARISON OF COMMUNITY DEVELOPMENT APPROACH
THE LEVEL OF CSR IMPLEMENTATION
THE SYSTEM AND INSTRUMENTATION OF CSR
THE BIAS OF CSR IMPLEMENTATION
CEOS CHALLENGES
DEFINE PRIORITY OF CSR IN INDOFOOD
HOGH QUALITY PRODUCTS AT AFFORDABLE PRICES
3 LEVEL CSR INDOFOOD
ORGANIZING THE CSR
BISMA (INDOFOOD SCHOLARSHIP)
INDOFOOD RISET NUGRAHA
FOOTNOTE FOR CSR

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FUNDAMENTAL OF CSR
CR / CORPORATE RESPONSIBILITIES :
COMPLIANCE TO REGULATION
COMMITMENT
LICENCE TO OPERATE

CSR / CORP. SOCIAL RESPONSIBILITIES :

ONLY WHEN PROFIT GENERATED

2
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WHY CSR IS IMPORTANT?

THE OBJECTIVE OF CSR :
SOCIAL ACCEPTANCE
OPERATIONAL SUSTAINABILITY
TO CLOSE THE GAP BETWEEN CORPORATE AND
SURROUNDING COMMUNITY

CSR / CORP. SOCIAL RESPONSIBILITIES :

CORPORATIONS HAVE BETTER INFORMATION
CORPORATIONS HAVE BETTER ACCESS
CORPORATIONS HAVE BETTER NETWORK
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THE BASIC AND SCOPE OF CSR

IN GENERAL
A. BASIC OF CSR :
CR # CSR
CSR # DONATION # PHILANTROPIC # ACTION
CSR NEEDS MORE INVOLVEMENTS OF THE CORPORATIONS
CSR NEEDS MORE INTERACTIONS + JOINT ACTIVITIES
CSR # SHORT TERM, BUT MEDIUM / LONG TERM

B. THE SCOPE OF CSR :

INBOUND CSR : TO ALL MANAGEMENT AND EMPLOYEE
OUTBOUND CSR : TO OUTSIDE THE COMPANY
4
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ROOM FOR CSR IMPROVEMENT

EXISTING

NEXT

1. PURPOSE

PHILANTROPY & SECURITY

STRATEGIC COMMUNITY
INVESTMENT

2. STRATEGY

AD HOC & REACTIVE

STRATEGIC & PROACTIVE

3. STRUCTURE

SEPARATE FROM
BUSINESS

LINKED TO BUSINESS
ACTIVITIES

4. INITIATIVE

PASSIVE

RESPONSIVE TO TARGET
AREA

5. DRIVERS

CHAIRMANS INITIATIVE

PART OF BUSINESS
STRATEGY

6. SUSTANIBILITY

ON OFF

CONTINOUSLY/MID TERM

7. FOCUS

DISASTER, POLITIC
RELATED EVENTS

5 AREAS IN PANCA BAKTI

5
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COMPARISON OF COMMUNITY
DEVELOPMENT APPROACH
DEVELOPMENT
FOR
COMMUNITY

DEVELOPMENT
WITH
COMMUNITY

DEVELOPMENT
OF
COMMUNITY

CORPORATE

CORPORATE & SOCIETY

SOCIETY

OBJECT

SUBJECT / OBJECT

SUBJECT

RESULT ORIENTED

RESULT ORIENTED &

PROCESS DEV.

PROCESS
DEVELOPMENT

SIDE EFFECT

DEPENDENT

DEPENDENT & SELF

RELIANCE

SELF RELIANCE

TIME FRAME

SHORT TERM / AD -HOC

MID TERM (CONTINOUS)

MID & LONG TERM

(SUSTAINABLE)

STATUS
CORPORATE

DONOR

AGENT OF
DEVELOPMENT

CORP. ORIENTED /
INLINE

SOCIETYS NEED &

CORP. AID / GOAL

INITIATOR
STATUS OF SOCIETY

GOAL

PROGRAM

AGENT OF
DEVELOPMENT

SOCIETYS NEED
6

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THE LEVEL OF CSR IMPLEMENTATION

Level 1

Level 2

COMPANYS RESOURCES

:A

THE SOCIETY NEEDS

:B

CSR IMPLEMENTATION

: B (DICTATING)

COMPANYS RESOURCES

:A

THE SOCIETY NEEDS

CSR IMPLEMENTATION

:B
:A+ B
(PARTICIPATORY)

Level 3

COMPANYS RESOURCES

:A

THE SOCIETY NEEDS

:B

CSR IMPLEMENTATION

: B (SUPPORTIVE)
7

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THE SYSTEM &

INSTRUMENTATION OF CSR
THE SYSTEM AND INSTRUMENTATION IS SUBJECT TO
SITUATION & CONDITION
IT DEPENDS ON THE OWNERS VALUES
IT DEPENDS ON THE COMPANYS POLICY
- MANAGEMENT HANDLING
- SOCIETY EXPECTATIONS

HARMONISED!!!

- COMPANIES OBJECTIVES
GUIDELINES CAN BE DEVELOPED
ACCOUNT RECORD
8
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THE BIAS OF CSR IMPLEMENTATION

A. THE CSR COST :
INVESTMENT COST or OPERATIONAL COST or
MARKETING COST

B. EXPATRIATE / CEO CONFLICT :

- THEY ARE CONTRACTED 1 or 2 or 3 YEARS SHORT TERM
- CSR (COST) NOT SHORT TERM
BURDEN TO P/L STATEMENT

C. CSR ACTIVITES GIVES EXTRA BURDEN TO THE DAILY

EMPLOYEES JOB
D. CSR # CR # PR # DONATION
E. NO. SIGNIFICANT APPRECIATION FOR PRACTISING
GOOD CSR, OR NO INCENTIVES
F. PERFORMANCE MEASUREMENT
9
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CEOS CHALLENGES
PROFIT
MARGIN
COST
PRODUCT / SERVICES

MNCs
HEADQUARTER

COUNTRY CEO

GROWTH
SALES
CUSTOMERS
COMPETITORS

COMMITMENT SHORT / MEDIUM TERM

ALLOCATED TIME, FUND& PERSON
CONTINOUS INTERACTIONS
TREAT AS ENTREPREUNEUR
(NOT AS OBJECT)

LIMITED LOCAL
INFORMATION
/ SOURCES

CSR PROGRAM
SECTOR
EDUCATION
HEALTH
FOOD & NUTRIENT
DISASTER
SME (LOCAL
ECONOMIC DEV.)

TIME LIMIT
Expatriate : 1 3 Years
Local CEOS : 5 Years

?
ECONOMIC VALUE

ACTIVITY
COMDEV
SOCIAL
PHILANTROPY
INST.BUILDING
CAPACITY BLDG
PR

ALTHOUGH COUNTRY DIRECTOR CHANGED

THE CSR PROGRAM NEED TO COUNTINUE

SOCIAL VALUE

SHAREHOLDER VALUE
BUSINESS
SUSTAINABILITY
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CSR

SOCIAL ACCEPTANCE
10

DEFINE PRIORITY OF CSR IN

INDOFOOD
(adopted from Prince of Wales Business Leader Forum)

1. BUILDING HUMAN CAPITAL

EDUCATION
HEALTH
2. PROMOTING THE ENVIRONMENT
GREEN PRODUCTION (NON ADDITIVES)
GREEN AREA AND CLIMATE CHANGE ADVOCACY
3. TRANSPARANCIES (GCG)
4. SOCIAL COHESION
THE WAY OF INTERATION
AS THE LICENCE TO OPERATE
5. ECONOMIC EMPOWERING
BASED ON OUR COMPETENCIES / NETWORK / ACCESS /
INFORMATION
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11

HIGH QUALITY PRODUCTS AT AFFORDABLE PRICES

Noodles
Food
Seasonings
Snack
Foods
Nutrition &
Special Foods
Bogasari
Cooking Oils
Margarine &
Shortening
12
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3 LEVEL CSR INDOFOOD

NO
1

LEVEL

LOCATION

CHARACTERISTI
C

CORPORATE

HEAD OFFICE
JAKARTA

- YEARLY THEME
- CROSS DIVISION
- PERCENTAGE
- 70% DONATION
30% REVOLVING

CONTINOUS
E

- LOCALIZED
- 70% DONATION
30% REVOLVING

FREQUENT

BUSINESS
UNIT &
FACTORY

43 LOCATION
IN FACTORY
SURROUNDI
NG

INTERACTIO
N
WITH
LOCAL
CULTURE

FUNDING

IMPORTAN
T

CORPORAT
E

IMPORTAN
T

MARKE
TING
COST

5.GCG

- SURROU
NDING
SOCIETY
- LOCAL
GOV.
- SME
- NGO
- LOCAL
INSTITU
TION

1.ECONOMI

- SME

IMPORTAN
T

MARKE
TING
COST

FREQUENC
Y

PROGRAM

TARGET

1.IRN
2.ENVIRON
MENT &
WASTE

- APPLIED

MARKETING

INDONESIA

1.HRD
2.ENVIRON
MENT
3.SOCIAL
COHESION
4.ECONOMI
C

- PRODUCT
LINKAGE
- 10% REVOLVING
90% PRODUCT AS
WORKING
CAPITAL

PACKAGING

- SME

EMPOWERING

RESEARCH

FREQUENT

C
EMPOWERING

2.SOCIAL
COHESION

13
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ORGANIZING THE CSR

ACTIVITY CENTERS

ACTIVITY
SUSTAINABLE DEVELOPMENT RESEARCH

PLAN & REPORT CONSOLIDATION

COORDINATE & CONSOLIDATE THE PREPARATION, REVIEW & PRESENTATION OF PROJECT PLANS, BUDGET &
REPORTS IN LINE WITH ISMS CSR STRATEGIC BLUEPRINT & PRIORITIES

PROJECT DOCUMENTATION

PRESCRIBE AND ENFORCE STANDARDS FOR PROJECT DOCUMENTATION AND SAFEKEEP PROJECT ARCHIVES

COMMUNICATION LIAISON

PLAN, IMPLEMENT AND EVALUATE A CSR-RELATED COMMUNICATIONS PROGRAM IN CORPORATION WITH

ISMS PR OFFICER

PROJECT INVESTIGATION

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR
PRIORITIES

PROJECT PLANNING

ECONOMIC
IMPROVEMENT
PROJECT MANAGEMENT

AUTOMATION

FIVE PILLARS
FOR
SUSTAINABLE
DEVELOPMENT

SOCIAL COHESION
PROJECT MANAGEMENT

HUMAN RESOURCE
ENHANCEMENT
PROJECT MANAGEMENT

CORPORATE
GOVERNANCE
PROJECT MANAGEMENT

PROJECT EXECUTION & MONITORING

EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF ECONOMIC
IMPROVEMENT PROJECT

PROJECT DISBURSMENT

ACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR ECONOMIC
IMPROVEMENT PROJECT

PROJECT INVESTIGATION

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR
PRIORITIES

PROJECT EXECUTION & MONITORING

EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF SOCIAL
COHESION PROJECTS

PROJECT DISBURSMENT

ACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR SOCIAL COHESION
PROJECTS

PROJECT INVESTIGATION

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR
PRIORITIES

PROJECT EXECUTION & MONITORING

EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF HR
ENHANCEMENT PROJECTS

PROJECT DISBURSMENT

ACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR HR ENHANCEMENT
PROJECTS

PROJECT INVESTIGATION

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR
PRIORITIES

PROJECT EXECUTION & MONITORING

PROJECT DISBURSMENT
PROJECT INVESTIGATION
ENVIRONMENTAL
PROTECTION
PROJECT MANAGEMENT

ORGANIZING DESCRIPTION
BUILD & MAINTAIN DEMOGRAPHIC AND SOCIO-ECONOMIC DATA BASES THAT SUPPORT PROPER PROJECT
IDENTIFICATION & SELECTION

PROJECT EXECUTION & MONITORING

PROJECT DISBURSMENT

EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF CORPORATE
GOVERNANCE PROJECT
ACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR CORPORATE
GOVERNANCE PROJECTS
PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR
PRIORITIES

EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF ENVIRONMENTA
PROTECTION PROJECTS
ACCOUNT FOR THE DISBURSEMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR ENVIRONMENTAL
PROTECTION PROJECTS

14
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BISMA
(INDOFOOD SCHOLARSHIP)
TIME :
Year 2008 until now
STATUS :
Routine & Yearly Budgeted

Graph.:
Total Student and Cost Indofood Scholarship (in thousand dollars)

250

240
Thousand dollar

PARTNER :
UI, ITB, IPB, UGM, UNAND, ITS
and
UNPAD
COST :
USD 240.000,- / year
COVER :
3 years
PROGRAM :
1. Soft Skill (5 x)
Indofood Leadership
Camp
2. Interaction :
Plant Tour to the Factory
and
with management
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200

200

Thousand dollar

150

139

150
Students

Total Student

Students

100
50
0

105

Cost
(in thousand dollar)

Students

50

Thousand dollar

2008

2009

2010

15

INDOFOOD RISET NUGRAHA

LOCATION :
Jakarta
TIME :
Year 1998 until now
STATUS :
Routine & Yearly Budgeted
PARTNER :
IPB, UGM, UNIDA, UNILAM, UNCEN,
UNISRI, UNS, UNDIP etc
COST :
Rp. 1.00.000.000,- / year

Bp. Franciscus Welirang foto bersama dengan

pemenang IRN

PROGRAM :
1. Food Applied Researchs
2. Help the Researchers in food
(Wheat, Corn, Banana, Cassava
Tuber, oil Palm and Sago)
OUTPUT :
Food Applied Research Proposal
500 proposal / year
Menteri Pertanian Prof. Dr. Ir. Bungaran Saragih , M.Ec bersama
para peneliti Terbaik Bogasari Nugraha (1998-2001)
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16

FOOTNOTE FOR CSR

1.

WILLING TO HELP IS GOOD.

BUT MAKING EFFECTIVE ACTIVITIES NEED MORE EFFORTS

2.

GIVING MONEY IS EASIER

BUT, GIVING THE APPROPRIATE ONE AND ACCEPTED BY THE SOCIETY IS
ANOTHER STORY

3.

ONE HAS TO UNDERSTAND THE LOCAL CULTURE,

LOCAL WISDOM AND ITS CHARACTER. EVEN THE INDONESIAN
(WHO RECEIVED OVERSEAS EDUCATION) STILL HAS DIFFICULTY TO BE
INGROUP WITH THE TARGETED SOCIETY

4.

IT IS AN ART TO BE IN IN THAT COMMUNITY

5.

IT NEED CONTINOUS DIRECT INTERACTION EVEN LIVE IN, WITH THEM

TO BE ACCEPTED

6.

THEREFORE, CSR/CD IS NOT SHORT TERM, BUT LONG TERM

7.

THE PROGRAM SHOULD NOT BE GENERALIZED,

EACH PLACE/COMMUNITY HAS THEIR OWN UNIQUES
17

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