INTRODUCTION

Corporate Social Responsibility in Malaysia

Corporate Social Responsibility (CSR) practices are growing on a
global scale and Malaysia is riding that momentum. The Government is
one of the few in Asia to enact CSR reporting requirements for PLCs. Since
the inception of the Global Reporting Initiative (GRI) in 1999, sixteen
different Malaysian companies published GRI reports by July 2012. There
are more than three different annual award programs in Malaysia to
recognize the CSR contribution of local businesses.
Despite these advancements, the practice of CSR still has room for
growth beyond philanthropy. CSR Asia conducted an analysis of media
reporting and concluded that CSR is still largely seen as philanthropy;
knowledge is superficial and partnerships need greater direction and
monitoring. In addition, the Malaysian Association of Chartered Certified
Accountants

(ACCA),

in

conjunction

with

their

2007

Malaysia

Environmental and Social Reporting Awards revealed multiple reporting

weaknesses, including companies being overly focused on philanthropic
activities.
Similarly, whilst the number of CSR awards continue to grow, very
few address disclosure but focus instead on specific areas such as
community investment projects or environmental impact reduction rather
than a holistic approach that encompasses all areas of sustainability and
disclosure of progress on that approach.

CORPORATE SOCIAL RESPONSIBILITY

What is Corporate Social Responsibility?
Corporate Social Responsibility (CSR) is referred to by various names
such as Sustainability; Corporate Citizenship; Corporate Responsibility;
Environment, Social and Governance and Triple Bottom Line. Despite this,
there

are

common

themes

to

the

definition.

Corporate

Social

Responsibility (CSR) considers; the current and future impact of business

operations, purchasing, and the sale of products and services on; the
environment, employees, local community and society in general.
Corporate Social Responsibility (CSR) is a set of voluntary actions a
business takes over and above compliance with the law. It includes, but is
not limited to corporate governance and philanthropy.
Types of Corporate Social Responsibility
The idea behind Corporate Social Responsibility is that companies
have multiple responsibilities to maintain. These responsibilities can be
arranged in a pyramid, with basic responsibilities closer to the bottom. As
a

business

meets

lower-level

responsibilities

that

obligate

it

to

shareholders and the law, it can move on to the higher level

responsibilities that benefit society.
The first responsibility is economic responsibility. A companys first
responsibility is its economic responsibility that is to say, a company
needs to be primarily concerned with turning a profit. This is for the simple
fact that if a company does not make money, it wont last, employees will
lose jobs and the company wont even be able to think about taking care
of its social responsibilities. Before a company thinks about being a good
corporate citizen, it first needs to make sure that it can be profitable.
2

The second responsibility is legal responsibility. A companys legal

responsibilities are the requirements that are placed on it by the law. Next
to ensuring that company is profitable, ensuring that it obeys all laws is
the most important responsibility, according to the theory of corporate
social responsibility. Legal responsibilities can range from securities
regulations to labor law, environmental law and even criminal law.
The third responsibility is ethical responsibility. Economic and legal
responsibilities are the two big obligations of a company. After a company
has met these basic requirements, a company can concern itself with
ethical responsibilities. Ethical responsibilities are responsibilities that a
company puts on itself because its owners believe its the right thing to
do, not because they have an obligation to do so. Ethical responsibilities
could include being environmentally friendly, paying fair wages or refusing
to do business with oppressive countries, for example.
The fourth responsibility is philanthropic responsibility. If a company
is able to meet all of its other responsibilities, it can begin meeting
philanthropic

responsibilities.

Philanthropic

responsibilities

are

responsibilities that go above and beyond what is simple required or what

the company believes is right. They involve making an effort to benefit
society. For example, by donating services to community organizations,
engaging in projects to aid the environment or donating money to
charitable causes.

Companys Profile

Petroliam Nasional Berhad (PETRONAS) is Malaysias National Oil

Company, and wholly owned by the Government. It was established on 17
August 1974 under the Companies Act 1965. The founder of PETRONAS is
Tengku Razaleigh Hamzah. PETRONAS is ranked amongst the largest
companies in the world with a proven track record in integrated oil and
gas operations. In 2012, Forbes magazine ranked PETRONAS as 68 th
largest company in the world. It has fully owned 103 subsidiaries, 19
partly owned outfits and 57 associated companies.
The business activities include the exploration, development and
production of crude oil and natural gas locally and abroad; the
liquefaction, sale and transportation of Liquefied Natural Gas (LNG); the
4

processing and transmission of natural gas, and the sale of natural gas
products;

the refining

and marketing

of petroleum

products;

the

manufacture and sale of petrochemical products; the trading of crude oil,

natural gas, LNG, petroleum products and petrochemical products; and
shipping and logistics relating to LNG, crude oil and petroleum products.
Committed to ensuring long-term business sustainability, PETRONAS
also strives to responsibly manage natural resources in a way that
contributes holistically to the well-being of the people and nations where
we operate. The vision of PETRONAS is to be a leading oil and gas
multinational of choice. It is a business entity where petroleum is their
core business. Their primary responsibility is to develop and add value to
this national resources. Their objective is to contribute to the well-being of
the people and the nation.

PETRONASs Corporate Social Responsibility Activity

PETRONAS supports community development programmes that
provide the skills and resources to help make a positive and lasting
difference to the lives and prospects of people and communities that they
come in contact with, in places where they operate.
Their

long-term

engagement

programmes,

carried

out

in

partnerships with local communities, industries, government and nongovernmental organisations, are in line with their mission to ensure that
the development of the earths precious natural resources is conducted
responsibly and in a manner that would bring robust ad sustainable
shareholder returns so as to allow them to contribute to the well-being of
people, communities and nations where they operate.
1. Program Bakti Pendidikan PETRONAS
5

The first programme it has organised is Program Bakti Pendidikan

PETRONAS. It was introduced in 2002 in partnership with schools
nationwide,

this

outreach

programmes

targeted

at

providing

underprivileged and academically challenged children in communities

where PETRONAS operates, with a strong academic foundation. In support
of

the

Governments

efforts

to

improve

the

levels

of

academic

achievement in Science, Mathematics and the English language among

students, the focus of this programme is on these core subjects, taught
through academic and non-academic activities conducted weekly by
professional teachers, and once a month, by PETRONAS staff facilitators.
In the year under review, 39 schools participated in this programme.
Over 1,000 academic and fun learning sessions were held in the
respective schools nationwide, benefiting over 3,000 Year 4 to Year 6
pupils. It is to provide students the opportunity to discover their potential
through activities such as role playing, quizzes and mind mapping.
Students are also exposed to skills and character development through
motivational sessions, educational competitions and annual camps
organised by PETRONAS staff volunteers. This programme is made
possible through the participation of over 700 PETRONAS staff facilitators.
There was a 22% increase in the number of students who achieved As in
their examinations compared to the previous year. Some 402 students
under this programme achieved three to five As in the core subjects.

2. National Consumer Campaign

PETRONAS joined the Campaign on 1st January 2009. In partnership
with the Federation of Malaysian Consumers Association (FOMCA),
PETRONAS sponsored the 3K Campaign in support of efforts to educate
and raise consumer awareness about smart and sustainable consumerism.
The campaign is a response to a deteriorating world economic situation

that has brought on a negative impact on the lives of Malaysian

consumers.
In the year under review, over 200 talks and workshops were carried out
reaching over 20,000 Malaysians nationwide, a 33% increase from the
previous year.
3. Kempen Kenali Anak Kita
In partnership with PENGASIH, a non-Governmental organisation
and self-help group affiliated with the World Federation of Therapeutic
Communities that addresses drug, alcohol and other substance abuse,
PETRONAS launched this programme in 2009 to support the Governments
efforts to combat the use and abuse of illegal drugs.
While raising awareness on the dangers of substance abuse, this
programme also equips parents with the knowledge to help prevent
children from substance use and abuse and promote a healthy lifestyle.
Over 5,000 parents attended a series of dialogue sessions, seminars and
workshops conducted in 2010 on the dangers of substance abuse.
An informal survey in 2010 showed that the programme was well
received by more than 86% of those who participated.
4. Sahabat Pendidikan Pencegahan Dadah (PPDa) PETRONAS
While PETRONAS works closely with parents in the Program Kempen
Kenali Anak Kita, the Sahabat PPDa PETRONAS is aimed at raising
awareness among students and teachers about substance use and abuse.
Various initiatives under this programme were organised in collaboration
with Malaysias Ministry of Education. In 2010, Sahabat PPDa PETRONAS
was the Ministrys sole nationwide drug awareness and prevention
programme. The programme has reached out to more than 10,000
students and teachers who are currently playing a role as drug awareness
change agents in their respective schools.

5. Programme of Sentuhan Harapan PETRONAS

It was launched in 2010, this programme involves the distribution of
food aid to selected hardcore poor families through PETRONAS Mesra
store in places where they operate. Sentuhan Harapan (A Touch of Hope)
aims to enable recipient families to overcome poverty through various
programmes to assist them to transform their lives socially and
economically. In 2010, PETRONAS contributed RM572,460 in food aid to
families in 10 states which is Johor, Kedah, Kelantan, Melaka, Pahang,
Perak, Sabah, Sarawak, Selangor and Terengganu.
6. Programme of Sentuhan Kasih PETRONAS
This programme was launched in 2005. The CSR programme aims to
reach to out to the less fortunate during festive seasons throughout the
year as well as to nurture the spirit of giving and volunteerism among
PETRONAS employees and affiliates, providing them with a platform to
engage and interact with members of the communities by contributing
their time, skills and experience.
During Hari Raya, Chinese New Year, Deepavali, Hari Gawai
(Sarawak) and Tadau Kaamatan (Sabah) festivals in the year under
review, PETRONAS hosted a series of gatherings for underprivileged
children from orphanages and shelter homes in and around our areas of
operations, in the spirit of sharing and caring. Between 300 and 500 staff
volunteers provided cash donations and engaged with more than 1,000
children who participated in the programme in 2010. Since its launch, the
programme joined the stable of PETRONAS sustainable signature
corporate social responsibility programmes designed and implemented to
benefit the less fortunate communities wherever it operates as part of its
larger corporate social responsibility commitment.
In addition to the corporate social responsibility programme,
PETRONAS also launched its Deepavali television commercial (TVC) and
webfilm, The Light Within, which revolves around social cohesion, hope
and optimism. The theme of PETRONAS festive storytelling for 2014 was
8

clearly portrayed through the story of an old man who spends the day
with a seven year old boy. The TVC, with its heartfelt messages, aims to
inspire the students and Malaysians at large to find the good in
themselves and ultimately be good to others.
At the same programme, PETRONAS presented a contribution of
RM50,000 to the school to purchase computer equipment for their
Computer Maintenance training syllabus which is a training that teaches
students how to repair and maintain electronic gadgets like computers,
smart phones and tablets.
The Monfort Boys Town has been providing residential care, general
education as well as industrial training skills to orphans and the
underprivileged students for the past 55 years. These significant
contribution made by the school has helped countless students gain
employment and become good citizens.
7. Merdeka Award
The Merdeka Award was founded in 2007 by PETRONAS, ExxonMobil
and Shell as a symbol of the oil and gas industrys contribution to
Malaysias enduring legacy, and to celebrate half-a-century of their growth
and progress as an independent nation. Each year, the Merdeka Award is
presented for outstanding achievements in five categories which is
Education and Community; Environment; Health, Science and Technology;
Outstanding Scholastic Achievement; and Outstanding Contribution to the
People of Malaysia. These categories represent key areas which are critical
to Malaysias continued growth and development. These categories are
also development areas which are supported by the Founding Members
through

their

various

Corporate Social Responsibility initiatives

in

Malaysia. In 2010, four outstanding individuals received the Merdeka

Award from the Patron, the Prime Minister of Malaysia.
8. Imbak Canyon Conservation Area
PETRONAS, in partnership with Yayasan Sabah, has contributed
substantial funds in support of the Imbak Canyon Conservation Area, a
9

region of unexplored and pristine jungle with a potential for rich

biodiversity. This is in line with their commitment to environmental
conservation. Their contribution will be used to set up the Imbak Canyon
Study Centre which will manage the area and conduct various activities
including research, environmental education and outreach programmes.
Imbak Canyon serves as a wildlife corridor linking the Danum Valley and
Maliau Basin, areas which also fall under the purview of Yayasan Sabah.
Imbak Canyon is expected to play a key role in future forest rehabilition,
while at the same time promote greater interest in environmental
education and nature tourism for Sabah and Malaysia in general.

9. Beacon Project
The Biodiversity, Environmental and Conservation (BEACON)
Project

is

signature

Corporate

Social

Responsibility

programme

developed by Malaysia LNG Group of Companies in collaboration with

Sarawak Forestry Corporation Sdn Bhd (Sarawak Forestry).
It was conceptualised in 2012 to conserve the marine life in
Bintulu through proactive measures that protect and improve the
ecosystem they work in. The BEACON Projects multi-prong approach
consists of the BEACON Reef Ball Project and the Conservation, Education,
Promotion and Awareness (CEPA) Programme.
10.

EcoCare

ecoCare programme is a joint programme of PETRONAS Chemicals

Group (PCG) and the Malaysian Nature Society (MNS) that involves the
reforestation and rehabilitation of ecologically sensitive mangrove habitat
along Sungai Kertih. Initiated in 2005, ecoCare is the signature CSR
programme for PCG with an investment of more than RM 10 million
beginning 2005 until 2019.
As of 2013, more than 11000 square metres of the mangrove forest
along Sungai Kertih have been replanted with more than 8,100 mangrove
10

seedlings and out of that, 5500 mangrove trees lives. As at today, the
number of volunteers have grown to 250 and it is seen as an effort to
encourage local community to get involved in mangrove rehabilitation.
11.

Myanmar

In Myanmar, PETRONAS continues to manage their socio-economic

and

humanitarian

projects

under

the

Yetagun

Socio-Economic

Development Programme. The programme focuses mainly on education,

nutrition and primary healthcare, especially for children in primary
schools.
Under this programme, Resource Learning Centres and home-based
Early Childhood Care and Development (ECCD) centres were built to
provide education to support the development of children during their
early years of childhood, giving them the opportunity to grow up healthy
and safe. Through the establishment of 30 learning centres and four home
based ECCD centres, more than 5000 young children have benefited. The
centre also conducts reproductive health awareness programmes to help
local communities improve pre-natal and delivery care, and to prevent
HIV/AIDS.
Recognising also the growing prevalence of unwanted pregnancy
and

sexually

transmitted

diseases

among

youth,

the

adolescent

component was integrated into the programme in August 2006. In 16 of

the villages along the pipeline area, training programmes in sewing,
electrical equipment repair and basic electrical wiring were provided to
further improve the livelihood of the people.
Besides

these

projects,

the

Yetagun

Programme

also

offers

computer training to underprivileged children and youth, equipping them

with skills that are essential for pursuing higher education and securing a
job.

11

To empower women to improve their lives, they also implemented the

Dawn Micro-financing Programme where women are given financial
assistance to run small businesses.
12.

South Sudan

PETRONAS extended support for school refurbishment projects in

Juba, South Sudan. In addition to some restoration work for selected
schools, PETRONAS also supplied the schools with new tables, desks and
chairs for students and teachers. To usher in the new academic year in
South Sudan, PETRONAS also distributed new school bags and stationery
under the Back-To-School programme. More than 1,800 students received
assistance under this project.
In

the

Sudan,

PETRONAS

ongoing

community

programmes

continued to gain momentum in the year under review. The PETRONAS

Mobile Library has reached 56 schools, up from 44 in the previous year
and has spread the joy of reading to 57,000 students, up from 55,000 a
year earlier.

Important of Corporate Social Responsibility

1. CSR as a business strategy.
Corporate Social Responsibility is an important business strategy
because, wherever possible, consumers want to buy products from
companies they trust, suppliers want to form business partnerships with
12

companies they can rely on; employees want to work for companies they
respect; and NGOs, increasingly, want to work together with companies
seeking feasible solutions and innovations in areas of common concern.
2. Increasing Profitability
It is generally held that corporate social responsibility could increase
company profits and thus most large companies are actively engaged in
it. But few executives and managers are aware of the research on this
important subject.
Most executives believe that CSR can improve profits. They understand
that CSR can promote respect for their company in the marketplace which
can result in higher sales, enhance employee loyalty and attract better
personnel

to

sustainability

issues

may

lower

costs

and

improve

efficiencies as well.
3. Increasing society welfare
CSR may also improve the welfare of the society. Now, companies are
concerned about societys welfare. CSR is a businesss concern for
societys welfare. This means that marketing managers are interested in
long-term corporate interests and also societys health. Companies can
look to solve societys problems by creating a product or service to fulfil a
need and they will profit and help the world.
4. Corporate identity and image
Communication is designed to operate not only on the image of the
company, but also to provide public information, to explain and comment
meanings, support cultural patterns and agitate. It can be noted that
corporate social responsibility is one of the most important factors that
influence the corporate identity and image. To create a positive image of
the company need perfect product quality, reliable service, reasonable
price, continuous innovation process and systematic work in favor of
business stakeholders. Effective communication of CSR activities should
provide an understanding and recognition of the value of the company,
which in the final phase has an impact on corporate identity and
subsequently on the corporate image.
13

5. Better employee morale and productivity

Through corporate social responsibility, individuals can realize their
personal values through their business. They feel greater levels of
achievement and are confident that their work is important for their
community and the world. They experience fewer regrets. They feel
excited going to work each day and would never characterize it as tedious
and unrewarding. Corporate social responsibility can be a source of
personal pride, and a way to make work interesting and important.

14

Conclusion
In terms of Corporate Social Responsibility activities, PETRONAS is
doing well, but it focuses more on non-direct activities. In order to become
sustaining corporation, PETRONAS should start practicing real Corporate
Social Responsibility by reducing and stopping environmental damage
caused by its operations and actively seeks renewable and sustainable
energy sources. In order to move into sustaining phase, PETRONAS must
first treat the environment as its definite stakeholder.

15

REFERENCES
1. http://www.petronas.com.my/media-relations/mediareleases/Pages/article/PETRONAS-PARTICIPATES-IN-EARTH-HOUR2010.aspx
2. http://www.petronas.com.my/sustainability/education/schoolsoutreach-programme/Pages/school-outreach-programme/schooladoption-programme.aspx
3. http://www.petronas.com.my/media-relations/mediareleases/Pages/article/PRIME-MINISTER-LAUNCHES-THE-MERDEKAAWARD.aspx
4. http://www.petronas.com.my/sustainability/MOEI/Biodiversity/Pages/I
mbakCanyon.aspx
5. http://www.petronas.com.my/sustainability/MOEI/Biodiversity/Pages/
default.aspx
6. http://imbakcanyon-borneo.com.my/partnership/
7. http://www.petronas.com.my/sustainability/community/globaloutreach-programme/Pages/global-outreachprogramme/myanmar.aspx
8. http://www.kln.gov.my/web/sdn_khartoum/e2011/-/asset_publisher/
ME2g/blog/%E2%80%9Cback-to-school%E2%80%9D-with-petronas?
redirect=%2Fweb%2Fsdn_khartoum%2Fe2011

16

APPENDIX
1. Program Bakti Pendidikan Petronas

17

2. National Consumer Campaign

18

3. Kempen Kenali Anak Kita

4. Sahabat Pendidikan Pencegahan Dadah (PPDa) PETRONAS

19

5. Programme of Sentuhan Harapan PETRONAS

20

6. Programme of Sentuhan Kasih PETRONAS

21

22

7. Imbak Canyon Conservation Area

23

8. South Sudan

24

25