It has been more than a decade since Indonesia has strictly mandated corporate social responsibility. The 2007 Law on Limited Liability Company regulates the corporate social and environmental responsibility of companies, requiring that companies, mainly state-owned enterprises and those in the energy and extractive industries, must fulfill their CSR obligations.
The 2012 Government Regulation on Corporate Social and Environmental Responsibility and the 2007 Law on Investment further exemplify Indonesia's commitment to prevent or reduce the social and environmental damage caused by corporations.
While many companies, both local and international, have contributed to the community through taxes and CSR programs, the lack of understanding of the benefits of proper CSR programs has deterred some companies from implementing their CSR correctly.
However, in 2017, we saw some improvements in this space. The Indonesian Financial Services Authority (OJK) issued a regulation mandating all financial service institutions, issuers, and publicly listed companies in Indonesia to develop and submit sustainable action plans and submit sustainability reports by 2020. That is one of the ways the government is supporting sustainable economic growth and helping Indonesia meet its commitment to reach the Sustainable Development Goals by 2030.
Just as it felt as though this could be the turning point of how companies in Indonesia can better contribute to the community, the Covid-19 pandemic wreaked havoc.
As the world grapples with the impact of Covid-19 and pressing issues like climate change, environmental degradation and rising inequality, we have now realized that our current social and economic system is too fragile.
Beyond the immediate impact on public health, the Covid-19 pandemic has significant implications on social, economic and psychological aspects of life, especially for the nation's most vulnerable communities. There will be 17.5 million more families falling below the poverty line due to Covid-19. Meanwhile, 25 million people in the informal sector are also at risk of being unemployed, with 8 million people at risk of being terminated from their employment.
As the pandemic brings about layered issues from different sectors, companies need to be flexible and plan their next steps accordingly. Beyond just doing good for the community, there is now a more urgent need to help Indonesia respond to the crisis.
Companies may have already planned or even executed their existing CSR programs, often going through months-long processes of assessments and approvals. But, in times of crisis, it is speed, flexibility, and innovation that will provide the most beneficial solutions to the problems in a community.
To help Indonesia emerge stronger from a crisis, companies can play a critical role by altering and switching their existing CSR programs to better respond to their communities' needs. The ability to swiftly work in crisis mode, provide immediate emergency response, and assist the government in its response program will redefine the longevity and standing of companies in their communities for months and even years to come.
Take the Rorotan Free Health Clinics constructed in collaboration between Thailand's oil and gas company PTTEP and Yayasan Dompet Dhuafa to serve the underprivileged communities of North Jakarta. Since its establishment in 2016, the clinic has helped 473,353 beneficiaries spread across Jakarta, providing preventive, promotive, and curative services to the community.
After the outbreak, PTTEP, through the Rorotan Free Health Clinic, promptly donated masks and PPE for the local community, providing socialization on healthy living and assistance to the most impacted families. Additionally, PTTEP's CSR program has provided benefits beyond immediate Covid-19 response. To support its health services, the health clinic also builds promotive health services through training, education, activism, and health screenings to create a healthy and resilient community.
Similarly, Indonesia's own Pertamina acted fast when the pandemic hit. They distributed 300 ventilators for state-owned hospitals and 300,000 vitamins for medical personnel, tanker crews, gas station operators, and the public. Understanding the critical need to support the country's healthcare system, it renovated Covid-19 referral hospitals. It provided medical facilities and equipment with a total cost of up to Rp 130 billion ($8.8 million).
CSR activities that work for long-term impact allow communities to not only survive the pandemic but also thrive after the epidemic has passed. Partnerships are also necessary to build resilient communities. CSR programs must be in line with government initiatives so that the impact can be more widespread and sustainable.
Both PTTEP and Pertamina supported the government stimulus program for SMEs during the pandemic. PTTEP, in partnership with Dompet Dhuafa, also provided 60 SMEs in North Jakarta with not only capital assistance, but also training, access to fintech tools, and business monitoring to thrive despite the pandemic.
Pertamina has also prepared business capital assistance through the Partnership Program to support Micro, Small, and Medium Enterprises (MSMEs) amid Covid-19 to 1000 SMEs in Riau, North Sumatra, DKI Jakarta, West Java, Banten, East Java, Bali, NTB, and West Kalimantan.
The Covid-19 pandemic has forced us to think differently about how we can do good for our community. This crisis has challenged us to embrace agility, flexibility, and innovation in our programs and shape them in ways that have previously not been planned. Be it this pandemic or the next natural disaster; we must strive to act adaptively and seek ways to come out stronger after the crisis together.
Maria Nindita Radyati is the executive director of the Centre for Entrepreneurship, Change, and Third Sector (CECT-USAKTI), a research center under the postgraduate program at Trisakti University.