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 PMBalai Kartini Exhibition & Convention Center

Jakarta - Indonesia

SYSTEM AND INSTRUMENTATION FOR

PRACTISING EFFECTIVE CSR

FW/sd/9/2010/sp

1

DAFTAR ISI

FW/sd/9/2010/sp

1. FUNDAMENTAL OF CSR2. WHY CSR IS IMPORTANT ?3. THE BASIC AND SCOPE OF CSR IN GENERAL4. ROOM FOR CSR IMPROVEMENT 5. COMPARISON OF COMMUNITY DEVELOPMENT APPROACH 6. THE LEVEL OF CSR IMPLEMENTATION7. THE SYSTEM AND INSTRUMENTATION OF CSR8. THE BIAS OF CSR IMPLEMENTATION9. CEO’S CHALLENGES10. DEFINE PRIORITY OF CSR IN INDOFOOD11. HOGH QUALITY PRODUCTS AT AFFORDABLE PRICES12. 3 LEVEL CSR INDOFOOD13. ORGANIZING THE CSR14. BISMA (INDOFOOD SCHOLARSHIP)15. INDOFOOD RISET NUGRAHA16. FOOTNOTE FOR CSR

2

FUNDAMENTAL OF CSR

FW/sd/9/2010/sp

CR / CORPORATE RESPONSIBILITIES :

COMPLIANCE TO REGULATION

COMMITMENT

LICENCE TO OPERATE

CSR / CORP. SOCIAL RESPONSIBILITIES :

ONLY WHEN PROFIT GENERATED

3

WHY CSR IS IMPORTANT?

FW/sd/9/2010/sp

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

4

THE BASIC AND SCOPE OF CSR IN GENERAL

FW/sd/9/2010/sp

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

5

ROOM FOR CSR IMPROVEMENT

1. PURPOSE

2. STRATEGY

3. STRUCTURE

4. INITIATIVE

5. DRIVERS

6. SUSTANIBILITY

7. FOCUS

PHILANTROPY & SECURITY

AD HOC & REACTIVE

SEPARATE FROM BUSINESS

PASSIVE

CHAIRMAN’S INITIATIVE

ON – OFF

DISASTER, POLITICRELATED EVENTS

:

:

:

:

:

:

:

STRATEGIC COMMUNITYINVESTMENT

STRATEGIC & PROACTIVE

LINKED TO BUSINESSACTIVITIES

RESPONSIVE TO TARGETAREA

PART OF BUSINESS STRATEGY

CONTINOUSLY/MID TERM

5 AREAS IN PANCA BAKTI

EXISTING NEXT

FW/sd/9/2010/sp

6

FW/sd/9/2010/sp

DEVELOPMENTFOR

COMMUNITY

DEVELOPMENTWITH

COMMUNITY

DEVELOPMENTOF

COMMUNITY

INITIATOR CORPORATE CORPORATE & SOCIETY SOCIETY

STATUS OF SOCIETY OBJECT SUBJECT / OBJECT SUBJECT

GOAL RESULT ORIENTEDRESULT ORIENTED &

PROCESS DEV.PROCESS

DEVELOPMENT

SIDE EFFECT DEPENDENTDEPENDENT & SELF

RELIANCE SELF RELIANCE

TIME FRAME SHORT TERM / AD -HOC MID TERM (CONTINOUS)MID & LONG TERM

(SUSTAINABLE)

STATUS CORPORATE DONOR AGENT OF

DEVELOPMENT

AGENT OF DEVELOPMENT

PROGRAMCORP. ORIENTED /

INLINESOCIETY’S NEED & CORP. AID / GOAL SOCIETY’S NEED

COMPARISON OF COMMUNITY DEVELOPMENT APPROACH

FW/sd/9/2010/sp

7

THE LEVEL OF CSR IMPLEMENTATION

FW/sd/9/2010/sp

Level 1

Level 3

Level 2

COMPANY’S RESOURCES : A

THE SOCIETY NEEDS : B

CSR IMPLEMENTATION : B (DICTATING)

COMPANY’S RESOURCES : A

THE SOCIETY NEEDS : B CSR IMPLEMENTATION : A + B

(PARTICIPATORY)

COMPANY’S RESOURCES : A

THE SOCIETY NEEDS : B

CSR IMPLEMENTATION : B (SUPPORTIVE)

8

THE SYSTEM & INSTRUMENTATION OF CSR

FW/sd/9/2010/sp

THE SYSTEM AND INSTRUMENTATION IS SUBJECT TO

SITUATION & CONDITION

IT DEPENDS ON THE OWNER’S VALUES

IT DEPENDS ON THE COMPANY’S POLICY

- MANAGEMENT HANDLING

- SOCIETY EXPECTATIONS

- COMPANIES OBJECTIVES

GUIDELINES CAN BE DEVELOPED

ACCOUNT RECORD

HARMONISED!!!

9

THE BIAS OF CSR IMPLEMENTATION

FW/sd/9/2010/sp

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 STATEMENTC. CSR ACTIVITES GIVES EXTRA BURDEN TO THE DAILY

EMPLOYEE’S JOBD. CSR # CR # PR # DONATIONE. NO. SIGNIFICANT APPRECIATION FOR PRACTISING

GOOD CSR, OR NO INCENTIVESF. PERFORMANCE MEASUREMENT

COMMITMENT SHORT / MEDIUM TERMALLOCATED TIME, FUND& PERSONCONTINOUS INTERACTIONSTREAT AS ENTREPREUNEUR (NOT AS OBJECT)

MNC’sHEADQUARTER

TIME LIMITExpatriate : 1 – 3 YearsLocal CEO’S : 5 Years

?

BUSINESSSUSTAINABILITY

SHAREHOLDER VALUESOCIAL ACCEPTANCE

CSR

LIMITED LOCALINFORMATION

/ SOURCES

SECTOREDUCATIONHEALTHFOOD & NUTRIENTDISASTERSME (LOCAL ECONOMIC DEV.)

CSR PROGRAM

MARGINCOSTPRODUCT / SERVICES

PROFIT

SALESCUSTOMERSCOMPETITORS

GROWTH

ACTIVITYCOMDEVSOCIAL PHILANTROPYINST.BUILDINGCAPACITY BLDGPR

ALTHOUGH COUNTRY DIRECTOR CHANGEDTHE CSR PROGRAM NEED TO COUNTINUE

ECONOMIC VALUE SOCIAL VALUE

CEO’S CHALLENGES

COUNTRY CEO

10

FW/sd/9/2010/sp

11

DEFINE PRIORITY OF CSR IN INDOFOOD

(adopted from Prince of Wales Business Leader Forum)

FW/sd/9/2010/sp

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

12

Noodles

Food Seasonings

Snack Foods

Nutrition &Special Foods

Bogasari

Cooking Oils

Margarine & Shortening

HIGH QUALITY PRODUCTS AT AFFORDABLE PRICES

FW/sd/9/2010/sp

3 LEVEL CSR INDOFOOD

NO LEVELLOCATION

CHARACTERISTIC

FREQUENCY PROGRAM TARGET

INTERACTION

WITHLOCAL

CULTURE

FUNDING

1 CORPORATE HEAD OFFICE JAKARTA

- YEARLY THEME

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

CONTINOUSE

1.IRN2.ENVIRON MENT & WASTE

- APPLIED RESEARCH-PACKAGING- SME

IMPORTANT

CORPORATE

2 BUSINESS UNIT & FACTORY

43 LOCATIONIN FACTORYSURROUNDING

- LOCALIZED- 70% DONATION 30% REVOLVING

FREQUENT 1.HRD2.ENVIRON MENT3.SOCIAL COHESION4.ECONOMIC EMPOWERING5.GCG

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

IMPORTANT

MARKE TING COST

3 MARKETING INDONESIA - PRODUCT LINKAGE- 10% REVOLVING 90% PRODUCT AS WORKING CAPITAL

FREQUENT 1.ECONOMIC EMPOWERING2.SOCIAL COHESION

- SME IMPORTANT

MARKE TING COST

13

FW/sd/9/2010/sp

14

ORGANIZING THE CSR

PROJECT DISBURSMENT

ENVIRONMENTAL PROTECTION

PROJECT MANAGEMENT

PROJECT EXECUTION & MONITORING

PROJECT INVESTIGATION

PROJECT DISBURSMENT

CORPORATE GOVERNANCE

PROJECT MANAGEMENT

PROJECT EXECUTION & MONITORING

PROJECT INVESTIGATION

PROJECT DISBURSMENT

HUMAN RESOURCEENHANCEMENT

PROJECT MANAGEMENT

PROJECT EXECUTION & MONITORING

PROJECT INVESTIGATION

PROJECT DISBURSMENT

SOCIAL COHESIONPROJECT MANAGEMENT

PROJECT EXECUTION & MONITORING

PROJECT INVESTIGATION

PROJECT DISBURSMENT

ECONOMIC IMPROVEMENT

PROJECT MANAGEMENT

PROJECT EXECUTION & MONITORING

PROJECT INVESTIGATION

PROJECT DOCUMENTATIONPROJECT PLANNING

PLAN & REPORT CONSOLIDATION

SUSTAINABLE DEVELOPMENT RESEARCH

ACCOUNT FOR THE DISBURSEMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR ENVIRONMENTAL PROTECTION PROJECTS

COMMUNICATION LIAISON

FIVE PILLARSFOR

SUSTAINABLEDEVELOPMENT

AUTOMATION

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

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISM’S CSR PRIORITIES

ACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR CORPORATE GOVERNANCE PROJECTS

EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF CORPORATE GOVERNANCE PROJECT

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISM’S CSR PRIORITIES

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

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

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISM’S CSR PRIORITIES

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

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

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISM’S CSR PRIORITIES

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

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

PROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISM’S CSR PRIORITIES

PLAN, IMPLEMENT AND EVALUATE A CSR-RELATED COMMUNICATIONS PROGRAM IN CORPORATION WITHISM’S PR OFFICER

PRESCRIBE AND ENFORCE STANDARDS FOR PROJECT DOCUMENTATION AND SAFEKEEP PROJECT ARCHIVES

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

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

ACTIVITY CENTERS ACTIVITY ORGANIZING DESCRIPTION

FW/sd/9/2010/sp

BISMA(INDOFOOD SCHOLARSHIP)

15FW/sd/9/2010/sp

105

50

139

200

150

240

0

50

100

150

200

250

2008 2009 2010

Total Student

Cost (in thousand dollar)

TIME :Year 2008 until now

STATUS :Routine & Yearly Budgeted

PARTNER :UI, ITB, IPB, UGM, UNAND, ITS andUNPAD

COST :± USD 240.000,- / year

COVER :3 years

PROGRAM :1. Soft Skill (5 x) Indofood Leadership Camp2. Interaction : Plant Tour to the Factory and with management

Thousand dollar

Thousand dollar

Thousand dollar

Students

Students

Students

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

Menteri Pertanian Prof. Dr. Ir. Bungaran Saragih , M.Ec bersama para peneliti Terbaik Bogasari Nugraha (1998-2001)

Bp. Franciscus Welirang foto bersama dengan pemenang IRN

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

PROGRAM :1. Food Applied Researchs2. Help the Researchers in food (Wheat, Corn, Banana, Cassava Tuber, oil Palm and Sago)

OUTPUT : Food Applied Research Proposal ± 500 proposal / year

INDOFOOD RISET NUGRAHA

16FW/sd/9/2010/sp

17

FOOTNOTE FOR CSR1. 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

FW/sd/9/2010/sp

18

FW/sd/9/2010/sp