[LETTERS] Expanding the cause of CSR overseas

On July 4, I attended a forum on corporate social responsibility (CSR) hosted by the Korean Embassy in Jakarta, Indonesia.

Many Korean businessmen, Indonesian officials and corporate leaders attended the forum, and the most notable accomplishment in the meeting was the signing of a Memorandum of Understanding between Apindo, the Indonesian Employers Association and the Korean Chamber of Commerce to promote the CSR of companies of both countries.

It is the first CSR-related cooperation pact signed by the Korean Chamber of Commerce and the local business leaders group. As Korea and Indonesia are to begin negotiation on the comprehensive Economic Partnership Agreement, which is a free trade agreement between the two countries, it is meaningful that Korean and Indonesian companies made a pledge to cooperate in CSR activities in earnest. In the past, problems associated with the social and environmental responsibilities of Korean companies operating abroad have been raised as Korean companies’ corporate activities become globalized.

Some Korean companies operating in China, Southeast Asia and Central Asia have been criticized for back wages, human rights violations, environmental pollution and irresponsible management. If the free trade agreement boosts the investments by problematic Korean companies, negative impact may spread.

Indonesia is a major member of Asean, the Association of Southeast Asian Nations. It has abundant energy and natural resources and has an enormous consumer market with a population of 240 million. As it is highlighted as one of the emerging economies, investors around the world are competing to penetrate into the market.

However, Indonesia is not likely to become a “land of opportunity” for anyone. This year, the Indonesian government started to implement polices based on economic nationalism and protectionism, including an importer verification system, a regulation on import of agricultural goods and imposing of 20 percent export tax on metal ores.

Having experienced a long colonial rule, Indonesia had suffered resources exploitation and environmental damage by foreign companies. Therefore, it passed a law that set CSR requirements for companies in 2007 for the first time in the world.

More than 1,500 companies are already operating in Indonesia, hiring about 800,000 local workers. I met with the government official in charge of the poverty reduction program, and he advised that Korean companies that are already contributing to the Indonesian economy by hiring local workers would become great and sustainable partners if they support the development goals of Indonesia through more aggressive CSR activities.

To make the cooperative relationship a long-term and continuous one, we need a new economic cooperation model based on mutual growth and prosperity. Government-level economic and trade policies, official development assistance policy, active CSR activities of the companies operating in Indonesia and public and private partnership programs supporting Indonesia’s growth objectives would be the key elements of the new cooperation model.

Since last year, the Ministry of Foreign Affairs and Trade has been promoting the global CSR project to support CSR activities of small and medium-sized businesses operating abroad, and the forum is proof that the project is making progress.

I hope to see more comprehensive and effective economic and trade diplomacy through new attempts transcending conventional operation.

By Nam Young-sook
*A professor at the Graduate School of International Studies of Ewha Womans University