CIPE Indonesia Program Coordinator Arian Ardie (Twitter: @aajkt) talks about the burgeoning Indonesian economy, foreign investment opportunities, and how Indonesian companies are coming to terms with what anti-corruption compliance means for them. Ardie also discusses the challenges of meeting cultural norms while being compliant with international business practices, and the inherent “sloppiness” of implementing decentralization and democracy in one of most populous countries in the world.
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“If a company’s goal is to stay in business for a long time, why take the shortcut and pay bribes, which can damage the company in the long term?” asked Sammy Hamzah, president of Indonesian Petroleum Association, at the launch event of CIPE and International Business Links (IBL)’s new Anti-Corruption Compliance guidebook for mid-sized companies in Indonesia’s oil and gas industry.
“When a company commits a corrupt behavior, it takes on average 20 to 30 years to bring back the company’s credibility.”
Corruption is a major problem in Indonesia. According to a Gallup poll, more than 8 in 10 Indonesians say that corruption is widespread throughout the nation’s government and businesses. The oil and gas sector is particularly susceptible to corruption because of the multiple steps in the procurement and licensing processes, as well as the sheer amount of the money involved.
That’s why CIPE and IBL produced the guide. It’s intended to help mid-sized companies looking to become suppliers of local or international oil and gas companies to understand the business case for anti-corruption compliance and instruct them on how to create an internal compliance system.
The votes are in and above are the winners you selected in the 2014 Global Editorial Cartoon Competition!
We received more than 350 entries from 67 countries. The winners are from Syria, El Salvador, and Indonesia. The competition provided a venue for artists from around the world to offer a personal interpretation of challenges faced by many citizens around the world.
This week’s Economic Reform Feature Service articles highlight the final two winning essays from CIPE’s 2011 International Youth Essay Competition. Riska Mirzalina and Ruth Nyambura, the second and third place winners respectively in the Corruption category, discuss how youth in their countries can engage in anti-corruption movements and advocacy to change the status quo.
In Riska Mirzalina’s “The Cost of Corruptions: A Tale from Indonesia” she points out that:
- While Indonesia is a land of abundant resources, corruption prevents the country as a whole from benefiting from them.
- The change from a centralized government to a decentralized government has not had the desired affect and has actually provided more opportunities and alternate paths for people to participate in corruption.
- Entrepreneurs, businesses, and associations must unify in their effort against corruption and bribery. The cost of not doing so is increased poverty, human suffering, and underdevelopment.
In Ruth Nyambura’s “Generation Now,” she talks about how:
- A large percentage of Kenya’s GDP is used to repay foreign aid. Much of the foreign aid is lost or misappropriated due to corruption.
- “Kitu kidogo” is a Kiswahili euphemism for a bribe. Bribes are pervasive in all facets of Kenyan life. As a result many entrepreneurs are choosing to leave the country, which has a negative effect on Kenyan society as a whole.
- The new generation will bear the brunt of corruption. Therefore the youth should refuse any form of corrupt practices including cronyism, nepotism and tribalism. By utilizing technology and adopting social media platforms the youth can fight corruption.
Thank you for everyone who participated in the 2011 competition! We recently closed the 2012 CIPE Youth Essay Competition, and look forward to reading them and announcing the winners in spring of 2013!
To add to the theme of International Women’s Day, here is a woman’s perspective on corporate social responsibility from Yanti Koestoer, Executive Director of Indonesia Business Links. She talks about this important issue in her CIPE Development Institute presentation (free registration required), focusing on the context of developing countries. Ms. Koestoer, who has developed and supervises numerous programs in business ethics, entrepreneurship and youth employment, and responsible natural resources practices, concludes that:
“Corporate social responsibility is important as an element of development because companies need to look after their communities. Companies have to look at that as part of their integrated strategy in doing business.”
In other words, corporate social responsibility (CSR), or corporate citizenship, is a business strategy that produces long-term benefits for both communities and businesses. Given the common misconceptions, it is crucial that the private sector, governments, and the public understand the meaning of corporate citizenship. It is not simply charity. Instead, it also focuses on contributing to the society through other means such as improving local human capital, protecting the environment, and developing the culture of accountability and transparency.
Ms. Koestoer adds that in her experience corporate citizenship should not be forced upon the private sector through legislation – it works better as a voluntary endeavor. Many small-scale enterprises have already been operating in that way for years but do not necessarily call it CSR. Therefore, it is important to keep them engaged in their communities without imposing excessive burdens. As good corporate citizens, all businesses in developing and developed countries alike can thrive responsibly.
You can learn more about CIPE Development Institute here.
Yesterday, I attended a roundtable discussion on the state of the media in Indonesia after Soeharto, held by the Center for International Media Assistance of the National Endowment for Democracy. Some interesting points relating to different types of media:
Print: Janet Steele (George Washington University School of Media and Public Affairs; author of a book on Tempo, an independent magazine during the Soeharto years), praised the relatively free regulatory environment instituted by the post-Soeharto government and noting that the last remaining great obstacle is the civil defamation law and its enforcement. Citing a poorly educated judiciary with little understanding of press freedom, she told one story of how, when a rival print news outlet’s conglomerate owner was logging illegally in a protected area, Tempo Magazine’s front cover story on the subject wrought a defamation law suit upon them. Curiously, the plaintiff was not the conglomerate, but rather the president of the conglomerate himself, who claimed that “a trial should not occur by press.” No one was surprised when Tempo lost the lawsuit.
Radio: Munarsih Sahana is a senior reporter for Radio Republic Indonesia, the government-owned station now converting into public radio. He noted that over 1,200 registered commercial stations now broadcast across different regions of the country; however, registration remains the problem. Indonesia’s uniquely decentralized democratic structure gives frequency allocation powers to regional governments, while licenses are issued federally by the Ministry of Information and Telecommunication.