July/August_Up.Date by BritCham Indonesia

JOURNAL

“Facilitating Trade & Investment Between Indonesia and Britain”

JULY/AUGUST 2013

A CORPORATE, SOCIALLY RESPONSIBLE INDONESIA

Coaching and Accountability page 10

Raising the Bar: Terminating Employees page 20

Infrastructure Sector Update page 26

Doing the Right Thing... page 34

TABLE OF CONTENTS

Journalists Round Table

EVENTS 6 7 8

'It's All About 2014' Journalists Round Table Breakfast Briefing Business Social Gathering GKSC Football Coaching Session with Chelsea's "Here to stay, here to play".

BUSINESS & ECONOMICS

10 Coaching and Accountability contributed by Think8 12 Leverage the Poten al Of LINKEDIN Company Pages For your business contributed by Poonam Sagar 14 Ten things you need to know about interna onal health insurance contributed by UltraCare

BANKING & FINANCE

16 HSBC Indonesia Manufacturing PMI 18 Employee Wellbeing - Can Your Staﬀ (or you) Aﬀord to Re re? contributed by PPI

Business Social Gathering

THIS MONTH'S FEATURES

28 Corporate Social Responsibility Framework in Indonesia - contributed by Britcham Young Profesional 30 Corporate Social Responsibility from the Tax Perspec ve - contributed by Sri Wahyuni 32 Kiss and Run or Long-Term Rela onship: Which CSR Are You? - contributed by Zack Petersen 34 Doing the Right Thing... - contributed by BT Global Services 36 The Roles Educa onal Ins tu ons have to play in Educa ng the public on Corporate Social Responsibility' - contributed by London School of Public Rela ons 37 CSR Stories -London School of Public Rela onship Climate Change Champions Club

37 CSR Stories - Jardine Shipping 38 CSR Stories - Outwardbound Indonesia

LIFESTYLE & HEALTH

39 Lammas Day...? 40 Liver cirrhosis – are you at risk and how to protect yourself? contributed by Raﬄes Hospital 41 100 years of the Chelsea Flower Show... and s ll going strong - Myth

MEMBER'S ANNOUNCEMENTS

42 The Bridge Group 42 Kingspan Renewables Launch Solar Cooling in Indonesia Anglo 43 E had Airways introduces faster connec ons between indonesia and europe and the middle east

*Cover image taken from www.google.com

INDONESIAN BUSINESS NEWS

20 Court Raises the Bar for Termina ng Employees in Indonesia contributed by SSEK 22 CSR in Indonesia – Meandering or Coming to the Point? - contributed by KADIN 24 “The 2nd Congress of Indonesian Diaspora”- contributed by HIPMI

GKSC Football Coaching Session with Chelsea's

Our patron:

Proudly sustained by:

SECTOR GROUP - FFFA

25 Could industry be the saviour of coral reefs? - contributed by Dr Dan Exton

The Execu ve Oﬀce is kindly sponsored by:

Airline partner of the year 2013/2014:

SECTOR GROUP INFRASTRUCTURE

26 Infrastructure UPDATE - contributed by Dr Sco Younger OBE This publica on is not for sale. It is distributed free to members of the Bri sh Chamber of Commerce in Indonesia (BritCham). The ar cles selected for this publica on represent a range of views on significant current issues in Indonesia. The views expressed in this journal cannot be assumed to represent the oﬃcial views of BritCham as a whole nor of its Board of Management and Execu ve Oﬃce. Any errors of fact that occur in the ar cles are the responsibility of the contribu ng author or publisher. The ar cles are not intended as formal advice and should not be relied upon as such.

www.britcham.or.id | 1

FORTHCOMING EVENTS

For further informa on or to make a reserva on, please contact events@britcham.or.id or call DHINI at +62 21 522 9453 For Associate sponsorship, please contact salesmkt@britcham.or.id

SSEK SEMINAR

TUESDAY

Inves ng in Indonesia: Naviga ng BKPM's new investment guidelines.

SEPTEMBER

THURSDAY

BISEA CONFERENCE

OCTOBER

THURSDAY

FRIDAY

PROFESSIONAL WOMEN’S GROUP

SEPTEMBER

OCTOBER

EXECUTIVE MARKETING PANNEL DISCUSSION

TUESDAY

SEPTEMBER

FRIDAY

BISEA CONFERENCE Catherine Eddy, Neilsen Indonesia

BRITCHAM'S REAL ESTATE & CONSTRUCTION GOLF CHALLENGE

OCTOBER

SPECIAL BUSINESS & SOCIAL GATHERING UK ALUMNI

THURSDAY

(Invita on only)

SEPTEMBER

MONDAY

OCTOBER

BISEA COCTAIL RECEPTION

WEDNESDAY

(Invita on only)

OCTOBER

EIBD 2013 Cocktail Recep on

TUESDAY

EIBD 2013 Main Conference

OCTOBER

Bri sh Chamber of Commerce in Singapore (britcham.org.sg)

Bri sh Chamber of Commerce in Thailand (members.bccthai.com) TUESDAY

FRIDAY

Ice break a Living 'TED' ChaiangMai experience

SEPTEMBER

Breakfast Club: Leadership is not Enough Briefing

THURSDAY

SEPTEMBER

THURSDAY

Network Evening

SEPTEMBER

BritCham F1 Sky High Networking Evening

OCTOBER THURSDAY

WEDNESDAY

Boardroom Briefing - Intellectual Property Law

14th Annual Business Awards Gala Dinner

OCTOBER

SEPTEMBER

Bri sh Business Group Vietnam (www.bbgv.org)

SATURDAY

TUESDAY

Networking Drinks Night

SEPTEMBER

Bri sh Chamber of Commerce in Malaysia (www.bmcc.org.my)

JULY/AUGUST 2013

OCTOBER

Great Bri sh Ball

CHAIRMAN'S MESSAGE

Haslam Preeston CHAIRMAN

s we approach the elec on next year, poli cs is taking an increasingly shrill tone. This should not be unexpected, with much the same thing happening in Australia, as Labor and the Coali on compete to take the toughest posi on on asylum seekers. Against an increasing background of jingois c na onalism, it is rather unfortunate that a review of the Nega ve List (DNI) is now taking place. In such a poli cised environment, it is hardly surprising that despite the desire of the new Finance Minister, Pak Cha b Basri, to liberalise the DNI, something which BritCham thoroughly supports, the actual outcome, indicated in closed-door briefings involving BritCham, may instead be further restric ons. As a result, despite the fact that a more liberal DNI would make Indonesia more compe ve in the global compe on for inward investment, it may simply be be er if the DNI review is le to the next government.

Another key issue which BritCham is currently watching closely is discussions over the minimum wage. Following last year’s increase of 40% (roughly double what most businesses had budgeted for), unions are now emboldened and are pushing for an increase of 50% at the end of the year. Whilst the Industry Minister, Pak Hidayat has indicated the government leans towards an increase of 20%, companies would do well to plan for the worst and budget for the higher figure. The Employer’s Associa on, APINDO has been very ac ve and is warning of mass layoﬀs if the government once again gives in to pressure from the unions, though given the current environment and the expedient nature of poli cs, this may be diﬃcult for the government to resist. APINDO’s own recommendations are based on three categories. Firstly, SME’s would make their own arrangements based on workplace negotiations. Secondly, labour intensive industries

would increase wages by the 2013 infla on rate + 5%, while capital intensive industries would increase by infla on + 20%. Labour intensive industries include garments & textiles, footwear, electronics, toys, furniture, food & beverage. Hopefully, a reasonable solu on that benefits workers, whilst not unduly impacting business, can be worked out. But considering the increasing pressure on business, against a background of a deteriorating fiscal and monetary situa on, it is the workers themselves that will lose out if businesses cannot cope with their wage bill. As a final point, there really is never a dull day in Indonesia. Whilst I always enjoy reading the reportage of the South China Morning Post or Financial Times (boredom overcomes me if I attempt The Straits Times), they really cannot beat The Globe and Jakarta Post for the amount of scandal – some mes of astounding propor ons. Tempo magazine o en reads like a work

Wisma Metropolitan I, 15th Floor Jl. Jend. Sudirman Kav. 29-31 Jakarta 12920 – Indonesia PHONE +62 21 522 9453 FAX +62 21 527 9135 EMAIL bisnis@britcham.or.id www.britcham.or.id

of fic on, such is the scale and nature of some of the corrup on, mismanagement and other scandals it reports. Whilst one might wonder (some do so aloud) why this does not provoke open rio ng on the streets, strangely enough it is also one of the reasons I am quite posi ve about Indonesia’s future. The Indonesian people are, on the whole, an extremely tolerant and posi ve group. Comparing the country to other emerging giants, whilst the government may not have the discipline of modern China, neither does it display the chaos of India, nor the corrupt despo sm seen in Russia. We live in a vibrant democracy where corrup on and other scandals are joyfully reported by the media. It not only makes for enjoyable reading, but is vital in assis ng the KPK making corrup on and similar misdeeds socially (and poli cally) unacceptable, which over the long run will result in a cleaner, more eﬃcient business environment.

OFFICERS CHAIRMAN Haslam Preeston VICE CHAIRMAN Maxi Gunawan HONORARY SECRETARY ACTING James Bryson HONORARY TREASURER Daniel Hankinson SECTOR GROUPS CHAIRMAN OF ENERGY & NATURAL RESOURCES SECTOR David Braithwaite MBE CHAIRMAN OF HUMAN RESOURCES David Knowles CHAIRMAN OF INFRASTRUCTURE Sco Younger OBE CHAIRMAN OF FOOD, FORESTRY, FISHERIES & AGRICULTURE Roger Pinder SECTOR COMMITTEES CHAIRMAN OF MEMBERSHIP SECTOR COMMITTEE Aziz Adam Sa ar CHAIRMAN OF SME SECTOR COMMITTEE Cynthia Wihardja CHAIRMAN OF YOUNG PROFESSIONALS GROUP Jay Singgih CHAIRMAN OF

PROFESSIONAL WOMEN COMMITTEE Julie e Williams BOARD MEMBERS Tom Aaker, John Arnold OBE (Former Chairman), James Bryson, David Burke, Rob Daniel, John Galvin, Colin Harvey, Malcolm Llewellyn OBE (Former Chairman), Tonny Pranatadjaja, Harun Reksodiputro, John Slack, Darwin Silalahi, Adrian Short, Julie e Williams, Aziz Adam Sa ar EX OFFICIO Debbie Clarke – Director of UKTI, Keith Davies OBE – Director of Bri sh Council, Heru Dewanto – IABA (CORRESPONDENCE FOR BOARD MEMBERS may be addressed to: info@britcham.or.id) EXECUTIVE OFFICE EXECUTIVE DIRECTOR Chris Wren (chriswren@britcham.or.id) EXECUTIVE ASST Riri (administra on@britcham.or.id) SALES & MARKETING COORDINATOR Shinta Permatasari (salesmkt@britcham.or.id) EVENTS COORDINATOR Dhini Puspitasari (events@britcham.or.id) FINANCE OFFICER Daliana Tiono (finance@britcham.or.id) PUBLICATIONS Robbie Stone (publica ons@britcham.or.id) BUSINESS DEVELOPMENT Hans Mohammad (busdev@britcham.or.id) UK SME Vickie Fox (uksme@britcham.or.id)

www.britcham.or.id | 3

EXECUTIVE UPDATE

Chris Wren EXECUTIVE DIRECTOR

he return to work a er a personal trip to the UK during the Idul Fitri break and the Independence Day celebra ons has the uncanny feel of a return to work a er a lengthy Christmas and New Year’s break. The cogs turn reluctantly, but there is both a fear and knowledge that top-gear needs to be hit, post-haste. I am sure I am not alone, so allow me to begin with a general “Welcome Back” to all our readers. Since last me I put pen to paper…

CHAMBERS’ INITIATIVE As all of you will now be aware, BritCham are signed up to a 5-year transi on to capacity-build to gradually take over UKTI’s market access support and services of Bri sh businesses looking to export and establish. In order to achieve this in physical resource terms, we are expanding our oﬃce space to accommodate five new team members and a 20-person mee ng room that can be divided. Work on this will start on September 15 and should be finished by October 31. VISIT BY DIRECTOR GENERAL OF THE BRITISH CHAMBERS OF COMMERCE In the last issue, I referred to further diversity of our range of services. A key to our success is communicating our capabili es to Bri sh businesses within the UK. With this in mind we welcomed the initiative of the British Chambers of Commerce Director General, John Longworth, who visited us on July 9. John met with Haslam and other Board representa ves, with Vickie Fox who is coordina ng the new project and Lizzy Hawkins, who is new in post as Director of UKTI having replaced Debbie Clarke. John took on board our strong desire for BCC to step up and to act as a communica ons hub between the eight foreign Chambers currently signed up to the ini a ve and the 50+ regional and provincial Chambers they represent in the

UK. As a result, the eight Chambers will be in the UK for a BCC-sponsored conference series of workshops, round-tables and Chamber visits between October 14-18. We regard this as a very posi ve response and fully expect the visit to be highly produc ve at a number of levels. ALUMNI GATHERING – SEPTEMBER 19 Many of you will have a ended previous special Alumni Gatherings hosted by our Ambassador at the ‘Residence’. This is a special gathering to celebrate the career success of Indonesians who have studied in the UK and returned to add value to a range of business and poli cal communi es. As Britain pushes hard to promote the merits of our under and post graduate opportunities, these alumni represent Ambassadors of the British culture and of our educa onal ins tu ons. You may note we have switched dates to accommodate the schedules of very special visitors and the capacity has increased to 220 (max) as a response to the greater demand. We expect around 30 universi es to be represented by alumni. CAUTION: Please be advised that attendance at this event is strictly by invitation, RSVP and personal confirmation. Alumni, members (incl. nominees) and special category sponsors only, are invited to request an invita on: premierevents@britcham.or.id

BRITAIN IN SOUTH EAST ASIA (BISEA) – THE 10TH CONFERENCE, JAKARTA, OCTOBER 9, 10, 11 The agenda for our hos ng of the 10th anniversary of the BISEA Conference con nues to develop. Some sessions are being ‘opened’ to all. As at today, ‘open’ sessions include: An ISO standard for An -Bribery & Corrup on; a discussion of the posi ve but changing consumer trends in Indonesia and pan S.E. Asia; the consumer friendliness of the current visa and passport systems in the context of businesses and tourism as an export. More detailed informa on of dates, mes and confirmed panelists will be forwarded imminently. BRITCHAM’S ‘GIVING KIDS A SPORTING CHANCE’ A big thank you to Chelsea for providing expert coaching sessions for some of our kids to par cipate. The kids were ‘chuﬀed’ by this unique experience. We look forward to more opportuni es a er the establishment of the Chelsea Blue Pitch – a cornerstone of their ‘Here to play, here to stay’ programme. CHRISTMAS PARTY Booking exclusivity for attendees of previous bashes, sustaining and other special sponsors starts from September 1, for two weeks. A er that window closes, it is ‘first come, first reserved.’ This event is always over-subscribed.!

EDITORIAL TEAM The Execu ve Oﬃce: chriswren@britcham.or.id, Robbie Stone. DESIGN, LAYOUT AND PRINTING PT. PHOENIX Communica ons. Jl. Benda Raya No. 98 A-B Cilandak 12560 T:+62-21 781 3212 | F: +62-21 781 2476 | E: crea veservices@phoenix.co.id | www.phoenix.co.id UP.DATE is published by BritCham (Bri sh Chamber of Commerce in Indonesia). This publica on may not, in whole or part, be lent, copied, photocopied, reproduced, translated or

reduced to any electronic medium or machine readable form without the express wri en permission of the publisher.

JULY/AUGUST 2013

OFFICE FACILITIES FOR YOU Full Ofmce & Hotdesk Facilities Introductions to already established UK companies • Temporary ofmce space with ongoing access to Chamber staff • Access to local business networks •

‘HEADSTART’ Indonesian Market Access, Country Information & Intelligence Made Easy.

For all enquiries and a complimentary conference call with an experienced business development adviser contact:

uksme@britcham.or.id

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www.britcham.or.id |5 *Some costs may apply

EV EN TS 'It's All About 2014' Journalists Round Table Breakfast Briefing

Haslam Preeston (Jakarta Land / BritCham Chairman) posing his ques on. John Slack (Jakarta Se abudi Internasional / BritCham Board Member) posing his ques on.

Tuesday, 16 July 2013 | Mandarin Oriental Hotel

Sponsored by:

our of the most respected Journalists in Jakarta came together for BritCham's business community for a discussion and expanded Q & A session of all the topical business issues that will be heavily influenced by poli cal posturing between now and the 2014 elec on. Those issues included; fuels subsidies and the economy, religion, regional autonomy development, labour relations in business and the fight against corrup on.

JUNE/JULY 2013

Guests listening to the panel

Haslam Preeston (Jakarta Land / BritCham Chairman), Karishma Vaswani (BBC), Bhimanto Suwastoyo (The Jakarta Globe), Helen Brown (ABC Australia) and Joe Cochrane (Interna onal Herald Tribune).

Karishma Vaswani (BBC) delivering her thoughts during the briefing

Dougie Douglas (E had), Richard Michael (IIF / BritCham Board Member) and Chris Wren (BritCham Execu ve Director).

Miroslav Dijakovic (Contained Energy Indonesia) with Phoebe Seno (middle) (Asian Tigers), Ben Bland (3rd from right) (Financial Times) and Deepak (far right)

Hans (BritCham), JeďŹ&#x20AC; Wilson (Synergy Downstream Solu ons) and David Metcalf.

Shinta (BritCham), Dougie Douglas (E had), Hani (BritCham), Richard Michael (IIF / BritCham Board Member) and Chris Wren (BritCham Execu ve Director) during the door prize draw.

Rob Stone (BritCham), Tin n Salim (E had) and Andrew Sutedja (far right) (S&P Law OďŹ&#x192;ces)

Business Social Gathering

kindly sponsored by:

Thursday, 25 July 2013

www.britcham.or.id | 7

JULY/AUGUST 2013

GKSC Football Coaching Session with Chelsea's "Here to stay, here to play". BritCham invited 30 children from Mama Sayang, Yayasan Del and Pondok Sruni to a end a morning training session with the on tour Chelsea FC Coaches under their "Here to stay, here to play" Asian Tour. On what was a very warm and clear Jakarta morning, fun, games and lots of football entailed. All Kids took away the importance of Sportsmanship and some rather 'premier league' style celebra ons, as seen prac ced in the photos.

www.britcham.or.id | 9

BUSINESS AND ECONOMICS

Ray Bigger Consults in Singapore and Indonesia. He will be travelling between both countries in 2012 consul ng in his area of exper se. He may be contacted at: ray@think8.net

Coaching and Accountability A key component for acquiring and retaining personnel is eﬀec vely managing the crucial aspects of coaching and accountability.

If you are a manager, how much me have you spent physically coaching your people in the last few months? If the answer is less than 20%-25% of your me then your people could be candidates to leave you, due to a lack of training, development, a en on or recogni on. If you are a team member, how much me has your boss spent coaching you in the last three months?. It should be something in the region of a day a week or thereabouts. If it isn’t reaching those levels, how do you feel about that? Coaching in this context doesn’t’ mean a formal sit down session, although that is always helpful and necessary. It could be just a couple of per nent ques ons about an account, or resolving a diﬃcult situa on with a client or merely asking how the sales pipeline is looking in terms of business on the books etc.

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JULY/AUGUST 2013

A lack of training and development is one major reason why people choose to leave and seek an alterna ve posi on where they feel valued, recognised, rewarded, challenged and they are learning and developing as people. The sad fact is that many managers have had li le or no training in Coaching and thus, avoid the issue hoping it will go away. Today’s newer members of the workforce are a diﬀerent breed. No longer are they a subservient bunch of “do as you are told” people but individuals who feel they are capable to get on with their roles without interference from a micro-manager mentally. Yes, they want the boss around but only when they need him and that is an environment that some managers today are finding it hard to cope with.

Coaching is a two way street. It has at its base the ability to ask and enquire rather than dictate and tell albeit there are those instances where direc on has to be laid out very clearly. A Coaching session is an example of a manager being able to influence his people to achieve higher levels of performance. For example if you are in a goal se ng mee ng for the next quarter or six months, telling a sales person they must/will achieve “this target, that target or the other target” is not likely to get you very far. You may have in your mind what the target/s could be/should be and the skill is asking the right ques ons of the sales person that enables him to discover perspec ve or opinions about his performance.

Coaching operates at four levels: Objec ves • what are the inten ons and purpose of each party to the Coaching

Commitment • is there a desire to improve and/or change? • is time being set aside to try new behaviours? • is their openness to nega ve feedback? Successful Outcome • how will success be measured? • what follow up will be available? Trust • is there a win-win climate? • is direct honest communication possible on all sides? • is there agreement on who will get what informa on? As I am sure you no ced all of the above are ques ons and during the coaching session the types of ques ons you might ask or could be asked may look like these:• How do you feel about your performance? • What is the most significant achievement this year/month/quarter and why? • Which aspect of your work have you excelled at and why? • What aspects of your performance are you not happy with and why? • What would you have done diﬀerently with hindsight? • Where do you think you could improve on the current performance? • What issues would you like my help on? • Where do you see the growth coming from within your department/ territory/account base over the next quarter?

• How many new accounts do you think you could open? • How would you go about doing that? • How could you shorten the decision making process? • How many referrals have you asked for this month? ……they can be adapted to other func ons of course. These are just some of the types of ques ons you need to ask and each answer provides informa on that will likely prompt another ques on. By carefully assembling the informa on and discussing it with the people who work for you, on their behalf you are pain ng a picture of how they can achieve an improved performance. Please note you are asking, not telling. This will help you get the all important buy in from your people as the target will in eﬀect be their crea on not yours and the next step is to get commitment. Se ng targets isn’t always about big percentage increases. Some people set overly ambi ous targets and your role is to lower expecta ons to a realis c level. Good targets should be out of reach but not out of sight hence the need to for people to be stretched. In addi on be mindful that on occasions targets are missed and this is where great coaching kicks in. Any idiot can cri cise and that is not coaching. In those diﬃcult moments people need even more help not simply cri cism. Coaching is about keeping a cool head and developing rapport with your people so they enjoy the sessions. Make public the

successes and give credit to the team. In the tough mes take the flack yourself not point fingers at the team or individuals. In the same breathe as coaching comes accountability and responsibility. You cannot separate the two. I have men oned accountability before and it is worth repea ng it here. Accountability is all about you being responsible and answerable for your actions, or lack of them, as the case maybe. It has to be ins lled in your people as a mark of honour not as a threat. Do you stand up and be counted i.e. own up, when things go wrong or try and shi the blame? Are you as a manager accountable? If you are reading this looking at your boss who avoids being accountable then fire him meaning resign and find a boss that accepts being accountable and responsible because the la er will be the one who understands developing his people is paramount. If bosses are unwilling to be accountable for what they and you do that is a fundamental character flaw. Eradicate any of these phrases if you hear them or thinking of using them yourself:• "I don’t know” • "I don't have me," • "It's not my job," • "Nobody told me," • "It didn’t ma er," • “Not my problem” • “Not my fault” Great Coaches are accountable because they take responsibility and ins ll it in others. They do not hide, ignore or turn away when ac on is required. So how accountable are you as a Coach? • Great coaching builds trust, integrity and respect? • Do you give and ask for feedback? • Listen and ques on. • Don't be afraid to say ‘no’ • Challenge Being a great coach takes practice. It means being accountable and responsible. The payback over me is you earn respect, trust and integrity. You just might keep the people you want to keep because you are developing them and their careers – think about it

www.britcham.or.id | 11

BUSINESS AND ECONOMICS

Poonam Sagar

Cer fied Project Management Professional, Technology and Online Media Consultant at PT Infotech Solu ons (www.infotech.co.id) an interna onal IT firm empowering media broadcasters, content providers and distributors to op mise business processes with integrated, scalable and op mised IT solu ons.

Leverage the Potential Of LINKEDIN Company Pages For your business With over 200 million active members, LinkedIn is the perfect professional social media network for businesses and communi es to promote their products and services, recruit top talent, and share important, interesting, and useful updates with Linkedin Company Pages. LinkedIn celebrated its three-millionth Company Page last month, but many businesses s ll don't understand the value of maintaining one. And here’s why. As a business, you need to be where your current and poten al clients are. As a consultant, thought leader or advisory service business, LinkedIn is where at least some of your clients are. Its sophistication and features makes LinkedIn Company Page a very valuable business tool for branding and sales strategy, to engage with your audience

12 |

JULY/AUGUST 2013

and help control the way your audience perceives you as a company. Linkedin users can then “Follow” your company to stay tuned for updates on addi onal services, statuses, and more. Linkedin will post these updates in the newsfeeds of your followers. Employees too benefit from these pages since they can list your company as their employer on their personal pages. It provides a professional front for your company on a major pla orm and a great place to showcase the people and skill set that make up your company Linkedin Company Pages are free to set up and require very li le technical know-how and you can get started once you have all the following informa on to fill out the profile. • An email address in your personal profile that is linked to your company domain • Your company name (be sure to use exactly the same company name as the

one listed in your personal profile.) • Names of page administrators • Logo • Corporate informa on such as:  A minimum of 250 characters describing your company  Keywords and phrases describing your product/service oﬀerings  Website/Blog RSS feed and Twi er account  Company size/type  Company Website URL Industry, operating status, year founded  Products or services  People who would provide recommenda ons or tes monials When all this informa on is collated, your Linkedin Company Page is just 3 steps away: 1. To get started, go to the “Companies” menu on LinkedIn. From there, select “Add Company”.

2. Enter basic information about your company, its description, number of employees, and industry it operates in. 3. Follow LinkedIn’s wizard for crea ng / comple ng the company profile In addition to showing off the basic informa on you provided, LinkedIn will pull in all data about your company as available on Linkedin, for example, all of your job lis ngs will automa cally show up on your profile, along with links to the profiles of all current employees, former employees, new hires, and recent promo ons. LinkedIn also does analysis of your company and the connec ons that your employees have on the network. For example, it will automa cally calculate your company’s median age, top schools, and other companies that they are wellconnected to. All of this aggregate data about your company gives poten al candidates (as well as anyone else interested in your company) a lot of informa on to dive into and help determine if it might be a good fit for them. And for you, once its setup, it all happens automa cally as you and your employees use LinkedIn, though you can always make edits to your company’s basic profile informa on. Company Page analy cs let businesses track various metrics for each of their posts; impressions, clicks, interac ons, and the number of followers acquired because of said post, and the level of engagement.

To help you create a standout LinkedIn company page, here are some best practices to enable management and engagement eﬀec vely.

instruc onal videos. If you are looking for examples for inspira on and ideas, check out these 3 great Linkedin Company Pages.

Best Prac ces: Managing a business page on LinkedIn • Update your profile image and info o en to keep it current and fresh • Tell your brand story in a compelling biography • Spotlight employees, customers and products • Feature your products and services to catch the eye of your target audience • Follow SEO indexing to ensure maximum brand exposure when searched • Be crea ve

1. Tata Consultancy Services, a global IT services, business solutions and outsourcing organisation with over 350,000 followers on their company LinkedIn page. They make great use of the “Careers” and “Product & Services” sections including videos showcasing the company and opportuni es. Pos ng frequency is 10 mes per day including whitepapers, videos and job opportuni es

Best Prac ces: Ongoing Engagement Tips • As a network for professionals, op mal posts are most o en during oﬃce hours • Keep your updates brief, professional and post once or twice a day • Rotate updates between linked posts, images and engaging comments • Get your employees involved • Ask for engagement (every once and awhile) More resources on how to op mise your Company Page, check out LinkedIn's Company Pages guide. The Resources tab is par cularly helpful and chock-full of

2. INSEAD, one of the world’s leading and largest graduate business schools with campuses in France, Singapore and Abu Dhabi, and academic partnerships with Universi es in the US, Asia and South America. Over 1300 of their employees are on LinkedIn and they have 12,000 followers on their LinkedIn Page. Pos ng frequency is once or twice a week including videos, blogs and webinars. 3. Adobe, an American multinational computer software company, Adobe has almost 160,000 followers on their LinkedIn page and has over 13,000 employees on LinkedIn. They post around 4-5 mes a week and include ar cles, blogs, videos, jobs and events.

With this new set of analyƟcs, you can idenƟfy the updates that drive the greatest engagement, filter engagement trends by type and Ɵme period, get more detailed demographic data about your followers, and see the growth of your follower base and benchmark it against similar brands, says LinkedIn’s Aviad Pinkovezky.

www.britcham.or.id | 13

BUSINESS AND ECONOMICS

Adi Warsono Adi Warsono is Interna onal Health Insurance Division General Manager for the Indonesia UltraCare plan range at PT. Bess Central Insurance. He is responsible for the sales, marke ng and opera on delivery of the UltraCare plan range in Indonesia. He has worked with Interna onal Private Medical Insurer, InterGlobal, which is responsible for the design and administra on of the Indonesia UltraCare plan for over seven years. He previously worked for DCB Bank in Indonesia.

Ten things you need to know about international health insurance Companies conduc ng business in Indonesia employing both expatriates and local staﬀ face the ques on of finding the best way to provide access to medical treatment for their workforce. The Indonesian government is inves ng heavily in healthcare with the aim of providing universal health coverage for the country’s 240 million plus popula on under the Social Security Providers (BPJS) Law1. The new approach is leading to significant new investment in the healthcare system, par cularly in Jakarta, where the government’s restructured hospitals aim to provide a standard of care comparable with that available in Singapore. The investment is undoubtedly necessary as at present World Bank figures suggest that Indonesia has just six hospital beds for every 10,000 people - some four mes below the global average. Everyone accessing the healthcare system in Indonesia has to pay for treatment. The cost of care combined with the rela ve shortage of facili es, at present, means that medical insurance is essential if expatriates and local employees want to be confident in receiving good quality healthcare in reputable hospitals and clinics. Interna onal medical insurance plans have a wide choice of benefits for businesses employing expats and local staff in

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Indonesia. Benefits such as in-pa ent and day-care cover are essen al, others, such as out-pa ent, maternity, dental, wellness or op cal benefits may be less important for some people. Cost is an issue too for employers and plans with a high level of benefits charge far more than those providing the basics. So what are the top ten things employers need to know about worldwide health insurance if they are to make an informed choice about the cover they need for their interna onal staﬀ? 1. In-pa ent and day-care benefits cover the cost of receiving eligible treatment in hospitals or clinics. This includes the cost of treatment following accidents or emergencies, charges for hospital accommodation and any fees for consultants, anaesthe sts and medical prac oners. It also provides cover for nursing care and all drugs, diagnos c tests, x-rays and scans. 2. Medical evacua on and repatria on cover: In a country as large as Indonesia with many remote and isolated areas, medical evacua on cover is considered

essen al. In the event of an emergency, it covers the costs up to the plan limit of transporta on, whether by ambulance, air ambulance, or emergency helicopter to a loca on where appropriate treatment is available. Some insurers even allow medical evacuation where medically necessary, whether the condition is cri cal or not. Following an evacua on, repatria on benefits provide cover for the cost of travel for a pa ent to return to the country where they live. 3. Travelling to another country for treatment: Many expatriates move or travel from country to country for work. Most international health insurance plans give members the flexibility to work and travel within a wide geographic region. This allows members to receive healthcare in any country within that area of cover if needed. In comparison, local health insurance plans restrict holders to receiving treatment in the country in which the plan is based oﬀering far less flexibility to plan holders. Many expats and local employees in Indonesia therefore, choose plans which cover the Asia Pacific region. Unless travel to North

America is likely, you might consider avoiding plans with USA cover as the costs are significantly higher. 4. Family cover is for expatriate workers with dependants. Many expats expect cover to be included for their spouse and/or children - and in reality would be unlikely to be able to perform their du es properly in the event of an accident or illness affec ng a dependant if cover was not in place. Look out for plans which cover the cost to allow a parent to accompany their insured child when they are receiving eligible in-pa ent treatment. It is also worth checking whether all dependants are able to accompany a member if medical evacua on is needed. Some plans restrict this to one person, which would leave families with the impossible decision of deciding whether to leave children behind or not to accompany their spouse in the event of an emergency. 5. Benefit limits: All interna onal medical insurance plans set financial limits on the value of treatment that can be received. These usually combine an overall plan limit with specific limits for certain types of treatment. Medical care can be expensive, par cularly for the treatment of serious conditions such as cancer. Employers o en consider $850,000 (around 7 billion Indonesian Rupiah) as a minimum annual plan limit. Cover of up $3.4 million is available on many plans. 6. Out-pa ent care: Most plans provide some out-pa ent cover for consulta ons with general prac oners, visits to clinics and the cost of prescribed drugs. Lower cost plans may restrict out-pa ent cover to treatment received after a stay in hospital. Higher cost plans will generally offer far higher benefit limits and a range of out-patient benefits. The key for employers is to decide exactly what level of cover is essen al for the wellbeing of their staff and what op onal treatments could reasonably be the employees’ responsibility. It is possible to manage the cost of cover by making sensible choices about the level of cover provided. 7. Wellness: International health insurance plans will frequently include op onal ‘wellness’ benefits. These are

designed to offer rou ne health-checks and screening for things like cancer and heart disease. The idea of wellness benefits is that they have the poten al to catch problems. For employers this may make the difference between a staff member receiving immediate preventa ve treatment instead of being signed-off for a longer period of me. There is however an addi onal cost associated with wellness cover and many employers opt to exclude it. 8. Maternity and dental cover can be regarded as optional benefits to be included at the discre on of the employer as they can add considerably to the total plan cost. In some cases cover may be unnecessary - for example maternity care for male employees. Dental cover for checkups and dental hygiene is o en regarded as optional treatment which can reasonably be met by the employee. It is worth no ng that emergency dental care that requires admission to hospital to restore natural teeth following an accident will usually be covered under the plan’s inpa ent and day-care cover. 9. Security assistance. Indonesia has more than its fair share of natural disasters and extreme weather events. Security assistance gives plan members access to advice about their personal safety and higher value plans may offer services such as emergency security evacua on in the event of civil unrest.

10. Underwri ng terms. Interna onal health insurance plans may be underwri en in a number of diﬀerent ways and employers can decide which option suits their employees best. Moratorium underwriting avoids the need for employees to complete lengthy medical ques onnaires, but excludes any pre-exis ng condi ons from treatment for a moratorium period - o en two years. Full Medical Underwri ng (FMU) allows members to declare their medical history, so that pre-existing conditions can be included or excluded from cover. FMU can provide reassurance to employees with known medical conditions about what conditions are covered by their Interna onal Private Medical Insurance (IPMI) plan. Finally, Medical History Disregarded (MHD) underwri ng is o en available on group schemes for a larger number of employees where the risk can be spread. This covers all employees for pre-existing conditions without a moratorium period. International medical insurance is considered essential for expatriates working in Indonesia. It can also be highly valuable for local employees as it gives them the ability to avoid using overstretched local medical facilities and the ability to travel for treatment if needed. For employers, the key to securing good value cover is to fully understand which benefits and the level of cover they want to oﬀer their workforce.

www.britcham.or.id | 15

BANKING & FINANCE

HSBC Purchasing Managers’ Index™ 2013

HSBC Indonesia Manufacturing PMI™ Manufacturing produc on stagnates as cost infla on hits series record Summary Output in the Indonesian manufacturing sector stagnated in July, ending a fourmonth expansionary sequence. Similarly, total new orders were unchanged, while export business fell for the second consecu ve month. Meanwhile, a sharp increase in fuel costs resulted in the strongest rise in purchasing prices since data collec on started in April 2011. The headline HSBC Purchasing Managers’ Index™ (PMI™) – a seasonally adjusted composite indicator designed to give a single-figure snapshot of operating condi ons in the manufacturing economy – posted 50.7 in July, down slightly from 51.0 in June. Despite falling for the third consecutive month, the latest reading indicated that manufacturing business conditions in Indonesia continued to improve, although marginally. July data highlighted posi ve contribu ons from the employment, suppliers’ delivery mes and stocks of goods purchased subindices. Production and new orders both stagnated in July. Monitored companies repor ng lower output commented on a lack of new work to replace finished projects, while firms signalling higher output generally men oned that demand was maintained. The stagna on in order book volumes followed a 13-month period of growth. Concurrently, new business from abroad decreased for the second successive month in July, amid reports of weaker demand from European clients and tough economic condi ons globally. Despite being moderate, the overall rate of contrac on was faster than that seen one month previously. Input prices rose sharply in July. Furthermore, the rate of cost infla on accelerated to the quickest in the short 28-month series history. Anecdotal evidence suggested that fuel price hikes and increased raw material costs both

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fed through to the latest rise in overall purchase prices. Output charges were then increased further, as firms a empted to pass on higher cost burdens. The rate of charge infla on was sharp, and the second-fastest in the series history. Manufacturers in Indonesia increased their input buying in July, as has been the case since February. That said, the rate of growth was only modest and eased to the weakest in five months. Panel members reporting higher purchasing ac vity men oned that this was intended for inventory building. Correspondingly, stocks of both purchases and finished goods were accumulated, following contrac ons indicated in June. The rates of increase were, however, slight in both cases.

being accumulated at a slight pace.” Key points Output and new order levels both unchanged in July  Export orders contract for second month running Input costs rise at strongest rate in survey history

HSBC Indonesia PMI 50 = no change on previous month

Increasing rate of growth

Increasing rate of contraction

Apr'11

Jul

Oct Jan'12 Apr

Jul

Oct Jan'13 Apr

Jul

Sources: Markit, HSBC

Backlogs of work in the Indonesian manufacturing sector rose in July, amid evidence of unfavourable weather, delayed delivery of raw materials and machinery repairs. Nonetheless, the pace of accumula on was only slight. As a result, firms hired addi onal employees for the fourth successive month. The rate of job creation was slight and little-changed from June. Meanwhile, average lead mes lengthened, with companies commen ng on arrangements with suppliers for later deliveries due to higher fuel costs. Comment Commenting on the Indonesia Manufacturing PMI™ survey, Su Sian Lim, ASEAN Economist at HSBC said:“Manufacturing conditions in July improved only marginally, reflecting increasing external drag as new export orders contracted for a second straight month. Manufacturers' margins were also under pressure, with input prices rising at a record pace on the back of higher hike subsidized fuel prices. It remains to be seen if manufacturing ac vity will pick up to more robust levels in the near-term, with inventories for future produc on

About Markit: Markit is a leading, global financial informa on services company with over 2,800 employees. The company provides independent data, valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational eﬃciency. Its client base includes the most significant ins tu onal par cipants in the financial market place. For more informa on please see www.markit.com About PMIs: Purchasing Managers’ Index™ (PMI™) surveys are now available for 32 countries and also for key regions including the Eurozone. They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and o en unique monthly indicators of economic trends. To learn more go to www. markit.com/economics The intellectual property rights to the HSBC Indonesia Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distribu ng, transmi ng or otherwise of any data appearing is not permi ed without Markit’s prior consent. Markit shall not have any liability, duty or obliga on for or rela ng to the content or informa on (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any ac ons taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequen al damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under license. Markit and the Markit logo are registered trade marks of Markit Group Limited.

www.britcham.or.id | 17

BANKING & FINANCE

Indonesia

Colin Bloodworth

has worked as a financial consultant in Indonesia since 1992. He is Director of PPI Indonesia and can be contacted at colin.bloodworth@ppi-advisory.com or +62 21 3004 8024

PERSONAL FINANCE

EMPLOYEE WELLBEING - CAN YOUR STAFF (OR YOU) AFFORD TO RETIRE? One aspect of CSR is the consideration that should be given to the welfare of employees. This entails ensuring that they enjoy a safe and pleasant working environment and that they receive pay and benefits that allow them to enjoy a decent standard of living. The obliga on does not end there. Should we not also ensure they live comfortably in re rement? We should in theory, but in reality it is not so simple. One day I had a call from recep on to say that a gentleman was asking to see me. When I saw him I immediately recognised him as a driver who had worked for an oil company I was with in Jakarta some 20 years previously. He had traced me to my new company. A er we had exchanged a few pleasantries he soon broke down and told me the sad story of his life since he was pensioned oﬀ. He was now too old to find employment and he and his wife were now des tute with no surviving family to help them. I oﬀered sympathy and a li le money and wished him well. I then checked with my former company and they confirmed he had been visi ng them too. His dilemma must be shared by millions of others in Indonesia and the world over who face old age and deteriora ng health with no state pension and no company or private pension. When the driver worked for the oil company the only ‘pension’

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provided for in the labour laws was a ‘pesangon’ consisting of a lump sum rela ng to the number of years worked. Where employers were concerned a re red employee was now out of sight and out of mind.

to cover the liability of laying staﬀ oﬀ, never mind providing for their re rement. I don’t know how many mes I have read in the press of workers arriving on a Monday morning to find factory gates locked and that the owners had disappeared.

But some progress has been made Today, conditions have improved somewhat for local employees in that larger companies now have some form of pension scheme. However, unless the employee has been a member of the scheme for many years the actual pension is likely to be a small one. Whatever the size of the pension, the cri cal issue then is to what degree, if any, the pension is protected against infla on. If there is no protec on and local infla on is running at say 10% per annum, the purchasing power of the pension will be halved in just seven years. A er another seven years it will be worth less than a quarter and a er another nine years just 10% of its original value.

I was appointed to the committee of a large sports club at the height of the Asian financial crisis in 1997. Due to the decima on of expatriate membership my first task to avoid losses was to dras cally reduce the labour force by way of some early re rements. I found I could not as no provision had been made in to cover the severance payments of staﬀ, many of whom had completed over 20 years’ service.

The dilemma for employers As anyone who has considered buying an annuity will know, the cost of infla onproofing a pension is considerable and that is the case in the US and UK where current interest rates are rock bo om. While big oil companies could absorb this cost it would be beyond the ability of most employers, especially in labour-intensive and highly compe ve industries. The fact is that the burden of the exis ng rights of employees weighs heavily on many employers. Many fail to accrue funds

In another case, a colleague who managed a large factory said that while business was booming he could add another 300 workers but he dare not because it could be difficult and costly to lay them off when there was a downturn. The simple solu on would be to hire contract labour but this is now illegal. It is unfortunate that many laws which are intended to protect and benefit workers have the opposite effect in the long run as they reduce future employment opportuni es. So should governments provide pensions and other benefits? In a perfect world, yes, but in reality it is a dream beyond reach. The UK perhaps was the world leader back in 1948 when its Na onal Health Scheme and State Pension Scheme were the envy of the world, but the world was different then; people

worked un l 65 and died just a few years later. Today, people are living into their eigh es and this puts huge pressures on the working force. In Indonesia people have more family support to compensate but even that is diminishing with urbanisa on. No doubt a few trillion Rupiah could be freed up if the remaining fuel subsidy were removed but there are other priori es such as educa on and infrastructure. Indonesia is not alone with its budget deficits. The US, UK and most of con nental Europe are struggling to make ends meet. Bri sh pensioners who have chosen to live in Indonesia are vic ms of an unusual form of discrimina on in that their state pensions are frozen from the me they leave the UK, even though they have completed their full contribu ons during their working lives. This applies to pensioners in 123 countries, including Australia and Canada, but those living in other countries enjoy annual increments in line with those living in the UK. There is reportedly a lady living in Australia who is today receiving a pension of six pounds a week, the same amount as when she le the UK in the 1970’s. There is an ac on group addressing this and a branch exists in Bali. If you would like to support it, I can provide the contact details. How prepared are Westerners for re rement? According to all reports, very poorly! It has been es mated that 90% of Americans will not be able to re re on savings and social security. According to a Har ord Insurance Study, in 2000 only 1% of Americans would be wealthy by the age of 65 and only 4% ‘well to do’. That leaves 5% s ll working, 36% would be dead and the remaining 54% dead broke! In the UK a report by the Chatham House Think Tank in 2011 stated that more than 15 million households would be unable to maintain their current way of life a er re rement, with many losing half their income a er 65. The re rement crisis in many countries has been caused by the scrapping of goldplated final salary pension schemes and the low value of annuities due to low interest rates. Companies have had no op on but to scrap their ‘defined benefits’ schemes as the funding became a crippling financial burden.

So what is the solu on? Since with the best will in the world neither governments nor employers can provide a level of benefits that would provide people with a decent standard of living in old age, what can be done? Employers may not have the financial means to solve the problem but they can take a proac ve approach by assis ng and educa ng employees so that they can help themselves. Where local employees are concerned they can provide counselling or seminars where the employees can learn the basics of banking, saving and re rement planning. They should be encouraged to match any pension contribu ons paid by the company into plans which ideally will provide income in re rement. If the company can aﬀord it, they should reward loyal staﬀ by assis ng them in the purchase of a property, no ma er how small. Where expatriates are concerned, they too should have access to appropriate financial advice. When they leave their home countries, they generally cease contribu ng to state and company schemes that would have ensured modest pensions on re rement. In most cases they have no choice but few set about replacing those schemes to fill the inevitable gap that will otherwise be created. Bri sh expatriates leaving company or private pensions

behind in the UK would be well-advised to consider transferring them oﬀshore to a QROPS while the facility is s ll available. Most people seriously underes mate how much they will require in re rement. What if you have le it too late to save? There are some measures le such as clearing debt, delaying re rement or working partme, trading down a property for a smaller one and so on. But preven on is always be er than cure. A final sobering comment is that for future re rees there is good news and bad news. The good news is that with improved lifestyles and medical care you are likely to live some 20 years longer than your great-grandfather. The bad news is that those could be years of abject poverty. So to prevent that happening take ac on now and if you are an employer or manager, make it part of your duty to spread the word? And finally what happened to the driver who called on me? He came a few more times until I finally discouraged him. Where he is now, who knows, but he is among millions of others who live from day to day and have li le me to think of the future. This is hopefully where we can help.

www.britcham.or.id ww ww. w.br .br brit ritch ittch ham am.o .o or. r.id i | 199

INDONESIAN BUSINESS NEWS

Ira A. Eddymurthy

Ira is a founding partner of Soewito Suhardiman Eddymurthy Kardono (SSEK), the 2013 Chambers Asia Indonesia Law Firm of the Year. She has been recognised as one of the top corporate, commercial, mergers and acquisi ons, and capital markets lawyers in Indonesia by leading independent legal publica ons.

Douglas G. Smith

Douglas is a foreign adviser at SSEK. He has more than 30 years of experience in Asia, North America, Europe and the Middle East. His main areas of prac ce include corporate law, M&A, private equity, finance, including Shariah-compliant financings, corporate restructurings, joint ventures and other commercial arrangements.

Court Raises the Bar for Terminating Employees in Indonesia In June of last year, the Indonesian Cons tu onal Court issued a decision that may have a far-reaching impact on employers in Indonesia who wish, due to economic circumstances or market condi ons, to downsize or ra onalise their labour force. The knockon eﬀects of that ruling are only now beginning to be appreciated.

Termina ng employees has never been an easy or straigh orward process in Indonesia. The employment law regime – largely governed by Law No. 13 of 2003 on Manpower (the Manpower Law), as amended by Constitutional Court decision No. 012/PUU-I/2003 of October 28, 2004 – is decidedly complex. Labour laws and regula ons change frequently, and while the crea on of a rela vely new Labour Court has improved the repor ng of important decisions, it has also resulted in some inconsistent decisions. The no on of termina on on no ce or pay in lieu of notice does not apply in Indonesia. The US concept of employment at will is similarly unheard of. Even where a valid reason

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exists under the Manpower Law for an employer to terminate, Labour Court approval of each termina on is required in the absence of a so-called Mutual Termination Agreement in writing between the employer and the subject employee. In addi on, the Indonesian Cons tu on enshrines every Indonesian citizen’s basic en tlement to employment. Ar cle 42d of the Constitution specifically acknowledges, along with a number of other basic legal principles, that

Every person shall have the right to work and to receive fair and proper remuneraƟon and treatment in employment.

Causes for termina on The Manpower Law does, however, stipulate permissible causes for termination. These include “ordinary” cause such as breach by an employee of his or her employment contract, company regula on, or collec ve labour agreement, upon due warning, and “serious” cause including the , providing false information to the employer, dangerous or immoral conduct, or similar behaviors. The Manpower Law previously expressly permi ed termina on for such serious cause without a court order. Note that since that provision was struck down by the Cons tu onal Court, employers are well advised to include termina on for serious cause with approval of the Labour Court in their employment documenta on. An employee can also

be dismissed in the event of his or her resigna on, death, or upon the employee reaching re rement age. The Manpower Law also recognises certain economic imperatives. An employer is en tled to dismiss an individual employee in the event of the bankruptcy of the employer or upon a change of status, merger, or consolida on of the employer. A similar en tlement to terminate exists under Article 164(3) of the Manpower Law where a company is closed down for reasons of efficiency (i.e., without two consecu ve years of financial losses) or due to two consecu ve years of financial losses or force majeure. The Ar cle goes on to s pulate higher termina on benefits for termina on for reasons of efficiency without such financial losses. For many years, employers in Indonesia have relied upon Ar cle 164(3) to jus fy downsizing a part of the workforce for reasons of efficiency, whereas Article 164(3) expressly contemplates the closing of the company as the triggering event. There is no other provision of the Manpower Law that expressly permits downsizing the workforce for reasons of efficiency. Cons tu onal Court ruling It was in this context that a group of petitioners who had been dismissed ostensibly on the basis of Ar cle 164(3) went to the Constitutional Court to contest their termina ons as contravening their cons tu onal rights (Case No. 19/ PUU-IX/2011). Importantly, in this case the employer entity closed its plant, terminated all employees, and then reopened the plant. In reviewing the case the Court was obliged to directly weigh the rights of employers under the Manpower Law against the right to work enshrined in the Cons tu on. The Court handed down its decision on June 20, 2012. In addressing the issues, the Court made a number of significant findings. First, it established that the inclusion of the word “efficiency” in Ar cle 164(3) could not, in and of itself, be interpreted as the basis or right for a company to terminate

an employee in Indonesia. The desire of an employer to make labour costs more efficient through the reduction of the workforce is not a proper legal basis for termina on in Indonesia. The Constitutional Court continued in this vein and noted that the termina on of employment of any worker is the very last resort of an employer a er making other efforts to achieve efficiency in the operations of its business. The Court offered a series of very prac cal alterna ves that any employer must consider prior to reducing its staff via termina on. These op ons include (a) reducing wages and benefits of upper-level workers (specifically at the manager and director level); (b) reducing the number of shi s; (c) limi ng or elimina ng over me work; (d) reducing work hours; (e) reducing the number of work days; (f) granting extended temporary leave to workers; (g) not gran ng contract extensions to those contract workers whose contracts have expired; and (h) gran ng early re rement and pensions to those who qualify. The Court concluded this reasoning by resta ng that the goal of achieving efficiency alone

could not form the basis of employee termina ons. Finally, and perhaps more importantly, the Cons tu onal Court addressed the meaning of Article 164(3) directly. In a move to remove any uncertainty or ambiguity in the Ar cle the Court stated that the provisions could only be invoked where the employer company in ques on needed, in fact, to be permanently closed down. Temporary or threatened closure of the employer was not sufficient to allow an employer the termina on rights specified in the Ar cle. In the view of the Court, any contrary interpreta on would be inconsistent with the Cons tu on. Conclusion The Constitutional Court’s ruling in the case is par cularly poignant when considering any acquisition or foreign direct investment where the intent of the investing party is to achieve efficiencies through the investment. It also underscores the need for planning and good counsel before taking steps to reduce the employee complement of any business in Indonesia.

www.britcham.or.id | 21

INDONESIAN BUSINESS NEWS

Patrick Henrikus Tangkau Research Oﬃcer in KADIN Indonesia (supported by SEBAR) Strengthening Business Associa ons for Reform (SEBAR) program SEBAR Advisors' priority mandate is to assist their respec ve business associa ons – AmCham, KADIN Indonesia and APINDO - in promo ng a healthy investment and business climate for domes c and foreign investors in Indonesia. Advisor ac vi es will be focused on assis ng the associa ons analyse key issues and advocate for reforms that will accelerate Indonesia’s growth towards con nual and inclusive economic development. The Advisors will be involved in the associa ons’ ac vi es, including posi on paper research and prepara on; periodical advocacy through outreach or roundtable discussions; Corporate Social Responsibility (CSR) projects; ins tu on’s capacity building, and coopera on building.

CSR in Indonesia – Meandering or Coming to the Point? Indonesia is in flux: economic growth, an upward-moving middle class and changing pa erns of consumerism impact not only businesses but also the environment and the society at large. Many local businesses and interna onal investors feel obliged to prove that they can contribute to overcoming these challenges. But corporate social responsibility (CSR) is far more than an act of goodwill. It represents an investment into staﬀ, local communi es and indirectly also the global community. Furthermore, in Indonesia CSR is standardised and regulated by Government Law No. 40/2007 (refer to Ar cle 74 for Limited Companies/PT). With this regula on the Government of Indonesia (GOI) forces local companies, not only but especially those that related to natural resources, to develop and implement CSR programmes. decisions and activities on society and the environment, through transparent and ethical behaviour that contributes to sustainable development, health and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organisation and practiced in its rela onships.”

Despite the formal ratification of this regulation its implementation still is feeble, for the following reason: there is limited enforcement and supervision by the GOI and par cularly the execu ve. Furthermore, any kind of violation or

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simply non-compliance with the law rarely leads to sanc ons. The international standard ISO 26000 (2010) defines CSR as a “responsibility of an organisa on for the impacts of its

CSR can be seen as a part of general Good Corporate Governance (GCG). It needs to be supported by three pillars that are interconnected with each other: the state and its ins tu ons as the regulator, the corporate world as a market par cipant, and the public as user of products and services. But lack of supervision by the GOI and rela vely weak CSR regula ons undermine the implementation of CSR programmes in Indonesia. Secondly, for many companies, CSR s ll is considered being a promo on and marke ng program rather than a program which is intended to benefit communi es and the environment, as outlined earlier. The Indonesian private sector organisa ons

simultaneously improving local capaci es and economic growth.

have differing approaches for socialising and promo ng the ‘spirit’ of CSR among their member companies. The Indonesian Chamber of Commerce and Industry (KADIN Indonesia) does not rely on a single standard for CSR or even the enforcement of members’ compliance. The Chamber agrees that CSR can help to improve social development and to contribute to the reduc on of poverty. It especially stresses the importance of those CSR programmes having sustainable effects, such as educa on programmes and the support of entrepreneurship. The support of young entrepreneurs and SMEs through CSR programmes became one of the main focuses of KADIN Indonesia and its new Vice Chair for CSR, businesswoman Yani Mo k. Very prac cally, the Chamber engages in raising awareness for CSR programmes among its members and the benefits arising for local business and the related communi es. One simple but effec ve medium is a regular column in the monthly newsle er which promotes best prac ce CSR programmes – implemented by Indonesian frontrunners. Meanwhile, the American Chamber in Indonesia (AmCham Indonesia) strives to ensure that respective businesses act appropriately by engaging local communities and stakeholders, being aware of operational impacts, and maintaining accountability for actions. AmCham also has a CSR commi ee that engages member companies to implement op mal CSR programming. With a strong commitment to conduc ng good business in Indonesia, AmCham and its member companies work to maximize profits while

The Employers Association APINDO supports the government in developing sustainable CSR programmes. APINDO views CSR as a private domain of a company, both in its type of programmes and the stakeholders targeted. Although currently, as an associa on, APINDO is not managing its own CSR funds it has done several eﬀorts in socializing and articulating the value of CSR and the sustainability of related programmes to its members. All that glitter is not gold. CSR programmes sometimes are designed in a less sustainable manner and only promote individual beneficiaries, not the communi es itself. A reason for this o en can be found in internal management: especially in larger companies CSR programmes occasionally lack a consistent framework which creates uncoordinated ac vi es, even among divisions within the same company. Secondly, CSR programmes are some mes programmed without seeking a close partnership with local communities at an early stage. This is o en driven by pure marke ng purposes and profit orienta on, hence a misapplica on of CSR. Only if implemented correctly it will be sustainable and also beneficial for both par es - community and company. With this in mind, some success factors for CSR programmes can be iden fied: First, a grand design for the development of such a programme is needed, one that defines the short and long-term goals for each CSR ac vity and that leverages best prac ces of other CSR programme to minimise ineﬃciency and programme failures. Secondly, a preliminary survey of the socioeconomic poten al of areas targeted for development is needed, aiming for minimising acceptance issues that may occur. This also can support the recruitment of local manpower for CSR ac vi es which in return provides these beneficiaries with enrichment and assistance. This local coopera on also must have a control mechanism such as

working mee ngs with them to broaden their horizons and hence implement new knowledge gained. Following this, a proper evalua on - for instance through ques onnaires - should secure suﬃcient feedback from the community, helping to improve subsequent ac vi es. Thirdly, another success factor can be coopera on with government ins tu ons, state/privately-owned enterprises (SOEs/ POEs), and local NGOs and community leaders to make the programmes more eﬀec ve and con nuous. Lastly, improve socialisation of CSR programmes and maintain a good relationship with the media who will widely spread the CSR programmes to public in order to support the con nuity and sustainability of the programme. Good deeds should be spoken well of. One of the most remarkable CSR success stories has been written by ASTRA. Established established in 1957 the company started its CSR programmes more than 40 years ago. One pillar is ASTRA’s founda on ‘Yayasan Dharma Bak Astra’ (YDBA, est. in 1980). Its primary focus is on the support of small and mediumscale enterprises (MSME) in various competencies including management, production technology, marketing, financing, and informa on technology. YDBA focuses on Income Generating Ac vi es (IGAs) which was a development programme for farmers and MSMEs in planta ons and mining sites of the ASTRA Group. This programme is a collabora on between YDBA and several members of Astra Group, covering the establishment of Micro Finance Institutions (MFIs), establishment of agriculture and fishery demonstration plots, 2-wheeler and 4-wheeler mechanic trainings, promo on of workshop status, rubber breeding and post harvest training, introduc on of 4-wheeled tractors to farmers in the context of farm mechanization. YDBA also developed a Business Development Agency (BDA) to facilitate its supervised MSMEs in obtaining financing from various financial institutions – banks and non banks.

www.britcham.or.id | 23

INDONESIAN BUSINESS NEWS

Jay Singgih

Head of Business Development & Strategic Investments at Bumi Laut Group, Chairman of Department for Europe & US Rela ons at Indonesia Young Entrepreneurs Associa on Jakarta (BPD HIPMI JAYA), Chairman of Young Professionals Group at Bri sh Chamber of Commerce in Indonesia (BritCham Indonesia), Vice Chairman of Permanent Commi ee for Venture Capital & Alterna ve Financing (Banking & Finance Commi ee) at Indonesian Chamber of Commerce & Industry (KADIN Indonesia). Twi er: @JaySinggih E-Mail: Singgih.Jay@googlemail.com

“The 2nd Congress of Indonesian Diaspora” (6). Youth Forum: Unleashing the Power of the Youth of the 21st Century. (7). Working, Doing Business or Studying Abroad? Lessons and Advices from Diaspora. (8). Diaspora Power: Its Relevance for Indonesia. (9). Indonesia’s Global Footprints: Protec on, Service and Welfare for Indonesian Diaspora. (10). Diaspora’s Innova on & its Advantages for Indonesia.

“Today, the new paradigm for the Indonesian Diaspora must recognise that every Indonesian living overseas can be a tremendous social and economic asset to our country and play a pivotal role in shaping its future.” Between 18th-20th August 2013, Jakarta hosted the 2nd Congress of Indonesian Diaspora (CID) which is the largest gathering of Indonesians living overseas, as well as people of Indonesian origin. This year’s theme was “Indonesian Diaspora Returning Home”, a follow-up to the 1st CID which was held last year in Los Angeles, with the theme of “Harmony in Diversity”. The Congress is intended to strengthen es, bonds and rela onships between Indonesians overseas. The Ministry of Foreign Aﬀairs of the Republic of Indonesia (MoFA RI) states that there are over 4.6 million Indonesian na onals residing abroad, and in addi on, foreign nationals of Indonesian origin number in the millions (around 8 to 10 million), residing in countries such as Suriname, South Africa, Madagascar, New Caledonia etc. The Congress also launched the Indonesian Diaspora Networks (IDN) which has currently been established in over 20 countries. This 2nd Congress was also intended to lead several initiatives through its task forces which were established to promote and address key advocacies and policies, cultural heritage and youth aﬀairs, knowledge transfer, philanthropic activities, education, migrant workers,

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aviation, public health services, green economy, science, technology and innova on, immigra on and ci zenship, public-private partnerships (PPPs) and infrastructure investments as well as professional and business es. This Congress also presented a public forum raising various themes, such as: (1). Indonesia as the World’s Emerging Power: Challenges and Opportuni es. (2). Indonesia in 2050: The View of Young Indonesian Diasporas. (3). Business Opportuni es, Investment and Networking: The Role of Diaspora. (4). Democracy: Good Governance and Pluralism. (5). Competing in the Global World: Diaspora’s Role in Globalising Indonesia’s Culture and Language).

The MoFA RI also established a Diaspora Desk within the Ministry to co-host this Congress. This was seen as the governments first concrete step in cemen ng its commitment to this cause, as well as showing that all of the Republic of Indonesia’s Diploma c global Missions fully support this ini a ve. This is where there is a strong network of Indonesian Diaspora is important and where it could promote socio-cultural understandings and increase trade and investment between Indonesia and their countries of residence. The CID aims to inspire the Indonesian Diaspora communities in connecting and uni ng into one big and integrated community, crea ng a tangible force in order to achieve a be er Indonesia. The CID also aims to foster and implement concrete ini a ves to empower Indonesian communities worldwide, and this is essen al to increase the contribu on of Indonesian Diaspora to the na on, as they are really Indonesia’s bridge to the world and the world’s bridge to Indonesia.

SECTOR GROUP - FFFA

Dr Dan Exton Opera on Wallacea Trust dan.exton@opwall.com

Could industry be the saviour of coral reefs? Pick up almost any product, from food and cosmetics to pharmaceuticals and even fire extinguishers, and there is a good chance that the list of ingredients will include one of the three compounds known as hydrocolloids. Carrageenan, otherwise known as E407a, is one, and is produced through the processing of seaweed. Indonesia is now the world’s largest source of farmed seaweed, although only around 23% of produce undergoes value-adding processing in country, with the vast majority exported to the Philippines where a handful of large factories produce valuable carrageenan. The existing dynamics of this industry have made seaweed farmers amongst the lowest earners in communi es already precariously close to the poverty line, while the impressive 12,491 United States patents have so far prevented Indonesia from gaining a foothold in the lucra ve produc on of a product in such high demand. However, in the world of conserva on and fisheries management, a livelihood which is already prac ced, and has the poten al for both growth and increased individual earnings provides something of a holy grail. It was therefore unsurprising that, as part of an 8 year long fisheries management project by the UK-based charity the Opera on Wallacea (Opwall) Trust, seaweed farming was identified

as the most promising option for the development of alterna ve income in the Wakatobi Marine Na onal Park. Using one tonne of dried seaweed shipped to a small laboratory in the UK, the Opwall Trust was able to develop a novel processing method that did not infringe on any existent patents, and most importantly was simple enough to be carried out in a local remote se ng. With the only by-product high quality fertiliser, the pollu ng eﬄuent commonly associated with seaweed processing also being addressed , crea ng a tangible force in order to achieve a be er Indonesia, and replaced with a secondary economic commodity. This provided the unique opportunity of processing seaweed at source, removing a lengthy drying stage believed to decrease the quality of the final product. This would bring with it the benefits of seaweed farmers selling for factory-gate as opposed to farm-gate prices, and provide an important source of fer liser to coral islands with typically nutrient poor soil, thus boos ng alterna ve food produc on with subsequent reduc ons in reliance on fisheries. However, a reduc on in overall fishing pressure is the primary objec ve, and this is achieved through a carefully designed business model whereby a propor on of local fishers surrender their fishing licenses in return for shares in the processing business, but whilst retaining a highly profitable opera on. Earnings for shareholders represents a significant increase on fishing income, whilst those remaining as fishers enjoy an economically valuable license in a closed fishery with

the prospect of increased sustainable catches brought about by the reduc on in eﬀort. Tax benefits to the local economy provide the icing on the cake to s mulate improved access to essen al services.

With the only by-product high quality fer liser, the pollu ng eﬄuent commonly associated with seaweed processing also being addressed , crea ng a tangible force in order to achieve a be er Indonesia, and replaced with a secondary economic commodity The Opwall Trust is currently targe ng three steps to the comple on of this best prac ce model in the Wakatobi Marine National Park. The first of these is to secure purchase agreements with food groups interested in incorpora ng more socially, ecologically and environmentally friendly raw ingredients into their products. The second is to construct a small pilot plant in the Wakatobi as a proof of concept. The ul mate aim, however, is to work with a private investor to construct a fully opera onal plant, with the poten al for future expansion into other areas of Indonesia. The Opwall Trust plans to donate the method to an investor prepared to adhere to the key principles behind the project, and work with them to ensure success, both on a business and a conserva on front.

www.britcham.or.id | 25

SECTOR GROUP - Infrastructure

Dr Sco Younger OBE Dr Sco Younger is currently a partner at Glendale Partners email: busdev@britcham.or.id

Infrastructure UPDATE SIGNS OF ACTIVITY While the overall record of work to be done under the infrastructure por olio remains very large, it is interes ng that a small number of key projects have been ge ng underway and other important, albeit overdue, ones are receiving more a en on. Toll roads

It is a high priority that the trans-Java toll road from west to east coast be completed as soon as possible and thus it is interes ng to note that construc on for the 116 km link between Cikampek and Palimanan started in late June a er six months of final paperwork leading to the release of first stage funding. From Palimanan to Semarang, onwards to Solo and thence to Kertosono to join up with the links in place or under construc on on the way therea er to Surabaya, there is ongoing ac vity towards comple ng and providing con nuous toll road travel between Java’s two main urban centres. Each of the missing links are receiving some form of a en on that will lead to construc on, with expecta ons that some sec ons will be underway by early next year. Perhaps comple on of the JakartaSurabaya route by 2017? However, just considering the urban and industrial growth that is spreading in every direc on from central Jakarta, it is evident that the exis ng and even the immediately planned network of toll roads is unlikely to be enough for the popula on and commercial ac vi es that are forecast for the urban sprawl over the next 10-15 years. A very clear and immediate case in point is the lack of adequate road connec ons that will be shortly required to support the major port expansion at Tanjung Priok. Bali’s first toll road connec ng the airport area to Benoa, the main port, has recently

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been completed and is expected to alleviate some of the conges on in that area as well as encourage development in the Benoa area of the island.

City transit links

As various studies over the past two decades have shown improving the efficiency of moving Greater Jakarta’s large populace is going to require more than just providing be er road access. The opportunity of having a decent road system across the city and surrounds had to be grasped forty years ago and today’s conges on is a result of that not having taken place. Like any modern city that can cater for its road transport properly, Jakarta should today have had twice the land area allocated to roads than it does.

Hence it is encouraging that the new city government has taken posi ve steps to put the stalled MRT and monorail projects back on track. Both projects, which will be able to contribute significantly to moving people in the city, are receiving considerable attention from their principals with the objec ve of having construc on underway by the end of the year. The monorail, in par cular because of its considerable flexibility of movement and rela vely small footprint as well as independence from ground subsidence, should be a starter for further such developments and be included into the planned update of the future integrated transport structure for Greater Jakarta. The plan must of course ensure many well thought through intermodal points of connec vity.

interest in invoking B to B procedures with the private sector looking to form direct rela onships with relevant local governments.

Renewable energy

The airport rail link project has been under considera on for several years and is well overdue. The drama c double digit growth in both domestic and international air travel over the past years has not only put tremendous strain on the carrying capacity of Soekarno-Ha a terminal, now working at 3 mes design capacity, but also on the road connections into the airport. Construc on of the rail link has to be and is seen as a top priority.

Airport expansion Recently the long-awaited new airport at Kuala Namu to service the Medan area has been opened. While the airport is linked by rail to the city, the current road connec on is sub-standard; this is subject to improvement and a toll road between the city and new airport is currently out to tender. Those who travel to Bali will be well aware of the ongoing upgrading taking place at the airport. In the medium to longer term, because of runway restric on, there will be a need to construct a new airport for which plans are well in place, although it will be several years before the new airport, to be located 100 km to the north of Ngurah Rai, will be opera onal. While improvements of necessity are ongoing at Soekarno-Ha a, a short term measure to alleviate the continuing demand in air travel is the reopening of Halim airport, East Jakarta, for specific flights. This is a necesary ac on since it will be several years before planned airports

at Kertaja to the east of West Java, and sponsored by the West Java government, and at Karawang and in Banten would be ready to add to available capacity.

Water In Jakarta the future of the operation for West Jakarta water remains unresolved although the likelihood of the local government having a large say henceforward would now seem likely. What this will mean in terms of service to the public and businesses in the coverage of water supply is s ll under discussion. Whatever emerges the issue of greater bulk water supply to the city also has to be put in place, and plans that have been in the pipeline for some me accelerated, for instance for the Kerian dam/reservoir and pipeline project to the southwest of the city. Decisions aﬀec ng two key government sponsored PPP projects affecting Lampung and for the East Java bulk supply development from the 4,000 l/sec Umbulan spring are expected to be made in the foreseeable future. The Lampung project requires the support of a new financing aid from government, the Viability Gap Fund (VGF), which is an cipated to be available in the fourth quarter this year. This VGF is a Ministry of Finance instrument to assist the development of PPP projects which, without this assistance, are not financially a rac ve to the private sector. However, for other water supply and upgrading projects, there is growing

There remains interest in developing further geothermal projects despite the low level of exploita on to date. Indonesia holds some 40% of the world’s total reserves but only about 7% has so far been exploited, and this signifies considerable underperformance in the sector. There is high risk involved at explora on level, now recognised by government, but poten al developers are not yet sa sfied that the risk-reward ra o being oﬀered jus fies investment. The hydro poten al across the country is also large and again the level of development in this area to date has been low. While not all poten al projects are conveniently located there is still considerable scope for expansion of run-of-river schemes and a few strategic reservoirs. However, the 100MW hydro and water supply/irrigation project at Jatigede in eastern West Java and Indonesia’s first pumped storage project at Cisongkan near Bandung are currently under construc on, with a small number of off-Java run-of-river projects either under construc on or in early stages of development. The solar potential of the country, especially to the east, which enjoys some of the highest sunshine hours in the world, is considerable and its applica on is appropriate for suppor ng many of the smaller communi es in Eastern Indonesia. Over the past few years a number of private funded projects have been built but, while the government recognises the requirement, as elsewhere, for a feed-in tariﬀ that is a rac ve to private sector investment, confirma on of the required legislation is yet pending in order to broaden the use of solar energy.

Final comment

There are encourging signs of movement but overall the level of development remains well below targets to support required economic growth, for example as set out in the government’s MP3EI framework document.

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THIS MONTH'S FEATURES

Andrew Sutedja LL.M in Commercial Law at the University of Sheﬃeld, UK., M.CIArb (Candidate)., Member of Young Professionals Group at the Bri sh Chamber of Commerce in Indonesia, Member of Young Interna onal Arbitra on Group-the London Court of Interna onal Arbitra on., Legal Manager at PT. Coal Networks Resources.

Corporate Social Responsibility Framework in Indonesia society. Furthermore, companies are enforced to be more sensi ve towards their stakeholders amongst others: any party aﬀected by the company’s policies and the policy’s makers.

The current global discourse on corporate social responsibility (CSR) emphasises its cultural universality and benefits. In reality, there are several obstacles to implementing CSR, particularly in many developing countries unlike in North America and many European countries where CSR is well applied. CSR; however, has been discussed and considered for the past decade at least. Earlier, many companies thought that business ethics, in rela on to CSR, are for the legal standards, administra on and compliance purposes only. Now, many companies views have changed. Having considered the importance of CSR and good business ethics, a tudes have switched to that of developing a company that is built on trust from

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Early Age of CSR Implementation in Indonesia For more than 250 years the majority of what is now Indonesia was governed by one of the biggest, most long las ng and least socially responsible of the colonial trading companies. The companies were in their own prototypes of the modern transnational corporation (TNC). The legacy inherited by the colonial regime and the Dutch East India Company (VOC) in Indonesia was a complicated bureaucracy, corrupt, monopolies and commensurate concentra on of wealth and power. Shortly after Indonesia declared its independence, Soeharto introduced the concept of CSR when he was appointed as the Chief of Staﬀ of Diponegoro Division in Semarang. At this me, he was aware of the dreadful harvest and that people were close to starva on. He saw that, with the many sugar factories, the city had substan al stocks sugar. Colonel Soeharto gathered the governor, local leaders and the representa ves from poli cal par es to discuss the seriousness of the situa on. He suggested alterna ves: let the people starve to death or have porridge instead of rice to eat, and drink with less or no sugar. To eat porridge was the consensus reached and they agreed to barter sugar for rice. They then exchanged sugar for medical supplies, army equipment, agricultural tools and fer lisers.

It was at this me that Colonel Soeharto embarked on his idea to build his many founda ons. The basis of the founda ons was to raise capital by imposing levies on goods and services, for instance, radio ownership or electric consump on. One of the earliest was the “Fourth Territory Founda on” established in June 1957. It raised funds to help improve the troops’ living standards and to provide them with addi onal income a er their re rement. The Founda on was aimed to help farmers. Indeed, social welfare, as known in the Western Countries, was almost nonexistent in the country. The scope of the ac vi es of the founda ons expanded into ventures like marke ng, transporta on and small enterprises. Furthermore, in 1958, Soeharto started similar undertakings in Solo. He observed only the posi ve impact of the founda ons and the benefits of such solidarity. Soeharto introduced the concept of CSR personally. However, many companies in that era did not drive themselves to become more involved in CSR ac vi es. In comparison, the condi on is ge ng be er now as many Indonesian companies pursue CSR ac vi es. The fall of Soharto in 1998 highlighted the importance of a companies integrity within the community. They had to be seen as a company that was not just out for proﬃt, but for the community as well. Thus, ethics and good corporate governance, over the subsequent years, jumped up through the gears to where it is now. However, there is s ll a way to go and one cannot expect things to be perfect overnight, especially in a country who's culture is considered one of the most complex to understand.

CSR under Indonesian Law The legal basis of CSR in Indonesia was introduced for the first time under ar cle 74 of the Law No. 40 Year 2007 (“Company Law”). The aim of this provision was to achieve sustainable economic development in order to improve the quality of life and surroundings that eventually gave benefit to the company itself, local community and society. This provision was intended to support harmonious and balanced rela on among companies and socie es. In order to carry such obliga ons, CSR ac vi es should be budgeted and governed as a company’s expense based on the appropriateness and fairness. In addi on to that, the law requires the company to produce CSR ac vi es in its annual report. The Indonesian Government also introduced the Government Regula on No. 47 Year 2012 (“Government Regula on”) as further implementa on on the Company Law. There are at least 3 main purposes of this Government Regula on: a. to increase awareness of companies to implement CSR; b. to fill the legal vacuum in CSR (non liquet); c. to strengthen regulation in CSR, which has been governed in various legisla ons in compliance with the company’s business line. The Government Regula on regulates as follows: a. CSR is prioritised for the natural resources-based companies; b. Company shall implement and conduct CSR in and out of the company itself; c. Company shall implement CSR in accordance with the company’s working plan; d. The CSR ac vi es should be synergised in accordance to the appropriateness and fairness principles; e. The implementa on of CSR ac vi es should be reported in the company’s annual report and presented before the annual shareholders’ mee ng; f. The government introduces tougher law by imposing penalties if the company disregards the law; g. The company that is implemen ng CSR should be awarded by the authority.

Stricter rule on the implementa on of CSR has been regulated under ar cle 15 (b) Law No. 25 Year 2007 on the Investment (“Investment Law”). It governs that investors shall conduct CSR and if they fail to do so, they might receive diﬀerent types of penalties such as: written warning, limitation on company’s activities, suspension of business ac vity and/or investment’s facili es and up to revoca on of business activities. Furthermore, as described under the explana on of Investment Law, foreign investment companies have the responsibility to conduct CSR continuously to create harmonious and balanced rela onships in the society.

CSR Among Its Pros and Cons The cons’ party argues the company is a profit-organisa on and not a person or group of people other chari es. The company pays some amount of tax to the government and therefore, it is an obliga on of the country to improve the public’s welfare. CSR, thus, is not longer required. On the other hand as a company should not be dis nguished from each individual who are involved in it, including: shareholders and employees. Thus, the company should not be driven of financial gain alone, but it shall have sensi vity towards the public’s interest, par cularly in the local communi es. The simple reason is because local community may have all the necessary resources and might be used for the company itself. Undoubtedly, if accompany runs without support from the local community, it may not appear as a rac ve for customers and employees. There are at least 6 benefits for a company in conduc ng CSR ac vi es: a. increases sales and market share; b. strengthens and brand posi oning; c. enhances corporate image and clout; d. increased ability to a ract, mo vate and retain employees; e. decreasing opera ng cost; f. increases appeal to investors and financial analysts. Indeed, a company should have the commitment to develop its local

community and not only seek financial profit. On top of that, implemen ng CSR is a long-term investment for a company because it may boost u lity and reciprocal rela onship among a company and the local community. The company does not only contribute to its shareholders but also its stakeholders as a result of local demands towards nega ve externali es from the social disparity. There are a few things that need to be considered before dra ing a law on the enforcement of CSR. The laws do not state clearly the type of penal es which company receive, moreover, the laws do not regulate any benchmarks on categories of viola ng the laws. Secondly, the provision should also regulate on the possibility of the government and the company in working together on CSR ini a ves. The current laws do not encourage enough and is more enforcing. So, what is the role of the government to make this real? It seems the government escapes its main duty to look after public’s welfare by enforcing the law. Lastly, if the government and company conduct CSR ac vi es simultaneously, it is very important to govern any thorough financing scheme to avoid any allega on on gra fica on. Conclusion It is fair to say that CSR makes a posi ve contribu on to the local community; it is arguable to say that it only makes a diﬀerence to certain companies targeted by consumers or who are already thinking ethically and responsibly. The implementation of CSR in Indonesia is ge ng be er from day to day, although many companies still abandon this concept. However, CSR remains an ideal in Indonesia regardless of its complexity, cultural and poli cal background. The government should be more proactive in implementing laws on CSR. It should understand that the role of government is not only crea ng new laws but to implement those laws consistently. On the other hand, companies should realise how important CSR programmes are for their local community.

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THIS MONTH'S FEATURES

Sri Wahyuni Sujono The Managing Partner of SF Consul ng She is a cer fied Tax A orney, Tax Consultant and holds a Brevet C, also a Chartered Financial Consultant (ChFC) and a qualified lawyer. Besides her role in SF Consul ng, Sri is also ac ve as the Vice Chairman of the Taxa on Commi ee at the Indonesian Chamber of Commerce (KADIN)and the Head of Foreign AďŹ&#x20AC;airs in the Indonesian Tax Consultant Associa on (ITCA). Email: sri.wahyuni@sfconsul ng.co.id

Corporate Social Responsibility from the Tax Perspective

Corporate Social Responsibility (CSR) is a programme conducted by a company as a manifestation of its social responsibility and concern. Law Number 40 of 2007 concerning Limited Liability Companies, Ar cle 74 s pulates that a company that conducts business ac vi es in the field of and/or related to natural resources must practice corporate social responsibility (CSR). This means that every company whose main business activity is managing, utilising, and having an impact on natural resources must conduct social and environmental ac vi es. This social and environmental responsibility is a corporate obliga on that is budgeted and calculated as a company expense, whose implementa on should be based on fairness and suitability. A company that does not carry out this obliga on will be subject to penal es in accordance with the laws and regula ons.

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In prac ce, CSR is implemented in diďŹ&#x20AC;erent ways. This depends on the internal policy of each company that wants to make a contribution or minimise the negative impacts that it causes on the environment and the surrounding community. Corporate Social Responsibility in the Tax Perspec ve Costs arising from CSR activities are recognised in the commercial financial statement. But from the fiscal point of view, the company needs to be concerned about whether the costs related to the CSR ac vi es can be treated as expenses or not. Referring to Income Tax Law Number 36 of 2008, not all CSR ac vi es can be treated as expenses. Several types of CSR ac vi es that can be deducted as expenses are specified in ar cle 6 paragraph 1 le ers (g), (i), (j), (k), (l), and (m) of the Income

Tax Law : g. scholarships, apprenticeships and training expenses; i. dona on for na onal disaster which is s pulated by a Government Regula on; j. dona on for research and development conducted in Indonesia which is s pulated by a Government Regula on; k. costs of social infrastructure development which is s pulated by a Government Regula on; l. donation in the form of education facilities which is stipulated by a Government Regula on; and m. donation for sport enhancement which is s pulated by a Government Regula on. CSR ac vi es in the form of scholarships, apprenticeships, and training which are provided by the company to its employees based on the above regula on scan be treated as expenses. In addi on,

scholarships given to students or other par es that have no rela onship with the company can also be treated as expenses. This is in line with the Elucida on of ar cle 6 le er g of the Income Tax Law Number 36 of 2008 :

"Expenditures on scholarships, apprenƟceships, and training for the purpose of enhancing the quality of human resources may be expensed, taking into consideraƟon the fairness, included in the scholarships that can be deducted as expense are scholarships for students and other parƟes.” Unlike scholarships, apprenticeships, and training, which are regulated in the Income Tax Law, dona ons are regulated in Government Regula on Number 93 of 2010. This regula on s pulates the types of dona ons that can be expensed by the company : 1. Dona on given to disaster vic ms in the context of mi ga on of a na onal disaster. This donation should be submi ed directly through the disaster management agency or submitted indirectly through an ins tu on that has obtained permission from the government to raise funds for disaster relief; 2. Dona on for research and development. This donation is only allowed for research and development conducted in Indonesia and be submi ed through a research and development ins tu on; 3. Dona on in the form of educa onal facili es which is submi ed through an educa onal ins tu on; 4. Donation to foster sports which is given to develop and coordinate branch organisations/ types of high-achievement sports which is submi ed through an authoried sports development ins tu on; and

5. Social infrastructure development costs that are incurred for the purpose of construc ng facili es and infrastructure for public and non-profit interests. The above dona ons, which are provided in the form of either cash or goods, are allowed to be deducted from the company’s income. The excep on is dona ons for social infrastructure development, which can be deducted from the company’s income only if provided in the form of facili es and infrastructure. In order to be granted deduc bility for those expenses, the company must meet several requirements based on article 2, ar cle 3, and ar cle 4 of Government Regula on Number 93 of 2010, as follows; 1. The company has fiscal net income stated in its Corporate Income Tax Return for the previous year, or in other words the company was not in a fiscal loss posi on in the previous fiscal year.

2. The dona on should not cause fiscal loss in the fiscal year when it is made. 3. Valid evidence of making the dona on. 4. The institution that receives the donation (or receives the donation to be distributed to na onal disaster victims) should have a Tax Identity Number, except for certain ins tu ons that are not subject to tax. 5. The dona ons should not exceed 5% of the previous year’s fiscal net income. 6. The dona on should not be given to the company’s related party. From the regula ons above, it is clear that not all CSR ac vi es conducted by a company can be deducted from the company’s income. To be able to charge the CSR expenses, the company must be able to meet all of the requirements.

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THIS MONTH'S FEATURES

By Zack Petersen Zack Petersen, a former Peace Corps volunteer, is the Corporate Social Responsibility Strategy and Communica ons Liaison for the Jakarta Globe and BeritaSatu Media. He founded Count Me In, a grassroots volunteer-connec ng ini a ve mobilising more than 10,000 volunteers with programmes across Indonesia, and co-created Drive Books, Not Cars, which has collected more than 32,000 books for children’s libraries in rural eastern Indonesia and raised more than $17,200 for street children in Jakarta. He is a master’s candidate in Global Management and Corporate Social Responsibility at Trisak University.

Kiss and Run or Long-Term Relationship: Which CSR Are You? for are campaigns that not only change the lives of those in their community, but also have a las ng impact on those people inside the company who give their me. That's right, CSR is not about giving money; it’s about giving me.

Plenty of people harbour completely justified suspicions a b o u t C o r p o rate S o c i a l Responsibility. In fact, a running joke amongst CSR prac oners is that there are more than 37 different definitions of what cons tutes CSR. So what is it? What is the litmus test for a crowned CSR campaign? What are we looking for when we search out campaigns that make a difference? The answer is originality — originality and immersion. Ideas will not be effec ve unless they involve crea vity. For most corpora ons, CSR is a branding campaign. Nets are thrown wide, around health, educa on and reducing poverty. The idea is that as long as you pick lowhanging fruit around these three themes your initiative will get a thumbs-up. Some companies implement ISO 26000 standards, which while well-meaning, has li le impact when essen ally only carried out on paper in an effort to obtain an o en misunderstood approval. The bo om line, across the board, is that CSR is whatever the company needs it to be. What organisa ons should be aiming

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Whatever happens, don’t let CSR serve as a wink-and-nod way to bolster public relations. Don’t let it be a piggy-back ini a ve where the company simply posts a few photos of the CEO at an orphanage or a campaign completely outsourced, created by se ng aside a sum of money and calling on an adver sing agency to come back with a commercial of kids playing with footballs in Flores. When done poorly, CSR is today’s go-to underhanded PR approach. What be er way to tell the world you’re an amazing company and quickly wipe your hands of ac vi es for the rest of the year than by boas ng about plan ng mangroves in Thousand Islands or pain ng a mural for a yayasan in Tanah Abang in your annual report and being done with it. Plan ng mangroves and pain ng murals are two perfect examples of what people in the CSR game call “Kiss and Run” programmes. The two ac vi es may seem like a great way to promote solidarity in the workplace and give back to the community, but plan ng mangroves that are likely to fail due to a lack of understanding about loca on and restora on sites, and pain ng a mural, which does no one any good if the yayasan can't aﬀord to pay the rent on the building, are perfect examples of CSR gone bad.

CSR is a lot like Valen ne's Day: If you have to be reminded once a year to tell your wife you love her, there’s a deeper problem at hand. Most people who head CSR programmes were hired as human resources managers and migrated over to CSR when the social responsibility craze swept the globe. I recently met a woman who manages the CSR programme for one of the biggest insurance companies in Indonesia. When I asked her about the company’s CSR programmes she boasted that for decades they had been building schools in disaster-stricken areas like Aceh and Mount Merapi. I asked her two ques ons: “When was the last me you visited one of the schools?” and “Do you have a teacher-training programme for the schools?” She had never visited the schools and had no idea if there were teacher-training programmes in place. I asked her what she did before she was the head of CSR. She was in human resources. If you build a school but don’t train the teachers, you haven’t built a school, you have constructed a building. Why not rent it out and use the money to pay for scholarships for students to go to schools with well-trained teachers? Also, if you have never visited any of the schools you have constructed, how on earth would you know if they are even func oning? Her answer, “Regional heads monitor such ac vi es.” She’d never seen it for herself.

A 2009 study by the World Bank found that Indonesia suffers from a phenomenal 21 percent teacher absenteeism rate. While visi ng schools as part of a CSR programme is a pleasant once-a-year experience, what CSR coordinators should be looking for, and what their bosses should expect, are across-the-board, year-long ini a ves intended to make a daily difference in the community. Most people would agree that as human beings, we all have an inherent sense of compassion. But deep down we don't want to complicate our own lives. During last January’s floods in Jakarta, a representa ve from an interna onal consulting group contacted me about doing some work in flooded areas. When I explained that we had organised a group of volunteers, headed to Manggarai, one of the hardest-hit areas, to run a pop-up library for the day, where parents would be offered a break from their du es and children would be given a chance to read and have their faces painted, she asked if there was “something closer to Semanggi.” CSR is about empathy. A story in a leading newspaper should not be the reason you help someone. Value and integrity, as listed in most vision and mission statements, should not be lost in CSR ac vi es. The ques on companies and CEOs need to ask themselves is would we be doing this if there weren’t TV cameras and reporters here? The objec ve should always be to be there for people. Not to engage stakeholders, not to be er your brand, but to simply help others. CSR should inspire, it should be the nervous system of the corpora on, meant to serve as a catalyst for pride and inspira on. There are plenty of ini a ves here that have meaningful and las ng effects on the community. The Down Syndrome Associa on of Indonesia has a wonderful programme where volunteers can sign up to accompany others while they mull

over shopping lists and compare prices at a local supermarket. Most of us take shopping for granted, and volunteering with this ISDI programme not only puts things in perspective, it serves as a jumping-off point for more interac on with the associa on. However, initiatives like Habitat for Humanity, while wildly successful in other parts of the world, don’t have the same impact here in Indonesia. Obviously, what works in one part of the world may not work in Indonesia. But because there is no bar for CSR, and most campaigns run on the coa ails of other successes, campaigns like Habitat for Humanity will con nue to find money. CSR doesn’t have to be simply going through the mo ons. Don't do it just to do it. Put some thought into it. Ingenuity and innova on are rewarded everywhere else in the workplace, so why not in the realm of CSR. Reach out to employees, ask them what they are interested in. Take an internal survey and see what those around you feel are poten al CSR programmes. You never know, your office might have a “coiner” in it. Coiners are the volunteer force of Coin a Chance!, a ny but powerful ini a ve that has kept almost 100 at-risk students in school, simply by collec ng loose change around the office. Coiners simply keep collec on ns, much like piggy banks, on their desks and colleagues drop in change when they can. This also serves as a way to stop people giving change to street children. Anyone who has volunteered with street kids knows handing over money on the street only makes the problem worse. If you really want to help, volunteer, either collec ng coins with Coin a Chance! or on the street with an organisa on like Sahabat Anak. Sahabat Anak, a longstanding volunteer ini a ve established to give street children the encouragement and mentoring they

need to stay in school and achieve their dreams has seven loca ons throughout Jakarta and is always looking for volunteers to do everything from teach to update computer so ware. It’s honestly a shame to see professionals with a par cular skill set out teaching predicates to street kids when they could be teaching organisa onal staﬀ to balance the books so that when it comes to asking for grant money or funding the yayasan’s paperwork is in order. Don’t swing a hammer when you can build a Web site. One of the least recognised ways to volunteer is through communications. One of the hardest things for worthy organisa ons like Mitra Netra, an amazing yayasan that works with the blind in South Jakarta, is getting the word out to the media. Press releases and clearly articulated communication, whether through Twi er or Facebook, is completely undervalued. Effective communication — and more importantly, storytelling — whether through social media or the press, is priceless. A story picked up by Kompas or featured on Metro TV’s Kick Andy could mean the diﬀerence between sending one kid to school or sending 100. At the end of the day CSR shouldn’t be about numbers, it should be about people. It’s not a photo opportunity, and the phrase “low-hanging fruit” should never be used. Again, take the me to look inside your organisa on; chances are there are plenty of people who are already engaged in meaningful volunteer initiatives across the city. Tap into those resources; encourage CSR innova on by trying new things. But the most important thing is immersion. You cannot pretend to know what the community needs by si ng in a boardroom and spitballing. You have to get out there and immerse yourself in the world, otherwise why even get involved?

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Levina Mahardja

Australia and Indonesia Marke ng Manager BT Global ServiceE: levina.mahardja@bt.com www.bt.com/globalservices

doing the right thing... Why it maƩers The world is changing faster than ever, and not always for the be er. The global popula on already consumes 1.5 mes the resources than can be renewed in a year, and two billion extra mouths to feed by 2050 will intensify this pressure. Society faces living within both financial constraints and the planet’s finite resources. Resources are dwindling. From oil to aluminium the planet is running out of the commodi es that have fuelled a century of growth and the development of our modern lifestyles. And these challenges apply to customers running mul na onal organisa ons as much as people managing household budgets. In today’s world, neither bank balances nor reputa ons can survive unsustainable prac ces, and eﬃciencies need to be built into all levels of opera ons. The connec ons between us have helped to make the world a smaller place and, while that makes the scarcity of resources a more evident problem, it also generates some of the tools we need to manage the problems we face. What CSR has to do with this? The irony is that the consump on and growth that got us to where we are now, has also been a catalyst for innova on, and it’s that crea vity that’s helping us find the solu ons to move forward. It’s now a matter of corporate responsibility as to why organisa ons drive economic and environmental sustainability into their operations. Wasted resources and unnecessary carbon emissions are two of the most pressing globally-important issues to be addressed. Tackling them globally means all organisa ons need to take a

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share of the responsibility for them. Global companies should have a universal mission that while we deliver profits, we also create a be er future through our business and ac vi es. In BT, social responsibility is in our DNA. We have been making a posi ve contribu on to society around the world for years and we are currently leading the telecommunica on sector in the Dow Jones Sustainability Index. BT is also in the process of calcula ng the carbon intensity of each of its products and working out how much carbon goes into running its operations. By leveraging ICT we hope that by 2020 the carbon impact of its whole business will be just a third of the amount it saves, achieved through its own internal eﬃciencies and through the products and services it provides for customers. How Indonesia comes into the picture In May 2011 the BBC released the results

of a survey into entrepreneurship. The poll asked people in 24 countries – among them China, the US, the UK, Germany and Australia – whether their cultures valued individual enterprise and whether people with good ideas could put them into prac ce. The result: Indonesians believed their country was the best place to start a business. There are many visitors to the country who look at its hustle and bustle and seeming lack of order and wonder why. But then the next sta s c may explain. Indonesia is home to the second largest Facebook user base in the world (more than 40 million, second only to the US). Jakarta is by far the biggest Facebook city in the world, with nearly double the number of users as the next largest, Istanbul, according to data from SocialBakers. com. ComScore lists Indonesia as having the largest number of Twi er users (the report lists countries in terms of reach,

but that equates to 52 million, some seven million ahead of Brazil). And Indonesia is, according to unoﬃcial figures, the largest BlackBerry market in the world. Indonesia has the economic growth and investment poten al to be regarded in the same light as the ‘BRIC’ countries. Indonesia is a poli cally stable democracy, which has enjoyed sustained periods of record economic growth and foreign investment, as well as now being the largest economy in South East Asia. Today, more than ever, Indonesia is ready to enter the global business stage Doing business and taking the responsibility share Despite the fact that Indonesia’s economic is getting stronger, there is however a growing lower and poor socioeconomic class of over 100 million whose income and private expenditure is between USD 2 to USD 4 per day and less than USD 2 per day, respec vely. Being a third world developing country, there is s ll a lot of social help needed in Indonesia. Mul na onal companies who are investing and doing business here, need to start thinking of ways to give back the society they are residing in.

Corporate social responsibility surrounding natural disasters emergency management has been the focus for a lot of companies and subsequently gained a lot of media a en on. Yet, there also other sectors we can contribute in. Health, educa on, and quality of life s ll require a lot of work. As a telecommunication company, BT is commi ed to growing the number of people who are digitally connected, as well as growing the number of lives improved by using our technology. From Brazil to China, from Spain to Japan, we have been running a number of projects to reach our goal. Building on a legacy from 2001, BT funded the opening of the Katha Informa on Technology and E-Commerce School (KITES) in the heart of Govindpuri – Delhi’s largest impoverished area. Since then, we have opened another 2 training centers. This year, we bring broadband internet access to communities across Africa that is es mated to directly and indirectly benefit approximately 700,000 people. We are looking forward to doing the same thing in Indonesia. As we know, Jakarta is one of the largest, if not the largest base of social media users in the world. Yet, as

a whole, the country is far from being connected and we are ready to start making changes here. But there is more to it than that Without doubt, Corporate Social Responsibility (CSR) will gain a lot of media a en on and significantly boost any company’s profile. Nonetheless, we believe CSR has more posi ve impact beyond that. People are one of the most important assets for business. This is par cularly essential when a global company is entering a new market. Having engaged employees that share the same values with their company will equip the business in this new field. In BT, we believe our people are doing special things on a daily basis. Every day, through their work, each BT employee is oﬀering their share in connec ng people around the world. Yet, in addi on to that, we encourage everyone in BT to oﬀer their help by giving them 3 days annually to do CSR ac vi es. During 2012, outside of the UK, this ini a ve has encouraged 136 days of volunteering in Germany. While 48 people went to Cambodia to build 36 houses and raised more than SGD 100,000. In Singapore and Hong Kong, hundreds of employees take part to raise funds and awareness through marathons and adventure races. In the UK, our employees volunteered over 43,600 days of BT me to community projects worth £13m. From CSR to simply doing the right thing At the end of the day, each and every one of us bears the responsibility to create a be er future. Doing business and inves ng in Indonesia gives us the opportunity to make this country a be er place. At this point of me, doing less harm is no longer enough, all of us need to start giving back and preparing this country for whatever lies ahead. All of us need to simply start doing the right thing.

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THIS MONTH'S FEATURES

The Roles Educational Institutions have to play in Educating the public on Corporate Social Responsibility' In Indonesia, Under Ar cle 15 of the 2007 Investment Law No. 25, every corpora on is obliged to implement corporate social and environmental responsibility, defined as: responsibility mounted in every investment company to maintain a rela onship which is in harmony, in balance and suitable to the local community’s neighbourhood, values, norms and culture. Indonesia is second to Denmark to mandate CSR. Focus points for Indonesia’s CSR programmes are: Poverty, Gender, Human Rights, and Environment. Most companies focus on Environmental CSR Programmes in Indonesia.

As early as at primary educa on, the value of CSR must be ins lled in the hearts and minds of the younger generation. For Environmental Protection, Small and simple projects like community clean ups and tree plan ng needs to be introduced. Educa onal Ins tu on will likely be the molders of this genera on. It is not only to teach companies, but the community as well.

CSR is the way companies engage with the community. CSR helps companies teach how to behave as a responsible ci zen. It is also the way for companies to gain acceptance where the business operates. CSR will never be meant as a bread and bu er for a community nor will it take away the du es of the government in helping communi es that have dire needs. Education is needed to ensure that the right defi on of CSR is perceived. According to UNESCO, the responsibility of higher Educa on can be summerised as the transfer of knowledge to the younger generation through a blanace of teaching, training and research.Higher educa onal Ins tutes are expected to function as social in tu ons ac vely for the development of individual learning and human capital, the socialisa on and cul va on of ci zens and poli cal loyal es and the preservation of knowledge and the fostering of legi mate pursuits for the

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na ona state (Gumport 2000). Thus, the behaviour and ac ons of the educa onal ins tu ons reflect directly back to the society through their alumni. Higher Educa on ins tu ons have direct impact on society. Education also plays a very important role in our society to create sustainable projects for CSR. A good CSR programme must always be sustainable and can be passed on and duplicated for a better future.

Educational Institution like LSPR have incorporated in their curriculum subjects like Communica on Climate Change and the Environment, this subject will enlighten and give knowledge to communica on students on how to understand climate change and what will be their roles to be help minimise the eﬀects of climate change and to create awareness on this issues. By the end of the Subject, the students are expected to have an increase d level of confidence and knowledge so they can live their lives as local and global ci zen. It will help students to iden fy the role of youths on climate change solu ons. To iden fy the quali es of a true leader/ how to become a leader. The subject will also teach students how to manage a good project for climate change solu ons and will definitely provide opportuni es for the interna onal exchange of Ideas when they conduct research and network to other universi es in other countries.

LONDON School of PUBLIC RELATIONSHIP CLIMATE CHANGE CHAMPIONS CLUB LSPR has been a part of the fight against Global Warming and also a part of Climate Change Solutions. Since our first LSPR Environment Month, working with the Bri sh Council, in 2008 we have grown bigger and bigger becoming the first University to be acknowledged as a Green Campus.

In February 2009, we hit our target of planting 2000 mangrove trees and did a massive clean-up for Muara Angke, followed by a Go Green Concert. To date LSPR has planted close to 10,000 mangroves across Jakarta and celebrated its 4th LSPR Environment Month in February this year.

Over the coming weeks, months and years LSPR will con nue to be part of the solu on and con nue the fight against Global Warming. A er all, this is our commitment to mother earth and our gi to the younger genera on.

Jardine Shipping On December 13th 2012, Jardine Shipping Services â&#x20AC;&#x201C; Indonesia established the Corporate Social Responsibility ini a ve. The idea was supported by JSS Indonesia Country Manager, Mr. Kim Ulrich who realised that the company should be involved in suppor ng the social environment. Since the establishment of the CSR initiative, JSS Indonesia has been involved in two CSR ac vi es.

of families were also displaced, lost their proper es and belongings, didn't have access to food, fresh water, sanita on or hygiene facili es.

Firstly, at the me when Jakarta was hit by the heavy floods, many people were stranded in their home. A large number

Secondly, during the holy month of Ramadhan, on 26th of July 2013, JSS Indonesia was back in action again

During their me of need, JSS Indonesia oďŹ&#x20AC;ered help to vic ms by evacua ng them to a safer place in a small village. We also donated food, drinking water, clothing and other essen al daily supplies for those who needed, especially children.

by giving dona on to orphans at an orphanage located at Jl. Tugu Utara, Koja-Jakarta Utara. On this occasion, we had done a break fasting event that a ended by 50 orphans and also gave some money as part of charity to support their educa on. The CSR was lead by Mr. Sahrul Salam and supported by an engaged and mo vated team

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THIS MONTH'S FEATURES

Wendy Kusumowidagdo She is the Senior Consultant for Outward Bound Indonesia. An interna onal licensed organisa on for outdoor learning, focuses on maximizing businesses performance by empowering leadership, developing winning a tude and building teams. To learn how we can help you accelerate your teams, visit www.OutwardBoundIndo.org

Outwardbound: If the physically disabled can do it, why can’t the rest of us? Outward Bound Indonesia began giving scholarships for people with disability to par cipate in our programs in the late 1990s. In the beginning, we specifically provided scholarships for the visually impaired. Like a common Outward Bound course, the blind par cipants would come to an environment that’s outside of their comfort zone. Hiking, trekking, canoe expedi on, ropes course are some of the challenges they faced. The goal of these projects was and has always been to give the scholarship recipients a second chance at Life, to help empower and develop them to

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become self confident and self suﬃcient, and to help them realize that their physical limita ons can be turned into achievement. This project soon grew and Outward Bound Indonesia began giving scholarships to individuals who are physically disabled, as well as other marginalized groups like youths at risk. To date, as part of our OBI Care commitments, Outward Bound Indonesia has helped empower hundreds of individuals who are blind, limbless or wheelchair bound.

LIFESTYLE & HEALTH

lammas day...? Ah, Britain. Home of many, many pointless and innocuous traditions: morris dancing, bottle kicking, straw bears, Christmas–it is a country steeped in bizarre and redundant rituals. Perhaps the most redundant of these is Lammas Day.

busted him out of prison. History is uncertain whether or not the angel had an elaborate escape plan ta ooed on his torso, so we can only assume that he most certainly did.

MAGIC BREAD!

The 1st of August in known in Catholic cultures as the feast of “Saint Peter In Chains,” which many scholars believe was the name of the hidden track in Manowar’s third album.

Celebrated on the 1st of August, Lammas Day began as one of the many harvest celebra ons in the Anglo-Saxon calendar, and commemorated the occasion when the first bread was made from the first of the harvested corn. By way of celebra on, the Anglo-Saxons would bring a loaf of bread to church with them, because nobody par ed harder than the Anglo-Saxons.

Good mes in Scotland are impossible to tell from bad mes In Scotland Lammas Day was tradi onally celebrated by “a day of sport.” Those of you familiar with Scotland will be unsurprised that the sport involved bea ng the hell out of each other and that the scoring system was measured mostly in blood, but some mes in tower demoli on.

The church bread would be blessed and later used for magical purposes, such as being sca ered around a barn to protect the newly stored grain. We can’t be sure what they wanted to protect the grain from, but seeing as rodents are tradi onally unafraid of bread or religion, we can assume that they were mostly seeking to fend oﬀ vampires with gluten allergies.

Like most Sco sh public holidays, Lammas Day quickly became an excuse to beat your neighbors with impunity. This long-held Sco sh tradi on has transcended its Lammas Day origins and survives in the modern public holiday known as “Saturday.”

“O, dear bread, deliver us from thy labours of bringing thee forth”

The whole point of Lammas Day, it seems, was to build a sense of community and high spirits whilst farmers worked their fingers to ny nubs and strained their backs to the breaking point. Perhaps in Lammas Day we may find the true origins of the corporate bonding event. Another historically noted way of marking Lammas day was by gi ing some of your hard-reaped harvest to your landlord, which squarely lands Lammas Day in the “Most Depressing Holiday Of The Year” running. Here’s what else the holiday celebrates:

JAIL BREAKS!

You’d be er have a Get Out of Jail Free card if you’re going to celebrate Lammas Lammas Day was also a day set aside to celebrate the jail-break of Saint Peter, who escaped King Herod’s clutches when an angel

VIOLENCE!

LAMMAS DAY IN MODERN BRITAIN

Now that Britain’s principal exports are misery and actors pretending to be American, most of their agricultural tradi ons have long since fallen into obscurity, kept alive only by men with beards, historical re-enactors, drunks or a combina on of all three. And so Lammas Day has fallen out of mainstream recogni on. Man, first we dumped Madonna on the Brits, now they’re ge ng stuck with all her lovers This is a tragedy. A er all, Britain is a country s ll very much impressed by bread, magic and people absconding from jus ce. It would seem that Lammas Day is a holiday with ideals s ll very close to the hearts of the Bri sh peoples. To this end we propose a new Lammas Day tradi on, wherein David Blaine is annually baked into a giant loaf of bread, from which he must endeavor to escape–with or without divine interven on. We’re sure that, with just a modicum of encouragement, and an extra day oﬀ, the Bri sh Isles will once again embrace Lammas Day with the same enthusiasm they reserve for Pancake Day, Whitsunday and Take A Bo le of Gin to Work Day.

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LIFESTYLE & HEALTH

Dr Kelvin Thia Teck Joo

MBBS (S’pore), MRCP (UK), M Med (Int Med), MCI (NUS),Raﬄes Internal Medicine Centre. Gastroenterology Dr Kelvin Thia is a Gastroenterologist. He graduated from NUS in 1998 and was in the Dean’s list for his final MBBS exams. He obtained his MRCP in 2003 and pursued his specialist training in Gastroenterology and Hepatology at SGH. He was accredited as a specialist in Gastroenterology in 2007 and was conferred as a Fellow in the Academy of Medicine Singapore in 2008. He further completed an Inflammatory Bowel Disease (IBD) Advanced Fellowship Programme in the Mayo Clinic in 2008, under the mentorship of Professor William Sandborn.

LIVER CIRRHOSIS – ARE YOU AT RISK AND HOW TO PROTECT YOURSELF? Liver cirrhosis can be classified into “compensated” and “decompensated” based on the degree of liver impairment. In the compensated state or early stage of cirrhosis, pa ents may have no symptoms and are diagnosed with cirrhosis based on laboratory or radiologic tests. However many pa ents with compensated liver cirrhosis may experience fa gue, general weakness and diﬃculty with concentra on which are o en ignored by pa ents. The specific symptoms of pa ents with liver cirrhosis which had deteriorated or in the “decompensated” stage would be abdominal swelling, jaundice (dark coloured urine), bleeding (in the stools and bruising in the skin), drowsiness, confusion and infection. Another important complica on of liver cirrhosis is cancer developing within the liver. Liver cancer develops silently and usually produces symptoms only in the late stage of the disease where the chance of cure is slim. How to protect yourself Firstly it is important to consume alcohol within safe limits. The recommended intake for healthy persons is </=7 units per week for women and < 14/= units per week for men. Early detec on and preven on of cirrhosis is better than looking for treatment when illness had happened. Talk to your doctor about ways you can check on your liver health. This can be assessed by arranging for laboratory tests which can tell if there is liver inflamma on and cirrhosis. Checking for hepatitis B and C infec on will also be relevant if you

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are staying in an endemic area, or have prior exposure such as blood transfusion, sexual exposure or a family member with the infec on. If you have hepa s B or C infec on, it will be important for you to consult a liver specialist who can advise you about monitoring and treatment available for these condi ons. If there is concern for liver cirrhosis or liver cancer risk, further radiologic imaging such as an ultrasound or CT/MRI scans will be useful. Treatment advances in viral hepa s b infec on There are now two potent oral an -viral medica ons available for the treatment of hepatitis B infection – Baraclude (Entecavir) and Viread (Tenofovir). Although they are not able to permanently eradicate the virus from your body, they are highly eﬀec ve in controlling the virus from mul plying and causing damage to the liver. There is good scien fic evidence to show that an -viral therapy can heal up liver inflamma on, reduce liver cancer risks and even reverse the progression of liver cirrhosis. These oral medica ons are convenient to take and are generally well tolerated with minimal risks of sideeﬀects. However not all pa ents would benefit from an -viral treatment when diagnosed with hepa s B and as such, a specialist review will be important to determine when to start treatment and for how long. Treatment advances in viral hepa s c infec on Recently there had been much progress in treating viral hepatitis C and all

infected pa ents should be encouraged to seek medical advice for treatment. The standard of care for all genotypes (subtypes) of hepa s C infec on had been injectable pegylated interferon and oral ribavirin medication for a duration of between 12-48 weeks, with the objec ve of clearing the virus from the body (cure). Genotype 1 hepa s C is common among pa ents in the region and treatment with pegylated interferon and ribavirin have a cure rate about 40-50%. A third an viral medica on, Victrelis (Boceprevir) in combina on with pegylated interferon and ribavirin, is now available specifically for genotype one. With this newer addi onal therapy (called triple therapy), the success rate for cure is about 65-70%, and there is poten al for a shortened dura on of treatment if the pa ent responds well.

Raﬄes Medika Indonesia Menara Anugrah 1st Floor, Kantor Taman E3.3. Jl. DR Ide Agung Gede Agung Lot. 8.6 - 8.7 Kawasan Mega Kuningan, Jakarta 12950 Phone : (021) 5785 3979 Fax : (021) 5785 3977 24 Hour Hotline: (65) 6311 1111 Email: enquiries_indonesia@raﬄeshospital.com

100 years of the Chelsea Flower Show... and still going strong The Chelsea Flower Show has become a regular fixture in the Royal calendar since it was first held in 1913 following the success of an interna onal hor cultural exhibi on organised by the Royal Hor cultural Society in the grounds of the Royal Hospital, Chelsea, the previous year. Since then it has been an annual event (with the excep on of some years during the First and Second World Wars) and takes place in late May. In celebra on of the Chelsea Flower Shows 100th anniversary, we have provided you with some of the more interes ng facts and figures... • The RHS Great Spring Show was first held in the now vanished RHS garden in Kensington in 1862.

• The showground covers 11 acres and serves as a series of playing fields for the rest of the year.

• Between 1888 and 1911 it was held in the Temple Gardens. It moved to its current site at Chelsea Hospital in 1913.

• The Great Pavillion, which houses the show’s indoor floral displays, is 12,000 square metres – the same size as two football pitches.

• The Chelsea Flower Show has been held in the grounds of the Chelsea Hospital every year since 1913, apart from gaps during the two World Wars.

• The 2010 Chelsea Flower Show is the 88th to be held at the Royal Chelsea Hospital.

• Of the firms that exhibited at the first Show in 1913, only two are s ll showing: McBean’s Orchids, and Blackmore and Langdon. • It is the flower show most associated with the Royal family. • The Chelsea rules forbid the use of coloured sculptures. So garden gnomes have been forbidden throughout its history.

• It takes 15 months to plan each show, with the gardens and displays taking 800 people over three weeks to build. • Each year, 157,000 people visit the show. The number has been capped at this level since 1988. • Last year, the BBC broadcast the show to an average of 2.2 million viewers. • Nearly 600 new plants have been launched at Chelsea in the past eight years.

• There is a total of 600 exhibitors at the Chelsea Flower Show, including 15 large show gardens and 21 small gardens. • The biggest ever show garden at Chelsea was created this year by the Eden Project at 600 square metres. • In 2009, 2,000 bo les of champagne and 46,500 glases of Pimms were drunk at the show. • Last year, 65,000 cups of tea and 18,000 sandwiches were served. • In 2009, 98.4 per cent of the materials used at Chelsea were recycled, including glass, paper and plas c

www.britcham.or.id | 41

MEMBER'S ANNOUNCEMENTS

The Bridge Group the global markets. The Bridge Group will specifically manage the middle er market across commodi es on behalf of both asset owners and buyers. Incorporated in Singapore and Indonesia the group will provide a total solu on for physical trade execu on to local and global players, providing an anonymous, verified membership environment for asset owners and buyers across the globe. Pak Roy Wicaksono and Mr Jeremy Kemp complete the signing at the MercanƟle AthleƟc Club, Jakarta

On July 25th 2013 the Joint Venture Agreement was signed between Pak Roy Wicaksono and the One Asia Group (OAG) to form The Bridge Group.

The Bridge Group provide transac onal execution services, bringing process, due diligence and order to the currently mixed opera ng environment, providing a consistent, risk mi gated deal flow which is measured and quan fied at each stage of the deal.

The Bridge Group has been established to provide expert accountable physical commodity trade execu on services to

The Bridge Group acts directly for asset owners and their appointed agents to improve their work flow for interna onal

clients and work with international and domes c clients to provide a clear environment for all par es. The One Asia Group was established in February 2011 to provide strategic advisory services to corporates in the region looking to build an interna onal presence and for interna onal en es looking to enter or develop their Asian opera ons. The group is cross sector and has grown to provide specialist advisory services in Strategy, Corporate & Finance, Trade, Renewable Energy and Hospitality sectors. Pak Wicaksono represents a number of businesses in the Asia region including Total Indo Mining Resources (TIM) and PT Garis Fajar Nusantara (GFN). For further informa on email us at enquiries@the-bridge.asia or enquiries@ one-asia.biz

Kingspan Renewables Launch Solar Cooling in Indonesia Anglo 4th-7th). Kingspan Renewables supplies packages to suit all homes and businesses and provides high performance hot water solu ons for all geographical areas. Kingspan Solar packages include everything you need for your installa on of the world leading Thermomax evacuated tube or Kingspan Solar flat plate collectors. “Kingspan Renewables Launch Solar Cooling in Indonesia Anglo-Irish building products company Kingspan’s Environmental Division is launching in Indonesia in September. With their Indonesian partners (Zeus Prima Garda and Bri sh export partner Valley Field) they will be showing their solar energy products at Electrical, Power and Renewable Energy Indonesia 2013 at Jakarta Interna onal Expo (September

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Unlike traditional flat plate collectors, Thermomax tubes work oﬀ solar radia on, meaning that they work from dusk to dawn. This makes them par cularly appropriate for Indonesia, where rain and pollu on often mean that there isn’t sufficient direct sunlight to produce energy using tradi onal solar panels. Each Thermomax tube has a 25 year life span and comes with an incredible 20 years guarantee, meaning that there is no need to regularly access

your roof to change tubes. Perhaps, the most exciting application is to couple the hot water output to an absorption chiller to provide air condi oning. So the heat of the sun is actually crea ng a cool environment in your home or workplace! In a climate like Indonesia’s this can save you between 4070% of your electricity costs, which as we all know will only increase over the 25 year lifespan of the tubes. Kingspan shortly be launching their small wind turbines, hybrid wind systems and insula on products (in which they are the world’s market leaders) to Indonesia, along with other products that are appropriate to the climate.”

Etihad Airways introduces faster connections between indonesia and europe and the middle east Etihad Airways, the national airline of the United Arab Emirates, is offering new connections and shorter travel times between Indonesia and popular des na ons in Europe and the Middle East in conjunc on with codeshare partner Garuda Indonesia.

The improved connec vity results from the retiming of Etihad Airways’ seven weekly flights and an increase in frequency to six weekly flights by Garuda Indonesia – bringing to 13 the total number of weekly flights the partner airlines operate between their respec ve hubs.

Etihad Airways’ retimed flights from Jakarta arrive in Abu Dhabi at 6.50am enabling seamless connec ons to more des na ons than previously. This includes Amsterdam, Athens, Belgrade, Chicago, Istanbul, Larnaca, Minsk, Moscow, Nairobi, New York, Paris, Toronto and Washington.

*New Garuda Indonesia’ schedule from June 21, 2013 FLIGHT

SECTORS

Timing

*New EƟhad Airways’ schedule from June 21, 2013 FLIGHT EY471 EY472

SECTORS

PREVIOUS PREVIOUS

Jakarta – Abu Dhabi

18.45 – 23.50

Abu Dhabi – Jakarta

02.40 – 14.15

NEW SCHEDULE

GA0088

Jakarta – Abu Dhabi

GA0089

Abu Dhabi – Jakarta

New days

19.35 – 00.35

Sunday, Monday, Sunday, Monday, Wednesday, Wednesday, Thursday, Friday, Friday Saturday

21.15 – 09.10+1

Monday, Tuesday, Thursday, Saturday

01.45 - 06.50 11.05 – 22.40

Previous days

Sunday, Monday, Tuesday, Thursday, Friday and Saturday

INDIVIDUAL MEMBERSHIP

Mr Jared Heath jared_heath@soemath.com

STANDARD MEMBERSHIP

Mr Joel Burges Technical Advisor

Mr Wilson Kalip Country Head

joel.burges@id.knigh rank.com

wilson.kalip@id.knigh rank.com

The Knight Frank Global Network has strengthened its presence with a collabora on with PT. Willson Proper Advisindo, Indonesia. Established since 2001, Knight Frank Indonesia has developed into one of Indonesia’s leading real estate consultancy firm with a powerful team of professionals. Knight Frank Indonesia is an integrated global real estate advisory firm whose mission is to create wealth for its clients, by maximizing the value of their property assets. More recently Knight Frank Indonesia has appointed Joel Burgess to set up a London Desk in their Jakarta oﬃce. Joel will be focusing on the increasing interest from Indonesian investors into London commercial and residen al property.

www.britcham.or.id | 43

MEMBER'S ANNOUNCEMENTS

STANDARD MEMBERSHIP

Ms Tiﬀany Kwan Manager ﬀany.kwan@quintessen ally.com

Mr Lius Widjaja General Manager

Mr Trevor Butcher CEO

lius.widjaja@quintessen ally.com

trevor.butcher@quintessen ally.com

Quintessen ally Lifestyle, the world's leading private Members club and luxury lifestyle concierge service, is proud to announce the launch of its Indonesia oﬃce. Quintessen ally Lifestyle's award winning 24/7 concierge service now caters to Members in over 65 oﬃces around the world, including London, Paris, Madrid, Singapore, Dubai, New York, Los Angeles, Seoul, Tokyo, Hong Kong, Moscow, South Africa, and now Jakarta.

STANDARD MEMBERSHIP

Graham Garven Partner graham.garven@vdb-loi.com

VDB Loi in Indonesia comprises: Larasa & Manullang, a highly respected corporate legal team headed by Partners D. Larasa and Fernando Manullang, who have more than 25 years of experience as lawyers in Indonesia with wide-ranging experience in inter alia M&A and FDI; and the tax prac ce of PT VDB Loi Indonesia, headed by Graham Garven, with over 20 years of professional tax experience, 15 of which have been in Indonesia. We are well posi oned to advise on transac ons and investment, and on the whole range of Indonesian and interna onal tax and transfer pricing ma ers aﬀec ng corporates.

STANDARD MEMBERSHIP

Mr Mark Sasongko Director

Mr John Van Oost Managing Partner

Mr Benyamin Wiranata Director

mark.sasongko@yishan-cp.com

john.vanoost@yishan-cp.com

ben.wiranata@yishan-cp.com

Yishan Capital Partners is an independent real estate investment and asset management firm specialising in the fast growing property markets of Southeast Asia. Yishan combines a research-driven approach with expert knowledge and reliable judgment to select investments with las ng performance. The firm extracts value and mi gate risk from each investment by se ng-up specialized asset management pla orms with dis nc ve exper se, well-defined processes and the highest ethical standards.

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in pla Li so ce mi m s t Ap e y ava ed pl ear ila y To gro ble da up y! s-

Learning Together is Fun!

In our Primary School the pupil teacher relationship is crucial and we consciously offer a happy, safe, caring and practical environment to learn in. We focus on independence and skills development, with a balance between adult led and child initiated activities. Oh, and we have fun too!

For 2012/2013 enrollments, please contact Admissions today. www.britcham.or.id | 45 Tel: (62-21) 745-1670 • Fax: (62-21) 745-1671 • E-mail: admissions@bis.or.id • www.bis.or.id

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