By,FRANCISCUS WELIRANGDirector of PT. Indofood Sukses Makmur, TbkPresented at,3rd IBL Conference on CSR 2010 Wednesday, 29 September 2010 Time 15.20 s/d 16.30 PMBalai Kartini Exhibition & Convention CenterJakarta - IndonesiaSYSTEM AND INSTRUMENTATION FORPRACTISING EFFECTIVE CSRFW/sd/9/2010/sp

1DAFTAR ISIFW/sd/9/2010/spFUNDAMENTAL OF CSRWHY CSR IS IMPORTANT ?THE BASIC AND SCOPE OF CSR IN GENERALROOM FOR CSR IMPROVEMENT COMPARISON OF COMMUNITY DEVELOPMENT APPROACH THE LEVEL OF CSR IMPLEMENTATIONTHE SYSTEM AND INSTRUMENTATION OF CSRTHE BIAS OF CSR IMPLEMENTATIONCEOS CHALLENGESDEFINE PRIORITY OF CSR IN INDOFOODHOGH QUALITY PRODUCTS AT AFFORDABLE PRICES3 LEVEL CSR INDOFOODORGANIZING THE CSRBISMA (INDOFOOD SCHOLARSHIP)INDOFOOD RISET NUGRAHAFOOTNOTE FOR CSR

2FUNDAMENTAL OF CSRFW/sd/9/2010/sp CR / CORPORATE RESPONSIBILITIES : COMPLIANCE TO REGULATION COMMITMENT LICENCE TO OPERATE

CSR / CORP. SOCIAL RESPONSIBILITIES : ONLY WHEN PROFIT GENERATED

3WHY CSR IS IMPORTANT?FW/sd/9/2010/sp THE OBJECTIVE OF CSR : SOCIAL ACCEPTANCE OPERATIONAL SUSTAINABILITY TO CLOSE THE GAP BETWEEN CORPORATE AND SURROUNDING COMMUNITY CSR / CORP. SOCIAL RESPONSIBILITIES : CORPORATIONS HAVE BETTER INFORMATION CORPORATIONS HAVE BETTER ACCESS CORPORATIONS HAVE BETTER NETWORK

4THE BASIC AND SCOPE OF CSR IN GENERALFW/sd/9/2010/spA. BASIC OF CSR : CR # CSR CSR # DONATION # PHILANTROPIC # ACTION CSR NEEDS MORE INVOLVEMENTS OF THE CORPORATIONS CSR NEEDS MORE INTERACTIONS + JOINT ACTIVITIES CSR # SHORT TERM, BUT MEDIUM / LONG TERMB. THE SCOPE OF CSR : INBOUND CSR : TO ALL MANAGEMENT AND EMPLOYEE OUTBOUND CSR : TO OUTSIDE THE COMPANY

5ROOM FOR CSR IMPROVEMENT1. PURPOSE

2. STRATEGY

3. STRUCTURE

4. INITIATIVE

5. DRIVERS

6. SUSTANIBILITY

7. FOCUS

PHILANTROPY & SECURITY

AD HOC & REACTIVE

SEPARATE FROM BUSINESS

PASSIVE

CHAIRMANS INITIATIVE

ON OFF

DISASTER, POLITICRELATED EVENTS

:

:

:

:

:

:

:

STRATEGIC COMMUNITYINVESTMENT

STRATEGIC & PROACTIVE

LINKED TO BUSINESSACTIVITIES

RESPONSIVE TO TARGETAREA

PART OF BUSINESS STRATEGY

CONTINOUSLY/MID TERM

5 AREAS IN PANCA BAKTIEXISTINGNEXTFW/sd/9/2010/sp

6FW/sd/9/2010/spCOMPARISON OF COMMUNITY DEVELOPMENT APPROACHFW/sd/9/2010/sp

DEVELOPMENTFORCOMMUNITYDEVELOPMENTWITHCOMMUNITYDEVELOPMENTOFCOMMUNITYINITIATORCORPORATECORPORATE & SOCIETYSOCIETYSTATUS OF SOCIETYOBJECTSUBJECT / OBJECTSUBJECTGOALRESULT ORIENTEDRESULT ORIENTED & PROCESS DEV.PROCESS DEVELOPMENTSIDE EFFECTDEPENDENTDEPENDENT & SELF RELIANCESELF RELIANCETIME FRAMESHORT TERM / AD -HOCMID TERM (CONTINOUS)MID & LONG TERM (SUSTAINABLE)STATUS CORPORATEDONORAGENT OF DEVELOPMENTAGENT OF DEVELOPMENTPROGRAMCORP. ORIENTED / INLINESOCIETYS NEED & CORP. AID / GOALSOCIETYS NEED

7THE LEVEL OF CSR IMPLEMENTATIONFW/sd/9/2010/spLevel 1Level 3Level 2COMPANYS RESOURCES: ATHE SOCIETY NEEDS: B CSR IMPLEMENTATION: B (DICTATING)COMPANYS RESOURCES: ATHE SOCIETY NEEDS: B CSR IMPLEMENTATION: A + B (PARTICIPATORY)COMPANYS RESOURCES: ATHE SOCIETY NEEDS: B CSR IMPLEMENTATION: B (SUPPORTIVE)

8THE SYSTEM & INSTRUMENTATION OF CSRFW/sd/9/2010/sp THE SYSTEM AND INSTRUMENTATION IS SUBJECT TO SITUATION & CONDITION IT DEPENDS ON THE OWNERS VALUES IT DEPENDS ON THE COMPANYS POLICY - MANAGEMENT HANDLING - SOCIETY EXPECTATIONS - COMPANIES OBJECTIVES GUIDELINES CAN BE DEVELOPED ACCOUNT RECORD HARMONISED!!!

9THE BIAS OF CSR IMPLEMENTATIONFW/sd/9/2010/spTHE CSR COST : INVESTMENT COST or OPERATIONAL COST or MARKETING COST EXPATRIATE / CEO CONFLICT :- THEY ARE CONTRACTED 1 or 2 or 3 YEARS SHORT TERM- CSR (COST) NOT SHORT TERM BURDEN TO P/L STATEMENTCSR ACTIVITES GIVES EXTRA BURDEN TO THE DAILY EMPLOYEES JOBCSR # CR # PR # DONATIONNO. SIGNIFICANT APPRECIATION FOR PRACTISING GOOD CSR, OR NO INCENTIVESF. PERFORMANCE MEASUREMENT

COMMITMENT SHORT / MEDIUM TERMALLOCATED TIME, FUND& PERSONCONTINOUS INTERACTIONSTREAT AS ENTREPREUNEUR (NOT AS OBJECT)MNCsHEADQUARTERTIME LIMITExpatriate : 1 3 YearsLocal CEOS : 5 Years?BUSINESSSUSTAINABILITYSHAREHOLDER VALUESOCIAL ACCEPTANCECSRLIMITED LOCALINFORMATION/ SOURCESSECTOREDUCATIONHEALTHFOOD & NUTRIENTDISASTERSME (LOCAL ECONOMIC DEV.) CSR PROGRAM MARGINCOSTPRODUCT / SERVICESPROFIT SALESCUSTOMERSCOMPETITORSGROWTHACTIVITYCOMDEVSOCIAL PHILANTROPYINST.BUILDINGCAPACITY BLDGPRALTHOUGH COUNTRY DIRECTOR CHANGEDTHE CSR PROGRAM NEED TO COUNTINUEECONOMIC VALUESOCIAL VALUE CEOS CHALLENGESCOUNTRY CEO10 FW/sd/9/2010/sp

11DEFINE PRIORITY OF CSR IN INDOFOOD(adopted from Prince of Wales Business Leader Forum)FW/sd/9/2010/spBUILDING HUMAN CAPITAL EDUCATION HEALTH PROMOTING THE ENVIRONMENT GREEN PRODUCTION (NON ADDITIVES) GREEN AREA AND CLIMATE CHANGE ADVOCACYTRANSPARANCIES (GCG)SOCIAL COHESION THE WAY OF INTERATION AS THE LICENCE TO OPERATEECONOMIC EMPOWERING BASED ON OUR COMPETENCIES / NETWORK / ACCESS / INFORMATION

12 HIGH QUALITY PRODUCTS AT AFFORDABLE PRICESFW/sd/9/2010/sp

3 LEVEL CSR INDOFOOD13 FW/sd/9/2010/sp

NOLEVELLOCATIONCHARACTERISTICFREQUENCYPROGRAMTARGETINTERACTIONWITHLOCALCULTUREFUNDING1CORPORATEHEAD OFFICE JAKARTA- YEARLY THEME- CROSS DIVISION- PERCENTAGE- 70% DONATION 30% REVOLVING CONTINOUSE1.IRN2.ENVIRON MENT & WASTE APPLIED RESEARCH-PACKAGING- SMEIMPORTANTCORPORATE2BUSINESS UNIT & FACTORY43 LOCATIONIN FACTORYSURROUNDING LOCALIZED- 70% DONATION 30% REVOLVING FREQUENT1.HRD2.ENVIRON MENT3.SOCIAL COHESION4.ECONOMIC EMPOWERING5.GCG SURROU NDING SOCIETY LOCAL GOV. - SME- NGO LOCAL INSTITU TIONIMPORTANTMARKE TING COST3MARKETINGINDONESIA PRODUCT LINKAGE 10% REVOLVING 90% PRODUCT AS WORKING CAPITALFREQUENT1.ECONOMIC EMPOWERING2.SOCIAL COHESION- SMEIMPORTANTMARKE TING COST

14 ORGANIZING THE CSRPROJECT DISBURSMENTENVIRONMENTAL PROTECTIONPROJECT MANAGEMENTPROJECT EXECUTION & MONITORINGPROJECT INVESTIGATIONPROJECT DOCUMENTATIONPROJECT PLANNINGPLAN & REPORT CONSOLIDATIONSUSTAINABLE DEVELOPMENT RESEARCHACCOUNT FOR THE DISBURSEMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR ENVIRONMENTAL PROTECTION PROJECTSCOMMUNICATION LIAISONFIVE PILLARSFOR SUSTAINABLEDEVELOPMENTAUTOMATION EXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF ENVIRONMENTALPROTECTION PROJECTSPROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR PRIORITIESACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR CORPORATE GOVERNANCE PROJECTSEXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF CORPORATE GOVERNANCE PROJECTPROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR PRIORITIESACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR HR ENHANCEMENT PROJECTSEXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF HR ENHANCEMENT PROJECTSPROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR PRIORITIESACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR SOCIAL COHESION PROJECTSEXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF SOCIAL COHESION PROJECTSPROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR PRIORITIESACCOUNT FOR THE DISBURSMENT OF FUNDS BASED ON THE APPROVED BUDGET FOR ECONOMIC IMPROVEMENT PROJECTEXECUTE ACCORDING TO QUALITY, COST & TIME STANDARDS, AND REPORT ON PROGRESS OF ECONOMIC IMPROVEMENT PROJECTPROPOSE, PRE-QUALIFY AND SELECT ENVIRONMENTAL PROTECTION PROJECTS IN LINE WITH ISMS CSR PRIORITIESPLAN, IMPLEMENT AND EVALUATE A CSR-RELATED COMMUNICATIONS PROGRAM IN CORPORATION WITHISMS PR OFFICERPRESCRIBE AND ENFORCE STANDARDS FOR PROJECT DOCUMENTATION AND SAFEKEEP PROJECT ARCHIVESCOORDINATE & CONSOLIDATE THE PREPARATION, REVIEW & PRESENTATION OF PROJECT PLANS, BUDGET &REPORTS IN LINE WITH ISMS CSR STRATEGIC BLUEPRINT & PRIORITIESBUILD & MAINTAIN DEMOGRAPHIC AND SOCIO-ECONOMIC DATA BASES THAT SUPPORT PROPER PROJECT IDENTIFICATION & SELECTIONACTIVITY CENTERSACTIVITYORGANIZING DESCRIPTIONFW/sd/9/2010/sp

BISMA(INDOFOOD SCHOLARSHIP)15FW/sd/9/2010/spTIME :Year 2008 until now

STATUS :Routine & Yearly Budgeted

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

COST : USD 240.000,- / year

COVER :3 years

PROGRAM :1. Soft Skill (5 x) Indofood Leadership Camp2. Interaction : Plant Tour to the Factory and with managementThousand dollarThousand dollarThousand dollarStudentsStudentsStudentsGraph.: Total Student and Cost Indofood Scholarship (in thousand dollars)

Menteri Pertanian Prof. Dr. Ir. Bungaran Saragih , M.Ec bersama para peneliti Terbaik Bogasari Nugraha (1998-2001)Bp. Franciscus Welirang foto bersama dengan pemenang IRNLOCATION :Jakarta

TIME :Year 1998 until now

STATUS :Routine & Yearly Budgeted

PARTNER :IPB, UGM, UNIDA, UNILAM, UNCEN, UNISRI, UNS, UNDIP etc

COST : Rp. 1.00.000.000,- / year

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

OUTPUT : Food Applied Research Proposal 500 proposal / yearINDOFOOD RISET NUGRAHA16FW/sd/9/2010/sp

17 FOOTNOTE FOR CSRWILLING TO HELP IS GOOD. BUT MAKING EFFECTIVE ACTIVITIES NEED MORE EFFORTS

GIVING MONEY IS EASIER BUT, GIVING THE APPROPRIATE ONE AND ACCEPTED BY THE SOCIETY IS ANOTHER STORY

ONE HAS TO UNDERSTAND THE LOCAL CULTURE, LOCAL WISDOM AND ITS CHARACTER. EVEN THE INDONESIAN (WHO RECEIVED OVERSEAS EDUCATION) STILL HAS DIFFICULTY TO BE INGROUP WITH THE TARGETED SOCIETY

IT IS AN ART TO BE IN IN THAT COMMUNITY

5. IT NEED CONTINOUS DIRECT INTERACTION EVEN LIVE IN, WITH THEM TO BE ACCEPTED

6. THEREFORE, CSR/CD IS NOT SHORT TERM, BUT LONG TERM

THE PROGRAM SHOULD NOT BE GENERALIZED, EACH PLACE/COMMUNITY HAS THEIR OWN UNIQUESFW/sd/9/2010/sp

18FW/sd/9/2010/sp