Professional Documents
Culture Documents
Silent and Shadow by Zikri
Silent and Shadow by Zikri
I. Part A
1. Introduction
Corporate social responsibility (CSR) arouses much controversy and
contestation in management. From definition of CSR itself is vary, as
expressed by McWilliams et al (2006) “there is no strong consensus
definition for CSR”. But, CSR definition according to Baker (no date)
is about sustainable livelihoods from establishing capacity building
skills of employees, the community and the government, respect
cultural differences and finds the business opportunities. Based on
corporate perspective, the principle of CSR is to create an image of
the company to the public, and another reasons behind that such as
to persuade relationship with local government or stakeholders in
order to help and develop its business processes. Thus, from public
or society perspective, the company has taken some advantages or
resources from their areas and the company must give
improvement to society especially in local community area in terms
of improving their quality of life. As explained by Blowfield et al
(2005) stated that, for the reason of commercial viability or to add
value to society, business needs to manage its relationship with
wider society.
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3. Problem Identified
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On this report the researcher will focus upon the subsidiary in Papua
– Indonesia. Because some issues have been identified such as the
environment in Papua is getting damage. Some demonstrations
from societies have been occurred to claim the company pledges to
the society. As reported by socialfunds.com (16 June 2006), “the
Freeport exclusion was based on allegations that the company has
caused extensive environmental damage by disposing of tailings
including arsenic, cadmium, and mercury from its Papua, Indonesia
copper mines into a natural river system. Moreover, some other
issues will be identified at silent and shadow section.
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Silent Shadow
Environment Environment
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Government Government
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Freeport Indonesia Ltd CSR Annual Report 2002 An article from Amnesty.org (2002) described that
described some points to achieve policy in community Freeport Indonesia Ltd has a contract of work that
development. Firstly, build relationship with people in described the company has broad powers over the local
the host country and especially with people indigenous original population and resources. The rights to take
to areas of operations and explorations. Secondly, land and other property and resettle indigenous citizen
consult with local populations about important with provide equitable compensation only for dwelling
operational issues that will impact to their communities. and other permanent improvements are included. Yet,
As supported on annual report Pursuant 2006, in order the article explained The communities especially in
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Employee Employee
As described by an article from mining.com, Freeport Beratabui (2007) expressed that; Freeport Indonesia Ltd
Indonesia focus on CSR key issue, which was integrating had around 13,000 Non-Papuans and 5000 Papuans
of ethnic minorities in the workplace and community. origin who were working. The discrimination was
Thus audit repot announced that Freeport Indonesia Ltd happened toward Papuans as well as Non-Papuans with
had a program to enhance in training and employment non-staff position such as firstly, non-staff employees
of the Papuans. The company also committed to are not allowed to bring their families to live with them
increase the number of Papuan employment. Then in the worker barracks. Secondly, restaurants, shopping
Freeport also responsible to improve their prospect centers and kiosks that owned by Freeport were not
employment and promotions. Ultimately, the company allowed to use. Moreover their children were not allowed
paid more attention to Papuan. Training program was to attend the school owned by multinational company.
established in order to prepare people technically for
their jobs at mine site. Papuans would be treated like
“premium class”. They have first preference especially Only one Papuan (Agus Kafiar) who represented top
Papuans who from 7 local tribes. In addition, the management level without right to make decision-
company would be responsible to create working making was given. Beratabui (2007) also said “Three
environment without discrimination in all aspects to Papuans are found at the Management level. The first
Papuans employment. Papuan manager ever at PT Freeport got his position
just one year before retiring and therefore with little
influence. In addition, according to Christian Evangelical
Source: Human Rights, Employment, and Social Churches (GKI)’s sources “PT Freeport employs Papuans
development audit report 2005 with poor qualifications in order to minimize their
influence. Mrs. L & P stated that even though they had
been working for PT Freeport for already ten years they
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5. Discussion
Although much has been written on silent and shadow report toward
Corporate Social Responsibility (CSR), in the report it has been
described about what the company doing toward its stakeholders.
Much less consideration has been paid to the development of the
company to its stakeholder and stated from both perspectives. This
section will discuss the issues from silent and shadow table and
linked to the theories in context of environment, government,
community, and employee.
5.1 Environment
From silent and shadow report can be concluded that the
environment management system by Freeport, does not prevent
the risk environmental damage in Papua. The company said that by
tailing management system, deposition area could be reclaimed
with natural vegetation or used for agriculture, forestry or
aquaculture when the mining is completed. But in reality some
rivers is contaminated with chemical pollutants. From this case, the
attitudes of the company toward public concerns should be
developed and crystallized. By maintaining and concern to
environmental impact, the company will improve its efficiency and
reduce barriers. As supported by Koch (1979) the isolations of
corporation can be reduced by revitalized sense of corporate
mission for more active and broader role in society and turn around
some of the current negative public attitudes toward business. This
theory also supported by Hunt (1995) the diminishing or removal of
trade barriers and persistent search for improving efficiency will
impact to businesses in easier communication, transport and the
growing sophistication and awareness of consumers. In order to
increase its intensity, Company has to deal with environmental
concerns in conjunction with a horde of other pressures. Hunt
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Hunt (1995) said that the level of concern fluctuates from time to
time, the environmental concern on the part of the public at huge
scale tends to wax and wane based on economic condition. The
declining of environmental concern as a general issues due to the
present recession. There are some factors which the company
should maintain its environment performance according to Hunt
(1995), as follows:
• Scientific evidence of specific aspects of environmental
damage
• Increasing public awareness of environmental issues
• Greater satisfaction of basic needs
• Increasingly to internalize environmental costs through
taxes and charges
• Growing emphasis on environmental matters in
education
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5.2 Government
From the Annual Report 2006 Pursuant to Section of The securities
Exchange Act of 1934 stated that the governmental issues between
the government of Indonesia and Freeport Ltd have been bonded
with contract agreement and foreign investment law protected it.
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5.4 Employee
The problem on employee issues has been highlighted on silent and
shadow account. Discrimination in the workplace was happened in
the Freeport Indonesia. As proved by Beratabui (3007) Freeport
Indonesia Ltd had around 13,000 Non-Papuans and 5000 Papuans
origin who were working at. In addition, only one Papuan who
represented top management level without right to make decision-
making was given. Then, employees had not been promoted yet
although working more than 10 years. But audit report argued that
Freeport Indonesia had a program to enhance in training and
employment of the Papuans. In additions, mining.com expressed
that Freeport Indonesia focus on CSR that integrate of ethnic
minorities in the workplace and community. As expressed on
direct.gov.uk, there are some types of discriminations related to
these issues. Which are, Direct discrimination is happened when an
employer treat a worker differently with other employees with less
favourably can be called as direct discrimination. Then Indirect
discrimination, can be happened when a condition in the workplace
or rules difficulty one group of people than another. Indirect
discrimination is illegal, it is done based on particular purpose. This
is illegal way to get business work and the way to achieving in
improper way.
F. Conclusion
Four main issues have been identified, which are these issues
related improvement to its stakeholder. CSR is an agreement
between company and its stakeholders or particular. It like a “give
and take”, which means company gives its obligations or voluntarily
to its stakeholders. Then stakeholders must give opportunities to
company to maximise the resources to be developed and generated
profit to improve the quality of its stakeholder in ethical behaviour.
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II. Part B
1. Book review
The book that has been chosen is the corporation – the pathological
pursuit of profit and power by Joel Bakan, the book tells us about the
corporation issue related to corporate social responsibility problems.
Particularly, examine the nature, the evolution impacts, and the
possible future of the modern business corporations.
The corporations have created the problems and they feel no guilty
for that. Because the corporation’s mind set is about profit, profit,
and profit. They find out the way how to get more profit by reducing
cost or increase their sales without concern to social matters. For
instance, some of products have been produced with the high price
but the cost or wages for the workers is very low. This is a kind of
matter that faced by people not for the corporations, because the
corporations do not concern to social life. The books also expressed
the corporation concern to health and safety in the organisation.
Some of examples were illustrated regarding the corporate
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III. References
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