Materi Presentasi ini dibawakan oleh Jalal dari CSR+ Indonesia dalam acara PWYP Knowledge Forum edisi pertama. Jakarta, 28 Agustus 2015

1. Materi Presentasi ini dibawakan oleh Jalal dari CSR + Ind
dalam acara PWYP Knowledge Forum edisi Pertama
dengan materi bahasan
“Global Sustainability Standards Focus on Extractive Industries”
Jakarta, 28 Agustus 2015

2. 28/08/2015
Global (Corporate)
Sustainability
Standards
Focus on Extractive Industry
J a l a l
Social Investment Indonesia/
Thamrin School of Climate Change and Sustainability
Presented in a discussion with
Publish What You Pay Indonesia
Jakarta, August 28 2015
Codes and standards at an
industry level are an integral
part of any corporate
responsibility programme.
Corporate responsibility will
succeed or fail based on its
ability to develop credible
industry-specific guidelines,
procedures and networks.
Deborah Leipziger
(2007; 2010)
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PART ONE. UNDERSTANDING CODES AND
STANDARDS
Evolution of Corporate Social Responsibility
• Value: ‘any object or quality desirable as a means or as an end in itself’. For
example: corporate responsibility values include diversity and honesty.
• Principle: ‘fundamental truth or law as the basis of reasoning or action; a
personal code of conduct’.
• Code of conduct: ‘formal statement of the values and business practices of a
corporation’. A code may be a short mission statement, or it may be a
sophisticated document that requires compliance with articulatedstandards.
• Norm: ‘model or pattern’. Norms tend to be internationally agreed.
• Standard: ‘an authoritative model or measure, a pattern for guidance, by
comparison with which the quality, excellence, correctness, etc. of other
things may be determined’
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Code of Conduct versus Standard
Codes and Standards Classification
Codes and standards can be distinguished by:
• Their focus or purpose (i.e. whether they are focused on process and/or
performance)
• The way in which they were developed (i.e. unilaterally, bilaterally or
multilaterally)
• Their scope (i.e. whether they cover human rights, labour and/or
environment)
• Their stakeholder (i.e. whether they are focused on employees, investors,
consumers and so on, or whether they are multi-stakeholder tools)
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Classification by Focus
• Performance-oriented codes define minimum
standards of what constitutes socially responsible
behaviour. For example, IFC Performance Standards.
These tools relate to the focus of corporate
responsibility and the desired outcomes that
companies are working towards.
• Process-oriented standards and guidelines define
the procedures a company should follow, such as
social reporting and stakeholder consultation.
Among the key examples of process-oriented tools
are the Global Reporting Initiative (GRI), and the
AccountAbility 1000 series (AA1000). These
instruments relate to the ‘how’ of corporate social
responsibility.
Foundation and
Certification Standards
• Foundation standards
lay the groundwork for
a new field, defining
best practice in an
emerging area.
• Certification standards
are systems that award
a certificate to
organisations that
comply with certain
criteria and that pass an
external and
independent audit.
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Classification by Method
of Development
• Unilateral codes are developed by a company. Usually,
there is some level of dialogue with key stakeholders,
but the company has ultimate responsibility for the
code.
• Bilateral codes are signed between two parties. For
example, a framework agreement between a trade
union and a company is an example of a bilateral code.
• Multilateral or multi-stakeholder codes are developed
by a network of organisations through extensive
negotiations. Examples are ISO 26000, GRI, SA8000 and
the Ethical Trading Initiative Base Code.
Classification by Scope
Corporate social responsibility includes a very wide range of
issues; however, most (but not all) CR initiatives address only a
portion of them. For Example:
Corporate governance
• OECD Principles of Corporate Governance
Combating bribery
• OECD Convention on Countering Bribery
• Business Principles for Countering Bribery
Environment
• Ceres Principles
• The Natural Step
Labour
• ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and
Social Policy
• Social Accountability 8000
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Classification by
Stakeholder Focus
Different standards and codes are targeted at
different groups of stakeholders. Most of the
initiatives focus on employees and suppliers. For
example:
• Employees: SA8000, ILO Code of Practice on HIV/AIDS
and the World of Work
• Suppliers: SA8000, Workplace Code of Conduct of the
Fair Labor Association, Base Code of the Ethical Trading
Initiative, Model Code of the Clean Clothes Campaign
Other Classification: by Industry Sector
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PART TWO. A GLIMPSE
OF CODES AND STANDARDS
Codes and Standards
• Investment Screening: Equator Principles
• Guidance on Social Responsibility: ISO 26000:2010,
International Council on Mining and Metals
(ICMM) Principles
• Stakeholder Management: AA1000 Stakeholder
Engagement Standard; ICMM Stakeholder
Research Toolkit
• Performance: IFC Performance Standards
• Reporting: Global Reporting Initiative Standard
Disclosure Generation 4 (G4), GRI Mining and
Metals Sector Disclosure (MMSD), Oil and Gas
Sector Disclosure (OGSD).
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Equator Principles
• The Equator Principles are guidelines for financial institutions
and provide a benchmark on social and environmental issues for
project financing.
• Adopted in 2003 by ten international banks, the Principles apply
across all sectors and countries, addressing all project financing
with a total capital cost of $50 million or over.
• In 2006, the Equator Principles Financial Institutions (EPFIs) met
to revise the principles. The principles were also aligned with the
new International Finance Corporation Performance Standards
and the total capital cost of project financing was amended to
$10 million or over.
• Now it has 80 signatories which promise: “We will not provide
loans to projects where the borrower will not or is unable to
comply with our respective social and environmental policies
and procedures that implement the Equator Principles.”
Principle 5.
Consultation and Disclosure
“For projects with significant
adverse impacts on affected
communities, the process will
ensure their free, prior and
informed consultation and
facilitate their informed
participation as a means to
establish, to the satisfaction
of the EPFI, whether a project
has adequately incorporated
affected communities’
concerns.”
Principle 5
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ISO 26000:2010
Guidance on Social Responsibility
• This International Standard was developedusing a multi-
stakeholder approach involving experts from more 16 than 90
countries and 40 international or broadly-based regional
organizations involved in different aspects of social responsibility.
• These experts were from six different stakeholder groups:
consumers; government; industry; labour; non-governmental
organizations (NGOs); and service, support, research, academics
and others.
• Specific provision was made to achieve a balance between
developingand developed countries as well as a gender balance in
drafting groups.
• Agreed and signed by 93% of ISO members, including Indonesia.
Many countries adopt ISO 26000 as national standard, including
Indonesia, with SNI ISO 26000:2013.
• Many experts believe that ISO 26000 will be the most important
“standard” on social responsibility, at least for a decade (2011-
2020).
ISO 26000:2010
Schematic
Overview
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Principles and Core Subjects
Principles
1. Accountability
2. Transparency
3. Ethical behaviour
4. Respect for stakeholder interests
5. Respect for the rule of law
6. Respect for international norms of
behavior
7. Respect for human rights
Core Subjects
1. Organizational governance
2. Human rights
3. Labor practices
4. The Environment
5. Fair operating practices
6. Consumer issues
7. Community involvement and
development
• To whom does the organization have legal
obligations?
• Who might be positively or negatively affected
by the organization's decisions or activities?
• Who is likely to express concerns about the
decisions and activities of the organization?
• Who has been involved in the past when
similar concerns needed to be addressed?
• Who can help the organization address specific
impacts?
• Who can affect the organization's ability to
meet its responsibilities?
• Who would be disadvantaged if excluded from
the engagement?
• Who in the value chain is affected?
Principle 4. Respect for Stakeholder Interest
• Stakeholder engagement involves
dialogue between the organization and
one or more of its stakeholders. It
assists the organization in addressing
its social responsibility by providing an
informed basis for its decisions.
•Stakeholder engagement should be
interactive and is intended to provide
opportunities for stakeholders' views
to be heard. Its essential feature is that
it involves two-way communication.
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Core Subject 7. Community Involvement
and Development
• Community Involvement
• Education and culture
• Employment creation and
skills development
• Technology development
and access
• Wealth and income creation
• Health
• Social investment
“Community involvement is an
organization's proactive outreach
to the community. It is aimed at
preventing and solving problems,
fostering partnerships with local
organizations and stakeholders
and aspiring to be a good
organizational citizen of the
community. It does not replace the
need for taking responsibility for
impacts on society and the
environment.”
ICMM 10 Principles
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• 01. Implement and maintain ethical
business practices and sound systems of
corporate governance.
• 02. Integrate sustainable development
considerations within the corporate
decision-makingprocess.
• 03. Uphold fundamental human rights and
respect cultures, customs and values in
dealings with employees and others who
are affected by our activities.
• 04. Implement risk management strategies
based on valid data and sound science.
• 05. Seek continual improvement of our
health and safety performance.
• 06. Seek continual improvement of our
environmental performance.
• 07. Contribute to conservationof
biodiversity and integrated approaches to
land use planning.
• 08. Facilitate and encourage responsible
product design, use, re-use, recycling and
disposal of our products.
• 09. Contribute to the social, economic
and institutional development of the
communities in which we operate.
• 10. Implement effective and transparent
engagement, communication and
independently verified reporting
arrangements with our stakeholders.

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Principle 9
• Engage at the earliest practical stage with likely affected parties to discuss and
respond to issues and conflicts concerning the management of social impacts.
• Ensure that appropriate systems are in place for ongoing interaction with affected
parties, making sure that minorities and other marginalised groups have equitable
and culturally appropriate means of engagement.
• Contribute to community development from project development through closure
in collaboration with host communities and their representatives.
• Encourage partnerships with governments and non-governmental organisations to
ensure that programmes (such as community health, education, local business
development) are well designed and effectively delivered.
• Enhance social and economic development by seeking opportunities to address
poverty.
Principle 10
• Report on our economic,
social and environmental
performance and
contribution to
sustainable development.
• Provide information that
is timely, accurate and
relevant.
• Engage with and respond
to stakeholders through
open consultation
processes.
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AA1000 Stakeholder
Engagement Standard 2011
• In the AA1000 Framework Standard published in 1999,
AccountAbility first introduced the principle of inclusivity. Inclusivity
is the participation of stakeholders in developing and achieving an
accountable and strategic response to sustainability.
• Stakeholder Engagement is a tool that organisations use to help
them achieve inclusivity. To support the achievement of inclusivity,
guidance on how to design and conduct stakeholder engagement
was included in the 1999 AA1000 Framework Standard.
• By 2005, this early guidance evolved into the AA1000 Stakeholder
Engagement Standard.
• AA1000 SES 2011 is the 2nd edition. The 3rd edition will be launched
in 2015 and currently being revised after public comments period.
Principles of Accountability
1. Inclusivity - For an organisation that accepts its
accountability to those on whom it has an impact and who
have an impact on it, inclusivity is the participation of
stakeholders in developing and achieving an accountable
and strategic response to sustainability.
2.Materiality - Materiality is determining the relevance and
significance of an issue to an organisation and its
stakeholders. A material issue is an issue that will influence
the decisions, actions and performance of an organisationor
its stakeholders.
3.Responsiveness - Responsiveness is an organisation’s
response to stakeholder issues that affect its sustainability
performance and is realized through decisions, actions and
performance, as well as communication with stakeholders.
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Stakeholder Identification
Relevant stakeholders are those individuals,
groups of individuals or organisations that affect
and/or could be affected by an organisation’s
activities, products or services and associated
performance with regard to the issues to be
addressed by the engagement.
• Dependency – groups or individuals who are
directly or indirectly dependent on the
organisation’s activities, products or services
and associated performance, or on whom the
organisation is dependent in order to operate.
• Responsibility – groups or individuals to
whom the organisation has, or in the future
may have, legal, commercial, operational or
ethical/moral responsibilities.
• Tension – groups or individuals who need
immediate attention from the organisation
with regard to financial, wider economic,
social or environmental issues
• Influence – groups and individuals who can
have impact on the organisation’s or a
stakeholder’s strategic or operational
decision-making
• Diverse perspectives – groups and individuals
whose different views can lead to a new
understanding of the situation and the
identification of opportunities for action that
may not otherwise occur.
Stakeholder Engagement
Engagement owners should also include
in their planning process activities and
methods that are essential to
engagement but are not themselves
formal engagement methods, including:
• Receiving unsolicited information
• Tracking information
• Creating awareness
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Stakeholder Research Toolkit
The Stakeholder Research Toolkit
provides step-by-step guidelines for
companies seeking to measure and
monitor their reputation among all
stakeholder groups. Specifically, the
toolkit provides a useful methodology
for companies seeking to work
collaboratively with stakeholders in
order to understand the key drivers of
reputation. This provides a mechanism
for companies to incorporate and
understand the perspectives of their
stakeholders regarding company and
industry performance.
Contents of ICMM’s SRT
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Data Collection Method for Ongoing Process
of Measuring Corporate Reputation
Demographic Measurement
Categories
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Template Survey
Instrument –
Community Health and
Well-Being
IFC Policy and Performance Standards
“The Sustainability Framework
articulates IFC’s strategic
commitment to sustainable
development and is an integral part
of its approach to risk management.
It provides guidance on how to
identify risks and deal with them, and
is designed to help clients avoid and
mitigate adverse impacts and manage
risk as a way of doing business in a
sustainable way.”
Executive Summary
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Differentiated Responsibilities to
IFC Policy and Performance Standards
The Eight
Performance
Standards
• PS 1: Assessment and Management of
Environmentaland Social Risks and
Impacts
• PS 2: Labor and Working Conditions
• PS 3: Resource Efficiency and Pollution
Prevention
• PS 4: Community Health, Safety, and
Security
• PS 5: Land Acquisition and Involuntary
Resettlement
• PS 6: Biodiversity Management and
Sustainable Management of Living Natural
Resources
• PS 7: Indigenous Peoples
• PS 8: Cultural Heritage
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Required Stakeholder
Engagement
Performance Standard – Example 1
Every Performance Standard consists of:
1. Introduction
2. Objectives
3. Scope of application, and
4. Requirements
“The client will provide workers with
documented information that is clear and
understandable,regarding their rights
under national labor and employment
law and any applicable collective
agreements, including their rights related
to hours of work, wages, overtime,
compensation, and benefits upon
beginning the working relationship and
when any material changes occur.”
(Requirement on Working Conditions and
Management of Worker Relationship –
Performance Standard 2)
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Performance Standard – Example 2 and 3
“For projects that are expected to or
currently produce more than 25,000 tonnes
of CO2-equivalent annually, the client will
quantify direct emissions from the facilities
owned or controlledwithin the physical
project boundary, as well as indirect
emissions associated with the off-site
productionof energy used by the project.
Quantification of GHG emissions will be
conducted by the client annually in
accordance with internationally recognized
methodologies and good practice.”
Requirement on Resource Efficiency –
Performace Standard 3
“The client will avoid or minimize the
potential for community exposure to
hazardous materials and substances that may
be released by the project. Where there is a
potential for the public (including workers
and their families) to be exposed to hazards,
particularly those that may be life
threatening, the client will exercise special
care to avoid or minimize their exposure by
modifying, substituting, or eliminating the
condition or material causing the potential
hazards.”
Requirement on Community Health and
Safety – Performance Standard 4
GRI Standard Disclosure G4
• Started in 2002, the reporting standard is
now on it 3rd version. The 4th generation
(G4) was launched in early 2013.
• The UN proposed to mandate sustainability
reporting for companies with market value
>USD100 milllion in RIO+20 Conferrence, but
came up with strong recommendation only.
However, many countries, including already
mandating sustainabilityreporting for all
companies (EU, through ‘report or explain’)
or all listed companies (e.g. Malaysia).
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Principles
Defining Content
• Materiality
• Stakeholder inclusiveness
• Sustainabilitycontext
• Completeness
Report Quality
• Balance
• Comparability
• Accuracy
• Timeliness
• Clarity
• Reliability
Materiality for sustainability reporting is not limited only to those sustainability topics that
have a significant financial impact on the organization. ... also includes considering
economic, environmental, and social impacts that cross a threshold in affecting the ability to
meet the needs of the present without compromising the needs of future generations.
Reporting Material Issues
• The report should
emphasize
information on
performance
regarding the
most material
topics.
• The process by
which the relative
priority of topics
was determined
should be
explained.
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Sustainability Performance
• Economic Aspect: Economic Performance;
Market Presence; Indirect Economic
Impact.
• Environmental Aspect: Materials; Energy;
Water; Biodiversity; Emissions, Effluents,
Waste; Products and Services;
Compliance; Transport; Overall.
• Social Aspect: Labor Practices and Decent
Work; Human Rights; Society; Product
Responsibility.
SO 1. Percentage of operations
with implemented local
community engagement, impact
assessments, and development
programs.
SO9 Operations with significant
potential or actual negative
impacts on local communities.
SO10 Prevention and mitigation
measures implemented in
operations with significant
potential or actual negative
impacts on local communities.
GRI-MMSD and GRI-OGSD
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Indicators in
GRI-MMSD
Indicators in
OGSD
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Towards
Standards
Convergence?
GRI G4 and ISO 26000
J a l a l
Chairperson of Advisory Board – Social Investment Indonesia
Reader on Corporate Governance and Political Economy – Thamrin School of Climate Change and Sustainability
jalal.csri@yahoo.com; jalal.csri@gmail.com
+62-815-13803616
THANK YOU VERY MUCH!
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