The mining and oil and gas industry contributes greatly to state revenue. The EITI (Extractive Industry Transparency Initiative) report for 2010-2011 showed that revenues from the oil and gas sector were 23% and from the mineral sector by 8.2% of total state revenue. In addition to its acceptance for the country, this industry is one of the businesses that have an impact on environmental sustainability. The Economics of Ecosystems and Biodiversity report shows the environmental impact of business (environmental cost of business) on the global economy reaches around 4.7 T. The most detrimental impacts come from greenhouse gas emissions, water use, land use, air pollution, land pollution, water, and waste.
Therefore it is necessary to ensure that the business that runs continues to care about environmental and social aspects. This mechanism manifests in global frameworks/standards such as OECD Guidelines, ISO 26000, Extractive Industry Transparency Initiative (EITI), ICMM, IFC Performance, TSM, and so on.
To learn about these global standards, PWYP Indonesia in its monthly activities, PWYP Knowledge Forum invited Jalal, CSR activist and founder of CSR + as a guest speaker (28/8). On this occasion, Jalal explained various global standards relating to extractive industries (mining and oil and gas).
One of the global standards discussed is ISO 26000 (The International Organization for Standardization). This standard is the main reference in making general guidelines, while at the same time responding to the challenges of the needs of the global community, including Indonesia.
ISO 26000 has 7 principles and 7 core subjects. These principles are accountability, transparency, ethical behavior, respect for stakeholder interests, respect for international norms of behavior, respect for human rights. Whereas 7 core subjects consist of organizational governance, human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development. Indonesia itself has agreed to ISO 26000 by signing in Copenhagen in 2010.
“Unfortunately, several laws that emerge after 2010 do not refer to this standard. Like the Law on handling the poor and the Law on social welfare, it does not refer to the 7th core subjects, namely community involvement, and development. ” Jalal said.
Another standard is the ICMM (The International Council on Mining and Metals), which was agreed upon in 2001 and acts as a catalyst in improving the performance of the mining and metals industry. ICMM has 10 principles, two of which stressed by Jalal are first, there are social, economic, and community institution development in the company’s operating area and second, implementing transparent and effective engagement and communication, through verification of reports with stakeholders.
Meliana Lumbantoruan, Research and Knowledge Manager of PWYP Indonesia said that the government hopes not only to adopt these global standards but also to ensure their implementation in Indonesia, particularly in the extractive industries. “The government can implement a reward and punishment system for companies that implement these standards,” he said. In addition, the public can also use global standards as an instrument in conducting corporate social audits. The government should also make the agreed standards a reference in drafting regulations.