The Public-Private Partnership (PPP) program should be expanded to cover cooperations in social activities between the government and private institutions, Vice President Boediono has said.“We have heard about a lot of PPP programs being implemented in infrastructure development,” he said in his opening speech at the international conference on the Corporate Social Responsibility (CSR) program in Jakarta, on Wednesday. He said the program should be expanded to include economic empowerment projects, which were in desperately needed in the country.

Boediono said he wanted to establish a synergised coordination between the government and private companies and that the National Community Empowerment Program (PNPM) could be one such example that could include private companies.

He said the PNPM was a successful government program that empowered community members in villages. Under the program, community members run businesses with government funding.

“I hope that corporations can support PNPM programs in some villages in line with their own businesses,” he said.

Speaking on the matter, Indonesia Business Links executive director Yanti T. Koestoer told The Jakarta Post that Boediono’s statement indicated the government’s good intentions to establish a synergy between government and corporations in addressing social problems.

However, she said, the government should map out potential social-empowerment activities and establish a monitoring system to avoid overlapping and ensure no regions were left behind.

Boediono did not say if PPP programs could be included in companies’ existing CSR programs or whether companies would get incentives if they undertook PPP programs.

“It would be good if the government offered incentives to corporations that contributed to socioeconomic empowerment through their CSR programs,” Yanti said.

According to a draft government regulation on donations and development of social infrastructure, companies are entitled to tax deductions if they are involved in charitable activities.

However, the mechanisms, types of sectors and donations that can be proposed for tax deductions are still being discussed at relevant ministries.

Commenting on these incentives, the Asia Pacific director at the International Business Leaders Forum, Peter Brew, said there should be incentives for all good human practices, such as good governance and good environmental practices.

“There can be a good tax incentive, but then again I would hate to think that people are doing it [CSR] just for tax benefits,” he said, adding that he agreed that companies should be fined for participating in bribery.

The Business for Social Responsibility’s energy and extractive division director Michael Oxman said incentives could be a good tool to push corporations to implement CSR practices. (map)

Source: Jakarta Post, 30th September 2010