The Business Case for CESR:
the Thai Experience
Ms. Jiranya Ratchinda
Manager, Strategic Corporate Citizenship, Kenan Institute Asia
Chaiyod Bunyagidj, Ph.D.
Vice President, Thailand Environment Institute
June 20, 2006
Four Seasons Hotel, Bangkok
OUTLINE
Introduction to CSR
4 Case Studies:
• The Bangchak Petroleum Public Company Limited
• Electricity Generating Public Company Limited
• Pranda Jewelry Public Company Limited
• Somboon Group
Q&A
• 390,000 cubic meters of CO2 are emitted,
• 1,629 cubic meters of glaciers in Greenland melt,
• 710 tons of oxygen are decreasing from the atmosphere,
• 2,300 square meters of arable land disappear,
• 3 cattle, 7 pigs and 1,100 chickens are consumed,
the meat production sums up to 6.9 tons,
Per second !!!
Edited by Ryoichi YAMAMOTO (DIAMOND Co.2003)
(Cont.)
• 5,100 square meters of natural forest disappear
• 1.3 motorcars, 4.2 television are produced
• 532 peoples go to MacDonald and consume more than
500 hamburgers,
• population increases by 2.4 persons
(200,000 persons per day),
Edited by Ryoichi YAMAMOTO (DIAMOND Co.2003)
Per second !!!
Annual Expenditure On Luxury Items Compared With
Funding Needed To Meet Selected Basic Needs
Product
Annual
Volume
Makeup
$18 billion
Social or
Investment Needed
Reproductive
Additional Annual
to Achieve Goal
$12 billion
health care for all women
Pet food in
$17 billion
Elimination of
Europe and
hunger and
United States
malnutrition
$19 billion
Perfumes
$15 billion
Universal literacy
$ 5 billion
Ocean cruises
$14 billion
Clean drinking
$10 billion
water for all
Ice cream in
Europe
$11 billion
Immunizing every
child
$1.3 billion
CSR
Definitions: Concept
• World Business Council for Sustainable
Development (WBCSD)
“The continuing commitment by business to behave
ethically and contribute to sustainable economic
development while improving the quality of life of
the workforce and their families as well as of the
local community and society.”
Scope
Product & worker safety
Labor standards
Human rights
Equal opportunity and access
Local and global environmental
Quality; Cleaner production
processes; Eco-efficiency;
Environmental Technology
Corporate Values and Purpose;
Transparency; Accountability;
Tackling corruption
People
Corporate
Governance
Corporate
& Ethics
Governance
& Ethics
Contribution
Environment
To Development
Corporate Citizenship
Enterprise development;
Community Investment;
Education;
Health/HIV/AIDS;
Overcoming Digital Divide
Developed by Suthisak Kraisornsuthasinee, Ph.D.
Assistant Professor, Thammasat University
The Dawn of the CSR Era
“85% of 140 Chief Executives of U.S.
based MNCs believe that sustainable
development will be even more
important to their business model in
five years than it is today.”
Recent Survey administered by
PricewaterhouseCoopers
Drivers of CSR






Shrinking role of government
Demands for greater disclosure
Increased customer interest
Growing investor pressure
Competitive labor markets
Suppliers relations
Benefits of CSR…
Increased sales and market share.
Strengthened brand positioning.
Enhanced corporate image and clout.
Increased ability to attract, motivate,
and retain employees.
 Decreased operating costs.
 Increased appeal to investors and
financial analysts.




…and Challenges




Choosing a social issue.
Selecting an initiative to address the issue.
Developing and implementing program plans.
Evaluation and Reporting.
THE BANGCHAK PETROLEUM
PUBLIC COMPANY LIMITED
A member of the
Thailand Business Council
for Sustainable Development
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
BACKGROUND
ESTABLISHED:
1984
VOLUME:
80,000 mil. Baht
STAFF:
757 (as of December 2005)
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
SCOPE OF BUSINESS
Integrated petroleum company
(production and marketing)
Refined oil sales
Oil refinery management;
capacity of 120,000 barrels per day
Consumer goods retail
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
RATIONALE FOR CESR
Bangchak Goal:
To be a company that helps develop a better
quality of life for all Thais
The company recognizes itself as a large petroleum
operation - safeguarding environment and society
is a priority consideration.
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
BANGCHAK CULTURE
The sustainable development of business,
the environment and society.
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
CESR HIGHLIGHTED PROGRAMS
Environmental Focus
•
•
Green products: Gasohol, Bio-Diesel
Environmental Management Accounting
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
CESR HIGHLIGHTED PROGRAMS
Socio-economic Development
•
•
Bangchak community gas stations
Community enterprises
>>
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
LESSONS LEARNED
Key Success Factors
- Management’s leadership
- Organizational culture
unit (mil. Baht)
Budget for Social Activities
10
8
6
4
2
0
Barriers
- Development of organizational culture
Countermeasures
- Management commitment and support.
2003
2004
2005
year
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
AWARDS & RECOGNITIONS
o Board of the Year Award for Exemplary Practices - 2004/ 2005
o Best Corporate Governance Report Award – 2005
o Most Creative Issue Award - 2004
o TIS 18001-1999 and OHSAS 18001-1999 Occupational Health and Safety
Management System
o ISO 14001-Petroleum Refining Certification, 1997
THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED
FUTURE CESR ACTIVITIES
Coordinating community networks
Expand business opportunities for communities
THE ELECTRICITY GENERATING
PUBLIC COMPANY LIMITED
A member of the
Thailand Business Council
for Sustainable Development
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
BACKGROUND
ESTABLISHED
1992
VOLUME
16,000 mil. Baht
STAFF
107 (as of December 2005)
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
SCOPE OF BUSINESS
Produce electricity and
supply to EGAT
under long-term power
purchase agreement.
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
RATIONALE FOR CESR
Corporate belief that success is intimately linked
with the qualitative growth of Thai society
Vision and policies designed to support
activities
Corporate contributions to society
and communities in which they operate
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
POLICY STATEMENT ON CSR
Alleviating environmental impacts and undertaking
review and evaluation of performance;
Encouraging employee responsibility for a clean
environment;
Communicating with the public and
sharing experience with other agencies on industrial
performance, knowledge and operating practices.
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
CESR HIGHLIGHTED PROGRAMS
Environmental Focus
Implementation of ISO 14001
Promotion of Alternative Energy
Energy Efficient Building
Program
Green Energy
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
CESR HIGHLIGHTED PROGRAMS
Social Development
Education
- Green library
- Learning facilities and equipment for schools
Youth
- EGCO’s Group Environment Conservation Camp
- Thai Forest Conservation Youth Camp
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
LESSONS LEARNED
Key Success Factors
- Top-down (Board’s & Company’s Policy)
- Achievement Incentives
- Availability of Budget
Barriers
- Lack of employee support
Countermeasures
-Raise awareness of employees
-Participation as indicator for performance appraisal
- Recognition of employee contribution to society and
environment.
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
AWARDS & RECOGNITIONS
Best Corporate Governance Report Award
Top ten listed company in terms of Good Corporate Governance
2001 Best Practices On Corporate Governance
The Good -Very Good Corporate Governance Company
Thailand Energy Awards for "Energy Efficient Building
Natural Resource Conservation Award
THE ELECTRICITY GENERATING PUBLIC COMPANY LIMITED
FUTURE CESR ACTIVITIES
Continue implementation of projects; and
Expand activities to new plant sites
Plans for New projects
Sustainable approach to prevent flashfloods and landslides
Environmental program at Nam Theun II project in Lao PDR
Green Classrooms
PRANDA JEWELRY
PUBLIC COMPANY LIMITED
PRANDA JEWELRY PUBLIC COMPANY LIMITED
BACKGROUND
 Established in 1973 as a jewelry exporter
 Started production base 11 years later
 Listed company on the Stock Exchange of
Thailand in 1990
 Operates 5 factories in 4 countries – Vietnam,
Indonesia, China and Thailand
 Signed the Global Compact Emphasis on
Human Rights, Labor Standards and
Environment
 Volume: 4,000,000 pieces of jewelry each year
 Staff: 3,500
PRANDA JEWELRY PUBLIC COMPANY LIMITED
SCOPE OF BUSINESS
Pranda Group of companies comprises of:
 9 affiliated companies
 2 Joint Ventures
Engages in design, manufacturing, domestic
and export markets and retail.
PRANDA JEWELRY PUBLIC COMPANY LIMITED
RATIONALE FOR CESR

Issues related to business
 Employee retention is key to business
success
 Require employee honesty and sense of
ownership

CEO’s Vision

Vision:
 Caring for employee benefit and welfare
 Sharing wellbeing with stakeholders
PRANDA JEWELRY PUBLIC COMPANY LIMITED
POLICY
 Employee Policy:
Treat all employees equally and fairly with proper
remuneration under a pleasant and safe working
environment.
 Society and Environment Policy:
Take responsibility for community environment
through participation in activities and events; and
strictly comply with related rules and regulations.
PRANDA JEWELRY PUBLIC COMPANY LIMITED
CESR HIGHLIGHTED PROGRAMS
Employees’ standard of living
 Recognize value of
personnel.
 Emphasis on staff
satisfaction (income, security,
welfare and
career path).
 Create environment for
employee participation
PRANDA JEWELRY PUBLIC COMPANY LIMITED
CESR HIGHLIGHTED PROGRAMS
Bilateral Education Project
 Cooperation with Kanchanapisek Royal Goldsmith College-2000
 Strategically link community program with core business
 Curriculum for Vocational Level Diploma and Higher Vocational
Level Diploma
 Budget allocation (from year 2000-2006) ~ 31 Million Baht
 Scholarships
 No. of students: 123 graduated,
302 currently studying
PRANDA JEWELRY PUBLIC COMPANY LIMITED
LESSONS LEARNED
Key Success Factors
 Skilled labor in design and manufacturing
 Employees’ honesty and efficiency
Cost and Benefits





Enhanced employee morale
Build skilled labor for jewelry industry
Market access (International Labor Standards)
Brand Value and Reputation
Community involvement with underprivileged youth
PRANDA JEWELRY PUBLIC COMPANY LIMITED
AWARDS & RECOGNITION
2004: Best Exporter
1999: Thailand’s Brand
1998: Best Marketing of New Gold Product and Best Gold Visual
Merchandising in Asia Pacific
1996: Best Own Design Exporter
1995: Best Exporter
PRANDA JEWELRY PUBLIC COMPANY LIMITED
FUTURE CESR ACTIVITIES

Strategic focus on Human Resource
Development and Welfare

Link communities’ needs with company’s core
business

Continue philanthropic and
social programs
SOMBOON GROUP
BACKGROUND
 Established over 60 years ago as a automobile parts distributor
 Expanded to automobile parts manufacturing
 In 1996 received technological know-how from Japanese partners
 Listed on the Stock Exchange of Thailand in 2005
 Obtained QS 9000 and ISO 140001 certification
SOMBOON GROUP
SCOPE OF BUSINESS
Somboon Group of company has 1700+ staff.
The group consists of 3 companies located in the same area.
1. Somboon Advance Technology Public Company Limited (SAT)
2. Somboon Malleable Iron Industrial Company Limited (SBM)
3. Bangkok Spring Industrial Company Limited (BSK)
SOMBOON GROUP
RATIONALE FOR CESR

Vision:
To be an employer of choice by improving quality of life for
employees and their families. The company strives to be a
neighbor of choice for surrounding communities by
expanding activities to cover communities’ social and
environmental aspects.

Issue related to business:
As the company is a heavy industrial plant, it is inevitable
that there are environmental impacts. The company focuses
its CESR programs on reducing air, sound and chemical
pollutions in and around the surrounding communities
SOMBOON GROUP
POLICY STATEMENT ON CSR
 2003-2007 Corporate Mission:
“To be an important part in Supply Chain to satisfy
customers, and encourage employees to be
environmentally and socially responsible.”
 Employee Policy:
“The company intends to improve employees’ standard
of living, including their morale and physical and mental
health, by paying suitable wages; and engage them in
the company’s community programs to enhance their
awareness of social responsibility and maintain
business ethics.”
SOMBOON GROUP
CESR HIGHLIGHTED PROGRAMS
Environmental Aspects
 Center of environmental community learning
 Energy saving program
 Green School program – Integrated environment and
community concept
Social and Community Aspect
 Drug-free company, cigarette- and alcohol-free
program, Good food for employees for better
health program
 External Community Involvement Program
SOMBOON GROUP
CESR HIGHLIGHTED PROGRAMS
 Tools / Concepts
Pursuing CESR activities through
Stakeholder Engagement
Engage all stakeholders including employee,
supplier, customer, community and partner in
CESR programs
SOMBOON GROUP
LESSONS LEARNED
Challenges
 Communication with local communities at initial stages
 Management buy-in and employee participation
Cost and Benefit





Obtain License to Operate
Increased productivity
Gaining a good reputation
Enhanced employee morale
Lower spending on community/ social projects through employee
volunteer program and in-kind contribution from partners only
around 200,000 baht in cash and estimate cost of 403,500 baht on
Employee Volunteer in year 2005
SOMBOON GROUP
AWARDS & RECOGNITIONS
QS 9000 Certificate
ISO 14000 Certificate
ISO/TS 16949 Certificate
2003: Quality Improvement Award (Zero Claim) and Quality
Excellence
SOMBOON GROUP
FUTURE CESR ACTIVITIES

Model Employee Volunteer Programs
1.
2.

Donation
Community Involvement
Strategic program development on public issues
1.
2.
The Sixtieth Anniversary Celebrations for His Majesty's
Accession
Livable community – restoring school, religious places
and public infrastructure in local communities
Ms. Jiranya Ratchinda
Manager – Strategic Corporate Citizenship
Human Capacity Development Division
CONTACT
ADDRESS
KENAN INSTITUTE ASIA
Queen Sirikit National Convention Center
2nd Floor, Zone D, Room 201/2
60 New Ratchadapisek Road,
Chaiyod Bunyagidj, Ph.D.
Klongtoey, Bangkok 10110
Vice President
Tel: 0-2229-3231-2 ext. 232
THAILAND ENVIRONMENT INSTITUTE
Fax: 0-2229-3130
16/151 Muang Thong Thani, Bond Street,
E-mail: jiranyar@kiasia.org
Bangpood, Pakkred,
Website: www.kiasia.org
Nonthaburi 11120
Tel: 0-2503-3333 ext. 405
Fax: 0-2504-4826
E-mail: chaiyod@tei.or.th
Website: www.tei.or.th
Q&A