GOOD CORPORATE & SOCIAL GOVERNANCE TO INTEGRATE ASEAN ECONOMY By Emil Salim, 17/1/2007

ASEAN DEVELOPMENT FEATURES 1. Development is based on land, minerals, natural, forests resources and services, with government and private sector as main actors in free market, globalize economy; 2. Its nature is exploitative, short term financial gain oriented dictated by economic oriented market profits; 3. Non-marketable social and ecological services are at the periphery of economic development; 4. Poor governance makes correction of market failures not effective; 5. Asean development is not sustainable, life-styles imitate materially based developed western pattern;

CONVENTIONAL BUSINESS CREED 1. The business of business in business. Corporate responsibility is to produce and sell, create employment, and pay taxes; 2. Corporate are responsible to shareholders who, as part of society serve best by making profits; 3. Government set the rules for market to operate, division of labor provides results; 4. Globalization and free trade will push corporate in higher level of economic efficiency; 5. Asean economic solidarity is only on paper;

CONVENTIONAL CORPORATE PARADIGM 1. Economic considerations dominates and subordinates social & ecological concerns 2. “More” and “short term gain” is preferred rather than “less” and “long term gain;” 3. Corporate focuses on “I or Us (without you)” as against “We or Us (with you); 4. To transform “homo-economics” into “economic animal” to grow, control and out-compete; 5. Corporate Social Responsibility is pursued to raise intangible benefits for the corporate;

PAST DEVELOPMENT’S LESSONS 1. Conventional development creates 20/80 world; 2. Asean population grows uncontrolled; 3. Asean environment degrades (deforestation, over fishing, high pollution) endangering life support system (water, air, climate, soil, genes); 4. Asean social cohesion weakened due to social conflicts and increase in-equity; 5. Asean suffers illegal logging, illegal fishing, illegal human flows, illegal trade, haze exports;

REVIVAL OF ASEAN SOLIDARITY 1. Asean shares common social values and interdependent eco-system as Asean integrating system to subordinate economic system; 2. Internalize valuation of social & ecological costs into economic business costs to get the price right through market corrections by governance; 3. Governance embodied equal partnership in decision-making among government-business- civil society representing specific social & ecological interests;

PROMOTE SUSTAINABLE LYFESTYLE 1. Promote spiritual, knowledge & cultural base lifestyle while putting more emphasis to reduce material content of consumption; 2. Raise value added on social & ecological resources through science and technology; 3. Emphasize use of renewable natural resources, renewable & closed cycle energies base growth; 4. Spatial & resource use planning in sustainable development to reduce ecological footprints; 5. Promote Asean values in sustainable lifestyles;

ASEAN CORPORATE SOCIAL RESPOSIBIITY 1. Corporate social responsibility is to improve internally life quality of employees/stakeholders; externally life quality of society and humanity; 2. Corporate development impacts exceed its own boundaries and affects whole nation and Asean; 3. Corporate acts of social responsibility is not based on charity but real cost effectiveness; 4. Corporate responds to tangible real incentives to strive for Asean economic integration; 5. Corporate needs to get the market prices right to integrate;

BLUE PRINT TOWARDS ASEAN INTEGRATION 1. Five pillars of Asean integration are: food, energy, education-health, employment and ecological sustainability or FE4S; 2. National sector policies need to be synchronized for Asean to be self-sufficient with high quality; 3. Government must set the appropriate frame- work in cooperation with corporate & civil society 4. Corporate social responsibility is coherent with implementing the Blue Print towards Asean integration.

FOLLOW UP ACTION 1. Strive for people centered Asean by engaging corporate, specific interests groups of civil society in national and regional dialogue with governments to draw comprehensively FE4S; 2. Strive for market corrections to get the price right by internalizing external non-econ.costs; 3. Draw on existing Asean experiences to plan; 4. Start socializing Blue Print of Asean Charter; 5. Draw an Asean specific Corporate Social Responsibility plan to integrate Asean 2025;