Sukanto Tanoto | Tanoto Foundation and Social Capital

Question: What are your views on Building Social Capital

Sukanto Tanoto‘s reply: Generally, in a totalitarian system of government, central government exercises more or less total control over the affairs of governing the entire nation. To get government support for a particular project, the establishment of social capital network has to start at the central government level. But during the transitional period from totalitarian to populist system and when power is being transferred to local authorities, relationship at the local level became more critical and a priority.

Therefore it is imperative to build social capital network through social responsibility and social development from ground level, i.e. where the project is located. The Group’s philosophy on business development is embodied in its Three Benefits Motto – Benefits to the People, Benefits to the Country, and Benefits to the Enterprise. This is the basis of the RGE Group’s CSR policy which has been in practice since the 80s.

The main thrusts are in philanthropic activities such as donations to public and social projects such as schools, hospitals, scholarships, special social/education projects, etc.

For example, in 1980, I donated USD 1.5 M to Aceh Province to build a public swimming pool in Bandar Aceh. It was the first swimming pool in Aceh. I still remember in those days, they had different days for boys and girls to use the pool.

In 1981/82, I also built schools in Besitang. Unfortunately, in Porsea, we did not do enough during the early years.

Finally the Executive Board (Dewan Pengurus) is the implementing body of the Tanoto Foundation. It reports to the Board of Patrons and executes the approved budget assisted by a management team, headed by an Executive Director. The Foundation employs about 70 people worldwide.

Up to 2008 the Tanoto Foundation was run independently of the business units. This was based on the traditional textbook thinking that philanthropy should be separate from Corporate Social Responsibility (CSR) activities that are directly related to the commercial interest of the business units. However, after a long internal discussion, it was decided that the Foundation should be coordinating with the CSR activities of business units because first the activities of the business units must always reflect and be consistent with the underlying values and vision of the Founder, hence the need for coordination. Secondly branding confusion, often experienced in Indonesian media, can be minimized when the various business units’ CSR’s are all co-branded together with the Foundation.