This paper is from a session at the Regional Conference on CSRO Accountability & Sustainability -- Critical Lessons from Best Practices, February 18-20, 2002. Text of this paper was prepared by the Philippine Business for Social Progress. Download printable PDF copy (325K) of the entire conference proceedings.
Since the democratic reform, I had been involved in the innovative development direct assistance program of CIDA. Later, we founded LDI and NGO-COD. The latter became the first social movement in Thailand where civil society & community-based organizations were organized to come up with a new constitution. Since the financial crisis, where the region was severely affected, SIF has been promoting bottom-up approach to give opportunities for communities nation-wide to cope with their own crisis.
Should things be the same as the past especially in the case of Thailand? No way because the government is changing fast & revenue from taxes is at 100M Baht, which are thrown as villages' funds. There is so much money and NGO do not know how to cope with this large amount. Although there are resources, and there is little capability. NGOs may be politicized or embroiled in bureaucratic system, but SIF try to liberalize them. The September 11 brought worst situation than the financial crisis. So the proposition is to change orientation from money to something else. But can NGOs sustain? It is doubtful given the current economic crisis.
SIF was the first funding mechanism that directly challenged government and demanded autonomy and money. It was given loan fund from World Bank. It handled the money and is delivering the funds directly to CBOs without interference from anyone.
The social fund was used as tool for community to learn to solve their problems. At the same time, local assets and local wisdom were harnessed from the community for local people to participate in their community learning/development. The second step is SIF utilized the community masterplan. It involves an in-depth research of learning about strengths & weaknesses of the locals, of community in relation to what they do. It involved learning what social capital or assets are there in the minds of locals or the community.
Thailand is still very rich in cultural and social capital. This is why Thailand does not experience social chaos like Argentina. In fact, these capitals have been in existence for a thousand years. However, both the NGOs and government do not realize or recognize the local resource. Part of NGO innovation introduced is to lead even liberalize local community from patronage system. NGOs tried to create space for the poor. SIF created space for NGO to work with the poor. Despite the efforts, the patronage system exists in the community. It is still widely practiced. So what to do now? Thai Constitution provides for decentralization, so SIF works with the Tambun Administrative Organizations (TAO). TAO creation is an attempt by government on decentralization, but power and money dictates the scenario within, leaving localization or people empowerment behind. CBOs/CSOs have a role to play to balance off the situation especially with globalization as major concern. SIF sees that the alternative to economic recovery is to bring new assets or consider asset-based community development. The assets are in the local community -- there are so much sharing and caring among people, and compassion for natural resources in the local community. Again, do NGOs mobilize these assets? Money capital is recognized but not so much the social capital. SIF tried to bring out a concept, where it synthesizes knowledge and money capital.
Globalization and privatization of government posed renewed challenge for local community. Money is not a problem to Thai NGOs as there are 1 million allotments per TAO per year. What is needed is to harness the knowledge. But in Bangkok, which is the seat of power, knowledge is less and less responsive or proactive to local needs. The institution realized that there is wealth of knowledge, local practices on natural resource or social safety nets from the community. And the practices/system have been there for years
No state can fix the complex impact of the crisis. The problems can't be solved by money alone but by knowledge that is so diversified and is waiting to be processed in the communities of Thailand. The way to reform the community is through social capital. So NGOs will still use the money, but will use it for people to learn and process the social capital present both in urban and rural communities. The challenge is how to process, localize the social capital.
Social capital is the spirit that guides or directs development. It is the core value that has been neglected. NGOs flaw is: they learned from western wisdom or state knowledge, but they devalue/degrade the local wisdom. Thus, they cannot mobilize the knowledge that still exists.
Human capital is also important. Money capital tends to draw men together. Men monopolize that area, while more women, children or the youth sector are out. There is an abundance of human capital in Thailand. There are hundreds of thousands of volunteers or people who work without pay in Thailand. But are they accepted as NGOs? Are they mobilized more? These human capital with hearts and brains are there waiting to be tapped.
Humannet are human links or relation, which is part of the human capital. They carry the social fiber, so they need to be organized and registered.
NGOs cannot be proactive in times of crisis. They need to create the learning process and conducts forum, dialogue and let people learn in very simple ways how to solve their problems. But people need to be capable to process. One point of concern is the TAO. How can the knowledge be synthesized? Are the TAO prepared to do development work? There are more questions to answers and challenges for Thai NGOs, such as:
Top
The Children and Youth Foundation of the Philippines (CYFP) is a resource organization and does not implement programs directly. CYFP identifies effective programs and organizations to implement their own agenda. However, based on their experience this approach has its problems because support provided to the organization is only for a short period of time (3 or 5 years) and after this the organizations will still be addressing the problems, which they were helped. CYFP recognized the need for the organizations to attain a certain degree of sustainability in order to do the work that they are supposed to do after the funds and assistance are withdrawn.
In view of this, CYFP defines sustainability as the ability of the organizations to do what they are mandated to do or what they feel they should do and produce the outcomes that are necessary after assistance is phased-out. For an organization to be sustainable, it should possess the following qualities or hallmark of effectiveness and sustainability:
In summary, the basic strategies adopted by CYFP as exemplified with their work on Pangarap Foundation are:
Session 2
In the last 10-15 years, there was a paradigm shift from business partnership for profit into a cross-sectional or inter-sectoral alliance wherein individuals, groups or organizations agree to work together in fulfillment of an obligation or specific tasks that are not necessarily business in nature.
Given this paradigm shift, each sector needs to understand the benefit of tri-sectoral partnership. Tri-sectoral partnership provides:
In working with the communities, Rio Tinto's policy is based on the principles of partnership cited above. The Rio Tinto policy has the following salient points:
The stages in community development strategy of Rio Tinto are illustrated in the figure below.
Compliance -- working in accordance to local and national standards. It is merely complying with regulations
Risks Management -- going beyond compliance. It is innovating on the different ways of communication and working together with communities
Value Creation -- goes beyond compliance and risks management. It is creating values and working strategically towards the company image and well-being of society
Q. Based on Rio Tinto's experience, have there been cases or actual experiences where the equity investment from civil society was other than social equity? How did Rio Tinto handled incongruence in terms of timetable of civil society needs and long term objectives of business?
Also, in your experience in implementing a contract, have you had a situation when a contract was broken and did you imposed sanctions as in a court case?
R. T. Malik: It takes a lot of time and efforts for the civil society organizations and the business sector, since the latter has its own objectives and are used to having quantitative measures. It is much more difficulty with the foundation because as Mr. Caccam mentioned earlier -- how do you quantify the results of what you are doing and how do you sit down with parties of different sectors and be able to agree on common objectives and timetable. There is a need to work together to level-off expectations from each sector and push forward the partnership's agenda and stick to the original agreement. The business community is aiming for a long-term benefit from the partnership while there is shorter term expectations from both the CSOs and government. It is important that the business sector show consistent commitment towards the original objectives of the partnership.
On breach of contract issue, Rio Tinto had not experienced any. The Asian way is to sit down with the different parties and try to resolve and understand the other's perspective to find a common ground.
A. Nakabutra: There are three ways to deal with business. One is to organize as civil society and let them become involved as part of a task force and be involved. Like in Thailand, the government has many policies on community enterprise i.e. one village one product. It is impossible for the villages to develop on their own the capacity to do marketing, feasibility study and investment channel to link with small and medium enterprises. What the foundation did was to organize the business sector in a civic way then linked and matched them with community-based organizations. A second way is by encouraging volunteers and sub-contract on a civic manner. Currently, SIF has a MOU with the Bank of Agriculture since both have common policies and objectives to empower the farmers and the agriculture group. After the MOU, the next step is to do a joint action plan between the bank and the farmers group through the facilitation of the foundation. Engaging in contracts is very delicate because business sector have a lot of power so that there is a need to educate the sector not to use their money power and treat the community like a labor force.
Q. Is social investment fund given as grants to community-based organizations? If the funds are provided as loans to individuals, do the CBOs get to keep the repayments to themselves? Is something paid back to the government?
Do they charge market interest rates when they lend out to the community?
R. A. Nakabutra: There are three levels by which CBOs access the fund. The government through the Ministry of Finance acquires loan from World Bank, which is payable in 15 years at an interest of 6.5% per annum. Once the CBO or the network of CBOs get the funds, it is either released as loan fund, revolving fund or as grant depending on the project design. The idea is to let them think for their own future. They are not required to payback but are made aware of the social costs. It is the government that pays the World Bank while the communities are asked to pay back to the society and are informed that their taxes serve as payment to the World Bank. The institution only gets 5% of the fund to cover administrative costs and be able to utilize volunteers nationwide.
Some charge a minimal interest of 2 Baht per month, which goes to the social safety net fund. All the profit goes back to the community in the form of social safety net, social welfare fund, scholarship fund and community forest program. The profit also helps the poor members who have no way of saving money on a monthly basis.
Q. All the presenters' organizations have dual function -- as implementing organization and as resource organization. Do you think there could be conflict of interest within the organization? In the future, do you still plan to continue the dual function or focus on only one function?
R. F. Rixhon: No conflict in the organization because its major function is to help organizations who will do the projects themselves and strengthen them to be able to do the project in a continuous way. CYFP is basically a resource organization and does not implement projects. It funds projects and provides technical assistance to organizations that receive their financial assistance. It is a direct implementer in the sense that it develops capacities of the assisted organizations.
T. Malik: At the time of Rio Tinto Foundation's establishment in 1996, the area was still part of a larger regency called Kuta regency which is in the very remote part of East Kalimantan. Rio Tinto wanted to work closely with the community, however there was no NGOs or CSOs yet. Given this scenario, Rio Tinto Foundation was established to implement programs and work with the community. The 5-year strategic plan of the foundation envisions that within 5-10 years, the organization in West Kuta should become independent of the foundation especially in their management and finances. In preparation for this, capability building activities are provided to the local people for them to know how to manage programs and look for alternative funding resources.
A. Nakabutra: There is always conflict unless focus is made on localization and decentralization through the CBOs or their network. But when there is partnership among the three sectors, the division of labor ensures less conflict.
Q. Given the innovative models presented in directly funneling the funds to the CBOs without intermediary organizations, have you been able to tract repayments to the revolving fund and are those repayments acceptable as far as you are concerned?
R. A. Nakabutra: Yes. Through the volunteers from the business and civil sectors who form the task force and conduct screening and monitoring for the organization. Aside from this, the organization works directly with the networks of CBOs and gives part of the social safety net amounting to 2 M Baht to help the poorest of the poor.
Q. How much money does the Rio Tinto Corporation put into the Foundation? What benefits do the corporation gets from the foundation?
R. T. Malik: The budget of the foundation is approved every year by the Rio Tinto headquarters and is not part of the percentage of the operations in Indonesia. Each operation has its own community development program and directly supports it. The foundation is separated from the business and gets funding from external sources. 100% of the generated funds are allocated to the beneficiaries and is monitored by the foundation's credible consultants.
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