The Dharma Shanti Educational Foundation and Human Capital Development:

Toward an Ethical Human Capital Development

An Introduction to

A Personal Note by:

Taat Subekti
Chairman of the Foundation First Draft, September 2011 Please Do Not Quote!

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Education is the point at which we decide whether we love the world enough to assume responsibility for it .. Hannah Arendt Notes and Acknowledgement:
1. On behalf of the foundation, we express our gratitude and deep appreciation to Prof. Mardjono Reksodiputro SH.MA, Bambang Hermanto, Ph.D., Dr. Adi Zakaria Afiff, Prof. Mulyadhi Kartanegara, Ph.D, Mas Achmad Daniri, Siti Adiprigandari Adiwoso, Ph.D., Prof. Firmanzah, Ph.D., Harianto Solichin MSc., Prof. Dr. Erman Radjagukguk SH.MA, Prof.Dr. Junus Husein SH.LLM. and Dr. Yusuf Sofie for their contribution to this writing. 2. This writing is only a personal note, the first draft of Dharma Shanti Educational Foundation Profile. This writing is not intended as and should not be assumed and treated as an academic paper/writing. It is just a cpollection of personal notes. Please do no quote. 3. For further information, critique, comment, and input, please send to secretary@dsief.org.

Prologue:
Literally, Dharma means duty or obligation; and Shanti means divine, peace, and harmony. So, Dharma Shanti means divine obligation or duty that every human must do in order to achieve happiness, welfare, peace and harmony in life, individually or collectively. We believe that education is one of the divine duties that every human being must do in order to create a better future and life for him/herself and his/her society.. Generally, education can be defined as activities that provide any means to teach, add, increase, enhance ones knowledge, skill, understanding and comprehension in all aspects and phenomena happening and existing in his/her life and living condition and environment. By and large, the ultimate objectives of education is, among others, to prepare and to support ones and his/her society better future and welfare and create prosperous, harmonious and peaceful living with others.

Dharma Shanti Educational Foundation: a Brief Introduction

Figure 1: Advisor's Meeting to Discuss Programs. From Left to Right: Widya Bharata, Foundations Supervisory Board; Dr. Adi Zakaria Afiff, Foundation Advisor; Prof. Mulyadhi Kartanegara, Ph.D., Foundation Advisor; Riza Rusdianto MBA, Foundations Secretary.

In carrying out its activity programs, the Dharma Shanti Educational Foundation or DSEF perceives human as neither assets nor resources. DSEF believes that human is capital, because this understanding implies liabilities that every human must be taken into account and must be responsible, toward her/him self and to each other, individually and collectively.

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Figure 2: Advisor's Meeting to Discuss Programs. From Left to Right: Dr. Ibnu Widayanto, Foundation Advisor and Executive Director of Dharma Shanti Institute of Human Development; Dra. Sri Lestari Prasilowati, MA, Foundation Advisor.

DSEF considers human has sets of rights and obligations in each role he/she plays within her/his entire span of life, which rights and obligations must be fulfilled properly, equally and fairly. The fulfillments of these rights and obligations will create harmonious and peaceful living within society where he/she lives with others, and will make her/him easily adaptable to the environments to obtain sustainable livelihood. As capital, human prosesses competences embodied in his/her abilities to show and perform attitudes, behaviors and actions to create and produce values in every aspect of daily activities. These values may be biological, personal (psychological), social (economic and political), and cultural values. As of the term of capital is explained and justified by the unique characteristics of competence, so competence can be expanded, enhanced, enlarged and increased by series of educational, training, learning, teaching and experiencing (including seeing and hearing) activities in life. In other words, competence is expandable and self generating with use; and transportable and shareable

Our Approaches:
Figure 3: Advisor's Meeting to Discuss Programs. From Left to Right: Widya Bharata, Foundations Supervisory Board; Dr. Adi Zakaria Afiff, Foundation Advisor; Prof. Mulyadhi Kartanegara, Ph.D., Foundation Advisor.

As we stated previously, we perceive that human is capital, and capital consists of series of competencies that make human able to play and perform her/his roles. Human competences are materialized in her/his day-to-day attitudes, behaviors, and actions to adapt and to respond to situations and conditions he/she encounters. Researchers and academicians say that it is almost impossible to understand human attitude, behavior and action comprehensively. Others also say that there is no single theory that can explain human attitude, behavior and action. We agree with those statements. However, these do not make us to give up in searching for better understanding to develop human capitals, which understanding can lead us to empower human competence. In order to get better understanding of human attitudes, behaviors and actions, we may need to differentiate 4 levels of approaches, as laid out by Talcott Parsons of Harvard University (1920-1979) in his Theory of Social System. He asserts that

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these approaches may lead us to prevent unnecessary debate on human actions, because we may categorize each opinion and theory into different level of discussion. Parsons stated that there are 4 levels of approaches to study human actions, that are, from biological, psychological (or personality), social and cultural approach. These approaches form a Envi ronment hierarchy, which biological lies at the bottom of the hierarchy, while cultural lies at the top of the hierarchy. These approaches can be applied separately, but they are actually intertwined and interdependent to each other in creating human action. These parts of approaches can be described as the followings. The system in below is the condition which the system above can be created and functioning. The system in above is to control the system in below so it can function properly. For example, biological system is the condition in which psychological system can be created and functioning, because there will no psychological system if there is no biological system. On the other hand, the psychological system will control the biological system in order it can support the function of the psychological system. The social system will only exist if there is psychological system that consists of persons with her/his personalities bind together to form social system, i.e., society. The persons may not be able to be compelled if the social system, which consists of systems of values and norms, can control individuals within this society.
Figure 4: Udayana Universitys Recorate Building; Udayana University is One of Our Partner in Education

In terms of human competence, based on these approaches, we may consider as every human has biological, psychological, social and cultural competences, in which biological competences provide human with condition to have her/his psychological competences. For example, from biological system approach point of view, every human inherites gene and DNA profiles from her/his family tree. The basic biological trait that may influence human competence biologically is sex, female and male. Eventhough there are debates relating to the sexual competence between female and male, but there is one certain competence that may differentiate between female and male. Female may bears and deliver baby, but male does not have such a competence.

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A person may obtain a gen and DNA profile that make her/him having a good and strong bone structure and grow taller than average people. These make her/him to have a better biological competence to become basket ball player (or athlete). However, this person may not become a good athlete if its psychological system that controls her/his biological system has competence to be in command of it. For example, the person does not have strong intention or motivation to become an athlete, so the biological competence does not grows, expands and enhances to provide the person athletics competence to become a good sport figure. A person may have good biological and psychological competences to become a real good athlete. He/she may have a good and muscular bone structure, and may have strong dedication and determination to become a good athlete. However, her/his social system, that is her/his society does not support and does not provide means and facility for her/him to grow, expand and enhance her/his athletics competence, the person may not become an athlete.

Figure 5: Meting with the Excutive of Udayana Universtity. From Left to Right: Omar Altalibm Ph.D, Foundation Advisor; Prof. Dr. IGP Wirawan, Udayana University Vice Rector; Taat Subekti, Forndation Chairman

These approaches fit the current perspective and study employed by academicians and researchers in categorizing human competences, that are, biological competence such as sport and outdoor activity competency; psychological competence such as emotional and decision making competency; social competence such as communication, interaction, leadership competency; and cultural competence, such as ethical and linguistic competency. Beyond this, as Talcott Parsons notion of the environment of this systemic approach, we may define it as spiritual competence that refers to human competency in understanding and translating beliefs and faiths of religions; or we may say it the unknown world. On the other side, there is also physical environment in which human life and being influenced by the environment she or he has been living through out her/his life. By using these approaches, we may study human competencies, and then, provide educational program that suitable to the respective approach level in order to design better learning processes that can be more successful in reaching the objectives of such programs, that is to expand, enhance, enlarge and increase human competences, which competences match her/his biological, psychological, social, and cultural properties, These competences, in turn, will improve, develop, strengthen, and empower her/his biological, psychological, social, cultural and spiritual capitals. In other words, we consider attitudes, behaviors, and actions are the condition in which human can develop her/his competences, while competences will control these attitudes, behaviors and actions. On the next level, we consider that these competences are the condition in which human can develop her/his capitals, while capitals will control the competences.

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Our notion of using human capital instead of human asset or resource cannot be separated from our perception of (or related to) the general definitiona of ethics that we will explain later in this writing. Dharma Shanti Institute of Human Capital Development: On July 25, 2011, Dharma Shanti Foundation established the Dharma Shanti Institute of Human Capital Development. Dr. Ibnu Widiyanto is the Executive Director of this Institute. The institute will carry out reseacrh, training and other academic activities, including graduate studies on all aspects of human capital development. The first programs conducted by the institute are the series of discussion programs of Business Ethics. These programs are collaboratively organized and administered with 4 (four) leading universities: University of Indonesia (Gradute School of Management, Faculty of Economics, on September 15, 2011, and Graduate School of Law, Faculty of Law, on September 22, 2011); Diponegoro University (Department of Management, Faculty of Economics, on September 27, 2011, and Faculty of Law, on September 29, 2011); State Islamic University Jakarta (Faculty of Economics and Business), on Ocotber 11, 2011; and Gajah Mada University (Faculty of Humanities) on Ocotber 27, 2011.

Why do Bother with Ethics?: an Introduction to the Issue

Figure 6: Panelists in Business Ethics Discussion at the Graduate Program of Management, Faculty of Economics, Universtiy of Indonesia, September 15, 2011. From Left to Right; Siti Adiprigandari Adiwoso, Ph.D.; Ir. Syahganda Nainggolan MM, Prof. Firmanzah, Ph,D,; Mas Achmad Daniri MBA; Harianto Solichin, MSc.; Dr. Adi ZakariaAfiff, the Moderator in the Program.

Human competence is the materialization of human capital. Competency is where human shows her/his ability to perform in her/his daily activities. In other words, briefly speaking, human performance shows her/his competence which competence derived from her/his capital. A person may have a very high capital that shapes into her/his competencies that yield an extraordinary performance in her/his job(s) and task(s). However, this performance does not guarantee that it brings a good or descent result for other persons, groups, societies and environments. Without standard to regulate her/his competencies, a person may jeopardize others. This standard, what we generally define as moral standard is basically ethics or ethical codes, that should guide human in performing her/his competencies. Ethical codes can be simply defines as the measure and assess of balancing between obligations and rsghts. Someone behaves ethically if and only if she/he had been done properly (or as promised or as contracted) her/his obligations before she/he may claims for her/his rights.

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What is Ethics?
Figure 7: Panelists in Business Ethics Discussion at the Graduate Program of Law, Faculty of Law, University of Indonesia, September 22, 2011. From Left to Right: Prof.Dr. Junus Husein; Dr. Yusuf Sophie; Heru Susetyo LLM (Moderator); Prof. Mardjono Reksodiputro SH.MA; Prof.Dr. Erman Radjagukguk SH.LLM.

Ethics is the field of philosophy that studies systems, norms, or values that distinguish between what is good and bad or right and wrong, which is many called it as moral philosophy. The study of ethics involves systematizing, defending, and recommending concepts of right and wrong behavior. Philosophers today usually divide ethical theories into three general subject areas: metaethics, normative ethics, and applied ethics. Metaethics investigates where our ethical principles come from, and what they mean. Metaethical answers to these questions focus on the issues of universal truths, the will of God, the role of reason in ethical judgments, and the meaning of ethical terms themselves. Normative ethics takes on a more practical task, which is to arrive at moral standards that regulate right and wrong conduct. This may involve articulating the good habits that we should acquire, the duties that we should follow, or the consequences of our behavior on others. Finally, applied ethics involves examining specific controversial issues, such as abortion, infanticide, animal rights, environmental concerns, homosexuality, capital punishment, or nuclear war. In terms of theoretical and conceptual background, there are many different theories and concepts concerning ethics such as Utilitarianism, Rights and Justice, The Market System, Cost-Benefit Analysis, Kantianism, Egalitarian Theory, Libertarianism, and Virtue Ethics. One concept is called Utilitarianism, which is the ethical doctrine that virtue is based on utility, and that conduct should be directed toward promoting the greatest happiness of the greatest number of persons. (Random House Inc, 2006) According to the utilitarian principle, you must analyze all the alternatives, and then choose the solution where the most will benefit. When caught up in a moral dilemma we have to take two concepts in to account, rights principles and justice principles. Our rights principles pertain to our human rights. Rights principles grant you certain moral or human rights because you are a human being. These rights are associated with duties of others not to violate your rights and, in turn, you have duties not to violate their rights. (Fritzsche, 2005, p. 50) Justice principles are usually associated with issues of rights, fairness, and equality. A justice act respects your rights and treats you fairly. (Fritzsche, p. 52) There are three different principles concerning justice. These are distributive justice, retributive justice and compensatory justice. Distribute justice is when you take the circumstances of why? into account, where as in retributive justice you take the what? and match it with the punishment accordingly. Compensatory justice is when one is compensated for the wrong doing.

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Further, the rights principles and justice principles are a set of rules that make up the principles of the moral standard. Nonconsequentialist or deontological principle is generally a normative stance that views what should be done as determined by fundamental principles that do not derive solely from consequences. An act or rule is right insofar as its it satisfies the demands of some overriding (non-consequentialist) principle of moral duty. (Contributing authors & University of Miami school of Medicine, 2005) The Market System is a method of social coordination (Charles Edward Lindbolm, 1917, p. 19) or sometimes known as capitalism or free enterprise system, is a system based on individual choice and freedom of enterprise while being driven by self interest. (Unknown) A Cost-Benefit Analysis is a process by which business decisions are analyzed. Egalitarian Theory is the belief that people should get the same, or be treated the same, or be treated as equals, in some respect. (Arneson, 2002). Another theory is the Libertarianism Theory, which is the belief of liberty or the political philosophy emphasizing the rights of the individual. The doctrine of libertarianism stresses the right to self-ownership and, by extension, the right to private ownership of material resources and property. Advocates oppose any form of taxation and favor a laissez-faire economic system. (Microsoft Encarta Online Encyclopedia 2008, 2008) Virtue ethics is currently one of three major approaches in normative ethics. It may, initially, be identified as the one that emphasizes the virtues, or moral character, in contrast to the approach which emphasizes duties or rules (deontology) or that which emphasizes the consequences of actions (consequentialism). (Hursthouse, 2003) Basically, someone who practices Virtue ethics has no motives of self gain. This theory is attributed to Aristotle and his teacher Plato, but can be tracked back as far as ancient china. Within our approach, in relation to human capital development, we focus our study of ethics into: a. individual ethics: a moral standard that an individual uses as guidance to behave. b. social ethics: a moral standard that a group/collectivity/society apply to its respective members as a set of norms and guidance to behave properly within the group/collectivity/society. The business ethics falls in this category. c. Cultural ethics: a set of standard based on values that a cultural group (such as ethnic group, religious group or nation) holds high, respects and glorifies. These values are believed to be the best standard in distinguishing what good and bad, right and wrong, or proper and improper. As society become more sophisticated and advanced, individual may possess and belong to more than just one social group/collectivity and to more than just one cultural group. It means that individual may occupy more statuses and she/he must play more roles, which each role has a set of obligations and rights. This condition creates a potential conflict between moral standards that an individual should hold and use as her/his guidance to behave properly. A simple example is that when an individual becomes an employee in a corporation, becomes a member of sport club,

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becomes a member of religious group, becomes a member of university alumni association, becomes a member of professional association, while in her/his family, she\he also becomes a member of a family, and may married to an individual from another ethnic group. This state easily build confusion on which standard(s) she/he should follow or apply within a given a situation at a given time.

To be truly effective, ethics must not just be a concept, but a core value of a culture; it is the culture that ultimately is the enforcement vehicle to support ethics. Bussiness Ethics: (adopted from Dave Mote updated by Karl Heil: Business Ethics, Stanford University Plato Encyclopedia of Philosophy)
The concept of business ethics is relatively new, having become an issue and an organized field of study only since the 1970s. Although numerous factors have contributed to the increased interest in business ethics, a chief influence has been a shift in societal values that underlie the business system. The change in American values has been characterized, in general, by a move away from traditional JudeoChristian ethics toward pluralism, relativism, and self-fulfillment. The end result has been a diminished base of universal moral norms and a subsequent interest in, and concern about, resolving ethical conflict. Understanding the evolution of morality in the United States is crucial to the study of business ethics. In concept, business ethics is the applied ethics discipline that addresses the moral features of commercial activity. In practice, however, a dizzying array of projects is pursued under its rubric. Programs of legal compliance, empirical studies into the moral beliefs and attitudes of business people, a panoply of best-practices claims (in the name of their moral merit or their contribution to business success), arguments for (or against) mandatory worker participation in management, and attempts at applying traditional ethical theories, theories of justice, or theories of the state to firms or to the functional areas of business are all advanced as contributions to business ethics. In this broad sense ethics in business is simply the application of everyday moral or ethical norms to business. Key Theories of Contemporary Business Ethics Albert Carr. He believes that ethics do not necessarily belong in business; they are a personal matter. The business world might contain a set of rules for participants to follow, but those have nothing to do with the morals of private life.
Figure 8: Panelists in Business Ethics Discussion at the Department of Management, Faculty of Economics, Diponegoro Univeristy, September 27, 2011. From Left to Right: Dr. Hardjum Muharam; Taat Subekti; Dr. Ibnu Widiyanto; Drs. Susilo Toto MM (Chairman of the Department Management), Drs. Fuad Masud, MIR (Moderator); Dr.Ir. Harry Miarsono MSc.; Brent Chinn, Ph.D.; Dr. Anis (Vice Dean I, Faculty of Economics).

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Business, Carr asserts, is really more like a poker game, the purpose of which is to win within the context of the rules. Business people cease to be citizens when they are at work. Furthermore, no one should criticize the rules of the game simply because they differ from societal morals. Carr's basic views on ethics in business are recognized for the insight they provide into the dynamics of a free and competitive market. Further study of Carr's views reveals a bent toward ethical relativism, which supports his view that we should not criticize rules of business, even if they conflict with our personal ethics. Milton Friedman (1912-). Milton Friedman advocates the classical theory of business, which essentially holds that businesses should be solely devoted to increasing profits as long as they engage in open and free competition devoid of fraud. Managers and employees, then, have a responsibility to serve the company they work for by striving to make money for it. The very act of seeking profits is, according to Friedman, a moral act. Adam Smith (1723-1790). Friedman's views generally support those of Adam Smith, who held that the best economic system for society would be one that recognized individual self-interest. That concept seems to conflict with the classical theory of business ethics. In his renowned Inquiry into the Nature and Causes of the Wealth of Nations (1776), however, Smith stated that society is best served when each person pursues his own best interests; an "invisible" hand will ensure that self-interested behavior serves the common social good. The competition that would result between individuals would be played out within the confines of government regulations. John Locke (1632-1704). John Locke is credited with outlining the system of free enterprise and incorporation that has become the legal basis for American business. His philosophy was founded on a belief in property rights, which are earned through work and can be transferred to other people only at the will of the owner. Under Locke's theory, which now seems intuitive because of its commonality, workers agree by their own will to work for a company for a wage. Shareholders receive the profits because they have risked their property. Thus, it is the responsibility of the company's workers to pursue profits. Immanuel Kant (1724-1804). Immanuel Kant believed that morality in all spheres of human life should be grounded in reason. His renowned "categorical imperative" held that: (1) people should act only according to maxims that they would be willing to see become universal norms (i.e., the Golden Rule); and (2) people should never treat another human as a means to an end. Kant's theory implied the necessity of trust, adherence to rules, and keeping promises (e.g., contracts). People have the capacity to forgo personal gain when it is achieved at the expense of others, and they can make a choice as to whether they will or will not follow universal norms Business Ethics in Indonesia Business World: Main Issues If we review the previous elaboration, we may understand that the conceptual and theoretical backgrounds of the study of business ethics were fundamentally based on the principles of individualism. Are they suitable and then applicable and implementable to Indonesian business world? We may ask ourselves concerning:

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1. As we may understand that Indonesian culture (ethnic cultures) were based fundamentally and mostly on collectivitism arther than individualism. Are these western conceptual and theoretical hypotheses can be applied and implemented to to study businessethics in Indonesian world? Parallel to this question is, as a matter of fact, can we just apply and implement all western conceptual and theoretical definition, assumptions, and hypotheses to Indonesian economics and business? - (Prof. Firmanzah, Ph.D.) 2. Originally, Indonesian system of law was based on traditional values, which law only impose within a given ethnic territorial boundary. Next, the system of law in Indonesia was established by kingdoms and sultanates, and only valid in their respective terrritory. Afterward, in the colonial era, the system law in Indonesia was made by the colonial government, based on continental system. In recent decades, many regulations were made by the Indonesian government based on common law. For example, the Act of Trade (Hukum Dagang) was made by the Dutch colonial government in the end of 19th century and is still valid today. While the newer regulations, such as regulation in capital market, in insurance and banking industry, and in other commercial trading and industry, were made by adopting US and UK Laws, which laws were fundamentally based on common law system. As the largest Muslim country in the world, we cannot neglect the influence of Islamic law in the making of regulations in Indonesian laws made by the government or its agencies. This complexity of fundamental values embeded in the in the Indonesian system of law, at a certain degree, will bring confusion and conflict (within individuals and collectivities) which standard must be held to behave. {Prof. Mardjono Reksodiputro SH.MA & Prof.Dr. Erman Radjagukguk SH.MA.) Which business standard or business ethical codes we must follow? Which values that business people and corporation will standardize their ethical conduct should be based on? The Making of Ethical Codes of Conduct: As we proposed in our approach on studying human capital development, we may
Figure 9: Panelists in Business Ethics Discussion at the Faculty of Law, DiponegoroUniverstiy, September 29, 2011. From Left to Right: Deputy Head, Central Java Regional Office of Commerce; Prof.Dr. F.X. Adji Samekto; Dr. Daminto Hartono, MBA; Dr. Wijaya.

have to start creating ethical codes of conduct by individual self regulating behavior (Dr. Yusuf Sofie). It means that individuals who carry out their businesses should hold a set of ethical conduct that can be accepted and approved by the most. This set of ethical standards must reflect the moral values that were based on collectivism principles.

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Can corporation be considered as an Individual? In the discussion of corporation as agent of change of ethical code of business conduct, there are many debates whether corporation is an individual (as an legal entity) or it is a merely collections of individuals who each individual must be responsible of her/his conduct. At law, the corporation is a person, distinct in its personality from the persons who bear ownership shares in it (its shareholders) or conduct activities on its behalf (its directors, officers, and other employees). Among the many manifestations of the corporation's separate legal personality are: (i) Distributions of dividends from the corporation to its shareholders are subject to income taxation in the same way that gifts between persons are subject to income taxation. If the corporation were not a separate legal person (as, for example, in U.S. and English law a partnership is not a separate legal person from the partners who compose it) the distribution of dividends would not a be a taxable event (because money would not be changing hands). (ii) Corporations are subject to civil liability that is distinct from that of its owners. Indeed, one of the principal motivations for organizing business activities in the corporate form is that corporate assets are legally separate from the personal assets of the corporation's shareholders. Shareholder liability for corporate debts is limited to whatever assets owners have contributed to the corporation in return for their ownership stakes. (iii) Corporations are subject to criminal liability that is distinct from that of its owners, directors, officers, or employees. If the corporation is a legal person, is it also a moral person? Anglo-American law takes no explicit position on this, although the corporate personality is frequently described there as a legal fiction, suggesting that the corporation's legally recognized personality is not also ontological fact. Business ethicists have taken a variety of positions on the question whether the corporation is a moral person or moral agent. Peter French (1979, 1984, 1995) argues that important features of the corporation and corporate decision making exhibit all of the necessary components of moral agency. He argues that corporations have corporate internal decision (CID) structures that provide sufficient grounds for attributing moral agency to them. These CID structures consist of two main parts: (i) an organization chart that corresponds to decision authority within the corporation and (ii) rules (usually contained in the corporation's articles of incorporation or its by-laws) for determining whether a decision, made by one who possesses decision making authority according to the organization chart, is a corporate decision rather than merely a personal decision. That is, analogous to H.L.A. Hart's (1961) rule of recognition for determining whether a norm is a legal norm, there is also a rule of recognition (or set of rules of recognition) for determining whether a decision is a corporate decision. Combining the organization chart with the rule(s) of recognition, one identifies corporate actions, intentions, and aimsthe stuff of moral agency in natural persons. Thus, for French, corporations are both legal and moral persons, and hence moral agents in their own right. To the contrary, Manuel Velasquez (1983) argues that the CID structures to which French appeals are the product of human agency and design. They are rules of cooperation among persons who, given their actions, intentions, and aims, associate under the corporate banner. Attributing moral agency to corporations opens the door to the intuitively implausible conclusion that a corporation can be morally responsible for something no natural person connected with it is responsible for.

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However, there is still ambiguity in Indonesia concerning this issue. We may observe, for example, the case of Lapindo Mud Disaster, CitiBank Private Banking that violates the banking ragulation, and Citibanks case that caused its client loss his life. Other cases such as accidents that involed bus and ferry passengers, food manufacturer that use hazardous chemical copmponents in their product and thje case of Prita against one hospital, may also reflect this issue. There is no sanction against these corporation. We should treat corporation as a legal individual entity that should bear the responsibility of corporations conduct. Corporation is not just a collection of individuals. These iniduals should not be perceived or treated as a bunch of agents, who can act according to their own respective interest. These individuals, even the board of directors or commissioners, must take the risk because these directors and commissioners were elected and appointed by its shareholders.

What Should Be Done?

United Nations has declared its Global Compact Principles that hopefully wil be adopted by its members in establishing a solid Business Ethics.

The United Nations Ten Principles of Business Ethics

The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anticorruption:
Figure 10: Panelists in Business Ethics Discussion at the Faculty of Economics and Business, State Islamic University Jakarta. From Left to Right: Dr. Haidar Bagir; Prof. Mulyadhi Kartanegara, Ph.D.; Prof. Abdul Hamid (Dean of the Faculty of Economics & Business); Prof.Dr. Margareth Geier; Taat Subekti.

Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses. Labour Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation. Environment Principle 7: Businesses should support a precautionary approach to environmental challenges;

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Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. These series of Business Ethics Discussion Programs that are collaboratively organized with 4 leading universities (University of Indonesia, Diponegoro University, Gajah Mada University, and State Islamic University Jakarta) are just a starting point to brain-storm what we must do in order to start building the Indonesian Business Ethical Codes of Conduct. The foundation has already been asked by several prominent academicians to coordinate the efforts in creating and developing a curriculum and syllabus of business ethics course for graduate student. We hope that many academicians and graduate students would join us in this joint efforts. Further Readings: Short List of Personal References 1. Adapted from: http://www.friesian.com/valley/dilemmas.htm 2. Joseph L. Badaracco Jr., Defining Moments: When Managers Must Choose between Right and Right (Cambridge, MA: Harvard Business School Press, 1997), pp. 4142. 3. The Center for Business and Ethics at Loyola Marymount University www.ethicsandbusiness.org/strategy.htm 4. Dobrin , A. , ( 2002 ) Ethics for Everyone: How to Increase Your Moral Intelligence, Wiley , NY., pp. 3132 . 5. Kohlberg , L. : ( 1981 ), Essays in Moral Development, Volume I: The Philosophy of Moral Development ( Harper & Row , New York); ( 1984 ), Essays in Moral Development, Volume II: The Psychology of Moral Development ( Harper & Row , New York). 6. Cohen, Randy, (2002) The Good, The Bad, and the Difference, Doubleday, NY, pp. 194201. 7. Ibid. pp. 134135. 8. Pierce: Morality Play: Case Studies in Ethics, McGraw-Hill, 2005 . 9. Ursula K. Le Guin , The Ones Who Walk Away from Omelas , 1973. Hartman , Laura, P. , Perspectives in Business Ethics , 2005 (3 rd Ed.) McGraw-Hill, New York 10. Bowie, Norman E. Business Ethics. Blackwell Pub., 1999. 11. Braybrooke, David. Ethics in the World of Business. Totowa, NJ: Rowman & Allanhead, 1983. 12. Cavanaugh, Gerald F., and Arthur F. McGovern. Ethical Dilemmas in the Modern Corporation. Englewood Cliffs, NJ: Prentice Hall, 1988. 13. Freeman, Edward R., ed. Business Ethics: The State of the Art. New York: Oxford University Press, 1991. 14. Harvard Business Review. The Business of Ethics and the Ethics of Business. Boston: Harvard College, 1986. 15. Madsen, Peter, and Jay M. Shafritz. Essentials of Business Ethics. New York: Meridian, 1990.

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16. Arnold, Denis G. and Norman E. Bowie. 2003, Sweatshops and Respect for

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90. Nozick, Robert (1974) Anarchy, State and Utopia. New York: Basic Books. 91. Miller, David (1999) Principles of Social Justice. Cambridge, MA: Harvard
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92. Arrow, Kenneth J. (1963) Social Choice and Individual Values (2nd edn). New
Haven, CT: Yale University Press. Notes and Acknowledgement: 1. On behalf of the foundation, we express our gratitude and deep appreciation to Prof.

Mardjono Reksodiputro SH.MA, Bambang Hermanto, Ph.D., Dr. Adi Zakaria Afiff, Prof. Mulyadhi Kartanegara, Ph.D, Mas Achmad Daniri, Siti Adiprigandari Adiwoso, Ph.D., Prof. Firmanzah, Ph.D., Harianto Solichin MSc., Prof. Dr. Erman Radjagukguk SH.MA, Prof.Dr. Junus Husein SH.LLM. and Dr. Yusuf Sofie for their contribution to this writing. 2. This writing is only a personal note, the first draft of Dharma Shanti Educational Foundation Profile. This writing is not intended as and should not be assumed and treated as an academic paper/writing. It is just a cpollection of personal notes. Please do no quote. 3. For further information, critique, comment, and input, please send to secretary@dsief.org.

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