Corporate responsibility towards community<\/p>\n
Hendarsyah Tarmizi
\nThe Jakarta Post<\/p>\n
\"We have done a lot of things to help the community but only
\nthe bad things appear in the press,\" said a public relations
\nmanager of a mining giant when asked about the company's
\ncommunity development (CD) program.<\/p>\n
Such a complaint is common among mining, oil and gas company
\nPR officials, and they are right. Most of the news about mining
\nconcerns environmental damage and conflicts with locals.<\/p>\n
Mining, oil and gas companies, which mostly operate in rural
\nareas, are more concerned about community development than are
\ncompanies outside the sector. They have to establish good
\nrelations with village people, who are now more aware of their
\nrights.<\/p>\n
Since the fall of authoritarian leader Soeharto in mid-1998,
\nprotests against mining or oil companies have become common in
\nmineral-rich provinces such as Kalimantan, Sumatra and Sulawesi.<\/p>\n
During Soeharto's era, protesting against large companies,
\nwhich mostly had strong backing from the local government and the
\narmy, could risk being put into a jail. Sometimes, the
\nconsequences could be worse.<\/p>\n
It is understandable if distressed local people are more vocal
\nnowadays. They are now free to say \"no\" to things they don't
\nlike. But the locals sometimes go too far, and are often
\nunrealistic in their demands.<\/p>\n
Forcing a company to employ all the unemployed living near the
\nmining site is one such unrealistic demand. The locals also often
\ndemand additional compensation for land used for mining years ago
\non the grounds that they were forced to sell their land at low
\nprices under duress.<\/p>\n
At present, most intimidation comes from the locals. The
\ncommunity leaders often mobilize the residents to blockade mining
\nareas or oil wells if their demands are not met.<\/p>\n
The resentment can be stronger, as some mining firms have
\nfailed to implement rehabilitation projects after their contracts
\nhave ended.<\/p>\n
The stereotype that mining operations come purely to \"steal\"
\nnatural resources and leave behind a wasteland surrounded by
\ndevastated communities can actually occur.<\/p>\n
Could CD programs eliminate conflicts between mining companies
\nand local inhabitants? The answer is yes.<\/p>\n
But community development should be considered an integral
\npart of a mining operation, which should be pursued by all mining
\ncompanies whether at a time of conflict or peace. It should not
\nbe used at all as a means of covering up local opposition to a
\nmining operation.<\/p>\n
Former director general of general mining at the Ministry of
\nEnergy and Mineral Resources Surna Tjahya acknowledges that,
\nbesides uncertainty over the status of land used by mine
\noperators, conflicts can also result from their lack of attention
\nto the welfare of locals.<\/p>\n
\"A good CD program will help reduce the locals' resentment, as
\nlong as it is designed and implemented in line with community
\nneeds,\" Surna, who is now the head of the ministry's human
\nresource training center, told The Jakarta Post.<\/p>\n
But he said that the source of conflicts was not merely due to
\npoor CD programs but more due to uncertainties over the status of
\nland used by mining companies.<\/p>\n
State land is often disputed by local inhabitants, who claim
\nthat the properties were owned by their ancestors, who had
\nobtained the undeveloped land from the Dutch government under hak
\nulayat (traditional land rights).<\/p>\n
He believes that the public resentment is part of the \"reform
\neuphoria\", which will eventually end with the return of proper
\nlegal enforcement.<\/p>\n
Oil, gas and mining companies in the country, especially the
\nmultinationals, have, in fact, possessed a strong awareness of
\ntheir need to share their wealth with the locals.<\/p>\n
A statement made by former president of Rio Tinto Indonesia
\nNoke Kiroyan at a recent mining seminar is quite inspiring.<\/p>\n
He said the responsibility towards community development is a
\nworking contract between mining companies with the community that
\nhas permitted them to enter and to commence operations.<\/p>\n
\"The operations of mining companies may have fulfilled all
\nlegal requirements, but without acceptance by the community the
\nfulfillment is only partial as it lacks legitimacy. Acceptance
\ncan be achieved only if we are worthy of being trusted,\" said
\nKiroyan, who is now president of the East Kalimantan-based coal
\nproducer PT Kaltim Prima Coal.<\/p>\n
In fact, most natural resources-based companies, such as
\nCaltex Pacific Indonesia (CPI), Newmont and Gulf Indonesia, also
\nshare the view on the need to promote the welfare of the people
\nsurrounding their mining areas.<\/p>\n
Caltex, which operates massive oil fields in Riau, spends
\nbetween US$3.5 million to $4 million per year in pursuing its
\nCD programs.<\/p>\n
Priority is placed on education, health and income generation,
\nin addition to the development of infrastructure, such as roads
\nand bridges.<\/p>\n
\"CPI is currently building a polytechnic school to prepare the
\nlocals to take a lead in the company's oil operations,\" CPI's
\nVice President Renville Almatsier said.<\/p>\n
The school, which will cost the company about Rp 18.5 billion
\n($1.7 million) to build, will open in September this year. The
\nfunds are not part of the budget allocated for the CD program.<\/p>\n
Renville said that the company was also active in providing
\nfinancial aid to improve the quality of local technical school
\nuniversities so that local job seekers who were not yet qualified
\nto work in the oil company could improve their knowledge and
\nskills at such schools.<\/p>\n
Vice president for corporate strategic development and
\ngovernment relations at Gulf Indonesia Resources S.Santosa said
\nthat community development was an integral part of a company's
\noperations.<\/p>\n
The formal contribution, such as taxes and royalties, was not
\nenough on its own, he added. A company, he said, had also to be
\nseen to be useful and beneficial for residents living in the
\nvicinity.<\/p>\n
\"If we succeed in running businesses there, the villages
\nshould have something too.\"<\/p>\n
\"We need their support, and they need us,\" Santosa said. \"If,
\nfor instance, the surrounding area where we work still has many
\nunemployed people, we cannot do business properly and safely.
\nKeep in mind that unemployment generates a lot of social tension
\nand other problems, which in the end will create disorder,\" he
\nexplained.<\/p>\n
For that reason, major companies should develop genuine
\nrelations with local people, intellectuals, authorities and
\ncommunity leaders. \"We have to be seen to be a good corporate
\ncitizen in the area.\"<\/p>\n
One of the problems many companies have faced in implementing
\nCD programs is assessing what assistance the villagers really
\nneed.<\/p>\n
\"This is the most difficult part, so we often ask local
\nuniversity researchers to help us,\" Santosa added.<\/p>\n
Many local residents and mining observers have often described
\nmining company community development as only good in theory.<\/p>\n
\"It is just a token gesture, \"NATO\", or \"no action, talk
\nonly,\" a mining observer said, describing how the local residents
\nnear a coal mining company should stage a demonstration only to
\nget what the company had promised to give.<\/p>\n
Jakarta-based mining advocacy network JATAM has also
\nhighlighted some reservations about CD programs carried out by
\nthe country's mining companies.<\/p>\n
Chalid Muhammad, the coordinator of the advocacy group, said
\nthat most of the CD programs of the mining companies were
\nformulated without the involvement of local residents.<\/p>\n
\"That's why many CD programs have failed to achieve their goal
\nin promoting the well-being of the locals,\" he told the Post.<\/p>\n
The concept of community development should, therefore, be
\nstreamlined to allow the participation of the locals in deciding
\nwhat kinds of programs can suit their needs, he added.<\/p>\n
Community development programs that only favor the companies
\noften generate conflict among residents, instead of benefiting
\nthem, he said.<\/p>\n
\"Those who benefit from the program and those who don't often
\nfight each other,\" he added.<\/p>\n
Worse still, according to him, many CD programs were often
\nused only to eliminate the opposition against mining companies,
\nrather than being designed as long-term programs to promote the
\nwelfare of the locals, who mostly remained in poverty.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/corporate-responsibility-towards-community-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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