The Institution of Corporate Social Responsibility (CSR) based on

Coal Mining Companies Stakeholder

As Martadani Noor

, Ravik Karsidi, Drajat Tri Kartono and Suwarto

Department of Development Extension/Community Empowerment, Postgraduate Program,

Sebelas Maret University, Jl. Ir. Sutami No. 36 Surakarta 57126, Indonesia

Keywords: CSR, Institutional, Companies, Mining, Stakeholders.

Abstract: In Indonesia, stakeholders have not been significantly used as the basis for CSR institutional development,

especially in coal mining companies which mostly related to environmental problems and felt by the

surrounding communities. This study aims to formulate the form of CSR institutions based on stakeholders of

coal mining companies. Formulation refers to the results of the analysis: stakeholder views on CSR, and

concerning normative, cultural-cognitive, regulations, and CSR organizations. This research was in Tapin

regency with a qualitative approach. Data collection in 2016 and 2018 through interviews and observations

with triangulation validation tests. Data sources from key CSR forum members and 6 stakeholder groups. The

results of the analysis show that the views of stakeholders experience a disparity in CSR orientation, namely:

CSR as a source of development funds and CSR as a corporate obligation for community welfare. The analysis

of CSR institutions is below, within the normative pillar, there are CSR partnerships, state compliance, and

CSR as community rights. Cultural cognitive pillars, as the reputation and glory of CSR. On the regulative

pillar, there are Regional Regulations concerning CSR. The formulation of CSR institutions includes CSR

partnerships, as normative pillars; The reputation and glory of CSR as a cultural cognitive pillar; and

regulators, supervision, awards and sanctions for CSR as a regulative pillar. The pillars are the basic principles

of CSR, the vision of CSR, CSR organizations in the form of CSR Research and Development Organizations.

1 INTRODUCTION

CSR in the context of sustainable development in the

last decade has increasingly increased as a priority

and the development of CSR is needed according to

the weaknesses found (Visser, 2007). On one side the

CSR institutions of developing countries still have

weaknesses institutional (Mohan, 2007) for example,

in terms of CSR codes and norms, standardization,

CSR governance and the influence of cultural

influences on different CSR for each developing

country (Welker, 2009). On the other hand, in the

case of Indonesia stakeholders have not significantly

used as the basis for the development of CSR

institutions, especially coal mining companies that

are mostly related to environmental issues (Yang,

2009).

The company must maintain its relationship with

stakeholders by accommodating the desires and needs

of its stakeholders, especially stakeholders who have

power over the availability of resources used for the

company's operational activities (Arenas, et all.,

2009). The Institutional in macro definition is a space

for community activities that uses its resources to

maintain social harmonization on the basis of three

pillars, namely: normative, regulative, and cultural-

cognitive. In micro-definition, institutions include

aspects of organizational structure, organizational

processes and individuals in organizations (Karsidi,

2001; Pedersen, 2006).

The desire of stakeholders can be accommodated

so that it will produce a harmonious relationship

between the company and its stakeholders. A

harmonious relationship will result in the company

being able to achieve company sustainability (Yin,

2013).

Based on the above arguments, this research

explores the stakeholder views of coal mining

companies regarding CSR institutions. Coal mining is

mainly related to environmental impacts. The final

goal of this research is to form of corporate CSR

institutions based on stakeholders of coal mining

companies in Tapin Regency, as one of the districts

in Indonesia that has great potential for coal mining

as the main mining commodity. Tapin Regency has a

production capacity in 2017 of 518,210,075. m3,

590

Noor, A., Karsidi, R., Kartono, D. and Suwarto, .

The Institution of Corporate Social Responsibility (Csr) based on Coal Mining Companies Stakeholder.

DOI: 10.5220/0008434105900594

In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World (ICIB 2019), pages 590-594

ISBN: 978-989-758-408-4

which has been mined by 29 coal mining companies

spread across 6 sub-district locations.

2 METHOD

This descriptive qualitative study has used a type of

case study that has not controlled the object of

research and focused on explaining the current

situation by digging data and analysing it that is

relevant to the formulation of research problems

(Hancock, 2006).

This research was conducted in two stages,

namely 3 months preliminary research in 2016 and

actual research in October 2018 through December

2018 in Tapin Regency, South Kalimantan province.

Primary data at the initial stage using a questionnaire

were obtained from 100 informants. The second stage

through observation and in-depth interviews were

obtained from managers of CSR forum representing

6 from coal mining companies, 4 from community

groups, 3 from local government officials, 3 from the

Regional People's Representative Council (DPRD), 1

from the mass media, 2 from academics, and 2 from

NGOs. Reliability and data validation is done by the

source and data triangulation method (Miles, 2009).

3 FINDING AND DISCUSSION

3.1 Realization and Views of

Stakeholders on the CSR Program

The form and target of the CSR program have shifted

from the original charity that will make the

community more dependent and unproductive,

towards community empowerment programs for

long-term needs. Therefore, CSR programs must be

directed at efforts to resolve the problems and needs

of the surrounding community for the long-term

interest (Brammer, et all. 2012).

The CSR forum for coal mining companies

consists of CSR managers representing coal mining

companies, namely: PT. Bhumi Rantau Energi, PT.

Energi Batubara Lestari, PT. Batu Gunung Mulia, PT.

Sumber Energi Kalimantan, PT. Gunung Persada

Mulia, PT. Putra Banua Tapin, and PT. Berkat Murah

Rezeki. The main tasks of the CSR forum are: (a)

Addressing the problems of the relationship between

each company and the community and making a CSR

program agreement; (b) Respond to the policies of the

Tapin District Government as well as proposed

activities from the community related to CSR. (c)

Creating and implementing joint activities for

improving CSR management.

The following are data on the implementation of

the profile of CSR programs for coal mining

companies in Tapin Regency which cover five fields

of education, health, socioeconomic, religious and

environmental fields as in table 1.

Table 1:The profile of CSR programs in 2017.

Fields (Objectives of

Strategies)

Programs

Education (Providing

assistance to increase

resources to the

community)

Scholarship assistance

for outstanding students

and poor students

Education (Improve the

positive image of the

Company)

Provide opportunities

for students to practice

work at coal mining

companies.

Social Economy

(maintenance activities, a

large number of non-skilled

workers are needed that

cannot be met internally).

Organizing short

education for graduates

of High School Skills

regarding Operation &

Maintenance.

Religious (Improve the

company's positive image

aimed at the religious

community)

Provide: (a) Finance

Umrah to religious

leaders; (b) financial

assistance and / or

material for the

construction of places

of worship.

Environment (Impacts

arising from mining

operations so as not to

damage the environment)

Selection and

installation of

environmentally

friendly waste

processing equipment.

Environment (Greening

around the company's area)

Providing assistance to

horticultural plant seeds

for the community

Health (Improve the quality

of life of people around the

company's area)

Clean water program in

the location of Pulau

Pinang Village with the

Water Treatment

Process program for the

needs of 195

households

Understanding the vision of CSR is an important

part of knowing CSR orientation. The perspective of

the Regional Government and DPRD that, the vision

of CSR carries out the obligation of the company to

provide funds that can be used by regional

development programs according to the policies of

the Regional Government.

The perspective of non-local government

stakeholders (community groups, NGOs, mass

The Institution of Corporate Social Responsibility (Csr) based on Coal Mining Companies Stakeholder

591

media, and academics) views the vision of CSR, the

company's obligation to empower the use of company

resources to overcome the problems of communities

around coal mining locations through community

empowerment. The data shows, the disparity of

stakeholders in the CSR vision.

3.2 Institutional Reality of CSR

3.2.1. The Normative Pillar

The normative is a basic adherence to individuals and

groups in carrying out social obligations as well as a

basis for binding social stability (Scott, 2014).

The views of the corporate CSR forum are based

on partnership norms that contain the value of

togetherness by empowering corporate resources for

community welfare and environmental conservation.

Local Government stakeholder views that, CSR is a

state norm that places the community as recipients of

CSR programs. The non-governmental stakeholder

view that CSR is a community rights norm.

3.2.2. The Cultural-cognitive Pillar

Cultural-cognitive explains the meaning that is

mutually understood between individuals or groups in

an institution that runs with mimetic meaning. This

dimension is characterized by the existence of a

mutual trust that makes sense in actions at the

institution (Scott, 2014).

According to the government stakeholders that

cultural-cognitive CSR is the belief in the glory of

CSR with rationality that carrying out state orders as

obedience will get recognition from the state. For

non-government stakeholders that cultural-cognitive

CSR is also the glory of CSR. However, by the

rationality that the company fulfills the rights of the

people will gain the legitimacy of the good of the

community. The CSR Forum believes that the

company will gain a reputation from the state and

society.

3.2.3. The Regulative Pillar

Regulative is a basic adherence to individuals and

groups to obtain social benefits and benefits derived

from the existence of regulations and at the same time

as a basis for social order (Jackson, 2010).

Regulative of the Tapin District Government on

CSR that contains the organization of Tapin

Regency's Corporate Social Responsibility Work

Team (CSR Team) in accordance with the Tapin

Regent Decree Number: 188.45 / 009 / KUM / 2018

concerning the CSR Team with the main tasks:

assisting the Regent of Tapin in organizing CSR in

Tapin Regency; (b) to identify the needs of

development programs and public services to be

synchronized with CSR programs in Tapin Regency;

proposed CSR program in Tapin Regency and (d)

carrying out monitoring and evaluation of the

implementation of the CSR Program in Tapin

regency. In practice, the CSR work team has not been

effective in carrying out their duties. This is because

there are no organizational sub-units to carry out the

main tasks of the CSR Work Team. Another reason is

that the CSR Work Team has difficulty coordinating

with the company. The difficulty is caused by the

management viewpoint of the CSR forum that, the

CSR Team's policy on CSR programs has different

targets for CSR areas and target community groups,

so the targets are also different in achieving

community harmony with coal mining companies.

3.3 The Form of Formulating CSR

Institutions based on Stakeholders

Formulation of the form of CSR institutions is based

on stakeholder studies of coal mining companies and

the CSR forum of coal mining companies in Tapin

Regency can be described as follows:

1. Stakeholders can become the institutional basis

of CSR through pillars: (a) CSR norms: The

good value of CSR partnerships; (b) Cultural-

cognitive CSR: Rational belief, a reputation and

glory of CSR; (c) Regulative CSR includes

Regional Governments as regulators,

supervisors, awards and sanctions on CSR.

2. Management of CSR with institutional forms,

namely: CSR Research and Development

Agency with a description as follows:

a. Name of institution: “Research and

Development Agency for CSR (Badan

Penelitian & Pengembangan CSR – BPP

CSR).

b. CSR principle

The principle of CSR institutions in Tapin

Regency namely: Legal certainty; Public

benefits; Togetherness; Openness;

Partnership; Balance; Harmony; Integrity;

Justice; Agreement; Sustainability;and

Environmental insight.

c. CSR Vision

The CSR vision framework is: "Ignition of

Community Empowerment,

Environmental Conservation and

Reputation of CSR in Tapin Regency".

ICIB 2019 - The 2nd International Conference on Inclusive Business in the Changing World

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d. CSR mission

Achieving the vision will be pursued with

a mission framework, namely: (a)

Establishing harmonious relationships

between CSR stakeholders; (b)

Coordinating participation and synergizing

government programs and corporate CSR

programs; (c) Monitoring and evaluating

the implementation of CSR programs; (d)

Conduct research and development of CSR

programs.

e. The main tasks of the BPP CSR are: (a)

Provide input to the Regional Head of

Tapin Regency (Regent) for CSR program

policies and strategies; (b) Conduct

mapping of target beneficiary areas in CSR

programs and socializing to stakeholders;

coordination between stakeholders and

companies related to planning,

implementing and monitoring evaluation

of CSR activities. (d) Monitor and evaluate

the implementation of the company's CSR

program; (e) Conducting research and

development of CSR programs on an

ongoing basis; (f) Provide

recommendations to the Regional Head of

Tapin Regency (Regent) regarding

reputation and sanction awards according

to the latest results of monitoring and

evaluation.

f. The scope of the BPP CSR program:

Health; Education; Social religion; Social

Economy; and Environment.

g. Organizational structure of the BPP CSR.

The organizational structure consists of

units: (a) Steering Committee and

responsible person (Chair and Deputy

Chairperson); (b) Executive Committee

(Chairperson, Deputy Chairperson and

Secretary); (c) Divisions: program

planning; monitoring and supervision;

research & development of CSR programs;

operational.

h. The BPP CSR Board: (a) Steering

Committee and Responsible Agency:

Head of Regional Government of Tapin

Regency; (b) Executive Committee: The

leaders of the Regional Government Unit,

Head of companies, Elements of Higher

Education, NGO elements; elements of

social religious organizations, elements of

company workers, and elements of the

mass media; (c) Part of supporting organs:

Based on the description of formulating the

institutional CSR based on coal mining stakeholder,

it can be described as shown in the figure 1.

Figure 1 : The form of the institution of CSR based on coal

mining companies stakeholder.

4 CONCLUSION

Based on the description of the analysis above, it can

be concluded that the existence of stakeholders view

of coal mining companies in the Tapin Regency

region towards the vision of CSR experiences a

disparity of orientation between the perspective of

CSR as a source of regional development funds and

CSR as the company's obligation for community

welfare. Likewise, on the pillars of CSR institutions

that the pillars of CSR norms, on the one hand as

partnership norms and the other side as state norms

and as community rights norms. In the cultural-

cognitive pillar that there are a reputation and glory

of CSR with recognition of the good that comes from

the state and society. On the regulative pillar, there

Stakeholders

Institutional CSR :

➢ Normative: CSR partnership;

➢ Regulative: Regulators, supervision,

awards and sanctions;

➢ Cultural - cognitive: the

reputation and

glory of CSR

CSR

principle

CSR Vision & Mission

BPP CSR

Steering Committee & person in charge

Executive committee

Divisions

Monitoring &

Evaluation

Program

planning

Research &

development

The Institution of Corporate Social Responsibility (Csr) based on Coal Mining Companies Stakeholder

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are regional regulations on CSR. All data findings

have provided a basis for formulating of form CSR

institutions based on coal mining companies

stakeholder. The form of CSR institutions in Tapin

Regency is (a) CSR partnership as a normative pillar;

(b) The reputation and glory of CSR as a cultural-

cognitive pillar and (c) regulators, supervision and

awards and sanctions for CSR as the regulative pillar.

All these pillars can form the principle, vision and

mission of CSR and organizations CSR in the form

of CSR Research and Development Agency.

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