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ABSTRACT
METHODOLOGY
This research uses qualitative method in the form of case study. Qualitative methods are
considered appropriate for exploring and understanding the meanings which some individuals or
a group of people assume are derived from social or humanitarian problems (Creswell 2010).
This study aims to see the stages in the implementation of corporate CSR can generate
good relationships between companies and local communities, also requires social capital in social
relations. If the implementation works well and social capital is well established, good
relationships between companies and local communities are also established. The time dimension
in this research is cross-sectional because this research is done to know how the relation between
company and local community at the time of research. Data collection is done by using in-depth
interview technique, where the interview or interview is done in depth to the subject of research
(informant) to obtain data relevant to the research.
Informant in this research is determined by purposive sampling technique. This study
selected several people to be informants in research based on research needs, i.e. stakeholders who
are directly involved with the implementation of CSR programs, and some of them lack
understanding of the implementation of corporate CSR programs. Key informants in this study are
the company, namely employees in the division relation as well as some local communities who
are actively involved in the implementation of corporate CSR programs.
This research used in-depth interview technique or qualitative interview to informants,
conducted semi-structured, directed, and reinforced by literature study (Sarwono 2006). This study
obtained data both orally and in writing. Then, this study also collects data through related
documents, in the form of public documents such as papers and newspapers or in the form of
private documents such as unpublished company data (Creswell 2010).
CSR Program
Prayogo (2011) explains that CSR is a company's obligation to create the welfare of local
communities, as well as build mutually supportive relationships with local communities. Mining,
oil and gas companies are required to have social responsibility that improves the welfare of the
local community, because it is exploitative or destructive nature in the local community residence
area. Good relations can be built through the implementation of a good CSR program as well.
Based on Prayogo et al. (2014), there are four stages in running corporate CSR, namely situation
analysis, planning, implementation, and evaluation.
The first stage is situation analysis. This stage is divided into two part, namely the analysis
externally and internally (Prayogo et al. 2014). External analysis is conducted to know the
community around the company's operating area through social mapping and need assessment that
contains the identification of community needs around the company's operating area. While the
internal analysis sees the company's readiness to implement CSR programs in terms of funding,
the ability of corporate staff running CSR programs, and determine the space for CSR
organization.
The second stage is the planning stage. Prayogo et al (2014) explain the planning stage is
to harmonize the government program plan with the company. Furthermore, the company sees
local potential to be invited to the implementation of CSR programs, as well as local potentials in
terms of community awareness, economic and environmental potential. The company also
determines the program focus and its priority scale. Program planning based on priority scale will
determine the allocation of funds and the time period of the company. The next step is to determine
the target achievement of each CSR program, this is done to facilitate monitoring the progress of
activities. Achievement targets can be complemented by time and scope limits to clarify and make
it easier for evaluators to evaluate the program. The final step in the planning stage is the
determination of the target of CSR beneficiaries, the goal is that the target is not widespread and
on point.
The third stage consists of three stages in it, namely preparation of program
implementation, program implementation, and monitoring (Prayogo et al. 2014). First, the
company done preparation by forming a stakeholder forum for delivering aspirations and
complaints from local communities. Next determining the implementer of the CSR program in
accordance with the criteria and program indicators made by the company. Then the company
determine recruitment program implementer in accordance with the needs of program
implementation. The company also binding communication with the company's stakeholders.
Second, is the stage of program implementation. The implementation phase of the program begins
with the socialization of the CSR activity plan. After conducting the socialization, the company
executes the planned program in accordance with the design of the plan that has been made before.
Third, the monitoring stages include determining the aspects to be monitored, the progress of the
activities, the participation of local communities, the constraints during the implementation of the
program and the settlement taken in the event of a constraint.
The fourth stage is the last stage in the implementation of the CSR program, namely the
evaluation stage. At the evaluation stage, the first thing to do is determine the scope of the program
to be evaluated. Then, determine the evaluator who can be done by the company itself or done by
a third party. Next is the determination of aspects to be evaluated can be based on certain indicators
such as legal aspects as well as program impact on various things. Finally, receive feedback from
the evaluation results on the program design, and then improved to be re-implemented in the next
period.
Stages of CSR program implementation by Prayogo et al. (2014) is considered appropriate
for this study in assessing the implementation of CSR programs in the company under study. Well
implemented CSR programs based on the stages of CSR program implementation, can build good
relationships between companies and local communities. the implication is to build social capital
that benefits both sides companies and local communities.
Apart from the CSR concept above, this study also needs to explain the concept of social
capital. Social capital is a resource inherent in a social network. These resources can be accessed
or mobilized through network ties (Lin 2001). Dale and Onyx (2005) sought to understand the
nature of social capital and the relationship between social capital and sustainable development (in
this study, hereinafter referred to as CSR and CD). There are six key elements of social capital that
illustrate that social capital positively leads to other capital toward sustainable development for
better communities.
a. Engagement, this element sees if empowerment is seen in helping each other.
Empowerment is an important first step in building social capital. Companies were done
empowerment will be involved both intellectually and emotionally to stakeholders. The
purpose of this element is the participation of the company in taking part to resolve social
problems and maintaining the community in the area around the operation.
b. Trust based on Dale and Onyx (2005) is an important part to formed a relationship. Trust
is essential to building social cohesion and economic success for the company. Time is
important in building trust, trust grows over time and the interaction that builds up between
the company and the local community. Distrust, bringing destruction in relationships and
separating members within the community.
c. Cooperation is important in social capital, essentially as a glue that connected one person
and another (Dale and Onyx 2005). Without cooperation, the relationships between people
with each other will be disconnected in a community.
d. Collective Norms is an important thing in society, because it describes a shared orientation.
Collective norms are an adhesive in the pattern of social relations, but these norms must be
made jointly by mutual agreement, to achieve common interests. Collective norms become
standard in action, so as not to harm both parties, and illustrate the same view between the
company and the community.
e. Knowledge Diffusion, one of them through increased literacy rate or education at the
individual level. The goal is, improving the economy of local communities, good education
will create an economically independent society as one of the goals of empowerment.
f. Sense of Shared Future, this element is continuous with the fifth element of knowledge
diffusion. An increase in literacy rate is a means for a more advanced in upcoming future.
Through building a good understanding with the contribution of networks as an effort to
increase social capital, communities can gain greater capacity in determining the best
resources for a more advanced future.
This study uses social capital concept of Dale and Onyx (2005). Social capital by Dale and
Onyx (2005) describes the existence of social capital to be important in the CSR program.
Social capital required by the company to be able to establish good relations with the
surrounding community. The better the relationships are built, the company will be easier to
achieve its business goals without overriding the social needs and the existence of local
communities around the operating area. following model of relationship of CSR program
implementation with social capital:
Operational Concept
This study was conducted on one of the extractive companies, namely CNOOC SES Ltd.
China National Offshore Oil Corporation (CNOOC) is China's largest offshore oil and gas
producer. CNOOC operates in the Block Southeast Sumatra region as one of the pioneer of
offshore oil production, offshore oil production, gas exploration and production (CNOOC
Company Profile 2013). On September 6, 1998, the Southeast Sumatra (SES) PCSs contract was
signed and extended for 20 years until 2018. CNOOC first implemented CSR programs in 2003,
with Kelapa Island as the first island to receive CNOOC CSR programs and become ring 1
company CNOOC. the coverage of the company's operational area covers the District of
Kepulauan Seribu District Administration, Serang District, especially Pulo Panjang Village and
East Lampung Regency, especially Muara Gading Mas and Margasari Villages, Labuan Maringgai
Sub-district (Community Relation Magazine 2010-2011).
CONCLUSION
The purpose of this study is to see how the role of CSR programs in building a good social
capital on the relationship between companies with local communities and local governments as
stakeholder company. Based on the results of the study, it can be concluded that the company still
has not implemented a good CSR program implementation. This is evidenced by several important
stages that have not been executed by the company. As a result, the social capital that is formed
from the implementation of the CSR program is still not optimal even though it has been well
established. This is in line with the extent to which companies integrate the interests of local
communities with the operations of the company's business as a form of corporate involvement in
activities that help the surrounding community (Sekajipo 2010). A good program is compatible
with the needs of the surrounding community, so evaluation needs to be done in order to assess
the conformity of the company's CSR program to the needs of the community, and in line with the
company's mission (Prayogo 2011). Stages of implementation of CSR programs that have not run,
of course, depend on the CEO or top management in making decisions to run CSR activities
(Dectomasi 2008 in Sekajipo 2010). One of the stages that have not been executed, there is at the
implementation stage. At this stage, the company has not established a stakeholder forum as a
forum for the community to convey their aspirations (either suggestions, complaints, etc.)
(Prayogo et al. 2014). Whereas communities are included, by way of communication and
negotiating with stakeholders to safeguard the interests of the company's business has a function
to maintain the relations of stakeholders and companies (Kemp and Owen 2013).
Social capital in the relationship between the company and the local community is well
established. The social capital that has been built has an impact on the local community's
acceptance of the company. Moffat and Zhang (2013) use one element of social capital that is trust
as one of the variables that builds acceptance. There is an interaction between the company and
the local community, the improvement of social infrastructure and justice into three things that can
build local acceptance of the company's existence (Moffat and Zhang 2013). This study shows that
the trust between the company and the local community has been built quite well, although still
hampered by problems in the past. Then in terms of interaction between companies and local
communities, reflected from the company regularly reduce the CSR program in the area of
Coconut Island. The company implements the CSR program itself, and builds self-managed
organizations to assist the running of several CSR programs. The CSR program that is given
periodically and involving local communities in self-managed organizations, illustrates the
interaction between companies and local communities. The CSR program, which is regularly
lowered by the company, covers the infrastructure sector, where the company makes
improvements to public infrastructure as well as building public infrastructure that was not
previously available in the Coconut Island area. For example, the construction of a pier previously
only made of stone and wood piles. The company is rebuilding and performing regular
maintenance. The pier was built because it is one of the common infrastructure needed by Coconut
Island community. Considering most of the heads of families in Kelapa Island work as fishermen.
Then in the case of justice, the existence of the company does not degrade the quality of life of
local people in Kelapa Island. In some ways the company helps improve the quality of life of local
communities, including providing free healthcare programs, scholarships and school packages for
outstanding students, building docks and meeting the need for clean water during the dry season.
The above explanation gives an idea that the company has been accepted by local people
because it has fulfilled some elements of acceptance. Apart from that, not only local people who
accept the existence of the company. The local government also accepted the existence of the
company. Seen from the statement of the local government who feel helped with the existence of
the company. Companies are considered to help reduce social problems that cannot be resolved by
the local government. As for the local community, acceptance of the existence of the company is
said to be a form of gratitude for the assistance provided.
This research provides some suggestions for future research development. First, the use of
quantitative methods can be used through the use of scores to be seen clearly, the stages of CSR
implementation that are still not good so that the company can fix it in the future. The goal is that
social capital between companies and local communities and local governments can be well
established. Second, future research needs to relate to the cultural circumstances and habits of the
surrounding community, so that the conformity of the CSR program can be better known to shape
social capital. This is caused by the differences in culture and habits that are quite influential in
the process of implementing CSR programs conducted by the company. As is known, the area
surrounding the operations of the oil and gas company CNOOC is small islands, which assumed
that each island has different needs and habits.
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