Abstract
In all industries, inclusively oil and gas, Corporate Social Responsibility (CSR), including community development and environmental protection, have a significance role for the sustainability of company business. However, despite established government regulations and a large amount of company budget for the program, the big question that arises is whether these programs have been effectively addressed the social and environmental needs of surrounding communities, and whether the program succeeded in supporting the sound operation of oil and gas companies. This qualitative research is conducted by collecting data from the central and local governments in Indonesia, from oil and gas companies throughout Indonesia, as well as from communities near operating areas, through desk study, survey, in-depth interviews, and Focus Group Discussion (FGD). The results showed that, in general, the community development and environmental protection program have been implemented. Unfortunately, the programs have not been yet fit to the societies socio-environmental condition, have not been yet answered all communities’ social, economic, environmental, and cultural issues, and have not been yet fully supported the sound operation of the company. This means that the programs have not been used effectively.
Highlights
Corporation, besides their role as business institutions, have the role of existence as social entity that affect and are affected by environmental conditions
The comdev program in oil and gas industry has been regulated through various regulations, including Law No 22 of 2001 on Oil and Gas, Government Regulation No 42 Year 2002 on Regulatory Agency for Upstream Oil and Gas Business Activities, Government Regulation No 35 of 2004 on Upstream Oil and Gas, as well as Governance Guidance for Regulatory Agency for Upstream Oil and Gas Business Activities No 017/PTK/III/2005 on Public Relations and Community Development
Things that lie behind it, among others, the lack of operational policies that guide the implementation of community development and environmental protection programs, especially in the oil and gas industry
Summary
Corporation, besides their role as business institutions, have the role of existence as social entity (corporate citizenship) that affect and are affected by environmental conditions. One form to manifest their concern for the people and environment is to carry out the Corporate Social Responsibility (CSR), one of them through community development (comdev) and environmental protection program (Carrol & Shabana, 2010; D’Amato et al, 2009; Crane et al, 2008; Hohnen, 2007). CSR is a part of corporate efforts to obtain the social license and to increase the social acceptance towards their existence and operations. It is not wrong if the CSR program is considered to be one of the strategies for social mitigation in addition to obtaining and increasing the social acceptance of the company (Morrison, 2014; Ugurlar, 2011). In relation to the environmental aspects, the oil and gas industry must comply with the Act No 32 of 2009 on the Environmental Protection and Management, in which the oil and gas industry must pay attention to aspects of environmental and social impact
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