Implementasi CSR Perusahaan MIGAS dalam pelayanan kesejahteraan Masyarakat di Tuban (study implementasi CSR Joint Operating Body Pertamina Petrochina East Java)

Abstract

This paper is a result of research study about the impact of Corporate Social Responsibility (CSR) of oil and gas company in social welfare. This research specifically focus on communities in five villages around an oil and gas Joint Operating Body managed by Pertamina and Petrochina of East Java operating in Tuban Regency, East Java Province. The company performed CSR as required by Law No.22 Year 2001 on Oil and Gas which further elaborated by Special Task Force for Upstream Oil and Gas Business Activities' (SKK Migas) Regulation No. 017/PTK/III/2005 on Guidelines for Community Development.
 The research method is a qualitative and descriptive. The research found that the company's CSR implemented four programs which do not led to a good practice of community development. Many programs implemented did not align with community needs, lacking of transparency – which then led to misuse of fund, and no impact on affected communities' welfare. Poverty in natural resource rich area is a common phenomena known as as the 'resource course'. It is called a 'curse' as the natural resources were supposed to be a blessing for a prosper and prosperous community. However, the opposite is often happen. This resource curse is believed can be solved by many things, in which one of them, is the company's role through Corporate Social Responsibility (CSR). 
 In order for CSR programs to work well, align with community needs and have a sustainable impact, then the management of CSR becomes an important thing to be pushed. Transparency and accountability of CSR programs are crucial points which required to be monitored by stakeholders. CSR is not a charity based on voluntary action, but an obligation that is the responsibility of the company as good mining practices.

A Review on Digitalization of CSR during the COVID-19 Pandemic in Indonesia: Opportunities and Challenges

“…Before the pandemic, several CSR programs directly helped people by building the infrastructure of social and religious facilities (Huda 2019), donating to education facilities, giving scholarships (Apriatma et al 2019), donating to survivors of natural disasters (Ramadhan and Wijaya 2020), and others.…”

Communicating Sustainable Brand Equity in a High Carbon Footprint and High-Risk Sector: Comparing Malaysia and Indonesia Oil and Gas Industry

“…For instance, in a study conducted in Sulewesi, Indonesia, Wangke argued that Sulawesi's local community voiced their disgruntlement towards oil and gas activities in that region [66]. Similarly, other studies conducted in the Indonesia region highlighted that CSR policy initiated by the oil and gas industry does not contribute directly to the community's interest [67,68]. Besides that, other issues that have been highlighted are related to the transparency of CSR funds used for community services.…”

Corporate social responsibility, financial fraud, and firm's value in Indonesia and Malaysia

“…The most important thing is the issue of transparency of CSR funds. This lack of clarity will cause much fraud in using these funds ( Huda 2019 ). Subsequently, it will decrease the positive value of CSR to the reputation and weight of the company.…”

“…On the other hand, CSR can distract the public and investors from covering fraud within the company ( Saxena, 2014 ). Fraud will impact investors' decreasing level of investment and the community's welfare ( Huda 2019 ). These two factors lowered the impact of CSR on the firms' value.…”