Corporate Social Responsibility in Mining Companies: Regulation and Business Role in Indonesia

Abstract

This study aims to examine the role of mining business actors concerning community development in Indonesia from a regulatory perspective related to corporate social responsibility (CSR) programs. This research used qualitative methodologies using interviews and literature reviews were used. Mining companies share the common objective of profitability with other business sectors. However, CSR program within companies mandates that mining companies play a developmental role as community agents in the vicinity of their operations. In Indonesia, the national ideology of Pancasila and the 1945 Constitution, serves as the highest legal document, which firmly establishes that mining resources are under the control of the state. These resources are used to achieve social justice for all Indonesians through equitable development carried out by companies. This study explores CSR programs in the Indonesian mining sector by conducting a special role regulated by the ideology and constitution of the nation.


Keywords: CSR, regulation, mining companies

References
[1] Jenkins H, Yakovleva N. Corporate social responsibility in the mining industry: Exploring trends in social and environmental disclosure. J Clean Prod. 2006;14:271- 284. doi:10.1016/j.jclepro.2004.10.004.

[2] Kurowski M, Huk K. Corporate social responsibility and the mining industry: Areas of use and opportunities to reduce the negative effects of activity. Eur Res Stud J. 2021;24(3):1129-1141.

[3] Wheeler D, Fabig H, Boele R. Paradoxes and dilemmas for stakeholder-responsive firms in the extractive sector: Lessons from the case of Shell and the Ogoni. J Bus Ethics. 2002;39(3):297-318.

[4] Veiga MM, Scoble M, McAllister ML. Mining with communities. Nat Resour Forum. 2001;25(3):191-202.

[5] Méndez JDM, Rodríguez RS. A profile of corporate social responsibility for mining companies present in the Santurban Moorland, Santander, Colombia. Glob Ecol Conserv. 2016;6:25-35. doi:10.1016/j.gecco.2015.12.005.

[6] Sharma D, Bhatnagar P. Corporate social responsibility of mining industries. Int J Law Manag. 2015;57(5):367-372.

[7] Pahlevi R. State-owned enterprises own the widest mining area in Indonesia (katadata.co.id). 2022. Accessed on April 24, 2023.

[8] ISO International Organization for Standardization 26000. Guidance on social responsibility (2). Bus Environ ISO 14000 Updates. 2009;20(7).

[9] Freeman RE. Strategic management: A stakeholder approach. Englewood Cliffs, NJ: Pitman; 1984.

[10] Donaaldson T, Preston LE. The stakeholder theory of the corporation: Concepts, evidence, and implications. Acad Manage Rev. 1995;20:65–91.

[11] Stake RE. The art of case study. Thousand Oaks, CA: Sage Publication; 1995.

[12] Law of the Republic of Indonesia No. 40 of 2007 concerning Limited Liability Companies (UUPT).

[13] Law of the Republic of Indonesia No. 25 of 2007 concerning Investment (UUPM).

[14] Ministerial Regulation PER-05/MBU/04/2021 on the Environmental Social Responsibility Program (TJSL) of State-Owned Enterprises.

[15] Law of the Republic of Indonesia No. 19 of 2003 concerning State-Owned Enterprises.

[16] Ministerial Regulation of State-Owned Enterprises No. PER-05/MBU/2007 concerning Cooperation Programs between State-Owned Enterprises and Small Businesses and Environmental Development Programs.

[17] Ministerial Regulation of State-Owned Enterprises of the Republic of Indonesia No. PER-02/MBU/7/2017 concerning the Second Amendment to Ministerial Regulation of State-Owned Enterprises No. PER-09/MBU/07/2015 concerning Partnership Programs and Environmental Development Programs of State-Owned Enterprises.

[18] Ministerial Regulation of State-Owned Enterprises PER-05/MBY/04/2021 dated April 8, 2021, concerning the Social and Environmental Responsibility Program of State- Owned Enterprises.

[19] Ministerial Regulation of Energy and Mineral Resources No. 26 of 2018 concerning the Implementation of Good Mining Principles and Supervision of Mineral and Coal Mining.

[20] Ministerial Regulation of Energy and Mineral Resources No. 41 of 2016 concerning the Development and Empowerment of Communities in Mineral and Coal Mining Activities.

[21] Constitution of the Republic of Indonesia 1945.

[22] Ministerial Regulation of State-Owned Enterprises of the Republic of Indonesia No. PER- 8/MBU/08/2020 concerning the Strategic Plan of the Ministry of State-Owned Enterprises for the years 2020-2024.

[23] Law of the Republic of Indonesia No. 3 of 2020 concerning Amendments to Law No. 4 of 2009 concerning Mineral and Coal Mining.