The development of businesses is basically aimed at enhancing public welfare by creating jobs, increasing state revenue and improving the quality of education.
However, there are also negative impacts, such as environmental damage and the socio-economic problems created by the economic disparities between the companies and the communities living in their vicinity.
CSR programs have become a global trend, and here in Indonesia, the CSR concept and implementation have become hot issues.
According to the World Business Council for Sustainable Development, CSR is a company's commitment to contribute to sustainable economic development in collaboration with its employees and their families along with the communities in the area to enhance people's quality of life.
One CSR activity is community development. The United Nations defines community development as a process whereby public efforts and potentials are integrated with resources belonging to the state or the government to improve people's economic, social and cultural conditions and to empower the public for advancement at the national level. For practical purposes, the term "public development" is based on community development, which was later made similar to locality development by Jack Rothman (1979).
A company using the community development concept emphasizes community capacity development and seeks local talents for employment. Apart from offering opportunities to local talents, the company builds an image of concern for local communities.
Community development programs have three main characteristics: community-based, local resource-based and sustainable.
PT Newmont Mining Corporation's subsidiary PT Newmont Minahasa Raya (PT NMR) created new jobs, developed community businesses, built roads, provided education and training programs as well as health facilities for the communities in the area. Now six years after it permanently closed the mine in 2004, it continues to rehabilitate its former mining area in Southeast Minahasa, some 80 kilometers south of Manado, the capital of North Sulawesi.
Similarly, PT Semen Gresik has also created jobs. The company, which has plants in Gresik and Tuban (East Java), believes that CSR should reflect the entire company's activities.
The presence of PT Semen Gresik is not limited to a single bottom line, that is, its financial condition, but an existence that is based on triple bottom lines, namely economy, social and environment. All this is explicitly stated in the company's mission: A commitment to enhance the welfare of its stakeholders, meaning shareholders, employees and the communities in the area.
PT Arutmin Indonesia is also active in community development programs and has been since its early days of operation. PT Arutmin Indonesia external affairs manager Delma Azrin said, "Our community development programs focus on the local communities based on our operational capacity and areas in three regencies in South Kalimantan, namely in Kotabaru, Tanahlaut and Tanahbumbu," as quoted by Human Capital magazine.
Large companies, whether multinational companies (MNC) or state-owned corporations (BUMN), especially those engaged in mining, are inseparable from their environment and surrounding communities. They usually have detailed community development programs that have a mission, targets, strategy, stages of implementation and coordination covering priority sectors like the economy of small and medium businesses (UKM - Usaha Kecil Menengah), education and health.
The increased productivity of small and medium businesses will have a great impact on public welfare that in turn gives the public access to better education and health facilities, which is important because the majority of people depend on such businesses.
Small and medium businesses absorb many workers but make a small contribution if wages are used as a productivity measurement. The wages in this sector are generally below the official minimum wage.
This reflects the low competitiveness of such types of businesses and will not reduce poverty in the long run, while at the same time the socio-economic cost increases nationwide.
Indeed, community development programs are not the ultimate solution to such problems, but they can at least create mutually beneficial collaboration between the companies and the communities around them.
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