I

n this land of plenty, many people live off its wealth, while others only get to taste the irony.

It’s a topic that fires up Maria Nindita Radyati, head of the graduate study program on corporate social responsibility (CSR) at Trisakti University in Jakarta. She’s written and talked a great deal about Indonesia being an example of “the resource curse”, a term first coined by British professor of economic geography, Richard Auty, in 1993 to describe how countries rich in natural resources tend to not benefit from their own wealth. It’s happening in many industries, including in the mining sector, Maria says, with corporations lacking foresight in fulfilling their social responsibilities.

“CSR programs shouldn’t be kiss-and-run occurrences,” said Maria. “Corporations need to develop the right programs and provide steady assistance. The best examples are those that enable people in local communities to create jobs, become business owners, and stand on their own two feet, without being dependent on anyone else. A positive initiative is building community cooperatives.”

In reality, more and more companies in extractive industries are now turning their attention toward empowering local communities. Some start on the premise that development is best started by and within locally based programs, calling it a form of social investment.

In line with this idea, Australian energy company Santos employs what they call “a participatory approach”, contracting universities and local NGOs to help identify community needs before designing development programs. But that’s not all.

“There is local government involvement to ensure that the planned programs do not overlap with ones run by the government,” said Hartono, Surabaya External Team Leader at Santos.

Santos targets communities in seven coastal villages in Sampang, Madura, East Java, and eight others spread across two islands in Sumenep, also in Madura – the same province where the company’s assets are based. Santos, which began its operations in Indonesia in 1997, also runs special programs for women running microbusinesses.

“We want to be a good neighbor to our stakeholders living around Santos operations,” said Hartono.

Financial support is also part of US-based mining giant Chevron’s CSR programs, through loans via a microfinance institution. In addition, Chevron offers business management training to small businesses and cooperatives.

In Balikpapan, East Kalimantan, the company assists in batik training for local women and people with disabilities. Participants are taught to craft handmade batik cloths with indigenous patterns using environmentally friendly materials. Promotion and distribution is all included with the package.

Adopting a similar approach, is the Indonesian pulp and paper company APP Indonesia, which provides women residing near the company’s mills with the training and tools needed for traditional weaving and producing handicrafts.

“We always aim for sustainable activities, which can have long-term benefits for the community. Among other areas of CSR, we prioritize investing in education and livelihood programs,” Aida Greenbury, managing director of Sustainability and Stakeholder Engagement at APP Indonesia, said.

For French-based oil and gas multinational, Total E&P Indonesie, which has operated in this country since 1968, the term sustainable development has evolved greatly. Moving past philanthropic approaches, for the past decade the company has been seeking ways to involve stakeholders in designing and implementing social programs, including in its financing.

And that’s not end of the transformation, says Kusuma Adinugroho, who heads the newly created Sustainable Development and Societal Relations Division at the company.

“We have to get ready for what the UNDP [United Nations Development Program] calls the ‘rights-based approach’,” he says. “We want to make sure we can improve the livelihoods in the communities where we operate so that, by the time we leave, the people will have better lives. We want to prepare them for free-market competition.”

There are three pillars to what his division is doing, he says: namely risk assessment, project and operational support and socioeconomic development -- all of which are based on standard practices of sustainable development principles.

A document released by the company also lists current strategies in 37 villages in East Kalimantan, such as providing capacity building for individuals and local contractors/subcontractors; increasing job opportunities for locals; opening markets with local products, such as fish crackers and fruit for the daily consumption of workers; and greater use of local materials.

With programs geared toward benefiting the people, the company hopes to win their hearts and minds. “The purpose of our work [at the division] is to anticipate, mitigate and prevent any social problems where we operate,” said Kusuma, citing recent news reports of communities rejecting other mining companies.

CSR experts believe that whatever social investment mining companies make in local communities is for their own good; all part of generating trust among stakeholders in their operations, which can lead to sustainable prosperity for both local people and the investors. Facts prove that success in securing local people’s trust contributes to the ability of companies in the mining sector to achieve their broader business objectives.