Forest community development: Enhancing corporate social responsibility in Indonesia's forestry sector

There are enduring problems regarding the relationship between corporations and the communities living close to their operations. The main causes of these problems include economic factors (Barron, Kaiser, & Pradhan, 2009) and a lack of opportunities for local people to work in the companies and to be involved in the companies’ projects on community development (Batruch, 2011). Problems have also arisen because of a demand by communities for a share of the benefits generated by the companies’ operations. The introduction of the concept of corporate social responsibility (CSR) has been recognised as a means by which the benefit collected by companies can be shared with local communities (Breen, 2007). However, it is difficult as the need for profit often conflicts with CSR as presented in the companies as case studies. This study analysed the root reason for CSR is a lack of ethics in CSR (such as poor communication, low levels of trust and commitment) which stems from a conflict between ensuring profits (such as endeavouring to meet the production target and sustaining timber supply for the furniture industry) and the need to do good and establish good community relations. Whilst, benefit sharing embedded in CSR implemented by the large and small forestry companies, as well as the mining company, is not simply sharing profits, opportunities and benefits from natural resource extraction, but it needs a long process, continuous communication and strong trust between companies and local communities. To explore a company–community relationship and its associated problems, three companies operating in South Kalimantan Province, were selected as case studies. These were two forestry firms and a mining company. Local communities located near the companies’ operations were also chosen as case studies to observe their villagers’ opinions regarding constraints and opportunities associated with the practice of CSR, and attempts to enhance its implementation.