ARTICLES

 

Empowering local communities: CSR communication strategies and NGO engagement in the Indonesian oil and gas sector

 

 

Ahmad Taufiq^I; Prof. Pawito Palimin^II; Dr Andre Noevi Rahmanto^III; Dr Drajat Tri Kartono^IV

^IDepartment of Communication Science, Faculty of Social and Political Sciences, Sebelas Maret University, Surakarta, Indonesia. Email: ahmadtaufiq2018@student.uns.ac.id (corresponding author). ORCID: https://orcid.org/0009-0004-3242-5051
^IIDepartment of Communication Science, Faculty of Social and Political Sciences, Sebelas Maret University, Surakarta, Indonesia. Email: pawito_palimin@staff.uns.ac.id ORCID: https://orcid.org/0000-0001-8246-0040
^IIIDepartment of Communication Science, Faculty of Social and Political Sciences, Sebelas Maret University, Surakarta, Indonesia. Email: andre@staff.uns.ac.id ORCID: https://orcid.org/0000-0001-7331-4973
^IVDepartment of Communication Science, Faculty of Social and Political Sciences, Sebelas Maret University, Surakarta, Indonesia. Email: drajattri@staff.uns.ac.id ORCID: https://orcid.org/0009-0003-8455-8633

 

 

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ABSTRACT

The Bojonegoro Regency in Indonesia's East Java province holds great potential in the oil and gas sector, which is important for supporting the regional economy. This study set out to determine how oil and gas companies communicate corporate social responsibility (CSR) programmes to stakeholders by analysing the motives behind involving local NGOs in implementing CSR and comparing communication approaches between the multinational oil company ExxonMobil Cepu Limited and domestic gas company PT Pertamina EP Cepu. Thematic mapping was utilised to visualise the relationships between the main themes constructed from the data. The findings highlight the key role of local NGOs in managing CSR, namely serving as communication channels, empowering beneficiaries, and maintaining a strong performance track record that is closely linked to oil mining locations. NGOs also fulfil a dual role, namely carrying out tasks that may prioritise corporate interests over community welfare, and acting as contractors or project partners for implementing programmes that may differ from their original mission.

Keywords: corporate social responsibility, CSR communication strategies, NGO engagement, oil and gas, community empowerment, Indonesia

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INTRODUCTION

The Bojonegoro Regency in Indonesia's East Java province holds significant oil and gas potential with 25% of Indonesia's reserves, including key fields managed by multinational oil company ExxonMobil Cepu Limited (EMCL) and domestic gas company PT Pertamina EP Cepu (PEPC) (KabupatenBojonegoro, 2020). Despite being a net oil importer, the region plays a crucial role in meeting domestic energy needs. However, challenges include balancing resource exploitation, environmental sustainability and community welfare; thus, emphasizing the need for transparency and effective CSR communication strategies (KabupatenBojonegoro, 2020).

CSR communication is an approach that could be used to alleviate conflicts that arise in the oil and gas sector. In the case of Pertamina EP, local communities manage wells based on customary law (Saeed et al., 2024; Emeka-Okoli et al., 2024), while Pertamina EP operates in accordance with statutory regulations (Barman & Mahakud, 2024; Dai & Liang, 2024). These differences in perception and approach create tensions that are difficult to resolve, affecting the sustainability of natural resource extraction and the welfare of local communities (Sholikin, 2019). In some instances, the conflict between the village elite and the cooperative has led to the marginalisation of some sections of the society (Belvage, 2016). Then, land use turned into a large project which resulted in the loss of jobs for the majority of the existing farmers (Katenova & Qudrat-Ullah, 2024; Sparacino et al., 2024). These actions, carried out by ExxonMobil, affect the social and economic life of the community (Sindhu et al., 2024; Wihartina, 2015). Based on this, significant control is needed over job benefits, CSR programmes, and the environmental impact (Macca et al., 2024; Wahyuhono et al., 2019).

Bojonegoro Regency saw an increase in NGOs from 101 in 2010 to 201 in 2022, indicating greater public awareness and demand for advocacy and social services (Subadi, 2023). Effective CSR communication strategies are crucial for building trust, credibility and transparency, especially in the oil industry, where operations impact local communities and the environment (Barman & Mahakud, 2024). Ineffective communication can undermine CSR reports and worsen public perceptions, as is evident from Pertamina EP's dominance in managing CSR programmes, which threatens the independent role of local NGOs in community development. The dynamics between ExxonMobil and Pertamina EP reveal an imbalance in CSR strategies, with ExxonMobil using a more hierarchical approach compared to Pertamina EP's semi-closed involvement. Local NGOs are essential in CSR communication, acting as effective intermediaries due to their understanding of local realities. They can convey information accurately and respond effectively to local issues, enhancing community trust. Their familiarity with the community positions them as trustworthy entities, highlighting their importance in promoting sustainable and inclusive CSR programmes in Bojonegoro Regency (Chang & Yu, 2024; Elliott & Copilah-Ali, 2024). Local NGOs facilitate effective communication and collaboration with communities, enhancing trust and participation in CSR programmes for sustainable development.

CSR research highlights several important aspects, such as the need for internal conflicts to be resolved (Hidayat & Prabawati, 2012), improvement of CSR regulations to reduce conflict and improve relations with the community (Subadi, 2023), and the need for effective CSR to increase policy effectiveness, responsiveness to the community, and to distribute benefits so that it not only benefits mine managers, but also improves local social and environmental conditions (Ridwan & Mursyidah, 2023). Sunarto et al. (2024) found that CSR can help mediate between village government, law enforcement officials, illegal oil mining communities, and other communities, with the aim of reducing tensions and increasing social and environmental sustainability in Keban Bojonegoro Village. Suprapti (2011) concluded that with an inclusive and sustainable CSR programme, Pertamina EP can improve relations with local communities, provide training to increase legal awareness, and assist in negotiating fair freight costs and promoting compliance.

This study explores how oil and gas companies communicate CSR programmes to stakeholders by analysing the motives behind the involvement of local NGOs in implementing CSR, and by comparing the communication approaches between multinational oil companies such as ExxonMobil Cepu Limited and domestic gas companies such as PT Pertamina EP Cepu.

The findings of the study contribute to CSR communication theory within the context of the energy industry, but also provide practical benefits in the form of guidance for oil and gas companies in improving the effectiveness of their communication with stakeholders and in designing more inclusive and transparent CSR policies. The study also underlines the importance of maintaining a balance between corporate interests and community welfare in the context of implementing CSR programmes.

 

METHODOLOGY

The study follows a qualitative approach to analyse the role of NGOs in the CSR of oil and gas companies in Indonesia (Khan et al., 2021; Setiawan et al., 2023; Wahid et al., 2023). Qualitative data analysis is used to answer complex questions and to explore NGOs' roles in CSR for oil and gas companies, focusing on interactions, communication, and stakeholder engagement in Bojonegoro, as set out in Table 1 (Ajayi & Mmutle, 2020; Elliott & Copilah-Ali, 2024; Modica et al., 2024). Data was collected from in-depth interviews with 25 participants representing oil and gas companies, the government, journalists, NGOs, and CSR beneficiaries.

 

 

NVivo 12 Plus software was used to analyse the data. Based on the data, the software creates a mind map to visualise the relationship between main themes, such as CSR communication and the role of NGOs. The analysis process includes categorical grouping, data interpretation, pattern determination, cross-case synthesis, and naturalistic generalisation to draw conclusions on communication strategies (Ellerup Nielsen & Thomsen, 2009; Ham & Kim, 2019; Mattera & Soto, 2023; Naatu et al., 2022).

 

RESULTS

ExxonMobil Cepu Limited's CSR programme

CSR communication strategy to stakeholders

CSR communication to stakeholders consists of three phases. The first phase is the delivery of initial information regarding the contents of the programme. Discussions on programme planning and implementation take place among village elites, programme-implementing NGOs, and company PICs. In this phase, the space for participation is wide open through input for the implementation of the CSR programme. For companies, the form of interaction in village meetings is in line with the direction and objectives of CSR communication.

Communication is carried out in line with the objectives, situation, and audience through face-to-face verbal communication, and/or written, as well as formal and/or informal communication (Interview IC.1)

Two-way communication in all the phases is essential because historically the CSR reports of oil and gas companies have been assessed by NGOs and the public as lacking credibility (Rathobei et al., 2024; Souza et al., 2021). For this reason, the two-way communication channel or dialogue between CSR facilitators (NGOs) and beneficiaries, especially during the first and second phases, should adhere to the principles of a participatory approach, including comprehensive dialogue, participation, cultural identity, and empowerment (Rademacher & Remus, 2017; Sparacino et al., 2024).

Major proposition:

Effective corporate CSR communication to stakeholders is crucial for building trust, credibility, and transparency.

Minor propositions:

a. Transparency is a moral basis for doing business and can help organisations emerge as trusted actors through CSR communication.

b. Adequate communication can increase the credibility of CSR reports and improve the perceptions of oil and gas companies towards NGOs and the general public.

Local NGO involvement in CSR management

Corporate motive for involvement in CSR management

All the participants agreed that the company had a motive for involving local NGOs. Firstly, it functions as a new corporate communication channel. The participants agreed that the NGOs' good track record influences the company's image/reputation in society. In addition to a good track record, the company also wants its partners to have a strong local network.

Local programme partners have added value because they have contextual understanding and good relations with beneficiary communities. Local NGOs can understand the characteristics of the local community and know exactly the needs of the community around the area of operation (Interview IC.1).

Companies engage politically-connected NGOs to improve communication with the government, enhancing CSR collaboration and benefiting local communities in Bojonegoro (Gálvez-Sánchez et al., 2024; Tjahjadi et al., 2021). As emphasised by Hamann and Acutt (2003), top management will be closely linked to effective CSR requiring collaboration between companies, the government and NGOs as development agents and emphasizing the importance of strategic fit and building trust (Llavero-Pasquina et al., 2024; Rathobei et al., 2024).

Major proposition:

Local NGO involvement in CSR programmes, strategic communication channels and community empowerment.

Minor propositions:

a. New communication channels: Involvement of local NGOs as a new communication channel for companies to convey non-CSR interests.

b. Reputation enhancement: Influencing a company's reputation by the performance and strong track record of local NGOs in building a positive image in society.

Corporate agents

The position of NGOs is not equal to that of corporations. The dominance of the company has an impact on the role of NGOs in managing CSR programmes, leading to NGOs becoming corporate agents. Most of the participants, including CSR-implementing and neutral NGOs, the mass media and beneficiaries, stated that there was a tendency for CSR programme-partner NGOs to become subjective.

...initially the mission was to empower. After becoming CSR partners, the NGOs turned into something like brokers, contractors, or agents. I think they are corporate agents because they become the representatives of the company (Interview IS.8).

Cooperation agreements between companies and NGOs are only related to the programme. There is no written commitment from NGOs to help with other company matters, for example reducing turmoil on the ground. However, the extra role of local NGOs was expressed verbally, as a consequence of cooperation.

...all NGOs have the same task. Although it is not in a vulgar way. However, it depends on how the NGOs understand and carry out the task? (Interview IN.2).

Local NGOs convey company missions, educate the public, and often function as contractors for CSR programmes, ensuring effective communication and project execution.

The research findings regarding NGOs' shift to the role of corporate agents, corporate mission carriers, and contractors reinforce previous research that was sceptical of corporate-NGO collaboration in CSR management because the values and paradigms promoted by NGOs and companies are contradictory (Kim & Nam, 2012; Ngan et al., 2022; Nupueng et al., 2022). These findings present a challenge to the expectations of NGOs as agents of development (Aarikka-Stenroos et al., 2022; Brzustewicz et al., 2022; Nupueng et al., 2022; Schetter et al., 2022; Tench & Amo-Mensah, 2015).

Major proposition:

The role of NGOs does not dominate in managing CSR programmes.

Minor propositions:

a. NGOs lose their critical nature because they are seen as corporate agents.

b. NGOs convey company missions and information to the public.

c. NGOs contribute as contractors or company project partners in CSR programmes.

Informing strategy and interaction from local NGOs: from village head to gentho

This theme focuses on NGO interaction strategies in the context of security and the success of CSR programmes in the EMCL operating environment. The role of the village head is important in determining NGO strategies, including selecting a CSR programme implementation team who suits community needs so as to reduce conflict and increase social security. The involvement of "gentho" (local thugs) as a security team was also revealed as a unique strategy to maintain the smooth running of the programme. By recruiting gentho, companies can leverage their influence to gain community support, manage conflict, and empower communities socially and economically; thereby creating a stable and conducive environment for the success of CSR programmes.

We also involve gentho. We tell them to be security guards who supervise building materials. The term is 'waker' (Interview IN.2).

The involvement of clerics and residents in CSR programmes is also important. These "kyai" (religious leaders) provide legitimacy and moral support, while residents as the implementing team increase empowerment, solidarity, and a sense of ownership of the programme. The approach taken by local NGOs as the programme-implementing team to use local elites, kyai, community leaders and gentho to communicate with residents is part of a strategy for open dialogue or two-way communication (Chaudhri & Hein, 2021; Maryani & Darmastuti, 2017; Yang & Liu, 2020). This contributes to the company's reputation (Ajayi & Mmutle, 2020; Sindhu et al., 2024).

Major proposition:

Local NGO participation can provide legitimacy and credibility to a company's CSR programme.

Minor propositions:

a. Local elites, such as kyai, can provide legitimacy and moral support for programmes, thereby helping to build trust among the community.

b. Gentho can play a vital role in maintaining security and order during programme implementation, so that the risk of conflict or sabotage can be minimised.

Pertamina EP Cepu's CSR programme

CSR communication strategy to stakeholders

Both Pertamina EP Cepu and ExxonMobil Cepu Limited apply a gradual approach in CSR communication, starting from closed communication with the government, then involving NGOs, and Anally open dissemination of information through the mass media and online platforms to reach the wider public.

...we tag stakeholders, for example, in this programme tag, we also tag the regent, the district government's account, and we do it regularly (Interview IN.8).

The findings underscore the increasing involvement of NGOs as communicators of CSR during the third phase, leveraging tagging strategies on social media to foster two-way interaction. There is recognition of the importance to enhance CSR communication for fostering dialogue and transparency, as emphasized by several authors (Ahmad et al., 2023; Brzustewicz et al., 2022; Dobele et al., 2014). Dobele et al. (2014) found that companies in controversial industries must manage stakeholder relationships, demonstrate management and employee commitment, have CSR champions, and understand independent stakeholder networks to be successful in CSR initiatives. Thus, the Proper programme encourages corporate social innovation (CSI) in Indonesia, but companies have difficulty adapting CSI strategically to regional issues and core competencies, thus requiring clearer patterns of comparison of approaches and effectiveness and strategic CSR activities (Prabawani et al., 2023).

Major proposition:

CSR communication strategy to stakeholders

Minor propositions:

a. The involvement of NGOs as communicators increased in the third phase.

b. Expansion of two-way communication channels for transparency and dialogue.

The involvement of local NGOs in CSR management

Company relations that dominate NGOs are not only found in EMCL's CSR programme, but also in PEPC's CSR programme. The NGO implementing the PEPC CSR programme also acts as the company's agent and as the carrier of the company's mission.

... NGOs seem to be subordinates. They carry out technical work and take up a lot of time and thoughts so that substantial work is even left behind (Interview IN.4).

NGOs also tend to lose their identity. The cooperation agreement signed with companies causes NGOs to be more preoccupied with corporate agendas. The work is no longer socially oriented but is carried out in partnership with companies. Good NGO-corporate relations can improve a company's reputation in the public's view (Christiawan & Limaho, 2020; Magrizos & Harris, 2023; Rademacher & Remus, 2017), and foster corporate legitimacy (Ajayi & Mmutle, 2020; Hu et al., 2023; Llavero-Pasquina et al., 2024). However, the results of this study indicate that the relationship between companies and NGOs in CSR programmes remains paradoxical (Ekhator, 2017; Sørreime & Tronvoll, 2020).

Major proposition:

The sustainability of local NGOs needs to be understood in a global scope.

Minor propositions:

a. Understanding CSR management collaboration with NGOs.

b. Reconciliation efforts through comparison and collaboration.

Company motives for involving local NGOs: good relations with government

The company's main focus remains on NGOs' abilities in community empowerment and effective communication, which are considered to be the main added value in maintaining the continuity of operations and harmonious relations with the surrounding environment.

So, the political access that local NGOs have is a definite consideration; yes, but that's not the main factor. This means that we remain proportional and professional; indeed it is one of the considerations, but not the main reason (Interview IC.2).

The findings also indicate that PEPC involves local NGOs as CSR implementers for another reason: good relations with the government. Local NGOs with good relations with the government have great potential to become partners with the company.

It's true [good relations with the government], for sure, because it's impossible to implement a programme well without the support from the government. We need support from the government, not resistance (Interview IC.2).

Collaboration between companies and NGOs not only helps foster trust between them, but also enables a mutually beneficial exchange of resources (Eweje & Palakshappa, 2009; Ngan et al., 2022). This is supported by other studies (Cust et al., 2023; Fontana, 2018; Nupueng et al., 2022) that also revealed a high interest in the collaboration of companies and NGOs in Sweden in CSR, highlighting the resource selection and adaptation of NGOs. Although this relationship cannot be separated in the context of public relations, the synergy between companies and NGOs must be well established to achieve optimal results (Brzustewicz et al., 2022; Souza et al., 2021; Tench & Amo-Mensah, 2015).

Major proposition:

The company's motive for involving local NGOs in CSR is to maintain good relations with the government.

Minor propositions:

a. NGOs are becoming a new communication channel for companies.

b. NGOs are able to empower local communities.

c. NGOs have a strong track record and network.

Company-NGO relations: reduced social role of NGOs

As mentioned previously, collaboration between companies and NGOs in the context of CSR is often the subject of complex debate. Although the aim is to create a positive impact on society and the environment, challenges often arise, including problems that arise when companies dominate local NGOs. This problem occurs when corporate interests sacrifice the NGO's original identity and mission, which should focus on the interests of society and their social goals. As stated earlier, the relationship between companies and NGOs in CSR programmes remains paradoxical as both have to fulfil shareholders' financial obligations and social responsibilities towards other stakeholders (Freeman & McVea, 2005; Gálvez-Sánchez et al., 2024). Therefore, the researchers agree with the opinions of Gergova and Warren (2024) and Nupueng et al. (2022) that NGO-company partnerships are beneficial for both NGOs and companies.

Major proposition:

Corporate domination of NGOs in CSR programmes threatens the identity and independent social goals of NGOs.

Minor propositions:

a. Appreciate NGO initiatives without excessive direction.

b. Balanced collaboration for the effectiveness of CSR programmes.

Informing strategy and interaction from local NGOs: building relationships with investor clusters

This study emphasizes the importance of two-way communication between local NGOs and investors in the Jambaran Tiung Biru (JTB) area. Good relationships with investors are important for sustainable CSR programmes.

So, sometimes we visit the investors regardless of whether we have something important to discuss or not. We do it even just to listen to their stories. Sometimes they need to be respected. We visit them to have a cup of coffee and listen to stories at their houses (Interview IN.8).

The research emphasizes that local NGOs engage various actors within communities to establish two-way communication and to enhance CSR programme effectiveness (Bag et al., 2024; Magrizos & Harris, 2023; Naatu et al., 2022). This approach builds credibility and legitimacy for companies through stakeholder synergy, aligning with findings that highlight participatory processes for societal benefit (Noor, 2020; Setiawan et al., 2023). Contrary to large corporations, these CSR models use informal channels and emphasize governance responsibility, supporting ESG diversification benefits and sustainability. Partnerships between companies, NGOs, and other stakeholders enhance dialogue and collaboration, which is essential for sustainable CSR (Aronczyk et al., 2024; Fan et al., 2024; Sopiana et al., 2021). Transparency, community involvement from planning to monitoring, and active stakeholder participation are key for CSR success, fostering trust, legitimacy, and community support (Elliott & Copilah-Ali, 2024).

Major proposition:

Two-way communication between companies, NGOs, and investors enhances CSR sustainability in Jambaran Tiung Biru (JTB).

Minor propositions:

a. Engaging key figures strengthens CSR implementation and supports local sustainable development.

b. Community participation reinforces CSR efforts and promotes sustainable development locally.

Comparing CSR approaches and effectiveness

The approach and effectiveness of CSR communication between ExxonMobil Cepu Limited and Pertamina EP Cepu can be differentiated based on the strategy and implementation results using a mind map model (Figure 1 and Figure 2).

 

 

 

 

ExxonMobil Cepu Limited's hierarchical CSR approach integrates politics, community empowerment, and communication - all crucial for operational sustainability (Figure 1).

Pertamina EP Cepu uses semi-closed, semi-open, and open strategies for CSR, focusing on community empowerment with proportional, professional communication channels supported by government relations (Rademacher & Remus, 2017). Despite its dominant position, NGOs and other local actors are involved as implementers.

This study's findings aligns with previous findings (Dai & Liang, 2024), highlighting the need for integrated communication strategies in CSR between ExxonMobil Cepu Limited and Pertamina EP Cepu (Elliott & Copilah-Ali, 2024; Emeka-Okoli et al., 2024). ExxonMobil emphasizes hierarchical local networks and political alliances, while Pertamina adopts a structured stakeholder engagement approach balanced with community involvement (Sparacino et al., 2024). Both models showcase different philosophies in managing CSR within complex socio-political contexts.

Major proposition:

ExxonMobil Cepu Limited relies on hierarchy and political support, while Pertamina EP Cepu uses a partnership approach in sustainable CSR.

Minor propositions:

a. NGOs play a role as implementers in ExxonMobil Cepu Limited's partnerships.

b. ExxonMobil focuses on political alliances; Pertamina prioritises formal structures for community support.

c. Both companies diversify CSR governance, integrating socio-political strategies for community engagement.

 

CONCLUSION

This study found that local NGOs play a key role in CSR management, serve as new communication channels, empower beneficiaries, have a good record of performance, and are close to oil mining sites. However, NGOs also become corporate agents, conducting tasks that benefit the company more than society, and serving as contractors or project partners implementing programmes that may not be in line with their original mission.

 

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Date submitted: 7 September 2024
Date accepted: 13 October 2024
Date published: 31 December 2024