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E-ISSN: 2808-6724
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EVALUATING THE SOCIAL RESPONSIBILITY PROGRAM BY PT.
PETROKIMIA GRESIK
Titiek Irewati
Faculty of Computer Science and Information Technology, Universitas Gunadarma, Depok, West Java, Indonesia
titiekirewati2@gmail.com
ARTICLE INFO
ABSTRACT
Published: January 30
th
, 2023
State-owned companies have an obligation to carry out Corporate Social
Responsibility (CSR) activities in a unified and sustainable manner, not only
in the form of temporary events that are charitable in nature. Qualitative
research with case study method were used to determine the effectiveness of
the implementation of the Social Responsibility program by PT. Petrokimia
Gresik. Based on the tracing of documents and survey facts, it is known that
the implementation of CSR by companies with a direction to advance food
security so that it has a heavy point in the agricultural sector at large. The
principle of partnership funds with a system of groups and cooperatives
while Community Development for village villages that are in the ring one
with the company directs to the field of education and skills. The response
of fostered partners and followers of educational programs is relatively
good because it fosters opportunities to make efforts, the ability of partners
to develop technologies, systems and products. Corporate Social
Performance has a positive relationship with Corporate Finance
Performance with the many recognitions and awards received by PT.
Petrokimia Gresik.
Keywords: social performance,
partnership programs, Petrokimia
Gresik
This work is licensed under CC
BY-SA 4.0
INTRODUCTION
In the 21
st
century, the main interest of a company is not only concerned with business
sustainability and economic benefits but also concerns the happiness of all stakeholders related to
the company. This opinion encourages the development of the implementation of corporate social
and environmental responsibility (TJSL) as a manifestation of one of the pillars in 3P (People,
Plant, Planet) (Rachman et al., 2012). Corporate social behavior is an organization's responsibility
for the impact in society or the environment caused by organizational decisions or activities
(Ahmed et al., 2021). The implementation of CSR in a company is inseparable from the internal
conditions of the company (Roza, 2014). In profit-oriented companies, the implementation of CSR
is limited by the existing budget and capabilities (Arato et al., 2016; Audretsch et al., 2022). For
medium or large companies, it is hoped that the implementation of CSR with the concept of
business sustainability and is more long-term so that the positive consequences felt by the
community are also more prolonged. CSR activities are part of business ethics to mutually benefit
interested parties (Bhattacharya et al., 2009; Mutti et al., 2012).
The strategic concept of corporate social performance connects various policies, programs
and results obtained during the company's contact with society. This concept is supported by
Stakeholder Theory which states that there is a positive relationship between corporate social
performance and corporate financial performance. The fulfillment of expectations and satisfaction
of various stakeholders is a driving tool for the organization's financial performance (Schaltegger
et al., 2019). The act of nexus and the contract or cooperation process make the company
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increasingly focused towards its financial performance goals (Orlitzky et al., 2003). The
occurrence of equilibrium between the interests of various parties makes the company increase the
company's adaptation to the expectations and desires of external parties (Abukosim et al., 2014).
In general, the company's ability to implement corporate social responsibility activities is
influenced by the magnitude of the company's impact on the environment, corporate governance
(GCG), and social impact caused by the company's business activities. In Indonesia, CSR activities
only developed rapidly in the 2000s, started by multinational companies, now increasingly
implemented by more companies even though the types of activities are more voluntary, charity,
philanthrophy (Ambadar, 2008).
PT. Petrokimia Gresik, a state-owned company that has since 1972 become an important
fertilizer producer both in Indonesia and in Asia, is in a position to be able to influence the
environment physically and socially. In this kind of state-owned company, the implementation of
CSR is expected to support development targets such as improving human resources and
improving community welfare as well as supporting the company's financial performance. There
has been many research discussing how the company implements CSR such as studies by Ningtyas
(2011), Argianzah (2019), and Widodo et al. (2017), but there has been none evaluating it. In line
with this idea, this study aims to evaluate the program programs implemented by PT. Petrokimia
Gresik and looked at the possible relationship of social performance with financial performance.
METHOD
The type of research method used was descriptive qualitative. The types and sources of data
in this study include primary data, namely making observations in several fostered business
groups, regional areas in the ring 1 environment, interviews with program participants. Secondary
data is the collection of Financial Statement documentation and reports on the implementation of
CSR activities. Observation time in the period from 2017 to 2021.
RESULT AND DISCUSSION
The company and the environment are inseparable and influence each other. State-owned
companies, one of the actors in the national economic system, play a role in producing goods or
services for the greatest prosperity of the people. The government regulates the involvement of
SOEs in community empowerment with the affirmation, "SOEs actively provide guidance and
assistance to entrepreneurs of weak economic groups, cooperatives, and communities.
PT. Petrochemical Gresik, which has been carrying out operational activities since 1972 and
since 2010, has carried out more Partnership and Community Development programs as a form of
implementing Corporate Social Responsibility. Vision of PT. Petrokimia Gresik in compiling this
Corporate Social Responsibility program is not just a social charity but rather directed to
sustainable conditions so that its influence on the environment is longer (PT Petrokimia Gresik,
2021).
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Partnerships with Small Businesses
Small businesses have a strategic role to increase growth in the national economy because
they cover almost all business fields, both in villages and cities.
Coaching Patterns
In the partnership program, the Partnership and Community Development Program (PKBL)
of PT. Gresik petrochemicals use a direct coaching pattern. The coaching pattern is pure coaching,
which means that small entrepreneurs are given capital loans for work or investment costs.
Partnership/Guarantee Pattern if the company cooperates with a group/cooperative that can
accommodate the production of small entrepreneurs as well as as a guarantor of loans given to
small entrepreneurs. The selection of fostered partners is in accordance with the provisions of
Ministerial Regulation 05/MBU/2007, namely businesses with a maximum annual sales turnover
of 1 billion Rupiah or total assets of 200 million Rupiah (Excluding land and buildings for business
premises). Coaching is carried out based on the needs and desires of the fostered partners. The
basic issues for small businesses are generally capitalization, marketing and technology issues.
Capitalization is only one aspect that is needed by fostered partners. As a company related to
agriculture, PT. Petrochemicals supports partners related to agricultural enterprises but forms of
support and guidance are also carried out in all sectors (Table 1).
Table 1. Proportion of Funds for Activities by Sector
Sector
Proportion of Funds (%)
Business Type
Industry
10
Weaving scabbard business, convection,
handicrafts, furniture, batik, food, earthenware,
rifles
Trade
13
Grocery stores, agricultural/plant stores, grocery
stores
Agriculture
38
Farmer groups for the process of cultivating crops
Farm
30
Beef cattle, chicken, goat and milking farms
Plantation
3,0
Group of sugarcane cultivation farmers
Fishing
3,0
Inland fishery cultivation group
Service
3,0
Computer repair business, sound system rental,
motor repair shop
PT. Petrochemical Gresik took a policy action on an installment pattern called "yarnen"
(Installment pay harvest, angsuran bayar panen). In this installment system, the debtor only pays
installments when the debtor receives the harvested money. This installment pattern is simple but
requires support, namely the existence of a farmer/business group that has business commitment
and the need for monitoring and assistance between the company and the business group. In the
mentoring process, the company prepares business actors to always innovate for the betterment of
the business.
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Evaluation of the Partnership Program by PT. Petrokimia Gresik
Evaluation is an important stage in the implementation of the Social Responsibility strategy,
a targeted and sustainable program is needed to achieve future targets in accordance with the
expectations of stakeholders.
Program Relevance
In terms of the relevance of the target partner, the partnership program has met the
requirements found in the regulation, namely the selection of partners according to the criteria as
stated in the ministerial regulation, namely a maximum turnover of 1 million Rupiah and a
maximum business asset of 200 million Rupiah. As a company whose core business is agriculture,
it is understood that fostered partners in agriculture broadly (Agriculture, animal husbandry and
fisheries) make up the majority of targets, covering 60% of the total.
Total Disbursement
The disbursement of funds demonstrates the effectiveness of the program as well as the
strength of achieving the goals. From 2017 to 2021, funds disbursed by PT. Petrokimia Gresik for
the Partnership Program.
Table 2. Amount of Disbursement of Funds for Partnership Programs
Year
2021
2020
2019
2018
2017
Funds (Rp. million)
42.973
38.255
47.103
43.706
52.423
Quantitatively, the amount of disbursement of funds reached an average effectiveness of
99.4% with an average collectibility rate of 90%.
Business Actors' Response to the Program
1) Innovation in the agricultural and plantation sectors: One of the farmer groups that feels
the results of innovation is the Mekar Sari Group, Kepanjen. The group focuses on
producing higher grades of sugarcane. The training obtained to improve cultivation and
business capital support for production facilities, effectively makes the achievement of
sugar content in sugar cane realized.
2) Livestock sector innovation: The Makmur Jaya cattle farmer group, Bareng Village,
Nganjuk has benefited from the training they have gained from Petrokimia Gresik. In the
village, a biogas reactor was built that utilizes cow dung so that the results can supply
energy in the village environment. The utilization of such cow waste significantly
reduces
3) Innovation in the fisheries sector: Gresik Regency as a coastal area has many fishery
businesses, one of which is Mr. Suparto who is trying to pond milkfish and tilapia. Mr.
Suparto stated that the support of funds and knowledge during his time as a partner of
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Petrochemical Gresik was very helpful in the efforts of mina padi (Integrated fisheries
system for fish and rice).
4) Innovation in the trade and industry sector: Industry players such as Mrs. Hartono, who
opened the Sari Kenongo batik business, are optimistic about innovation innovations to
improve business. The profit he earned during his time as a partner of Gresik
Petrochemical was the opening of the market and the support of equipment and business
raw materials. Market development also eventually led to the emergence of new designs.
The innovation of patterns, motifs and colors then also expands people's interest. Gresik
City is famous for milkfish products, related to that the training program of Petrochemical
is product development and working on by-products. One of those who carry out is the
shop ibu Muzanah, which has made other products such as the manufacture of shredded
milkfish, milkfish contents that are more durable. Various innovations and the ability to
maintain quality make consumers more loyal and grow in number.
Community Development Program
Community Development Program of PT. Petrochemical Gresik is more concerned with
providing education as an effort to improve the quality of society, both informally and assistance
for formal schools. Improving the quality of the community is also related to environmental
conservation efforts. A better understanding of the importance of environmental stewardship
makes environmental conservation programs more viable.
Table 3. Field of Activity of Community Development Program
Field
Activities
Education
1) Providing scholarships to students and students,
Establishment of Healthy Village Cadre Schools;
2) Assistance with educational means (books, computers,
laboratories); and
3) Internship program in the company
Practical Skills
1) Handicraft training, salon business, sewing sewing; and
2) A skills training workshop for the metal industry that
banyak is located in Gresik
Environment
1) Environmental conservation;
2) Mangrove Culture; and
3) Waste/waste recycling;
Facilities and
infrastructure
Construction and repair of houses of worship, schools, village
facilities (village halls etc.).
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Total Disbursement of Funds for Community Development Programs
Table 4. Amount of Funds for Community Development Program
Year
2021
2020
2019
2018
2017
Funds (Rp. Million)
10.002
6.840
15.261
13.370
22.213
Response of Training Program Participants
1) The participants of the community development program related to the
addition/improvement of skills are people from ring 1 villages such as Roomo Village,
Tlogo Corner, Kroman, Lumpur, Karang Poh, Karang Turi, Suko Rame, and Ngipik;
2) One of the program participants, expressed his joy at being able to produce handicraft
products such as patchwork leather bags because he participated in the training program.
The training group he participated in has been empowered to produce products that are in
demand for wedding souvenirs and accessories purposes; and
3) Other participants, expressed optimism about the skills they had to increase their insight
and family income. Some participants have even utilized skills in the field of information
to market their business products.
The Relationship between Social Performance and Financial Performance
The implementation of the Social Responsibility program by Petrochemical Gresik is not
easy or runs very smoothly. At the beginning of the implementation, there were many obstacles,
namely the lack of public understanding of the program offered so that at first there were still
complaints of dissatisfied people with the program, there was still little manpower that could be
lowered to accompany the community before the realization of the regeneration system. The
amount of funds is also limited because there is a certain rule that it cannot exceed 2% of the
company's profit. The implementation of activities certainly requires time, effort and patience.
The positive response and enthusiasm of the community finally paid off with the recognition of
the appraisers for the implementation of corporate Social and Environmental Responsibility in
Indonesia.
Corporate Social Performance
PT. Petrokimia got several awards for 2021, as follows:;
1) Indonesia Green Awards 2021, the best in the development of nature conservation
tourism handling plastic waste, saving natural resources, engineering technology in
energy saving, biodiversity, pioneering pollution prevention, and integrated waste
handling;
2) The Best Indonesia CSR Senior Leader 2021;
3) Top CSR Awards 2021 for integrated cattle breeding environmental programs and
healthy village environment programs;
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4) Gold National Appreciation. In 2021, finally for the first time PT. Petrochemical Gresik
earned the title of "gold" as a company with a commitment to society and the
environment; and
5) Nusantara CSR awards for the Community Development program with the category of
Healthy Village Program and SEKAR MAMAMIA Program (Mama and Youth Cadre
School).
Corporate Finance Performance
What PT. Petrokimia Gresik for several years to further empower and improve the condition
of the community through the Partnership and Community Development program also showed
results in the company's financial performance. Company earnings and gains from stocks increased
(Tables 5 and 6). In 2021 PT. Petrochemical for the first time obtained the title of "gold"/ gold
after previously still at the level of "blue". The company also received awards related to its ability
to improve financial conditions and maintain the company's reputation and management practices
(Good Corporate Governance). In theory, the influence of social performance on the financial
performance of the company allegedly does not take place at the same time. The condition of social
activities in the previous year that has the potential to affect the company's financial performance.
What happened to PT. Petrokimia Gresik is in line with Shinohara's research (2014) which resulted
in social performance having a positive influence on financial performance with the greatest
influence in the 5-year period of current activities. Likewise, the vision and mission of
Petrochemical Gresik to carry out coaching through the form of farmer groups and business groups
is very appropriate to facilitate the distribution of PT. Petrochemical Gresik's products.
Petrochemical Gresik. The company's commitment to the economic improvement of its
stakeholders has a positive influence on financial performance.
Table 5. Company Profit
Year
2021
2020
2019
2018
2017
Profit (Rp. T)
1,941
1,189
1,394
1,751
0,685
Table 6. Net Profit Per Share
Year
2021
2020
2019
2018
2017
NPS/net profit per share (Rp. million)
294.044
214.578
197.566
269.384
35.722
1) Financial Statement Score: Health level (AA condition (score 81.50)/healthy);
2) GCG score with a score of 94.06 (Excellent);
3) Award Most Trusted Company dalam implementasi GCG;
4) The best GRC overall for corporate governance;
5) Gold Rank for continuous performance reporting
(Cui et al., 2015; Kementrian Lingkungan Hidup, 2012; Kusuma & Aryani, 2020; McWilliams & Siegel, 2000; Shidiq et al., 2020; Wibisono et al.,
2014; Yang & Lin, 2010)
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CONCLUSION
The results of the evaluation of the CSR program run by PT Petrokimia Gresik refer to the
term process takes time. The success of the Mitra and Bina Lingkungan program was seen in 2021
with the award received by PT Petrokimia. The condition of social performance is also followed
by financial performance, namely the company's financial condition that is getting better with
healthy criteria and rewards as a trusted company and has a good company management system.
In Gresik Petrochemicals, it turns out that there is a positive relationship between social
performance and financial performance. It must be maintained so that the performance is indeed
sustainable in the long term.
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