Social And Environmental Responsibility Of Mineral Mining Corporates In Divesting Company Shares

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Social and Environmental Responsibility of Mineral Mining Corporates in Divesting Company Shares

Introduction

In the current business world, there is a significant shift in the way companies are managed, moving from the shareholders theory to the stakeholders theory. This theory considers a company as a social institution, where the interests of shareholders are no longer the dominant thing. As a result, the issue of corporate social responsibility (CSR) has become increasingly relevant, especially because CSR is related to business ethics and company moral responsibilities towards employees, the environment, and the surrounding community.

The Importance of Corporate Social Responsibility (CSR)

Although the CSR concept is important, regulations that regulate it are still limited, especially in the context of the company's legal in Indonesia. Mining companies in the form of Limited Liability Companies (PT) should comply with the PT Law, but in practice, they are more subject to the Mineral and Coal Mining Act (Minerba). The mining management system in Indonesia is pluralistic, which indicates that many parties are involved in managing these resources.

One crucial aspect in the Minerba Law is the adjustment of existing mining contracts, but the renegotiation process determined by the law is often not running smoothly. Regulations regarding CSR in mining, which should support sustainable development, are often not well implemented. Therefore, it is essential to use social contracts as a parameter to measure corporate social responsiveness.

The Role of Contract Renegotiation in CSR

Contract renegotiations can strengthen corporate social responsibility for the community and the environment. With the obligation to build domestic management and purification and use local goods and services, it is expected to stimulate the business activities of local communities that support the operation of mining companies. From a legal, social, and philosophical perspective, this renegotiation can also be seen as an effort to increase legal certainty, benefits, and justice.

The Obligation to Divest Shares

One of the factors that influence the implementation of CSR is the obligation to divest shares that must be carried out by foreign investors. This stock divestment is an obligation aimed at improving the welfare of the Indonesian people, because dividends from the shares purchased can be utilized for regional development. By involving the government, both central and regional, as shareholders, transparency and accountability in company management can be realized properly.

The Role of Government in Mining Companies

The importance of the role of government in mining companies cannot be ignored. The government as a shareholder has the rights regulated in Law No. 40 of 2007, and their involvement can create a better environment for companies and the community. In this way, the social responsibility and environment of mineral mining companies can be optimized, which in turn will bring benefits to all parties involved.

Conclusion

Overall, transformation towards management that focuses on stakeholders and better CSR application in the mining industry is an important step to achieve sustainable development and community welfare. In the future, better regulations and implementation will be very necessary to ensure that these companies not only pursue profits, but also contribute positively to the community and the surrounding environment.

Recommendations

  1. Strengthening CSR Regulations: The government should strengthen CSR regulations to ensure that mining companies comply with the law and contribute positively to the community and the environment.
  2. Improving Contract Renegotiation: The renegotiation process of existing mining contracts should be improved to ensure that the interests of all parties involved are taken into account.
  3. Increasing Transparency and Accountability: The government should increase transparency and accountability in company management by involving the government as shareholders.
  4. Promoting Sustainable Development: The government should promote sustainable development by encouraging mining companies to adopt environmentally friendly practices and contribute to regional development.

Future Research Directions

  1. CSR Implementation in Mining Industry: Further research is needed to explore the implementation of CSR in the mining industry and its impact on the community and the environment.
  2. Contract Renegotiation and CSR: Research is needed to investigate the relationship between contract renegotiation and CSR in the mining industry.
  3. Government Role in CSR: Further research is needed to explore the role of government in promoting CSR in the mining industry.

Limitations of the Study

  1. Limited Data: The study is limited by the availability of data on CSR implementation in the mining industry.
  2. Case Study Approach: The study uses a case study approach, which may limit the generalizability of the findings.
  3. Theoretical Framework: The study uses a theoretical framework that may not fully capture the complexities of CSR implementation in the mining industry.

Conclusion

In conclusion, the social and environmental responsibility of mineral mining corporates in divesting company shares is a critical issue that requires attention from the government, mining companies, and other stakeholders. The study highlights the importance of CSR implementation in the mining industry and the need for better regulations and implementation to ensure that these companies contribute positively to the community and the surrounding environment.
Frequently Asked Questions (FAQs) on Social and Environmental Responsibility of Mineral Mining Corporates in Divesting Company Shares

Q1: What is the significance of corporate social responsibility (CSR) in the mining industry?

A1: CSR is essential in the mining industry as it ensures that companies contribute positively to the community and the environment. It also helps to build trust and reputation among stakeholders, including investors, customers, and local communities.

Q2: What are the key challenges faced by mining companies in implementing CSR?

A2: Some of the key challenges faced by mining companies in implementing CSR include limited regulations, lack of transparency, and inadequate resources. Additionally, the mining management system in Indonesia is pluralistic, which can make it difficult to implement CSR effectively.

Q3: How can contract renegotiation contribute to CSR in the mining industry?

A3: Contract renegotiation can strengthen CSR by ensuring that mining companies comply with the law and contribute positively to the community and the environment. It can also help to increase legal certainty, benefits, and justice for all parties involved.

Q4: What is the role of government in promoting CSR in the mining industry?

A4: The government plays a crucial role in promoting CSR in the mining industry by setting regulations, providing guidance, and ensuring that companies comply with the law. The government can also involve itself as a shareholder to increase transparency and accountability in company management.

Q5: How can mining companies ensure that their CSR efforts are effective and sustainable?

A5: Mining companies can ensure that their CSR efforts are effective and sustainable by setting clear goals and objectives, monitoring progress, and engaging with stakeholders. They should also adopt environmentally friendly practices and contribute to regional development.

Q6: What are the benefits of CSR implementation in the mining industry?

A6: The benefits of CSR implementation in the mining industry include improved reputation, increased trust among stakeholders, and better relationships with local communities. It can also help to reduce the risk of social and environmental conflicts and improve the overall sustainability of mining operations.

Q7: How can CSR implementation contribute to sustainable development in the mining industry?

A7: CSR implementation can contribute to sustainable development in the mining industry by promoting environmentally friendly practices, reducing the risk of social and environmental conflicts, and improving the overall sustainability of mining operations.

Q8: What are the limitations of CSR implementation in the mining industry?

A8: Some of the limitations of CSR implementation in the mining industry include limited regulations, lack of transparency, and inadequate resources. Additionally, the mining management system in Indonesia is pluralistic, which can make it difficult to implement CSR effectively.

Q9: How can mining companies measure the effectiveness of their CSR efforts?

A9: Mining companies can measure the effectiveness of their CSR efforts by setting clear goals and objectives, monitoring progress, and engaging with stakeholders. They should also adopt a framework that takes into account the social, environmental, and economic impacts of their operations.

Q10: What is the future of CSR implementation in the mining industry?

A10: The future of CSR implementation in the mining industry is promising, with many companies recognizing the importance of contributing positively to the community and the environment. However, there is still a need for better regulations and implementation to ensure that CSR efforts are effective and sustainable.

Conclusion

In conclusion, CSR implementation is essential in the mining industry to ensure that companies contribute positively to the community and the environment. By understanding the significance of CSR, the key challenges faced by mining companies, and the role of government in promoting CSR, stakeholders can work together to create a more sustainable and responsible mining industry.