Questions/Answers

Muara Enim Regency is located in South Sumatra Province, Indonesia. To plan development, Muara Enim Government conducts a "musrenbang" which is an annual process where the community meets, discusses the problems faced such as issues of education, health, nature conservation, infrastructure development and then proposes programs and activities to solve the problems. "Musrenbang" starts from village level to district level. But not all community’s proposals in the "musrenbang" can be realized because of limited development fund. As an illustration, the proposed program for the 2020 financial year that came after district level “musrenbang” reached 438 programs and 2,483 activities with funding needs reaching 2,047 trillion rupiah (146 billion dollar) while the draft local government budget assumption is 1,234 trillion rupiah (88 billion dollar). There is a gap between the budget needs to realize community proposals with the assumption in the draft local government budget amounted 812.18 billion rupiah (58 billion dollar) or 60.3%. On the other hand there are problems in managing CSR fund. CSR is nothing more than a public relations activity of the corporation without substantial changes. CSR distribution is less sustainable, less systematic, more as charitable act, and the community feels less CSR benefits because it is not based on local community needs. Sometimes there are overlapping activities because CSR programs compiled by the company are also listed in the Muara Enim’s local government development plans. This initiative aims to obtain a source of development funding outside the local government budget to finance proposed activities from the community by integrating CSR fund management and "musrenbang". Community proposals through "musrenbang" that cannot be financed by the local government budget are collected in the local government development plant non local government budget (RKPD Non APBD) report which is then offered to companies.

The main idea of this initiative is to optimize collaboration between government, private sector and community in regional development through the integration mechanism of managing CSR fund with "musrenbang". This is a comprehensive approach in accelerating the implementation of SDGs in the regions because the proposed program of community activities that support the achievement of SDGs can be financed through both the local government budget and CSR. Proposed program activities will not overlap because they passed an accountable process through "musrenbang" and are summarized in a transparent RKPD Non APBD Report.

This initiative supports many SDGs goals including: 1. Goal 1 targets 1.4 and 1.a 2. Goal 2 targets 2.2 and 2.3 3. Goal 3 of targets 3.1, 3.2 and 3.3 4. Goal 4 targets 4.a and 4.b 5. Goal 5 targets 5.a 6. Goal 6 targets 6.1 and 6.2 7. Goal 8 targets 8.3 and 8.5 8. Goal 10 targets 10.1 9. Goal 11 targets 11.1 10. Goal 17 target 17.17 This initiative provides data on community proposals through "musrenbang" in the form of activities to address issues including health, sanitation, education, environment and disasters, basic infrastructure, community empowerment summarized in RKPD non APBD report. Proposals for community that cannot be financed from local government budget are being offered to companies to be funded from the company's CSR funds. In other word, this initiative provides data support and financial support for the implementation of SDGs goals and targets through regional development.

The initiative has been running for 8 years and will continue with the issuance of Regional Regulation concerning Investment that mandates companies to carry out corporate social responsibility. In Indonesia, making CSR an obligation provides legal certainty because it can avoid the different interpretations by companies as can be happen if CSR is left voluntary. The government has also signed agreements with several companies regarding the implementation of CSR Programs in 2020. The benefits that have been felt by the community and the efforts made by the local government will guarantee the sustainability of the initiative in the long run.

This initiative has a significant impact in the increased of development implementation in Muara Enim. Development funding is greater because it involves private sector through CSR programs. It can be seen that 2018 local government budget direct expenditure amounted to 1,302,223,225,320.95 rupiah (93 billion dollar) while those from the private sector amounted to 89,993,403,819 rupiah (6 billion dollar) or 6.91% of the budget provided by the local government. Accountability for the implementation of regional development planning has also increased. The implementation of development is more efficient and there is no overlap between programs financed by local government budget or other sources and is transparent because it is widely publicized. The utilization involving the government and other local stakeholders. Through this initiative local government succeeded in convincing the community that it was able to work together with the private sector to carry out development in accordance with the community's proposal. Even the implementation of CSR programs has been directed towards the achievement of targets in the Sustainable Development Goals (SDGs). Companies are asked to prioritize funding of community proposals that are aligned with SDGs whose aim is to strengthen the implementation of SDGs in regional development.

This initiative provides women with access to skills training and capacity building for their products. Women who are members of farmer women groups and micro small business owner get training in business development and creative economy that is funded by CSR fund through the "musrenbang" proposal. They also get business capital loans. This is an effort to overcome gender inequality in the economic field. This initiative has contributed to the contribution of women in work income in Muara Enim, which before initiative was 34.17% increased to 36.73% in 2017. This figure is higher than the national achievement of 36.62%.

Target groups of this initiative are the community, especially the poor, children and women. Community enjoyed health facilities valued at 6,917 billion rupiah (44 million dollar), educational infrastructure such as scholarships for poor children, classrooms and teacher training amounting 98.6 billion rupiah (70 million dollar), public facilities construction including roads and worship facilities amounting 366.8 billion rupiah (262 million dollar), disaster relief and greening 4.9 billion rupiah (292 thousand dollar), community empowerment include MSME partnerships, training in business development and creative economy for women and group empowerment in the amount of 18.8 billion rupiah (1,2 million dollar).. This initiative significantly contributed to the increase of Human Development Index (HDI) of Muara Enim from 62.12 before the initiative, increased to 68.28 in 2018. It also contributed to the increase in GDP, from 28.15 trillion rupiah in 2013 to 35.76 trillion rupiah in 2017 or increase of 7.60 trillion rupiah. In 2017 Muara Enim experienced economic growth of around 8.72 percent, faster than the previous year and became the highest economic growth in South Sumatera. In addition, it also contributed to the reduction of poverty rate in Muara Enim, which in 2011 was 13.21 percent, down to 12.56 percent in 2018.

The steps taken in implementing the initiatives are: 1.Local governments mobilize resource opportunities to the private sector. Muara Enim Regent issued a Regulation on the Corporate Social Responsibility - Partnership and Community Development Program (CSR-PKBL) as a follow-up to the charter agreement between the Regent, private sector, NGOs, universities and community leaders in the context of implementing participatory, transparent and accountable CSR. 2.Bappeda (regional development agency) facilitates the formation of CSR-PKBL Forum and provides a secretariat in Bappeda to assist the operational of the CSR-PKBL Forum. 3.Bappeda held a CSR-PKBL Forum coordination meeting informing Regional Government's plan to involve private sector in the development financing proposed through "musrenbang". 4.Secretariat of the CSR-PKBL Forum then recapitulates the results of district level “musrenbang” that cannot be financed by the local government budget in a report (RKPD Non APBD report) and will be offered to companies to be implemented through company CSR fund. 5.Hold CSR-PKBL forum meetings that discuss RKPD Non APBD reports and agree on which programs and activities will be funded by CSR, including the ability to support the program for the coming year. 6.Implementation of activities carried out by each company. 7.Internal and external evaluations. The external evaluation was carried out in collaboration with a private consultant through a benefit value survey of PT. Bukit Asam Tbk and measuring impact innovation conducted by State Administration Agency (LAN) 8.Reporting is done by sending Muara Enim Regent’s letter to all companies operating in Muara Enim Regency to report on the realization of the CSR program, which is done quarterly. Awarding the award "CSR-PKBL award" to companies that meet the assessment criteria and carry out CSR programs well, so that it can motivate other companies to continue doing CSR as a moral commitment.

There are several obstacles faced in implementing the initiative, such as : 1.Not all companies have submitted CSR-PKBL Program Planning and Realization Reports, so it could not be able to identify the role of the private sector as a whole, the solution is to send the Muara Enim Regent Letter every quarter to raise company awareness about the importance of CSR-PKBL Implementation Reports. 2.Relatively low political will of company leaders in utilizing CSR-PKBL fund for regional development, the solution is Muara Enim Government has drafted Regional Regulation concerning Investment that invites every investor to carry out corporate social responsibility.

This initiative is an innovative program because this simple initiative succeeded in changing the way companies and communities view governance in regional development and transforming CSR fund management. The community is becoming more convinced by the "musrenbang" process that can be seen from the increasing proposal in the "musrenbang" in 2015 are 2.090 proposals raised to 4.966 proposal in 2020. Companies arrange CSR programs and activities better. CSR activities are no longer just giving out prizes, but strategically planning programs that produce impacts not just results so that CSR programs have long-term benefits for companies, local government and the community.

This initiative adopts Indonesia's national development planning system with modifications as needed. Muara Enim Regency is the first local government in Indonesia to document and bring community proposals closer with bottom up planning ("musrenbang") mechanism to the private sector. With this mechanism, the results of the district level "musrenbang" that cannot be financed by the local government budget will be carried out with CSR through in accordance with the specified regional priorities. Private sectors are requested to work together with government to realize community welfare. This task is no longer seen as the sole responsibility of the government.

Several regions in Indonesia have conducted learning study in Muara Enim, including the Government of West Tanjung Jabung Regency, Ogan Ilir Regency, Bogor City, Bandung Regency, so it is possible those regency/ city has adapted this initiative with a style adapted to the conditions and capabilities of each region. This initiative received an award from The La Tofi School of CSR at Nusantara CSR Summit & Awards 2016. In addition, Pangripta Nusantara award was awarded in 2017 from Minister of National Development Planning / Head of Bappenas (National Planning Agency) for the achievements in Best Innovation through creation of RKPD Non APBD Reports. This awards can inspire other regions to adopt the same regional development planning mechanisms that are integrated with the management of CSR funds in their regions.

This initiative is very simple and easy to implement. Things that can be transferred from this initiative such as the process of preparing a RKPD non APBD report that is integrated with “musrenbang”. It will make it easier for the community so they do not need to repeatedly make proposals. The provision of a secretariat to help CSR-PKBL Forum administratively can be replicated in other areas who wants to replicate this initiative. In addition, the local government awarding companies that had implemented CSR programs every year. This awarding is a way to maintain partnerships with private sector.

Muara Enim government allocates an annual budget of 300 million rupiah (21.429 dollar) per year which is used for operational of CSR-PKBL Forum secretariat, meeting expenses, official travel, surveys, monitoring, and selection of CSR-PKBL Awards. Human resources directly involved are civil servant from Bappeda office, Head of the CSR-PKBL Forum, Community Leaders, Village Heads, District Heads, Agricultural Extension Officers, CSR managers of the companies.

This initiative will continue with the allocation of fund amounting to 321.280.200 rupiah (22.948 dollar) for the operational of CSR-PKBL Forum Secretariat in 2020. It also has been included in 2018-2023 local government medium term development plans through the development cooperation program. Institutionally the CSR-PKBL Forum was formed based on the Regent's decree and led by the Regent as chair of the steering committee with members from local government, community leaders, NGOs and companies operating in Muara Enim Regency. This forum is a joint forum to consult and solve problems related to the implementation of CSR programs.

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The initiative was officially evaluated through a survey of benefits value of the CSR program carried out in 2015 by PT. Bukit Asam in collaboration with private consultant. The survey was conducted on recipients of CSR funds in 2014-2015 period by analyzing the perceptions of the community on economic and social benefits. In 2018 LAN (State Administration Agency) conducted an evaluation by measuring the impact of innovation. The analysis is carried out using the post intervention project group method, which is digging data after the program is implemented without having to compare the data before the program is implemented.

Indicators used in the survey of benefits value conducted by PT. Bukit Asam are 1) the benefits of community empowerment, 2) the benefits of improving the community's economy, 3) the benefits of environmental sustainability, and 4) the benefits to the government. Indicators for measuring the impact of innovations carried out by the State Administration Agency are from 1) the budget, 2) the mechanism of implementing CSR programs, 3) productivity, 4) the quality of CSR programs implemented by the company, 5) changes in mindset and 5) involvement of stakeholders outside government agencies.

Evaluation results from a survey by PT. Bukit Asam states that people who live far from the company's location feel more significant value from the company's CSR funds compared to those who live near the location of the company or ring I. So the categorization of villages that get CSR program based on the company's proximity location, should begin to be replaced with affected villages and lack of access. The state administration agency evaluation results, from the budget side, Muara Enim are proven to have development funding sources outside the local government budget, the mechanism for implementing CSR is more effective and efficient. CSR programs run in more good quality than before innovation. In addition there was a change in mindset and the company awareness in Muara Enim which previously considered CSR as a burden. The results of this evaluation are summarized by the CSR-PKBL Forum Secretariat as meeting material in the CSR-PKBL Forum coordination meeting and become input for improving the implementation of the initiative.

Institutionally the implementation of the initiative through the CSR-PKBL Forum which is a special institution/ forum formed directly under the supervision of local government, companies and communities. The formation of the CSR-PKBL Forum was based on the Muara Enim Regent Decree Number: 568 / KPTS / Bappeda-Sanpras / 2011 consisting of a steering committee and an implementing agency. The steering committee tasks are setting policies related to planning and implementing, monitoring and controlling the implementation of the initiative. The steering committee is directly chaired by the Regent. The implementing agency tasks are preparing plans according to the priority scale for the implementation of the initiative, identifying and discussing various problems in implementation, conducting monitoring and evaluation as well as conveying the work and decisions of the forum to the wider community. Forum members consist of 163 companies operating in Muara Enim. The CSR-PKBL forum is assisted by a secretariat located in Bappeda (regional planning agency). The Secretariat is in charge of organizing administrative support of all forum affairs, organizing and coordinating forum meetings, making minutes of meetings, gathering and distributing meeting results and disseminating information to the public.

This initiative is a joint product of stakeholders in the implementation of development. Muara Enim government in this case Bappeda through the CSR-PKBL Forum Secretariat as a facilitator of initiative implementation that connects the interests of the community with the private sector. This initiative is supported by companies operating in the Muara Enim that required to carry out social responsibility to the community. Community participation near company location act as a supervisor of development also conveyed the aspirations of development in the “Musrenbang” and as an object that was empowered through CSR activities. For example farmer groups and farmer women's groups. The village/ sub-district plays role in the implementation of the Village “Musrenbang” and the District “Musrenbang”, which also plays role in proposing the proposed programs / activities in development each year, both to be implemented through the local government budget and through CSR programs. NGOs accommodate, process, manage and carry out community aspirations in the field of development, especially in parts that are often not paid attention to by the government. Local legislative assembly, through Commission III always supervises and invites companies to work meetings to discuss the implementation of CSR programs.

This initiative shows that development funding from non local government fund can be obtained by building synergy and good coordination between local government, companies and communities. The community benefits from implementing CSR programs and it is a solution for companies that have been struggling to find proposals for activities needed by the community. To increase the implementation of initiative in the future, it is necessary to revise Regent Regulation No. 30/2011 on Corporate Social Responsibility - Partnership and Community Development Program by including important points to improve the implementation of this initiative. For example formulating target recipients of CSR-PKBL programs which must be prioritized by the company, so that it is not only focused on the area near company location or certain community groups, but the CSR-PKBL program should actually be directed to villages in the category of minimal access to education, health and development programs.