Essay: PT Toba Pulp Lestari Tbk – Forest management

CHAPTER I
INTRODUCTION
1.0 Introduction
This chapter provides the case study’s background and problem statements. Subsequently, it also states the research questions, research objectives and case issues for this case study.
1.1 Background of the Study
The management of PT Toba Pulp Lestari know how to do the industrial forest management are responsible for potential environmental risks contribute positively to the business and beneficial to our employees, customers, shareholders, and other stakeholders. We also believe that adequate environmental policies and implementation strategies of sustainable forest management, including protection of biodiversity, management of protected flora and fauna, as well as pollution prevention as a guideline responsible environmental management will minimize the environmental impact, increase economic benefits, then through continuous improvement program, the results of which means the environmental performance can be achieved.
Forestry sector Indonesian government had the to do committed considerable high for developing plantations in order to increase the potential forests and support the provision of raw material wood processing industry. Commitment socialized to people and the international community Indonesia. Hence with the policy of the government and with the social community, it will be implemented in plantation development sustainable for the long term, with in terms of administration and in terms of technical implementation.
The management of PT Toba Pulp Lestari Tbk believes that industrial forest management are responsible for potential environmental risks contribute positively to the business and beneficial to our employees, customers, shareholders, and other stakeholders. We also believe that adequate environmental policies and implementation strategies of sustainable forest management, including protection of biodiversity, management of protected flora and fauna, as well as pollution prevention as a guideline responsible environmental management will minimize the environmental impact, increase economic benefits, then through continuous improvement program, the results of which means the environmental performance can be achieved. Product: in this case we take pride as a manufacturer / pulp industry that only exists only in North Sumatra, which produces a superior product that is eucalyptus pulp that can live at an altitude of 1000-1500m above sea level, and this we get from industrial forests around plateau, and we always participated keep in terms of environmental protection and maintain product quality eucalyptus pulp so that it can compete in world markets. Markets: target determining our current market is China, because China’s population is almost 1/3 of the population of the earth. So the very promising Chinese market continues to grow rapidly until today. Price: the price of market pulp is determined which always follow the trend of supply and demand in the world market. Logistics and distribution: transportation capital that we use today is the container shipment; in connection with the consideration of logistic cost is also a factor that China’s logistics market cost lower compared to Europe and America. Communication: Proper communication can provide a positive perception to the market, communication includes direct sales, relationship and carry out surveys to customers in the form of customer satisfaction surveys (customer satisfaction survey) manufacturers in the pulp and paper industry in the world, partly because of the production of pulp and paper in the country benefited by various natural and geographical conditions at the equator. Currently, Indonesia is ranked 11th for the paper industry and 9th world for the pulp industry. Indonesia benefited from Indonesia’s geographical location at the equator on average have trees that grow three times faster than in the countries that are in cold regions, making available vast forests as a source of raw materials, but it is also located in Indonesia the middle of the emerging Asian economic giant into new markets the world’s largest pulp and paper in the future. Global competition in the pulp and paper business is very high and environmental requirements applicable also becoming increasingly stringent. Moreover, energy-saving programs and environmentally friendly is today the demands of business, because the export destination countries and the buyers are increasingly demanding the pulp and paper produced from legal sources, which comes with an official certification regarding its legality. Especially for the Pulp and Paper Industry in Indonesia, today is growing and developing rapidly in line with the increasing consumption of pulp and paper usage. The development of this industry will continue to increase and supported also by the existence of Indonesia which have a comparative advantage, such as the potential of forest to supply the wood as raw material. This potential will increase with the development program. Industrial Plantation Forest is now being implemented. Similarly, the availability of non-wood raw materials is relatively abundant.
Pulp industry is also one industry which has an important role and i the flagship product in supporting the Indonesian economy. There are 3 main reasons behind the importance of the contribution of this industry, first: main target of product is foreign investor and stakeholders; Second: an imported component used in the production process is worth no more than 30%, and Third: pulp and paper products tend to be much intended for the export market. So that in times of global economic crisis facing Indonesia at that time, the industry is still reliable in helping the acceptance of foreign exchange. Importance of the pulp and paper industry is not large regardless of the condition they have. Until now the Indonesian pulp and paper industry has a comparative advantage compared to other countries. The advantages are more reliant on abundant sources of raw materials at a relatively cheap and labour with relatively low labour costs. Product: in this case we take pride as a manufacturer / pulp industry that only exists only in North Sumatra, which produces a superior product that is eucalyptus pulp that can live at an altitude of 1000-1500m above sea level, and this we get from industrial forests around plateau, and we always participated keep in terms of environmental protection and maintain product quality eucalyptus pulp so that it can compete in world markets. Markets: target determining our current market is China, because China’s population is almost 1/3 of the population of the earth. So the very promising Chinese market continues to grow rapidly until today. Price: the price of market pulp is determined which always follow the trend of supply and demand in the world market. Logistics and distribution: transportation capital that we use today is the container shipment; in connection with the consideration of logistic cost is also a factor that China’s logistics market cost lower compared to Europe and America. Communication: Proper communication can provide a positive perception to the market, communication includes direct sales, relationship and carry out surveys to customers in the form of customer satisfaction surveys (customer satisfaction survey)
Product: in this case we take pride as a manufacturer / pulp industry that only exists only in North Sumatra, which produces a superior product that is eucalyptus pulp that can live at an altitude of 1000-1500m above sea level, and this we get from industrial forests around plateau, and we always participated keep in terms of environmental protection and maintain product quality eucalyptus pulp so that it can compete in world markets. Markets: target determining our current market is China, because China’s population is almost 1/3 of the population of the earth. So the very promising Chinese market continues to grow rapidly until today. Price: the price of market pulp is determined which always follow the trend of supply and demand in the world market. Logistics and distribution: transportation capital that we use today is the container shipment; in connection with the consideration of logistic cost is also a factor that China’s logistics market cost lower compared to Europe and America. Communication: Proper communication can provide a positive perception to the market, communication includes direct sales, relationship and carry out surveys to customers in the form of customer satisfaction surveys (customer satisfaction survey).
1.2 Problem Statement
Company which is active in manufacturing paper founded in the year 1983. Manufactures paper grade pulp and eucalyptus pulp produced from plantations; it has a total plantation area of approximately 47.544 hectares. formerly known as in 1989 was welcomed by people with full of hope because the company is believed to be able to meet society’s expectations as follows:
1. Can accommodate local labor.
2. The company is expected to play a role in improve the quality of social community life.
3. The Company will be the pioneer income distribution.
4. Help preserve local culture and art.
The presence of industrial company in terms of the national and regional economic development in basically do not matter because it has met the general criteria, which are:
a. Operating license has officially obtained by President of Indonesia since 1998. Normatively licensing means that in internal and external factors have been considered and arrangements have been reviewed in general.
b. Activities of the company with regard to the economic potential exploration area and increase the added value of these resources.
c. Pulp production in exporting can be benefit to government and large foreign exchange for the country Indonesia
The background of the company is the community living in the area and some part at around the industry area. Company was opened the assumption of the community with this industry can be an opportunity to effectively as a motor of economic community, due this industry as huge company for produced pulp where located in North Sumatera. However, since the opening of the industry, which is the industry based manufacture of pulp. Have pro and cons to environment and social welfare, which are:
In terms of economic, the positive effect experienced by residents cover components social economy, which is a source of livelihood component, income, education, employment. In addition in terms of health, the negative cause of processing pulp which waste pulp can be effect to water pollution people who have diseases such as respiratory problem, got sick and skin problem, cough, etc. this problem is really disturbing condition of the general society who live in around area the industry.
In fact in terms of the environment cause of industrial activities such logging. As known a raw material for made pulp this derived from the forest plantation industry. Raw materials comes from trees derived from managed logging gradually conducted by the company, after cutting tree can be effect to erosion and burning the wood which that has been used then. Meaning of that can be effect to air pollution on surrounding communities.
In Addition, a sense of community’s dissatisfaction about an issues of the emergence of the company. Issues that blamed for bringing economic loss with a double negative effect to local communities around industry and also for local governments. Another accusation is that people lose livelihood, public facilities and infrastructure were damaged, experienced public health disease, and damage which occurs to environmental in around area industry.
Besides that, from the society perspective, has affected to environmental such as water pollution problems. The waste from the company flows to villages and homes around the plant population. Waste disposal has become a talking point, and damage the health of local residents. Many residents complained of the stench of sewage released when the plant operates. Waste disposal from the pulp operation also produce unpleasant scent and foul odor that could potentially cause environmental pollution and disturb the health. This is because of the pulp operation has yet to implement waste management to the maximum. In addition, activities of industry such as deforestation with clear cutting trees from industry forest plantation to get raw material causing a damaged ecosystem and protest from local community. It also has effect to soil erosion and air pollution to environmental. Hence, this commitment in CSR program which 1% net sales from the company’s should be contributed to societies. However, challenges in addressing CSR issue. Therefore, this case study aims to analyze these challenges and thus provide recommendation and suggestion to company.
1.3 Research objective
1. To identify the effect of business operation of PT Toba Pulp Lestari to societal and environmental.
2. To analyze the measures taken by PT Toba Pulp Lestari in addressing the challenges in Corporate Social Responsibility programme.
3. To provide recommendations for PT. Toba Pulp Lestari in order to further improve their CSR for creating strength and meeting the opportunity.
1.4 Research Question
1. What are the societal and environmental issues faced by company?
2. How business operation to address those challenges in their Corporate Social Responsibility programme?
3. What are recommendations for company to further improve CSR for creating strength and meeting the opportunity
1.5 Case Issues
PT. Toba Pulp Lestari, is a company which is active in manufacturing paper founded in the year 1983. PT Toba Pulp Lestari manufactures pulp and eucalyptus pulp produced from plantations. It has a total plantation area of approximately 47.544 hectares.
Besides that, from the society perspective, has affected to environmental such as water pollution problems. The waste from the company flows to villages and homes around the plant population. Waste disposal has become a talking point, and damage the health of local residents. Many residents complained of the stench of sewage released when the plant operates. Waste disposal from the pulp operation also produce unpleasant scent and foul odor that could potentially cause environmental pollution and disturb the health. This is because of the pulp operation has yet to implement waste management to the maximum. In addition, activities of industry such as deforestation with clear cutting trees from industry forest plantation to get raw material causing a damaged ecosystem and protest from local community. It also has effect to soil erosion and air pollution to environmental. Hence, commitment in CSR program which 1% net sales from the company’s should be contributed to societies. However, PT. Toba Pulp Lestari has challenges in addressing CSR issue. Therefore, this case study aims to analyze these challenges and thus provide recommendation and suggestion to company.
1.6 Organization of the Remaining Chapters
Chapter 1 provides the introduction of the background for this case study, and follows by problem statements, research questions, objectives and case issues.
Chapter 2 provides as overview of country profile of Indonesia political and government, economic, social and demographics, environmental, culture, social welfare and legal.
Chapter 3 describes the overall background of Industry.
Chapter 4 provides literature review industry, economic aspect, social aspect, environmental management, corporate social responsibility, deforestation, water pollution.
Chapter 5 provides data collection methodology and the analysis tools that applying in this case study.
Chapter 6 provides the case write up regarding to program corporate social responsibility and effect cause of business operation.
Chapter 7 provides the case analysis to via SWOT and TOWS perspective.
Chapter 8 concludes with recommendation to this case study.
CHAPTER 2
COUNTRY PROFILE
2.0 Introduction
This chapter provides the overview of Indonesia from its political, government, and economic perspective. Besides that, social and demographic, environmental, culture, social welfare, and legal system in Indonesia are also being covered.
2.1 Overview of Indonesia
The management of PT Toba Pulp Lestari Tbk believes that industrial forest management are responsible for potential environmental risks contribute positively to the business and beneficial to our employees, customers, shareholders, and other stakeholders. We also believe that adequate environmental policies and implementation strategies of sustainable forest management, including protection of biodiversity, management of protected flora and fauna, as well as pollution prevention as a guideline responsible environmental management will minimize the environmental impact, increase economic benefits, then through continuous improvement program, the results of which means the environmental performance can be achieved. The management of PT Toba Pulp Lestari Tbk believes that industrial forest management are responsible for potential environmental risks contribute positively to the business and beneficial to our employees, customers, shareholders, and other stakeholders. We also believe that adequate environmental policies and implementation strategies of sustainable forest management, including protection of biodiversity, management of protected flora and fauna, as well as pollution prevention as a guideline responsible environmental management will minimize the environmental impact, increase economic benefits, then through continuous improvement program, the results of which means the environmental performance can be achieved.
2.2. Social Aspects
Responsibility is an obligation of the company to participate in activities that protect and contribute to the welfare society. While there are some more understanding and interpretation of social responsibility, but corporate social responsibility is always formed by cultural and historical period in which the company operates. Social activities which is donated the company cannot fully improve public welfare. The persistence of the deficiencies arising during the company operates. Perhaps the company has a strong commitment in the field of social responsibility, but the method or procedure performed has not directly felt by the general public but only to certain social groups. Principles that can be taken is Principe waiter. This principle states that the company has an obligation to see that the wishes of the people served with firm action, and this action will be channeled profits directly to the public. Under this principle, the community will against companies which have anti-competitive attitudes and anti-social. Principle another that can be taken is Principe charity which suggests that the affluent have to give to people who do not have. Below This principle, individuals and communities can encourage the use of the company most of their power and wealth to social activities, in this context both management and employees of the company touched contribute directly to the public, rather than through a bureaucracy that will cut it. The second principle is a basic idea for the company to changing attitudes to be better and not only will serve a certain group but must serve all communities, particularly communities who are in a corporate environment. However, with a paradigm supported by new high commitment a company can change weakness associated with social responsibility.
2.3. Economic Aspects
The existence of a company will be able to increase economic growth. The Company is a manifestation of an investment that is expected return (return) in the future, with this range of resource investment can be utilized to support the continuity and development that will come. The company would have to empower human resources as energy labor, technology as the processing, natural resources as a material to be processed, land as a place of facilities and so forth. With this leverage, the company expects revenue to be used to empower pseudo resource uses. Therefore, with activities doing various parties will be able to obtain contributions in accordance with the position. For example, the government will obtain tax contributions, employment will generate revenue, the public will gain revenue opportunities to exploit the opportunities that arise with the presence of a company In connection with the existence of a company, the economy will be able to increase driven by a variety of emerging needs and therefore various contributions. But can otherwise occur if it is not accompanied by high social responsibility of companies because many companies only obtaining oriented towards profit regardless of other factors are sufficient effect. Judging from the economic angle, the existence of a company can also be used to increase revenue by designing types of taxes in accordance with the operations. When connected with implementation of regional autonomy in the territory of the Republic of Indonesia, then any industrial or Companies can be utilized as a contributor to the region in order improving regional development and improvement of infrastructure local governments to improve services to the public.
2.4. Environmental Management
The management of PT Toba Pulp Lestari Tbk believes that industrial forest management are responsible for potential environmental risks contribute positively to the business and beneficial to our employees, customers, shareholders, and other stakeholders. We also believe that adequate environmental policies and implementation strategies of sustainable forest management, including protection of biodiversity, management of protected flora and fauna, as well as pollution prevention as a guideline responsible environmental management will minimize the environmental impact, increase economic benefits, then through continuous improvement program, the results of which means the environmental performance can be achieved. In this case that is conserved is not “environmental” but “The ability of the environment”. The ability of harmonious and balanced environment here which need to be preserved, so that any changes are always accompanied held with efforts to achieve harmony and balance of the environment at a level that new (Act No. 23 of 1997).
The term “preservation of the Global warming has become an international issue. One of them is associated with the degradation of forests, especially tropical forests. But frankly logging only one factor. Another factor is still a lot, one of which is the dominant fossil fuel consumption (factories, vehicles, boats). But during forest management discipline is run in compliance with the principles of sustainable and continuous (sustainable), then there should be no concern destroy nature. So the key: discipline adhere to the principle of sustainable and continuous. The principle of environmental management is not again based on preservation the ability of environmental function but are implemented based on the principle state responsibility, a principle of sustainability, and utility. Based on the principle of state responsibility, on the one hand, the state guarantees use of natural resources will benefit as much as possible for the well-being and quality of life of the people, both the present generation and generations future. While on the other hand, the state prevents activities utilization of natural resources within its jurisdiction that give rise losses on the jurisdictions of other countries and protects the state against impact activities outside the territory of Indonesia. Principle of sustainability implies that every person bears the obligation and responsibility towards future generations and towards each other in one generation. For the implementation of the obligations and responsibilities, the capacity of the environment must be preserved. The preservation capability the environment becomes a prop of development itself. With the benefit principle implies that all efforts and activities use of natural resources will benefit as much as possible for the well-being and quality of life of the present generation and future generations. Environmental management goal is to achieve development environmentally sustainable living. Understanding development environmentally sustainable living is a conscious effort and planned, which integrates the environment, including resources, to the development process to ensure the ability, welfare, and quality of life the present generation and future generations. The target to be achieved in environmental management in Indonesia, namely:
1. The achievement of harmony, harmony, and balance between people and Environmental. Symbols as the state philosophy and give confidence to the people and Indonesia that the happiness of life will be achieved if based on harmony, harmony, and balance, both in relation man with God Almighty and humans with humans, man and nature, and man as a person, in order to achieve progress is born, and inner happiness.
2. The realization of human Indonesia as a human environment that has attitudes and acts to protect and nurture the environment. This goal is intended to create human and people of Indonesia are cultured and love for the environment, so it has the ability to maintain and increase the carrying capacity as well as capacity the environment is becoming a mainstay of sustainable development.
3. Ensuring the benefit of present and future generations. This goal reminds us that the use of natural resources as the main points of the people’s welfare is not only enjoyed by the present generation alone, but should also be enjoyed by future generations, which is legacy for our children and grandchildren, it means use of natural resources should be sustained and sustainable.
4. The achievement of preservation of the environment.
5. The controlled utilization of the resource wisely. This target has of particular significance in relation to resource use is not renewable (nonrenewable resource), so that aspects such as effectiveness, power order as well as the results to be considered in addition to the absolute aspects of recycling (Recycling) should always be cultivated using a variety kind of simple technology or technology countryside (rural technology). Control wise use of resources not only directed to saving resources are not renewable, but also to search Other alternative resources in order to obtain energy.
6. The protection of the unitary Republic of Indonesia to the impact of business and / or activities outside the territory of the country which cause pollution and / or destruction of the environment (Law No. 23 of 1997). This latter target as a manifestation of the rights of sovereign states such as Indonesia to protect themselves from the effects of pollution and / or destruction the environment is done by other countries. Therefore, the environment must be managed to preserve the principle of environmental functions that are harmonious and balanced for support sustainable development environment for improvement ability, well-being and quality of life of the present generation and future. Everyone has an equal right to a good environment and healthy. Understanding people here include individual, group of people, or legal entity. A good and healthy environment will ensure individual, group of people, or a legal entity to enjoy a landscaped environment and meet the health requirements, so as to materialize the environment the harmony in which the Indonesian people can thrive in harmony, harmony, and dynamic balance. Indirectly, the government have an obligation to create a good environment and healthy. With their social rights or subjective rights, then every citizen states the right to demand the state to realize a good environment and healthy. The so-called subjective rights is the most widespread forms of protection of a person. With the subjective rights give to have a legitimate claim to ask for interest to be a good environment and healthy it is respected, a demand that can be supported by legal procedures, the legal protection by the courts and other devices. The suit has two (2) different functions, namely the first function, which is linked to the right to defend itself against outside interference cause harm to the environment, while the second function is associated to the right to demand that something actions environment can be preserved, restored or repaired.. This protection is normally implemented through judicial process. However, there were also other possibilities to enforcement of environmental laws, such as the right to participate in administrative procedures or to appeal to the tuition higher administrative agency. Liabilities realize good environment and healthy not only the burden of government, it is the duty of every individual, group of persons or entities law to preserve the function of the environment and to prevent and Cope damage or pollution. There are three obligations that must be done or charged to each person, group of persons or legal entities, namely:
1. The obligation to preserve the function of the environment, so it is not Preserve the environment, but sustainment
2. The obligation to prevent pollution occurs or the onset and / or destruction environment.
3. The obligation to tackle pollution and / or destruction of the environment that occur or arise.
The obligations of the government in the framework of environmental management life include:
1. Realize, grow, develop and increase awareness and responsibility for decision makers in environmental management. Decision makers in environmental management here is parties- authorities, the government, society and development actors other.
2. realizing, grow, develop and raise awareness rights and responsibilities of society in environmental management. These activities are carried out through counseling, guidance, and education and training in order to improve the quality and quantity of human resources.
3. Realize, grow, develop and improve partnerships between the business community and the government in efforts to conserve power support and environmental carrying capacity. The role of community here include participation, both in efforts and decision-making process on preservation of the carrying capacity and environmental carrying capacity. In order to the role of partnerships developed society actors environmental management life, namely governments, businesses, and communities including, among others, non-governmental organizations and scientific professional organizations.
4. Develop and implement management policy environment which ensures the maintenance of the carrying capacity and carrying capacity environment.
5. Develop and implement the pre-emptive, preventive, and proactive in preventing a decrease in the carrying capacity and carrying capacity environment. The device is pre-emptive action performed at the level of decision-making and planning, such as governance space and EIA. Preventive action is at the level of implementation through compliance with the quality standards of waste and / or economic instruments. While is proactive action at the level of production by applying standardization
environment such as ISO 14000 environmental management instruments
pre-emptive, preventive and proactive as the development and the application of environmentally sound technology, the application of environmental insurance life and environmental audits carried out voluntarily by responsible business and / or activities in order to improve performance.
6. Utilize and develop environmentally sound technologies.
7. Carrying out research and development in the environmental field.
8. Provide environmental information and disseminate it to society.
9. Giving awards to people or institutions who contributed in the field Environment. As noted above, on the basis constitution, the earth, water and natural resources contained therein to the extent controlled by the State as the supreme power organization of the entire people. Word controlled not mean possessed, but is understanding that gives authority to the state as an organization of power of the Indonesian nation the highest level to regulate the use and management of resources such nature. Therefore, utilization and resource management nature by the country should be profitable for the people as a whole, not just enjoyed by only a handful or a group of people or vice versa even cause misery of the people. Environmental management is a system with integration as its main characteristic. The point of integration in environmental management lies in the national policy of environmental management, among other:
1. Government policies and take action encourages increased efforts to conserve the environment for support sustainable development.
2. Policies and measures referred to above is set by legislation. Setting authority to the government sets national policy environmental managemet and spatial planning include:
1. The Government set a national policy on environmental management life and spatial planning, with due regard to religious values, customs customs, and values that live in the community.
2. Management environmental implemented in an integrated manner by government agencies in accordance with the duties and responsibilities of each, society and other development actors to pay attention to integration planning and implementation of the national policy on environmental management.
3. Environmental management must be integrated with the arrangement
space, the protection of non-living natural resources, protection of natural resources artificial, conservation of natural resources and ecosystems, cultural heritage, biodiversity and climate change.
4. The integration of the planning and implementation of national policy management the environment as referred to above, coordinated by the Minister. In the framework of the preparation of environmental management policy life and spatial planning must be considered in a rational and proportional potential, aspirations and needs, as well as the values that grow and thrive in the community. For example, attention to indigenous people who live and life relying on the natural resources found in the vicinit. It is clear that governments have an obligation or need to pay attention and heed rational and proportionate religious values, customs, potential, aspirations and values that live, grow and develop in society in order to prepare and establish national policies environmental management and spatial planning. This provision intends to protect and maintain the sustainability of indigenous people and their habits the concept of religion in the management of natural resources or the environment, as well as as well as confirming the recognition of legal rights for indigenous people and their
surrounding communities on the environment. During this time the rights of indigenous peoples and local communities are always defeated by the interests of national development and local, who brought as a result of the disruption of the legal community ties, place for them in doing activities together. It is intended to achieve integration (integration) in setting the national policy on environmental management and spatial planning. Better management of the environment and spatial planning, both have relevance and influence each other.
2.5. Sustainable Development
Global warming has become an international issue. One of them is associated with the degradation of forests, especially tropical forests. But frankly logging only one factor. Another factor is still a lot, one of which is the dominant fossil fuel consumption (factories, vehicles, boats). But during forest management discipline is run in compliance with the principles of sustainable and continuous (sustainable), then there should be no concern destroy nature. So the key: discipline adhere to the principle of sustainable and continuous.
1. Equity and social justice
In this case sustainable development should ensure equitable distribution for current and future generations in the form of equitable distribution land resources, production and economic factors, the form the welfare of all sections of society.
2. Respect for diversity
Biodiversity and cultural diversity should be maintained. Biodiversity is a prerequisite to ensure that resources Nature is always available on an ongoing basis for the present and future. Diversity maintenance culture would encourage treated equally on everyone and make knowledge of the traditions of the various societies can be better understood by the public.
3. Using an integrative approach prioritizing sustainable development linkages between human nature. Humans affect nature beneficial and destructive manner. By Therefore, the use should be based on an understanding of the complexity the relationship between natural systems and social systems by using methods more integrative in development implementation.
4. Long-term Perspective, a sustainable development perspective that is often overlooked, because people usually tend to judge the present is more important than time will come. Therefore, such a perception needs to be changed. Sustainable development requires us to manage natural resources rationally as possible. This means that the four groups of natural resources, such as group of mining natural resources, nature conservation forest, protected forest and production forest can be processed, as long as rationally and sensibly. But welfare contains wider meaning, including not only material prosperity, fulfillment the needs of the present generation, but also includes non-physical well-being, quality of quality life with a decent living environment lived and guarantees that the welfare of maintaining continuity for future generations. Must be prevented welfare of the present generation is achieved by destroying environment for improving the welfare of future generations. In the approach this justly, “what is taken from nature must return to nature, at lack replaced with a role similar to the natural. Sustainable development paradigm is a critique of development on the one hand, but on the other hand is a normative theory that thrusts praxis new development as a way out of failure over the years. In that sense, the paradigm of sustainable development not just a critique of development, but also is a critic ideology of development, namely the ideology of. As a normative theory it Indonesia urged the nation to abandon the attitude that makes economic development as the only national development goals. He urges Indonesia to immediately give equal attention for socio-cultural development and the environment, if not longer repeated crises socio-cultural and environmental crisis experienced by today.
2.6. Influences Development
Development is seen as a multi-dimensional process will include aspects of life in society, namely non-economic aspects and aspects economic development of both physical and non-physical nature of a society is a e combination of social development, economic and institutional better contained the essential values of human. The development process thus causing motion mobility group community-related, even sometimes can collide with Another group, so that also takes place social values to one another. In this circumstance arises inability balance (disequilibrium) in social value systems. Large projects have the ability to cause shock and imbalance in the social environment. Good construction with big leap and construction of large projects equally affect the social environment. Imbalance is happening here could lead to social influences such as the emergence of groups of people who disrupted his ability to to continue living in the midst of a rapidly changing society. Development is always the risk of environmental disruption, disruption of harmony between man and his environment. But without the development of public services will not be sufficient to meet the purposes population continues to grow, so will lead to poverty expanding that eventually led to the environmental damage, because residents will commercialize natural resources excessively.
Development of a project since the Planning is already aims to increase the income (value added), further to create change for the better in the social aspects of society. Society meant here is of course the entire community of a region, country or perhaps the whole world. But the fact they are located around the project forgotten or having a negative impact compared with the community far away from the project (Amsyari, 1993). Overall socio-economic impacts often become negative. It is why in controlling the impact of a project in the form of a negative impact on the physical chemical, biological and socio-economic and cultural avoided or reduced. Thus also socio-economic impacts should be sought seek to increase it so that the overall socio-economic impact can be positive form, so as to create public welfare.
2.2 Political and Government
Global warming has become an international issue. One of them is associated with the degradation of forests, especially tropical forests. But frankly logging only one factor. Another factor is still a lot, one of which is the dominant fossil fuel consumption (factories, vehicles, boats). But during forest management discipline is run in compliance with the principles of sustainable and continuous (sustainable), then there should be no concern destroy nature. So the key: discipline adhere to the principle of sustainable and continuous.:
a. Because investment in the agricultural sector is considered less profitable,
in other words, the marginal rate of return of the agricultural sector expected to be low, and anyway due to the pressure of population growth continuous, then this field will be affected by the law of the less (Diminishing return).
b. Because the agricultural sector is considered slow growth, among others due to the presence of social and institutional barriers that are difficult changed, at least in a fast tempo. Therefore, industrialization is expected to act as dynamist who will bring all sectors of the economy at the level of growth rate higher. Actually hopes to shed this industry sector quite a lot, for example, with goods that are not only good quality, but affordable by purchasing power. To build an industry the government had determined the areas of industrial growth centers. With Thus industrial development in addition to realizing the economic structure increasingly balance between industry and agriculture, also directed that in the sector itself manifest balance and harmony between groups and business types Among industrial fulfillment domestic industries and for export between industry capital-intensive and labor-intensive industries and so on. A fairly rapid industrial development has given rise to various sorts technologies that have an impact on the environment. In the implementing environmentally sound industrial development sustainable.
Besides that, from the society perspective, has affected to environmental such as water pollution problems. The waste from the company flows to villages and homes around the plant population. Waste disposal has become a talking point, and damage the health of local residents. Many residents complained of the stench of sewage released when the plant operates. Waste disposal from the pulp operation also produce unpleasant scent and foul odor that could potentially cause environmental pollution and disturb the health. This is because of the pulp operation has yet to implement waste management to the maximum. In addition, activities of industry such as deforestation with clear cutting trees from industry forest plantation to get raw material causing a damaged ecosystem and protest from local community. It also has effect to soil erosion and air pollution to environmental. Hence, this commitment in CSR program which 1% net sales from the company’s should be contributed to societies. However, challenges in addressing CSR issue. Therefore, this case study aims to analyze these challenges and thus provide recommendation and suggestion to company.
2.2. Social Aspects
Social responsibility is an obligation of the company to participate in activities that protect and contribute to the welfare society. While there are some more understanding and interpretation of social responsibility, but corporate social responsibility is always formed by cultural and historical period in which the company operates. Social activities which donated the company fully improve public welfare. The persistence of the deficiencies arising during the company operates. Perhaps the company has a strong commitment in the field of social responsibility, but the method or procedure performed has not directly felt by the general public but only to certain social groups (Pelly, 1991). Principles that can be taken is waiter. This principle states that the company has an obligation to see that the wishes of the people served with firm action, and this action will be channeled profits directly to the public. Under this principle, the community will against companies which have anti-competitive attitudes and anti-social. Below This principle, individuals and communities can encourage the use of the company most of their power and wealth to social activities, in this context both management and employees of the company touched contribute directly to the public, rather than through a bureaucracy that will cut it. The second principle is a basic idea for the company to changing attitudes to be better and not only will serve a certain group but must serve all communities, particularly communities who are in a corporate environment. However, with a paradigm supported by new high commitment a company can change weakness associated with social responsibility (Pelly, 1991).
2.3. Economic Aspects
The existence of a company will be able to increase economic growth. The Company is a manifestation of an investment that is expected return (return) in the future, with this range of resource investment can be utilized to support the continuity and development that will come. The company would have to empower human resources as energy labor, technology as the processing, and natural resources as a material to be processed, land as a place of facilities and so forth. With this leverage, the company expects revenue to be used to empower pseudo resource uses. Therefore, with activities doing various parties will be able to obtain contributions in accordance with the position. For example, the government will obtain tax contributions, employment will generate revenue, the public will gain revenue opportunities to exploit the opportunities that arise with the presence of a company. In connection with the existence of a company, the economy will be able to increase driven by a variety of emerging needs and therefore various contributions. But can otherwise occur if it is not accompanied by high social responsibility of companies because many companies only obtaining oriented towards profit regardless of other factors are sufficient effect. Judging from the economic angle, the existence of a company can also be used to increase revenue (PAD) by designing types of taxes in accordance with the operations. When connected with implementation of regional autonomy in the territory of the Republic of Indonesia, then any industrial or Companies can be utilized as a contributor to the region in order improving regional development and improvement of infrastructure local governments to improve services to the public.
2.2.1 Foreign Relations and Military
Global warming has become an international issue. One of them is associated with the degradation of forests, especially tropical forests. But frankly logging only one factor. Another factor is still a lot, one of which is the dominant fossil fuel consumption (factories, vehicles, boats). But during forest management discipline is run in compliance with the principles of sustainable and continuous (sustainable), then there should be no concern destroy nature. So the key: discipline adhere to the principle of sustainable and continuous.
a. Because investment in the agricultural sector is considered less profitable,
in other words, the marginal rate of return of the agricultural sector expected to be low, and anyway due to the pressure of population growth continuous, then this field will be affected by the law of the less
b. Because the agricultural sector is considered slow growth, among others Due to the presence of social and institutional barriers that are difficult changed, at least in a fast tempo (Rahardjo, 1990). Therefore, industrialization is expected to act as dynamist which will bring all sectors of the economy at the level of growth rate higher. Actually hopes to shed this industry sector quite a lot, for example, with goods that are not only good quality, but affordable by purchasing power. To build an industry the government had determined the areas of industrial growth centers. With Thus industrial development in addition to realizing the economic structure increasingly balance between industry and agriculture, also directed that in the sector itself manifest balance and harmony between groups and business types Among industrial fulfillment domestic industries and for export between industry capital-intensive and labor-intensive industries and so on (Amsyari, 1993). A fairly rapid industrial development has given rise to various sorts technologies that have an impact on the environment. In the implementing environmentally sound industrial development sustainable.
2.2. Social Aspects
Social responsibility is an obligation of the company to participate in activities that protect and contribute to the welfare society. While there are some more understanding and interpretation of social responsibility, but corporate social responsibility is always formed by cultural and historical period in which the company operates. Social activities which has donated the company cannot fully improve public welfare. The persistence of the deficiencies arising during the company operates. Perhaps the company has a strong commitment in the field of social responsibility, but the method or procedure performed has not directly felt by the general public but only to certain social groups (Pelly, 1991). Global warming has become an international issue. One of them is associated with the degradation of forests, especially tropical forests. But frankly logging only one factor. Another factor is still a lot, one of which is the dominant fossil fuel consumption (factories, vehicles, boats). But during forest management discipline is run in compliance with the principles of sustainable and continuous (sustainable), then there should be no concern destroy nature. So the key: discipline adhere to the principle of sustainable and continuous.
2.3. Economic Aspects
The existence of a company will be able to increase economic growth. The Company is a manifestation of an investment that is expected return (return) in the future, with this range of resource investment can be utilized to support the continuity and development that will come. The company would have to empower human resources as energy labor, technology as the processing, natural resources as a material to be processed, land as a place of facilities and so forth. With this leverage, the company expects revenue to be used to empower pseudo resource uses. Therefore, with activities doing various parties will be able to obtain contributions in accordance with the position. For example, the government will obtain tax contributions, employment will generate revenue, the public will gain revenue opportunities to exploit the opportunities that arise with the presence of a
company. In connection with the existence of a company, the economy will be able to increase driven by a variety of emerging needs and therefore various contributions. But can otherwise occur if it is not accompanied by high social responsibility of companies because many companies only obtaining oriented towards profit regardless of other factors are sufficient effect. Judging from the economic angle, the existence of a company can also be used to increase revenue by designing types of taxes in accordance with the operations. When connected with implementation of regional autonomy in the territory of the Republic of Indonesia, then any industrial or Companies can be utilized as a contributor to the region in order improving regional development and improvement of infrastructure local governments to improve services to the public.
2.4. Environmental Management
1. Concerted efforts to “preserve the function of the environment”, ie maintaining environmental sustainability, so as to support the life humans and other living beings and protect the capacity of the environment against attacks from the outside;
2. Efforts are formulated in a variety of activities which constitute a step policy arrangement, utilization, development, maintenance, restoration, supervision and control of the environment. Indonesian environmental management based on the principle (principle) that certain environmental management based on preservation capability harmonious and balanced environment to support development sustainable for the improvement of human welfare. If in the process of development that occurred unfavorable impact to the environment he must do an effort to eliminate or reduce the negative impact, so that the state of the environment became congenial and balanced again. In this case that is conserved is not “environmental” but “The ability of the environment”. The ability of harmonious and balanced environment here which need to be preserved, so that any changes are always accompanied held with efforts to achieve harmony and balance of the environment at a level that new (Act No. 23 of 1997). The term “preservation of the environment’s ability harmonious and balanced” bring the harmony between “development” and “environment”, so that both that sense, the development and the environment are not opposed to one another. As for the “environmental preservation” which means preserving the environment it is used in the context of nature conservation and nature reserve. There is the term “environmental preservation”, which is meaningful, a series of efforts to maintain the continuity of the carrying capacity and carrying capacity environment. Principles and objectives of environmental management that management the environment, held by the principle of national responsibility, the principle sustainable and utility aims to achieve development environmentally sustainable in the context of human development Indonesia fully and development of the entire Indonesian society faithful and devoted to God Almighty. The principle of environmental management is not again based on preservation the ability of environmental function but are implemented based on the principle state responsibility, a principle of sustainability, and utility. Based on the principle of state responsibility, on the one hand, the state guarantees use of natural resources will benefit as much as possible for the well-being and quality of life of the people, both the present generation and generations future. While on the other hand, the state prevents activities utilization of natural resources within its jurisdiction that give rise losses on the jurisdictions of other countries and protects the state against impact activities outside the territory of Indonesia. Principle of sustainability implies that every person bears the obligation and responsibility towards future generations and towards each other in one generation. For the implementation of the obligations and responsibilities, the capacity of the environment must be preserved. The preservation capability the environment becomes a prop of development itself. With the benefit principle implies that all efforts and activities use of natural resources will benefit as much as possible for the well-being and quality of life of the present generation and future generations. Environmental management goal is to achieve development environmentally sustainable living. Understanding development environmentally sustainable living is a conscious effort and planned, which integrates the environment, including resources, to the the development process to ensure the ability, welfare, and quality of life the present generation and future generations.
1. The achievement of harmony, harmony, and balance between people and environment. symbol as the state philosophy and give confidence to the people and Indonesia that the happiness of life will be achieved if based on harmony, harmony, and balance, both in relation man with God Almighty and humans with humans, man and nature, and man as a person, in order to achieve progress is born, and inner happiness.
2. The realization of human Indonesia as a human environment that has attitudes and acts to protect and nurture the environment. This goal is intended to create human and people of Indonesia are cultured and love for the environment, so it has the ability to maintain and increase the carrying capacity as well as capacity the environment is becoming a mainstay of sustainable development.
3. Ensuring the benefit of present and future generations. This goal reminds us that the use of natural resources as the main points of the people’s welfare is not only enjoyed by the present generation alone, but should also be enjoyed by future generations, which is legacy for our children and grandchildren, it means use of natural resources should be sustained and sustainable.
4. The achievement of preservation of the environment.
5. The controlled utilization of the resource wisely. This target has
of particular significance in relation to resource use is not renewable, so that aspects such as effectiveness, power order as well as the results to be considered in addition to the absolute aspects of recycling (Recycling) should always be cultivated using a variety kind of simple technology or technology countryside (rural technology).
6. The protection of the unitary Republic of Indonesia to the impact of business and / or activities outside the territory of the country which cause pollution and / or destruction of the environment (Law No. 23 of 1997). This latter target as a manifestation of the rights of sovereign states such as Indonesia to protect themselves from the effects of pollution and / or destruction the environment is done by other countries. Therefore, the environment must be managed to preserve the principle of environmental functions that are harmonious and balanced for support sustainable development environment for improvement ability, well-being and quality of life of the present generation and future. Implementation of a business and / or activity must be followed with prevention efforts and / or prevention of pollution and / or destruction of the environment it (Act No. 23 of 1997). Everyone has an equal right to a good environment and healthy. Understanding people here include individual, group of people, or legal entity. A good and healthy environment will ensure individual, group of people, or a legal entity to enjoy a landscaped environment and meet the health requirements, so as to materialize the environment the harmony in which the Indonesian people can thrive in harmony, harmony, and dynamic balance. Indirectly, the government have an obligation to create a good environment and healthy. With their social rights or subjective rights, then every citizen states the right to demand the state to realize a good environment. The so-called subjective rights is the most widespread forms of protection of a person. With the subjective rights give to have a legitimate claim to ask for interest to be a good environment and healthy it is respected, a demand that can be supported by legal procedures, the legal protection by the courts and other devices. The suit has two (2) different functions, namely the first function, which is linked to the right to defend itself against outside interference cause harm to the environment, while second function is associated to the right to demand that something actions environment can be preserved, restored or repaired. His protection is normally implemented through judicial process. However, there were also other possibilities to enforcement of environmental laws, such as the right to participate in administrative procedures or to appeal to higher administrative agency. Liabilities realize good environment and healthy not only the burden of government, it is the duty of every individual, group of persons or entities law to preserve the function of the environment and to prevent and Cope damage or pollution. There are three obligations that must be done or charged to each person, group of persons or legal entities, namely:
1. The obligation to preserve the function of the environment, so it is not preserve the environment, but sustainment
2. The obligation to prevent pollution occurs or the onset and / or destruction environment.
3. The obligation to tackle pollution and / or destruction of the environment that occur or arise. The obligations of the government in the framework of environmental management life, include:
1. Realize, grow, develop and increase awareness and responsibility for decision makers in environmental management. Decision makers in environmental management here is parties- authorities. the government, society and development actors other.
2. Realizing, grow, develop and raise awareness rights and responsibilities of society in environmental management. These activities are carried out through counseling, guidance, and education and training in order to improve the quality and quantity of human resources.
3. Realize, grow, develop and improve partnerships between the business community and the government in efforts to conserve power support and environmental carrying capacity. The role of community here include participation, both in efforts and decision-making process on preservation of the carrying capacity and environmental carrying capacity. In order to the role of partnerships developed society actors environmental management life, namely governments, businesses, and communities including, among others, non-governmental organizations and scientific professional organizations.
4. Develop and implement management policy environment which ensures the maintenance of the carrying capacity and carrying capacity environment.
5. Develop and implement the pre-emptive, preventive, and proactive in preventing a decrease in the carrying capacity and carrying capacity environment. The device is pre-emptive action performed at the level of decision-making and planning, such as governance. Preventive action is at the level of implementation through compliance with the quality standards of waste and / or economic instruments. While is proactive action at the level of production by applying standardization environment such as ISO 14000 environmental management instruments pre-emptive, preventive and proactive as the development and the application of environmentally sound technology, the application of environmental insurance life and environmental audits carried out voluntarily by responsible business and / or activities in order to improve performance.
6. Utilize and develop environmentally sound technologies.
7. Carrying out research and development in the environmental field.
8. Provide environmental information and disseminate it to society.
9. Giving awards to people or institutions who contributed in the field environment. Constitution, the earth, water and natural resources contained therein to the extent controlled by the State as the supreme power organization of the entire people. Word controlled not mean possessed, but is understanding that gives authority to the state as an organization of power of the Indonesian nation the highest level to regulate the use and management of resources such nature. Therefore, utilization and resource management nature by the country should be profitable for the people as a whole, not just enjoyed by only a handful or a group of people or vice versa even cause misery of the people. Environmental management is a system with integration as its main characteristic. The point of integration in environmental management lies in the national policy of environmental management, among other:
1. Government policies and take action encourages increased efforts to conserve the environment for support sustainable development.
2. Policies and measures referred to above is set by legislation. Setting authority to the government sets national policy environmental management and spatial planning includes:
1. The Government set a national policy on environmental management life and spatial planning, with due regard to religious values, customs and values that live in the community.
2. Management environmental implemented in an integrated manner by government agencies in accordance with the duties and responsibilities of each, society and other development actors to pay attention to integration planning and implementation of the national policy on environmental management.
3. Environmental management must be integrated with the arrangement
space, the protection of non-living natural resources, protection of natural resources artificial, conservation of natural resources and ecosystems, cultural heritage, biodiversity and climate change.
4. The integration of the planning and implementation of national policy management the environment as referred to above, coordinated by Minister.
In the framework of the preparation of environmental management policy life and spatial planning must be considered in a rational and proportional potential, aspirations and needs, as well as the values that grow and thrive
in the community. It is clear that governments have an obligation or need to pay attention and heed rational and proportionate religious values, customs, potential, aspirations and values that live, grow and develop in society in order to prepare and establish national policies environmental management and spatial planning. This provision intends to protect and maintain the sustainability of indigenous people and their habits the concept of religion in the management of natural resources or the environment, as well as as well as confirming the recognition of legal rights for indigenous people and their surrounding communities on the environment. During this time the rights of indigenous peoples and local communities are always defeated by the interests of national development and local, who brought as a result of the disruption of the legal community ties place for them in doing activities together. Bringing together policy-setting between the authorities of national environmental management with national policy-setting authority at once spatial planning in one hand. It is intended to achieve integration in setting the national policy on environmental management and spatial planning. Better management of the environment and spatial planning, both have relevance and influence each other.
2.5. Sustainable Development
Since the 1980s a political agenda focused on environmental begin what is known until now as the paradigm of sustainable development. Started first, this term appears in the World Conservation Strategy of The International Union for the Conservation of Nature (1980), and is used by Lester R. Brown (1981) in the book Building a Sustainable Society. The term then became very popular through represents the culmination of a political process, which is finally on Development paradigms Continuous has been accepted as a political agenda for development all countries in the world. Sustainable development, on the one hand, should be laid down as human needs and aspirations of present and future, therefore, rights human present and the future, therefore, a human rights such as the rights economic, social, and cultural and development rights can help clarification direction and orientation of the formulation of the concept of sustainable development. The basic principles of sustainable development include several things:
1. Equity and social justice
In this case sustainable development should ensure equitable distribution
for current and future generations in the form of equitable distribution
land resources, production and economic factors the form the welfare of all sections of society.
2. Respect for diversity (diversity) Biodiversity and cultural diversity should be maintained. Biodiversity is a prerequisite to ensure that resources Nature is always available on an ongoing basis for the present and future. Diversity maintenance culture would encourage treated equally on everyone and make knowledge of the traditions of the various societies can be better understood by the public.
3. Using an integrative approach prioritizing sustainable development linkages between human nature. Humans affect nature beneficial and destructive manner. By Therefore, the use should be based on an understanding of the complexity the relationship between natural systems and social systems by using methods more integrative in development implementation.
4. Long-term Perspective, a sustainable development perspective that is often overlooked, because people usually tend to judge the present is more important than time will come. Therefore, such a perception needs to be changed. Sustainable development requires us to manage natural resources rationally as possible. This means that the four groups of natural resources, such as group of mining natural resources, nature conservation forest, protected forest and production forest can be processed, as long as rationally and sensibly. This approach does not reject the amended and natural resources for development and human welfare. But welfare contains wider meaning, including not only material prosperity, fulfillment the needs of the present generation, but also includes non-physical well-being, quality of quality life with a decent living environment lived and guarantees that the welfare of maintaining continuity for future generations. Must be prevented welfare of the present generation is achieved by destroying environment for improving the welfare of future generations. In the approach this justly, “what is taken from nature must return to nature, at lack replaced with a role similar to the natural. Sustainable development paradigm is a critique of development on the one hand, but on the other hand is a normative theory that thrusts praxis new development as a way out of failure over the years. In that sense, the paradigm of sustainable development not just a critique of development, but also is a critic ideology of development, namely the ideology of a normative theory it Indonesia urged the nation to abandon the attitude that makes economic development as the only national development goals. He urges Indonesia to immediately give equal attention for socio-cultural development and the environment, if not longer repeated crises socio-cultural and environmental crisis experienced by today.
2.6.Influence Development
Development is seen as a multi-dimensional process will include aspects of life in society, namely non-economic aspects and aspects economic development of both physical and non-physical nature of a society is a e combination of social development, economic and institutional better life and contained the essential values of human needs. The development process thus causing motion mobility group community-related, even sometimes can collide with Another group, so that also takes place social values to one another. In this circumstance arises inability balance in social value systems. Large projects have the ability to cause shock and imbalance in the social environment. Good construction with big leap and the construction of large projects equally affect the social environment. Imbalance is happening here could lead to social influences such as the emergence of groups of people who disrupted his ability to continue living in the midst of a rapidly changing society. Development is always the risk of environmental disruption, disruption of harmony between man and his environment. But without the development of public services will not be sufficient to meet the purposes population continues to grow, so will lead to poverty expanding that eventually led to the environmental damage, because residents will commercialize natural resources excessively. Development o a project since the planning is already aims to increase the income (value added), further to create change for the better in the social aspects of society. Society meant here is of course the entire community of a region, country or perhaps the whole world. But the fact they are located around the project forgotten or having a negative impact compared with the community far away from the project. Overall socio-economic impacts often become negative. It is why in controlling the impact of a project in the form of a negative impact on the physical chemical, biological and socio-economic and cultural avoided or reduced. Thus also socio-economic impacts should be sought seek to increase it so that the overall socio-economic impact can be positive form, so as to create public welfare.
2.2.2 Administrative Division
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
2.5 Environmental
Indonesia’s with symbol which is Eagle with diversity of tropical climate, and archipelagic geography, support the world’s second highest level of biodiversity another meaning is deforestation after Brazil, and its flora and fauna is a mixture of Asian and Australasian species. Indonesia has four Island islands called part which are:
Indonesia is second only to Australia in terms of total endemic species, with 36% of its 1,531 species of bird and 39% of its 515 species of mammal being endemic. Indonesia’s 80,000 kilometres (50,000 miles) of coastline are surrounded by tropical seas that contribute to the country’s high level of biodiversity. Indonesia has a range of sea and coastal ecosystems, including beaches, sand dunes, estuaries, mangroves, coral reefs, sea grass beds, coastal mudflats, tidal flats, algal beds, and small island ecosystems. Indonesia is one of Coral Triangle countries with the world’s greatest diversity of coral reef fish with more than 1,650 species in eastern Indonesia only.
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. traffic congestion, garbage management, and reliable water and waste water services. Deforestation and the destruction of peat lands make Indonesia the world’s third largest emitter of greenhouse gases. Much of Indonesia’s deforestation is caused by forest clearing for the palm oil Industry, which has cleared 18 million hectares of forest for palm oil expansion. Palm oil expansion requires land reallocation as well as changes to the local and natural ecosystems. Palm oil expansion can generate wealth for local communities, if done right. If done wrong, it can degrade ecosystems and cause social conflicts.
CHAPTER 3
INDUSTRY PROFILE
3.0 Introduction
This chapter will discuss about the overall overview Pulp and Paper in companies in Indonesia. Subsequently, comparative advantage over other countries is covered.
3.1 Overview of Pulp and Paper in Indonesia
3.1.1 Pulp Industry
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
3.0.2 Production Pulp in Indonesia
Besides that, from the society perspective, has affected to environmental such as water pollution problems. The waste from the company flows to villages and homes around the plant population. Waste disposal has become a talking point, and damage the health of local residents. Many residents complained of the stench of sewage released when the plant operates. Waste disposal from the pulp operation also produce unpleasant scent and foul odor that could potentially cause environmental pollution and disturb the health. This is because of the pulp operation has yet to implement waste management to the maximum. In addition, activities of industry such as deforestation with clear cutting trees from industry forest plantation to get raw material causing a damaged ecosystem and protest from local community. It also has effect to soil erosion and air pollution to environmental. Hence, PT Toba Pulp Lestari has commitment in CSR program which 1% net sales from the company’s should be contributed to societies. However, challenges in addressing CSR issue. Therefore, this case study aims to analyze these challenges and thus provide recommendation and suggestion to company.
3.1 Comparative Advantages over other Countries
The pulp and paper industry in Indonesia is ranked 3 in 2013 than other countries and is still open to further development. This is because of Indonesia’s supporting factors and comparative advantage in terms of land coverage, surplus,
3.1.1 Development of Pulp & Paper
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company a
nd consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. 50
CHAPTER 4
LITERATURE REVIEW
This chapter will firstly give an overview industry, perspective of social and perspective of economic, environment management and include the effectiveness of environmental management, corporate social responsibility and thus deforestation and water pollution.
4.0 Industry
Introduced influence of Industry pulp to social welfare. This study indicated that industry when construction started becomes strategy in the early days after the independence, the leader’s framers wisdom and planning in developing countries, are generally more interested in the idea of industrialization. Industrialization is realized with the establishment of large factories and modern, for politicians and statesmen is a symbol of progress and development. There is a reason that more rational reason why the industry is considered more important to be developed, which are:
a. Because investment in the agricultural sector is considered less favourable, in other words, the marginal rate of return of the agricultural sector expected to be low, anyway due to the pressure of population growth continuous, and then this field will be subject to the law of the smaller (Diminishing returns).
b. Because agriculture is considered slow growth, among others due to the presence of social and institutional barriers that are difficult changed, at least in a fast temp.
Has become imperative for the industry to provide the infrastructure and means for smooth operations (production). To Therefore, industrialization is expected to act as a motivator which will bring the entire sector of the economy at the level of growth rate higher. Actually expectations shed to this industry sector quite a lot, for example, with goods that are not only good quality, but affordable by purchasing power. Build an industry the government has determined the areas of industrial growth centres. With The Thus the construction industry in addition to realizing the economic structure more balance between industry and agriculture, also directed that in the sector itself manifest balance and harmony between groups and type of business industry between domestic fulfilment industry and for export between industry capital-intensive and labor-intensive industries and so on. Fairly rapid industrial development has led to various kinds technologies that have an impact on the environment. In industrial development aimed at sustainable environment should be the prevention and control of pollution caused by industrial activities on the environment.
3.1 Social Aspect
Social responsibility is an obligation of the company to participate in activities that protect and contribute to the welfare of society. Although there is some understanding and interpretation of more specific of social responsibility, but corporate social responsibility has always formed by the culture in which the company operates. Social activities who has donated the company has not fully can improve public welfare. There is still a shortage shortages arising during the company operate. Perhaps the company has a high commitment in the field of social responsibility, but the method or procedure performed has not directly felt by the general public but only to certain social groups (Pelly, 1991). The principle that can be taken is principle of service. This principle states that companies have an obligation to see that the community wishes served with the actions o the company, and with this action will be channelled profits directly to the public. Under this principle, the community will against companies that have anti-competitive attitudes and anti-social. Principle another that can be taken is principle of charity which suggests that the sufficient to give to the poor. In this principle, individuals and communities the company can encourage the use of most power and their wealth for social activities, including both management and employees of the company emotion contributes directly to the public, but by enjoying the results of their own. Both of this principle is a basic idea for the company to change in order to better attitude and not only will serve a specific group but must serve all communities, particularly communities who are in a corporate environment. However, the new strategy to support by a strong commitment the company can change the weaknesses related to social responsibility.
3.2 Economic Aspect
The existence of a company will be able to increase economic growth. The company is a manifestation of an investment that is expected returns in the future, with this range of resource investment can be utilized to support the continuity and development that will to come. Companies must manage human resources as energy work, as processing technology, natural resources such as land will be treated as public facilities and so on. With regular management of the company expects revenue to be used to empower other human resources. Therefore, the activities carried out by the party to intervene will be able to obtain a contribution. For example, the government will obtain tax contributions, workers will earn income and take advantage of the opportunity. Terms of general, the existence of the company which the economy will be able to improve the socio-economic communities, driven by various emerging needs and because of the various contributions. However, if the contrary not carried out with a good responsibility of the company, there will be a loss, because many companies make a profit but a policy with no attention to other factors that influence.
The terms of the economy, with the company also got a chance to increase locally-generated revenue to implement the government tax accordance with its operations. If it is associated with the implementation of regional autonomy in the Republic of Indonesia, then any industry or company can be utilized as a contributor to the region to boost regional development and improvement of infrastructure and the government to improve services to the public at large.
3.3 Environment
4.3.1 Definition of Environment
The continuous pressure coming from the regulatory bodies, non-governmental organisations as well as active social groups have continue to show interest in the business operating practice but pressures on the role plays by business in society and also surrounding environment suggested that environment literally means surrounding and everything that affect an organism during its lifetime is collectively known as its environment. In another words ‘Environment is sum total of water, air and land interrelationships among themselves and also with the human being, other living organisms and property’. It includes all the physical and biological surrounding and their interactions. Environmental studies provide an approach towards understanding the environment of our planet and the impact of human life upon the environment. Thus environment is actually global in nature; it is a multidisciplinary subject including physics, geology, geography, history, economics, physiology, biotechnology, remote sensing, geophysics, soil science and hydrology, etc.
4.3.2 Environmental Management
Environmental management is a process that industries, companies, and individuals undertake to regulate and protect the health of the natural world. In most cases, it does not actually involve managing the environment itself, but rather is the process of taking steps and promoting behaviours that will have a positive impact on how environmental resources are used and protected. Organizations engage in environmental management for a couple of different reasons, but caring for the natural world, following local laws and rules about conservation, and saving money are usually near the top of most lists.
This study indicated that environmental management involves the processes of setting ‘objectives, plans and systems that determine operations’ position and responsiveness to environmental issues and regulation. From the research in the ‘eld of environmental management falls into two streams. The ‘rst stream examines the antecedents of environmental management practices maintaining that the adoption of environmental management practices is contingent upon various factors including regulation and legal requirements. Conclusion of this study indicates that organisations are more likely to adopt environmental management practices when they are experiencing greater pressure from customers, local communities, regulators, the government and competitors. In addition, those organisations with greater resources and more committed managers are more likely to adopt environmental management practices to a greater extent. The effectiveness of environmental management is measured in respect of the effectiveness of environmental management processes and environmental performance. While there is extensive literature on the adoption of environmental management practices fewer studies have focused on the second stream of research which examines the effectiveness of environmental management. Environmental management goal is to achieve development environmentally sustainable living. Definition of development environmentally sustainable living is a conscious effort and planned, which integrates the environment, including resource, into development process to ensure capability, welfare, and quality of life the present generation and future generations. Development that blends environment, including resource becomes a means to achieve sustainable development and a guarantee also for the ability, welfare and quality of life of the present generation and future (Act No. 23 of 1997).
4.3.2 The effectiveness of environmental management
This study indicated that environmental management is effective when the intended objectives are attained. The majority of studies assess the effectiveness of environmental management in respect to environmental the effectiveness of an initiative can be assessed based on:
i) the usefulness of information
ii) improvements in organisational processes and
iii) Improvements in organisational performance.
This suggests that environmental performance is contingent upon the effectiveness of environmental management processes. Consequently, this study contributes to the literature by examining the effectiveness of environmental management with respect to both its effect on environmental management processes and environmental performance. The study assesses the effectiveness of environmental management processes in respect to the achievement of eleven desired objectives of environmental management which are based on Lawler (2003) Most studies in the ‘eld have assessed the effectiveness of environmental management using the third approach, with the adoption of environmental management practices found to contribute to improvements in environmental performance. However suggestion, improvements in environmental performance do not occur directly. Rather they are the result of the effect of environmental management on organisational processes.. Argue that irrespective of the type of management practice, process effectiveness represents an antecedent of desired performance. and are shown in the Appendix. These objectives facilitate a favourable operating environment which in turn, assists an organisation to achieve environmental outcomes.
4.4 Corporate Social Responsibility
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Markets: target determining our current market is China, because China’s population is almost 1/3 of the population of the earth. So the very promising Chinese market continues to grow rapidly until today. Price: the price of market pulp is determined which always follow the trend of supply and demand in the world market. Logistics and distribution: transportation capital that we use today is the container shipment; in connection with the consideration of logistic cost is also a factor that China’s logistics market cost lower compared to Europe and America. Communication: Proper communication can provide a positive perception to the market, communication includes direct sales, relationship and carry out surveys to customers in the form of customer satisfaction surveys (customer satisfaction survey) deemed as a means of better understanding stakeholders’ demand and further fulfilling their requirements Besides, at an operational level, a dynamic implementation of CSR could make the CSR governance more systematic, efficient and effective. Furthermore, organization’s resource could achieve an effective and efficient utilization two broad approaches for integrated CSR governance, which are Product: in this case we take pride as a manufacturer / pulp industry that only exists only in North Sumatra, which produces a superior product that is eucalyptus pulp that can live at an altitude of 1000-1500m above sea level, and this we get from industrial forests around plateau, and we always participated keep in terms of environmental protection and maintain product quality eucalyptus pulp so that it can compete in world markets. Markets: target determining our current market is China, because China’s population is almost 1/3 of the population of the earth. So the very promising Chinese market continues to grow rapidly until today. Price: the price of market pulp is determined which always follow the trend of supply and demand in the world market. Logistics and distribution: transportation capital that we use today is the container shipment; in connection with the consideration of logistic cost is also a factor that China’s logistics market cost lower compared to Europe and America. Communication: Proper communication can provide a positive perception to the market, communication includes direct sales, relationship and carry out surveys to customers in the form of customer satisfaction surveys (customer satisfaction survey)
CHAPTER 5
METHODOLOGY
In this chapter, primary and secondary data collection methodology that applying in this case study are discussed. Primary data collection focuses on semi-structured interview and observation technique while secondary data collection is based on process of documentary reviewing. After that, SWOT and TOWS analysis, which are the analysis tools for this case study also, being covered.
5.0 Primary Data Collection
In this research, primary data information will be collected through individual depth interview and on field observation in Interview is useful to gather subjective perspective from interviewees. Interviewees also can respond freely to the question asked. Freedom for respondent to answer how they wish to is important in giving them a feeling of control in the interview situation. Consequently, also becomes a respect act to the respondent. However, the concern of semi-structured interview is time consuming. The amount of interview time depends on the interviewee. And the company for marketing the product located in main city. Meaning of that, research just can be get information to interview.
Qualitative question for interview, which involved mostly as open-ended questions were asked in the semi-structured interviews. The target interviewees for this research were Director, Executive Director, Manager of Marketing, Human Resource Department and Legal Department. The interviews were conducted for at least 45 minutes in each interview session.
Another primary data collection methodology was observation technique with communication through email. for the observation because of limited time, researcher can’t be able to go there and see directly main resource for production.. However, Company gave solution and helping for interviewee to research easy getting information data from respond through email. So means that, the interviewee can directly asked about industry operations.
5.1 Secondary Data Collection
Secondary data collection was done through reading, interpreting, and extracting key points from the public and non-public domain documents. The secondary data were from Internet, company website, Government website, Indonesia Stock Exchange and reliable news media website. Documentations such as strategy marketing, process production, guidelines and hiring had been shared by the company as supplementary information for the study. Most of the documents are not allowed for sharing due to company confidential policy and to protect its business model.
5.3 Analysis Approach
The analysis of this case study will starts with external and internal environment as the input to SWOT analysis, and follows by TOWS analysis in order to guide the research, elaborate and evaluate the data findings and provides recommendations to the organization.
5.3.1 SWOT Analysis
SWOT analysis gives a platform to synthesize and integrate various types of information throughout the data collection process. It is extensively using to evaluate and analyze internal and external factors that will affect an organization (Curtis, 2008) summarized the SWOT analysis as:
‘ Strength: An important factor to form a competitive operation, where the organization able to do well compares to its competitors and be competitive.
‘ Weakness: Characteristics that are being performed badly and could be done better, such as limitation in resource and lower capabilities and incompetence.
‘ Opportunity: Trends that observed in the external environment that creates chance and can be profitably exploited.
‘ Threats: Barriers and constraints that happen in the external environment that will hinder towards achieving sustainable competitive advantage.
External factors are important to visualize and access the opportunities and threats, which are subjected to the will of political, economic, social, technology, environmental, legal and demographic that a business is facing.
On the other hand, the evaluation of internal factors, mainly focuses on strengths and weakness of a company, is crucial in order to evaluate how a company is performing. McKinsey 7S (Strategy, structure, system, staff, skills, style, shared value) model is using obtained an effective internal environment evaluation. All the determinants are cross-dependent to each others. For example, the direction of shared value will determine the formulating of strategy, as well as systems using in company, so on and so forth.
The McKinsey 7S divides into ‘hard’ and ‘soft’ factor category. Strategy, structure and system are categorized as ‘hard’ factors such as mission statements and information system that the management can directly exert influence on them. Whereas ‘soft’ factors which are shared values, skills, style and staff are tend to be intangible and related to organization culture.
5.3.2 TOWS Analysis
TOWS analysis is a framework that combining both external factors that determine by SWOT analysis, reorganizes and integrates them into the strategic planning process. It illustrates the way of matching the external opportunities and threats that faced by the organization with its internal strengths and weakness. In order to create possible alternative strategies and be more competitive that might not be otherwise be considered, as per illustrates in Figure 14.
The different matching between internal factors (Strength and Weakness) and external factors (Opportunity and Threat) will provides different strategies and outcomes.
CHAPTER 6
CASE WRITE UP
This chapter will first give overview of including overview of the pulp industry, then following raw materials, production and employees the company. Then follows by manufacturing process, research and development Company. Thus will be explaining about program CSR/CD implemented of company, including challenges facing by CSR issues. Lastly, effect of business operation to environmental, which focusing on information about issues of deforestation, soil erosion and water pollution cause of business operation. Besides that, from the society perspective, has affected to environmental such as water pollution problems. The waste from the company flows to villages and homes around the plant population. Waste disposal has become a talking point, and damage the health of local residents. Many residents complained of the stench of sewage released when the plant operates. Waste disposal from the pulp operation also produce unpleasant scent and foul odor that could potentially cause environmental pollution and disturb the health. This is because of the pulp operation has yet to implement waste management to the maximum. In addition, activities of industry such as deforestation with clear cutting trees from industry forest plantation to get raw material causing a damaged ecosystem and protest from local community. It also has effect to soil erosion and air pollution to environmental. Hence, this commitment in CSR program which 1% net sales from the company’s should be contributed to societies. However, challenges in addressing CSR issue. Therefore, this case study aims to analyze these challenges and thus provide recommendation and suggestion to company.
6.2 Overview of Industry Pulp
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
` 6.2.1 Raw Materials
The government initially issued a policy obligating every pulp plant around 200,000-300,000 hectares of HTI. These investments for HTI usually reach ten percent per capital for every factory and infrastructure, which could be worth US$ 1,5 billion. Further pulp concession holders attempt to buy woodcuttings from land clearing such as from oil palm and transmigration projects areas. These HTI and others materials will produce shorts fibers as raw material for the pulp industry. Pulp is the raw material processed to create paper, and the raw material is made from short fibers derived from wood and non-wood product. Currently, the greater part of pulp industry uses HTI materials such as eucalyptus. There are three kinds of pulp processing: (1) mechanical; (2) chemical; (3) semi chemical. The most popular process in Indonesia is chemical, followed semi-chemical. Technically, the supply of raw material from 200,000 ha of HTI must support each pulp industry (factory). For example, the harvesting of eucalyptus trees over period of 8 years will produce 200 m3 of wood per hectare. Although This industry will produce 2-3 percent (5,2 million tons of pulp) of total world pulp production in the year 2000, according PT. Toba Pulp Lestari optimistic that in the coming decade the production of pulp industry will be develop.
6.2.2 Business Operation
6.3 Manufacturing Process
The process whereby timber is converted into paper involves five steps. The first four convert the logs into a mass of cellulose fibres with some residual lignin using a mixture of physical and chemical processes. This pulp is then bleached to remove the remaining lignin and finally spread out into smooth, pressed sheets (often with chemicals added to provide particular properties such as colour or water resistance). Below will be explaining steps to process the pulp:
‘ Step 1 – Wood preparation
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.bark is a good fuel, and is normally burnt in a boiler for generating steam. After debarking, the logs are chipped by multi knife chippers into suitable sized pieces, and are then screened to remove overlarge chips. The thickness of the chips is the most important parameter, as this determines the speed and the thoroughness of the impregnation of the cooking chemicals into the wood chip. Neither debarking nor chipping are usually necessary for sawmill chips.
‘ Step 2 – Cooking
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. in what is called a “Kappa number”. This number is directly related to the amount of lignin still remaining in the cooked pulp.
There are two different cooking systems; batch and continuous. In batch cooking, chips and white liquor are charged to a pressure vessel and are then heated with steam to a set temperature for a set time. When the correct delignification has been achieved, the cook is “blown” (the pressure is suddenly released so that the cooked chips disintegrate into fibres). In the continuous process, chips and white liquor are fed continuously to the top of a tall pressure vessel. The chips move down the ‘digester’ by gravity (as a plug) to be finally blown from the bottom of the vessel. The cooking time cannot be varied in this case (it is set by the production rate) and only the temperature and the chemical charge can be controlled. Many developments have taken place during the last decade to improve the ‘science’ of kraft pulping. The challenge has been to remove as much of the lignin as possible without degrading the cellulose and without losing too much yield. It is now well known that the concentrations of NaOH, Na2S and dissolved lignin during the various phases of the delignification are of crucial importance for the pulp strength. Generally speaking, it is desirable to have a high sulphide concentration in the beginning of the cook, a low lignin concentration in the liquid phase towards the end of the cook, and an even alkali concentration during most parts of the cook. How to achieve this in practice under conditions of high temperature and high pressures has been a challenge, and much development is still going on.
‘ Step 3 – Pulp washing
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
‘ Step 4 – Pulp screening
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
‘ Step 5 – Bleaching
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
6.3.1 The Market of Production
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better..
6.4 Employees
an industrial producer of pulp or commonly known as pulp. Its production is sold in domestic market and abroad (exports). In 2006, out of 1.007 total employees working for there were 319 or equals to 31.75% coming from municipal the detail as follows: There were 102 workers coming from 5 villagers nearby which were only 1 km from the mil, There were 71 workers coming from outside the nearby villagers, There were 146 workers coming from municipal Total of Employees who working around 15.594. There was divided by 3 criteria which are: employee composition by ethnic, employee composition by religion, and employee composition by gender.
6.5 Research & Development
Mr. Panjaitan takes the position of Director at to pro??duce raw paper pulp and viscose fibber for textile raw material. The factory location was at company continues to run community programs and partnerships involving local businessmen around the plant as well as the operational area of forest that was in around area industry. In 2012 for about 360 local companies incorporated in our partnership program. Total value of the transaction for the partnership program in 2012 valued at IDR 519.6 billion. Paper Pulp was produced for the first time in 1989; viscose fibre was then produced in 1993. Around 70 % of the production is exported abroad and the other 30 % was used for domestic market (Panggabean, 2006). Therefore, rice of pulp market determined which always follow the trend of supply and the demand side in the global market. Logistics and distribution, currently for the transportation company used is container shipment.
6.6 Program CSR/CD
Mr. Panjaitan takes the position of Director this company as a public company is committed to implement the principles of good corporate governance, disclosures, transparency, and accountability. Actually, the concept of Corporate Social Responsibility ) is similar to Community Development (CD) by Management of sustainable forest resource has commitment of the company at the time re-operational that has been included social contribution fund set aside for community development of 1% of Net Sales/Year. Company used of environmentally technology. Locally human resources prioritizes a suitably qualified employee and company needs. Also doing a business partnership agreement with local communities and have good cooperation between the company and the local community operating the company. For the CSR in
Community Development
Actually the concept of Corporate Social Responsibility) is similar to Community Development (CD). Community Development Program was embedded in CSR program and the Government formed an independent team, with responsibilities were mainly:
1. To monitor and evaluate the smoothness operation of based upon the company new paradigm.
2. To gather, collect and filter complaints or reports from community for potential problem and then identify, analyse and find the mutual beneficial solution for individual problem
3. To provide a recommendation to or other stake holders to eliminate and minimize potential problems.
4. To file reports with opinion and recommendations to government North Sumatera government bodies’ necessary, regarding the execution of the company new paradigm, stones and solution taken to reduce and rectify problems.
Partnership Program, which several activities outside company main business was done together in partnership with community, such as to supply timber, transportation and forestry nursery and other factory requirement. The partnership employed almost 6.000 workers. The partnership becomes an essential ingredient to the company to be accepted by the community. CSR also have Community Development Program (CD) aim contribute to internal and external community development program. For internal community program the company contribution to social welfare include integrated farming system, education, infrastructure and other social environment) and thus for external community development program contribution which is 1% Net Sales per year to society.
The Community Development Program divided into 2 (two):
1.Internal Community Development
As an additional to CSR program (worth 1% of net sales), the company also provides an extra contribution for internal community development program to support and help the following activities:
‘ Integrated Farming System (IFS) in the form of Snow Ball System or Profit Sharing. The format of IFS is a program to combine farming, fisheries and agriculture in an integrated system to the community. There were already 107 families from the community that took part in this program. After the member of the community received a proper training and exercises, the company distributed 3 cows (1 male and 2 female) and pigs. Other contributions were in the form of agriculture and vegetable seeds, grass seeds for animals and fishes.
‘ Infrastructure Program
The contribution in infrastructure was in the form of opening a new road to villagers, roads repair and improvement, sports area development, electricity and irrigation. The road development had reached around 14.500 meters in length.
‘ Education Program
‘ Other social Help Program
‘ Other social help provided by the company was in the form of free medical help, natural disasters, seminars and religion activities/celebrations.
1. External Community Development (1% Net Sales per year)
The company had committed the management to execute the new company paradigm seriously and provide 1% pulp net sales to support External Community Development and this company also received achievement from forest partnership, community forest cooperatives, and community training, labour supply and also village infrastructure in year 2008-2010. This table shown total amount of CD program in 2010-2012
6.7 Challenges Faced by
In recent years the role of valuable natural resources such a wood as a source of conflict has been documented in many countries Yet Thus, every day in various parts of the world is still more conflict over forest resources that occur at the local level. In Southeast Asia, particularly in Indonesia, the conflict regarding resource forests often occur at the local level and in a large enough scale. Conflict This is not only a significant impact on people’s incomes rural and resulted in exhaustion of the following forest biodiversity contained therein, but also the nature of political power
destabilizing, especially in rural areas where law enforcement very weak and where the opportunity improve the economic life of society The countryside is very limited Government forestry sector in particular has had a considerable commitment high for developing plantations in order to increase the potential forest and to support the provision of raw material wood processing industry. Commitment This has also been socialized to the people of Indonesia and the international community. Therefore, the development of plantations will continue to run, with always held improvement both in terms of administration and in terms of technical implementation . Implementation of plantation development is one part of the system forest management overall. Therefore, in implementation should always follow developments in the management system forest. Fundamentally during the last five years has been and is happening a fairly fundamental change in the paradigm of the management of forest resources national. Among other forest use is not concentrated on timber forest products as long as this, the role of forest communities with their business organizations further enhanced, as well as the need for business efficiency in facing the market Global. The businesses Industrial Plantation Forest is composed of the large employers still the same player as concessionaires. The implementation of forest management through the system Container Rain Forest has been running for more than 30 years has been recorded in the history of forestry Indonesia as a bad reputation. Common parameters used in the assessment of the reputation is only from two aspects, namely “sustainability aspect” and “aspects of the empowerment of local communities” (Pelly, 1991). Local communities are physically and historically parties concerned with forest resources, it is necessary to obtain the right of priority.
6.8 Effect on Environment
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better.
6.8.1 Deforestation
Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better. Climate change can be reduced through the implementation of strict internal company and consistent in environmental friendly and sustainable forest management policy. With the application of this principle is true, then the transformation of the issues of climate and environmental damage need not be feared, it can even preserve and maintain natural forest ecosystems with the better..
6.8.2 Soil Erosion
This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.
6.8.3 Water Pollution
This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.
CHAPTER 7
CASE ANALYSIS
The case analysis will starts with conducting a SWOT analysis to based on McKinsey 7S (Strategy, structure, system, staff, skills, style, shared value) model while the external factors was performed from political, economic, social, technology, environmental and legal perspective. Then a TOWS analysis framework is presented to perform a strategic positioning.
7.1 SWOT Analysis In recent years the role of valuable natural resources such a wood as a source of conflict has been documented in many countries. Thus, every day in various parts of the world is still more conflict over forest resources that occur at the local level. In Southeast Asia, particularly in Indonesia, the conflict regarding resource forests often occur at the local level and in a large enough scale. Conflict. This is not only a significant impact on people’s incomes rural and resulted in exhaustion of the following forest biodiversity contained therein, but also the nature of political power destabilizing, especially in rural areas where enforcement very weak law and where the opportunity improve the economic life of society The countryside is very limited. Government forestry sector in particular has had a considerable commitment high for developing plantations in order to increase the potential forest and to support the provision of raw material wood processing industry. Commitment has also been socialized to the people of Indonesia and the international community. Therefore, the development of plantations will continue to run, with always held improvement both in terms of administration and in terms of
technical implementation. Implementation of plantation development is one part of the system forest management overall. Therefore, in implementation should always follow developments in the management system forest. Fundamentally during the last five years has been and is happening a fairly fundamental change in the paradigm of the management of forest resources national. Among other forest use is not concentrated on timber forest products as long as this, the role of forest communities with their business organizations further enhanced, as well as the need for business efficiency in facing the market Global. The businesses in the Industrial Plantation Forest is composed of the large employers who still the same player as concessionaires. The implementation of forest management through the system Container Rain Forest has been running for more than 30 years has been recorded in the history of forestry only from two aspects, namely “sustainability aspect” and “aspects of the empowerment of local communities”. Local communities are physically and historically parties concerned with forest resources, it is necessary to obtain the right of priority in
7.2 Internal Factors
This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.
7.3 External Factors
This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.
CHAPTER 8
RECOMMENDATIONS AND CONCLUSIONS
In this chapter, case issues and analysis results for are reviewed again. Then it is following by recommendations, which are suggested based on the analysis results from TOWS framework in order to overcome the case issues. This chapter ends with a conclusion for this case study.
8.0 Case Issue
This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.2.2. Social Aspects
Social responsibility is an obligation of the company to participate in activities that protect and contribute to the welfare society. While there are some more understanding and interpretation of social responsibility, but corporate social responsibility is always formed by cultural and historical period in which the company operates. Social activities which donated the company cannot fully improve public welfare. The persistence of the deficiencies arising during the company operates. Perhaps the company has a strong commitment in the field of social responsibility, but the method or procedure performed has not directly felt by the general public but only to certain social groups. This principle states that the company has an obligation to see that the wishes of the people served with firm action, and this action will be channeled profits directly to the public. Under this principle, the community will against companies which have anti-competitive attitudes and anti-social. Principle another that can be taken is Principe charity which suggests that the affluent have to give to people who do not have. Below This principle, individuals and communities can encourage the use of the company most of their power and wealth to social activities, in this context both management and employees of the company touched contribute directly to the public, rather than through a bureaucracy that will cut it. The second principle is a basic idea for the company to changing attitudes to be better and not only will serve a certain group but must serve all communities, particularly communities who are in a corporate environment. However, with a paradigm supported by new high commitment a company can change weakness associated with social responsibility.
quality of life of the present generation and future (Law No. 23 Year 1997). The target to be achieved in environmental management in Indonesia, namely:
8.3 Conclusion
Therefore, The Company needs to resolve the conditions to preserve the forest which are:
1. Reforestation or replanting after deforestation actions
2. Prohibit deforestation in an arbitrary manner (human error)
3. Implement the new strategy which are before the cutting the tree. The industry should choosing the tree for good woods so meaning that’s this action can be avoid damaging ecosystem, flooding, air pollution, water pollution.
4. Commitment of Government, NGOs, the association of company to responsible such as go green to sustainability industry.
5. Policy of Government has to give punishment to who is making action Illegal logging
6. Apply new strategy which is buy special machine for irrigation waste pulp so that can be resolve water pollution. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.v This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.vv This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.v This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.vvvv This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of
the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.v This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.vvv This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations. This is the commitment of the company at the time of re-operations that have been poured in the Notarial Deed, then up at any time prior to a change in the commitment, the Fund CD / CSR 1% will still be applied are derived from available cash although the company suffered losses. And because it has a firm commitment, the financial system has been reserved to fund CD / CSR 1% of the Net Sales. Regarding its impact, would it have an impact on the company’s internal, but it is not how when compared to the creation of a good working relationship between the company and the community around the area of operations.
The waste from the company flows to villages and homes around the plant population. Waste disposal has become a talking point, and damage the health of local residents. Many residents complained of the stench of sewage released when the plant operates. Waste disposal from the pulp operation also produce unpleasant scent and foul odor that could potentially cause environmental pollution and disturb the health. This is because of the pulp operation has yet to implement waste management to the maximum. In addition, activities of industry such as deforestation with clear cutting trees from industry forest plantation to get raw material causing a damaged ecosystem and protest from local community. It also has effect to soil erosion and air pollution to environmental. Hence, this commitment in CSR program which 1% net sales from the company’s should be contributed to societies. However, challenges in addressing CSR issue. Therefore, this case study aims to analyze these challenges and thus provide recommendation and suggestion to company.