Community engagement in the mining industry : a critical theory approach to examine engagement with community partners from corporate versus indigenous perspectives.

Abstract

The rising interest in corporate social responsibility (CSR) has encouraged business corporations to incorporate their stakeholders within the process and activities of discharging their social responsibility. Whilst the demand to enhance CSR through stakeholder engagement has increased, there is little attention on engaging stakeholders in culturally different groups. This study offers insights into the stakeholder engagement of PT Freeport Indonesia, a subsidiary of the United States-based Freeport-McMoRan Inc. in West Papua, with two indigenous communities, Amungme and Kamoro, as primary stakeholder groups living in the vicinity of the mining operations. Using a critical approach to examine the community engagement from both corporate and indigenous perspectives, I argue that the company’s engagement with the communities in this study is one-sided engagement. CSR initiatives merely meet global best performance standards and the responsibility vested in the company by the Government of Indonesia. Thus, the indigenous engagement represents Indonesia’s typical CSR practices of community development programmes, run by various community and government partnerships, and using a rational process of engagement. Although continuing controversies from the lack of community consultation, social and economic development issues, human rights violations, and environmental destruction have constituted the rationales of engagement, the contrasting perspectives of the indigenous community present various struggles with the perpetuation of inequality from the company’s development programmes. Limited indigenous participation and continuous power imbalances in each stage of engagement have triggered the community’s distrust of the company’s commitment and seriousness about empowering them. Community organisations established as indigenous agencies also show very limited power to alleviate the issues. Lack of local government involvement in the engagement expressed by the two parties in this study contributes to these challenges. The study provides insights into how the mining companies and governments should engage with the indigenous communities and suggests possible future actions from an indigenous perspective to achieve better community engagement. It contributes to the literature on CSR in developing countries, stakeholder engagement, engagement with indigenous partners, and stakeholder theory.