Corporate-Community Engagement—The Case Study of Malaysian Palm Oil Companies in Indonesia

Abstract

Corporate-community engagement is one of the integral components of Corporate Social Responsibility (CSR), this is especially challenging in international business endeavour where a company is considered a foreign entity and any negative encounter against a local community would easily backfire its existence as well as portrays negative image of its home country. By and large, any business’ CSR initiatives in whatever forms and shapes would positively contribute to the triple-bottom-line of business, namely profit, people and planet. Apart from looking after its employees, engaging local community is inevitably included under the people bottom line. Malaysian Palm Oil Companies over the last three decades have expanded their activities in Indonesia to gain competitive edges by tapping attractive land’s price and relatively cheaper labour resources. Notwithstanding of socio-economic contribution of Malaysian Palm Oil Companies in their host country through job opportunities, improvement in infrastructure as well as economic gains by Indonesian government through tax payment, not much has been studied about their benefits to local communities who live within the vicinity of the palm oil plantations. Against this academic lacuna, this study aims to investigate level of engagement of Malaysian Palm Oil Companies in Indonesia with local communities by using six companies as the case study. Utilising on qualitative method where interviews were conducted with the community leaders and palm oil companies’ management in various provinces in Sumatra and Kalimantan. The results of the study found that majority of those companies hardly engage with their local communities. These findings are instructive where Malaysia Palm Oil Company needs to proactively embrace and engage community engagement through a deeper, meaningful and continuous collaboration the local communities in order to gain minds and hearts of their existence which in turns can contribute to the sustainability of their companies and also the palm oil industry.