Managing Social Risk and Impact Through Stakeholder Engagement and Integrated Social Development Program. A Case Study of Sumatera Geothermal Project

Abstract

The project’s development, either conducted by the Government or private sector, often can’t be spared from adverse impact to environment and social that may leads to loss of income sources or other means of livelihood to the Project Affected Peoples (PAPs). In the view of national and international regulations, the project’s initiator are required to avoid environmental damages, social conflict, and severe long term hardship toward the local community upon the appropriate measures are carefully planned and carried out through the project’s Environmental and Social Management System. Considering project development generally affecting the local community, therefore a mitigation of environment and social impacts needs to be established to reduce the adverse impact of the project activities to the local communities. The environment and social impact mitigation are deem to ensure improvement or at least restored the social and ecological conditions. The key challenge is how to balance between project investments with the risks such projects can pose to adverse impact and social conflict to the local communities. States, parastatals and companies making investments, must take increased responsibility. Through the Involvement of Local Institution and Collaboration with Geothermal Industry, the implementation of social risks mitigation process and impact mitigation expected could be implemented more participatory and effective. This can be learn from the case study that implemented in geothermal project in Solok Selatan region in West Sumatra, Rantau Dedap in South Sumatera and Rajabasa in Lampung, Indonesia. The projects have established collaboration with local institution, namely Community Committee especially in managing local recruitment, local supplier, grievance mechanism. This Community Committee consists of Head of Village figures covered in the project affected area. The role of Community Committee is to connect between the interests of the project and the local constituents, which are manage through the local customs and wisdom. In addition, the company also runs the Integrated Social Development Program to boost up the Livelihood of the Project Affected People. By doing those measures, company will be able to ensure local community involvement and participation in the project, and obtaining the “Social License to Operate”. We, simply call it as “a perfect blend of customary stakeholders and corporate governance”