PROVISION FOR POST PROJECT EVALUATIONS FOR THE
UNITED NATIONS DEMOCRACY FUND
Contract NO.PD:C0110/10

EVALUATION REPORTUDF-INS-08-254 Strengthening Local NGOs in Areas where
Extractive Industries Operate (Indonesia)

Date: 5 June 2013191

Acknowledgements
The evaluators would like to thank everyone who made this evaluation
possible by contributing their time, insight, and organizational supportespecially Sukasmanto, IRE Executive Director, and the staff of IRE.
Many project stakeholders, local authorities, and extractive companies
also provided relevant input. All errors and omissions are the sole
responsibility of the authors.
Disclaimer
The views expressed in this report are those of the evaluators. They do
not represent those of UNDEF or any of the institutions mentioned in thereport.
Authors
This report was written by Florence Burban and Laila Kholid Alirdaus.
Landis MacKellar, Evaluation Team Leader, provided editorial andmethodological input and quality assurance with the support of Ms.
Aurélie Ferreira, Evaluation Manager. Mr. Eric Tourres was Project
Director at Transtec.

192

Table of Contents
I. EXECUTIVE SUMMARY
II. INTRODUCTION AND DEVELOPMENT CONTEXT(i) Project and evaluation objectives(ii) Evaluation methodology(iii) Development context

III. PROJECT STRATEGY(i) Project approach and strategy(ii) Logical framework

IV. EVALUATION FINDINGS(i) Relevance(ii) Effectiveness(iii) Eficiency(iv) Impact(v) Sustainability

V. CONCLUSIONS
VI. RECOMMENDATIONS

I. Executive Summary(i) Project Data
The “Strengthening Local NGOs in Areas Where Extractive Industries
Operate” project sought to enhance trust-building and cooperation
among local governments, nongovernmental organizations (NGOs) andextractive industries by strengthening the capacity and credibility ofNGOs as partners in corporate social responsibility (CSR) programs. The
focus was on improving the ability of local NGOs to forge permanent
partnerships with companies and local governments in CSR policy
design and implementation. The project worked with three types of
stakeholders locally and nationally: (i) local governments, (ii) extractive
companies and (iii) NGOs/community-based organizations (CBOs).
Its operations involved (i) needs assessment by local stakeholders; (ii)promotion of interaction among local NGOs, local governments, and193

extractive industries through national workshops designed to build trustand forge partnerships; (iii) local workshops, capacity-building, and a
microproject competition among 20 local NGOs, and (iv) support for the
implementation of 12 microprojects focusing on CSR systems, poverty
reduction, and gender equity.
The project was implemented by the Institute for Research andEmpowerment (IRE) in ive districts (Bojonegoro, West Sumbawa, East
Kutai, Kutai Kartanegara, Anambas) located in four regions of Indonesia
where extractive industries operate (Java, Kalimantan, Sumbawa, andSumatra), working directly with local stakeholders.
The “Strengthening Local NGOs in Areas where Extractive Industries
Operate” project was a two-year effort funded by a UNDEF grant in theamount of US$350,000. The project ran from 1 November 2009 to 30
October 2011. According to the project document, its main activities
would consist of:- a diagnostic review and NGO needs assessment with respect to
CSR practices;- training for NGO capacity-building and support;- formulation and implementation of pilot projects with NGOs;- local and national workshops for local governments, NGOs, andextractive industries- the publication and dissemination of information on best practices
to encourage related parties in extractive regions across Indonesia
to replicate similar activities launched by the Institute for Researchand Empowerment (IRE).
(ii) Evaluation Findings
All planned activities were implemented on time and according toschedule. The capacity of 40 NGOs was strengthened and 12 CSR
microprojects were implemented. Interaction between companies, local
governments, and local NGOs took place at both the local and national194

levels. The draft regulation that, according to the project document, wasto be submitted to the Ministry of Environment as a regulatory umbrella
did not materialize but was replaced by recommendations promoting
NGO involvement and the partnership model.
The project’s objectives were relevant, given the legal and iscal
requirements governing CSR, the degree of poverty in extractive areas,
the lack of enforcement of CSR policies, and the lack of attention paid tocivil society engagement and NGO involvement as direct beneits of CSR
policies. According to oficial statistics, the ive targeted districts wereamong the poorest in Indonesia and had previously encountered problems
with civil society organizations. The project’s strategy of identifying
and working directly with local NGOs/CBOs, local governments,
and companies at the district level brought project activities closer tobeneiciaries. Meeting with all parties involved was an important irst
step in building mutual trust to facilitate a common understanding of
CSR challenges, including those related to civil society engagement. All
stakeholders expressed their concerns. Companies and local governments
must pool local civil society resources if they are to have a visible impact
on the community with which they are working. Most participating
NGOs said it was the irst time they had had the opportunity to meet
directly with companies and local authorities. The cascading nature of the
project made it easier to reach the grassroots level. However, the projectrisks and problems working at the district level in terms of corporate andlocal government commitment were neither adequately identiied nor
addressed during the design and implementation phase. The speciied
outcomes were ambitious, given the outputs expected to contribute tothem. It appears to have been assumed that putting stakeholders together
and sharing knowledge through local and national workshops, NGOtraining activities, and microproject experiences would be suficient toalter perceptions and create stakeholder partnerships for joint CSR policy
design and practices.
The IRE project’s intervention strategy with selected NGOs/CBOs
detracted from its overall coherence and was inadequately responsive for195multistakeholder partnerships. The diagnostic review and needs assessment
did not capture the information needed for project implementation. There
was no contextual information on CSR budget allocation per district, thedegree of CSR integration in local development planning, the nature ofcivil society engagement with stakeholders, budget allocations to NGOs,or data to assess what speciic CSR practices had achieved thus far andwhat was needed in terms of local NGO capacity-building to improvethese organizations’ credibility with stakeholders. From the standpointof poverty and gender equity issues, CSR performance was completely
ignored. No reference was made to the existing Kutai Timur CSR forum
and the value added that IRE could bring to it. Although it was clear thatthe situation on the ground inluences the nature of CSR partnerships andcivil society engagement, the needs assessment was not used to modify
the agenda for local action, and the absence of a multifaceted approach
tailored to the local situation and stakeholder needs also detracted from the
project’s coherence. This was due primarily to the lack of methodologicalguidance and information on CSR policies, practices, budget allocation,etc. to ensure transparency and accountability. Moreover, weaknesses in
NGO capacities were considered the main obstacle rather than a challenge
to be overcome.
The lack of coordination between NGO and workshop activities undercut
the effectiveness of the project, as it treated NGO activities as standalone actions with no local government or corporate involvement.
Training activities for NGO capacity-building focused primarily on
NGO organizational and project management, entrepreneurial skills,
and alignment with companies’ CSR requirements, which diverted thefocus from expected outcomes related to the NGOs’ ability to affect CSR
policy performance. Most of the 12 microprojects selected involved
business opportunities in agroindustry and farming. There was no
speciic mechanism to review the results of NGO microprojects during
workshops, which represented a missed opportunity to build broader
support for the changes advocated at the local and government level.
This was not an effective way to help local actors make their voices heard196

by authorities and private enterprises or to facilitate trust-building anddialogue on how CSR should be managed in civil society engagement
and how to involve NGOs as CSR partners to further public welfare.
In terms of eficiency, questions arose about the selection of extractive
areas requiring a high travel budget in comparison with the budget for
CSR ield activities. There were also questions about the funds provided
for NGO projects. Only 5% of the total budget was allocated to suchprojects.
The impact was nonexistent. The IRE project did not change stakeholders’perceptions but instead, reinforced current corporate practices in which
civil society empowerment is regarded simply as donations to NGOs. At
project conclusion there was no formal partnership among stakeholders,most of the NGO microprojects had ended, and participating NGOs still
considered themselves passive beneiciaries of CSR funds. An evaluation
reported on activities and outputs, but the indicators it provided were
unveriiable and not detailed enough to extrapolate impacts.
The recommendations contained in the IRE’s book “Strengthening
Partnerships for Accelerated Poverty Reduction in the District Mining
and Oil and Gas Industry” were widely disseminated, along withseveral policy papers targeting policymakers and extractive companies,
to encourage other related parties in extractive regions to replicate
similar IRE experiences. Similarly, the UNTV documentary posted on
the Internet ensures that the project’s outcomes will endure beyond its
lifetime. IRE developed essentially good institutional relations with theinterrelated parties, local NGOs, local authorities, and companies basedin the selected district. However, the project’s sustainability is impaired,because it failed to tackle the strategic issue of CSR’s impact in terms ofpoverty reduction, addressing only practical issues instead.

197

(iii) Conclusions
The conclusions that follow are a synopsis of the answers to the evaluationquestions found in Annex 1.
- The project’s focus, as designed, was relevant and important, givenIndonesia’s social and democratic context. However, lack of information
to ensure transparency and accountability and the failure to consider
the districts’ social context has made it hard for IRE to capture civilsociety capacity-building needs. The project did not fully appreciate thecomplexity of the companies’ CSR activities -which are patchy, sectorbased, and inluenced by the political climate in each extractive area - andhow they affected NGO/CBO participation and collaborative approaches
to CSR. This conclusion is based on indings related to relevance andeffectiveness.
- Use of the local and national level to implement CSR activities
was an effective approach to CSR stakeholder interaction, as it
gave companies, local governments, and NGOs an opportunity toshare their respective concerns. However, the disconnected content
of activities focused on corporate CSR grant requirements rather thanan understanding of CSR processes and their inluence on CSR design
policies limited the usefulness of this approach, as it resulted in the
duplication of CSR practices, stand-alone NGO project activities, and alack of CSR ownership and collaborative CSR initiatives. This conclusion
is based on the inding related to effectiveness.
- The overall intervention strategy made a difference to individual
participants but was neither coherent nor effective. It did not meetthe objective of strengthening NGOs’ ability to inluence extractive
companies’ CSR policies, resulting in weak impact. Although
microprojects and training for NGOs yielded some useful information to
enable local NGOs to meet extractive companies’ requirements for CSR
grants, it was evident that developing the competitive skills of NGOs
did not reduce their fragmentation or help them think more strategically198

about collaborating among themselves and with stakeholders on CSR
issues. The IRE approach of using NGO microproject approaches similar
to those of extractive companies resulted in the duplication of efforts
with no value added. This conclusion is based on indings related toeffectiveness and impact.
- The use of ex post evaluation and publications for advocacy
purposes was a good programmatic technique but required a focus on
indicators at project start-up to assess the impact in terms of change.
This diagnostic review and needs assessment yielded statistical data on
district poverty rates for the project but not indicators correlated with the
project’s main goals of NGO capacity-building and obtaining signiicant
data for CSR partnership-building. Since the needs assessment did not
identify speciic data and indicators, the process did not guarantee thecredibility of the data and indicators submitted in the ex-post evaluation
and report. This conclusion is based on indings related to impact andsustainability.
- UNDEF funding lent IRE and project activities greater credibility
and visibility in the eyes of government authorities and companies.
CSR policies are sensitive issues in Indonesia, and attaching the UN logo
to the project helped present it as an apolitical, neutral exercise. The IRE
project, however, focused on NGO capacity to implement projects fundedwith CSR donations, diverting the focus from the outcomes containedin the project document. The UN logo was eventually used to promote
practices similar to those already employed by extractive companiespractices with proven limitations when it comes to poverty reduction andgender equity.
(iv) Recommendations• Pressure more forcefully for information on CSR
transparency and accountability in the local context. Knowing what
has worked and what has not is very important for engaging stakeholders
in further discussions on how to develop NGO skills. Transparency
199

and accountability are a prerequisite for strong partnerships, especiallywhen the issue is contentious in extractive areas. As CSR is part ofgovernance because public moneys are involved, information bothfrom companies with CSR programs and local authorities to ensuretransparency and accountability should be considered a prerequisite forbuilding partnerships around CSR issues. Better information on the costs
and beneits of CSR implementation at the district level and an inventoryof extractive industry practices could help IRE identify NGO capacity
constraints and priority needs, tailoring different partnership models to thesituation in each district. Transparent information could also help NGO
participants understand their roles and responsibilities in a CSR systemand how they can hold local government and companies accountablefor CSR design and implementation activities. This recommendation isbased on Conclusions (ii) and (iii).
• Formalize stakeholders’ commitment to building
ownership within an integrated framework involving all stakeholders.
In a partnership and trust-building project such as this one, IRE mustbring implementers together into a single integrated program by jointly
designing activities, engaging in strategic planning and initiatives/projects, and branding the project to lay the groundwork for common
understanding and practices among agents of change. Presentation ofdifferent models found across Indonesia could also strengthen partnershipmodels. This recommendation is based on Conclusions (ii) and (iii).
• Encourage concerted coordination of civil society groups
in joint capacity-building initiatives. Changes in CSR governance will
not come about without concerted advocacy on the part of civil society
groups that come together with an understanding of CSR challenges forsociety as a whole. The kinds of activities that NGOs engage in could
be used to improve information to raise awareness about CSR, facilitate
dialogue, and promote advocacy skills to tackle CSR performance onpoverty issues. A wide range of topics, including an understanding of
CSR policies and practices, could be addressed in training courses forNGOs (budget analysis, monitoring of oil and mining operations, tax laws,
200

public information on government revenues and payments by extractive
companies, information on other CSR networks, etc.). Grants could be
used to bolster NGO capacity to build coalitions among fragmented local
actors and foster communication, coordination, and advocacy amongNGOs. It could enable NGOs to be better represented in the CSR system
to give them an opportunity to develop joint programs and share theindividual expertise of NGOs with other groups. This recommendation isbased on all the Conclusions above• Prepare a results-based project performance andmonitoring plan at the start of the project to track the progress madetoward achieving outcomes and to measure results. This should be used
to track expected activity outcomes, not just activity outputs. Examplesof performance indicators could include: the number/type of CSR policychanges resulting from project activities, the nature of partnership models
developed, the degree of NGO knowledge about CSR practices and iscal
requirements, etc. This recommendation is based on Conclusion (iv).
• Control use of the UN logo in disseminating information
on best practices and lessons learned after a project’s completion.
UNDEF should monitor UN publications and media products more
carefully to maintain the UN branding image and UNDEF value added.
This recommendation is based on Conclusion (v).
II. Introduction and development context(i) Project and evaluation objectives
The Strengthening Local NGOs in Areas Where Extractive Industries
Operate project was a two-year, US$350,000 project implemented by
the Institute for Research and Empowerment (IRE). $25,000 of thiswas retained by UNDEF for evaluation. Running from 1 November,2009 to 30 October, 2011, it worked to strengthen the role of NGOs
though trust-building and better cooperation among national and local
authorities, NGOs, and extractive industries that deliver corporate social201

responsibility (CSR) funds. It attempted to do this by bolstering thecapacity and credibility of local NGOs as CSR program partners and as
the empowering agent in communities with CSR programs.

The project was implemented in ive districts in four regions of Indonesia
where extractive industries are operating. It worked directly with local
nongovernmental organizations (NGOs), community-based organizations(CBOs), extractive companies, local governments, and national
authorities based in those areas. IRE conducted a needs assessment andCSR diagnostic review in the ive targeted districts (Bojonegoro, West
Sumbawa, East Kutai, Kutai Kartanegara, and Anambas) and devised
project activities to boost the capacity and credibility of local NGOs
as partners in CSR programs to increase trust and cooperation among
stakeholders.
UNDEF and Transtec have agreed on a framework to govern the evaluation202

process, which is spelled out in the Operational Manual. According
to the Manual, the objective of the evaluation is to undertake in-depth
analysis of UNDEF-funded projects to gain a better understanding ofwhat constitutes a successful project, which will in turn help UNDEF
devise future project strategies. Evaluations also assist stakeholders indetermining whether projects have been implemented in accordance withthe project document and whether anticipated project outputs have beenachieved.”(ii) Evaluation methodology
The evaluation was conducted in November 2012, with ieldwork inIndonesia from 6 to10 of that month. UNDEF evaluations are qualitativeand involve a standard set of evaluation questions focusing on therelevance, effectiveness, eficiency, impact, and sustainability of the
project and any value added accruing from UNDEF funding (Annex 1).
This report follows that structure. The evaluators reviewed the available
documentation on the project and the issue of local Indonesian NGOs
and the challenges posed by corporate social responsibility (CSR) funds
delivered by extractive industries in the country (Annex 2). Interviews
were held with the project team from IRE, whose main stakeholders
include NGOs, extractive industries, local government, and CBOs
participating in this project. The evaluators interviewed the IRE project
team in Yogyakarta, East Kutai, and Kutai Kartanegara (East Kalimantan
region) in person, (Annex 3).
During preparatory work, the evaluators identiied several issues thatthey followed up on during ieldwork in Indonesia. These included:• The project’s ability to achieve its anticipated outcomes,
since its goals were ambitious considering the absence of CSR
guidelines and common policies and the diversity of districts.
• The extent to which project activities leveraged existing
local NGO capacity to establish/strengthen sustainable
CSR partnerships with extractive companies and local203authorities and inluence social and economic development
policy.
• Sustainability issues and the degree of cooperation between
local authorities, CBOs, and NGOs
• Civil society ownership of the program, which IRE sought tobuild, and whether the agenda resulted in sustainable changes
for the intended beneiciaries.
• Value added by IRE, as the project document suggested
there was a lack of NGO participation in CSR policies andstakeholder partnerships, leading to lower CSR performance .
(iii) Development context
The project design was based on the situation in Indonesia. CSR funding is
not a new topic; however, it has evolved only in recent years. The driving
force behind CSR was the international business ethics movement. CSR
originally began as a movement to minimize the harmful environmental
impact of industrial plants and day-to-day business practices. CSR policy
has recently evolved with the recognition that the extractive sector has asigniicant component linked to community, social, and gender issues inengagement with civil society.
Indonesia has enacted a number of laws to protect equality of rights
and opportunities for civil society, establishing legal corporate social
responsibility requirements in limited liability companies in 2007 (Law40/2007). At the time, Article 74 stated that all companies, especiallymining ventures, must conduct CSR activities as part of their responsibility
to society. The law was followed by Government Decree No. 47 -2012
on “Corporate Social and Environmental Responsibility1 to guarantee
further implementation of the law.

204

Although these regulations do not state clearly how CSR should begoverned, several multinational initiatives have attempted to standardize
or offer CSR guidelines in Indonesia. Many national initiatives haveemerged, including the National Committee on Corporate Governance,
devoted mainly to establishing a good corporate governance code.
Several corporate forums on CSR were held, attended by representativesof extractive industries, government, and the people. A forum in Kutai
Timur, a district selected by IRE in East Kalimantan Province, was set
up in 2006 as a response to unsupervised CSR activities in the area. The
forum is expected to facilitate integration of the CSR budget into local
government development planning. Bandung, West Java, has a similar
forum for building a corporate-government consensus, where speciic
development areas are jointly deined to contribute to local government
development planning.
It is unclear, however, to what extent the various initiatives are guiding
day-to-day CSR performance, creating amanifest gap between rhetoric and societal
and economic decisions. While there is arange of key commitments to providing andstandardizing CSR guidelines to promotelocal development policy to reduce poverty,
only a few CSR initiatives have contributed
to poverty reduction.
Understanding CSR programs and their implementation in Indonesia
is not optimal, and CSR funds have yet to prove effective in reducing
poverty. Although Indonesia is a wealthy country with a multitude ofnational and multinational extractive industries working in the oil, gas,and mining (coal, gold, and iron) sectors throughout its islands, the country
still has critical problems in terms of the distribution of well-being andthe poverty of people living the areas where extractive industries operate.
One of the main issues underscored by IRE is the fact that the regulations<?>

Tanggung Jawab Sosial dan Lingkungan Perseroan Terbatas

205are not considered to advocate for popular participation in CSR
governance.
As a result, certain CSR practices in Indonesia do not represent theobjectives of CSR itself. For example, private enterprise only makes
donations or contributions for infrastructure. Most extractive companies
have internal problems that include CSR management. Furthermore, mostcompanies operating in Indonesia are facing challenges from the external
environment. Although local authorities have increasingly sought to
use CSR funds to further their development policy, poor governanceby local authorities tasked with developing poverty reduction policies
is one of the main issues discouraging companies from adopting clear
CSR guidelines. Signiicantly, CSR funds are not fully integrated into
the local government-managed local development planning process
for the promotion of social and economic development. Local NGOs/
CBOs are fragmented and incapable of serving as partners in CSR policy
design. As a result, companies prefer to subcontract CSR implementation
to international and national-level NGOs, as evidenced in Kutai
Kartanegara, the district selected by IRE in Kalimantan, where Chevron,the multinational oil company, operates, designating Swisscontact to run
its CSR programs.
Community action through NGOs/CBOs is often viewed as working in
opposition to extractive companies’ interests. In many extractive areas, it
is not unusual to ind people mounting roadblocks to the extractive area
when their demands are not met. Many companies have a community
public relations division alongside the community development division
to deal with social unrest. Chevron and Newmont are examples in which
community public relations and community development divisions haveworked hand in hand to address community-related issues. Disruptive
behavior on the part of NGOs and CBOs discourages interaction
among companies, local governments and civil society and civil society
engagement in CSR policy design and implementation. On the other
hand, as the IRE needs assessment manual states, people living in theareas surrounding extractive industries are not well-coordinated and206

organized. They are ruled by elites that control access to information about
the companies and government. The fragmentation of society has led todomestic competition for winning CSR project donations. NGOs and
CBOs view CSR grants primarily as private business opportunities rather
than social and economic development opportunities for civil society
in extractive areas. In the Bojonegoro district, where the multinational
ExxonMobil oil company operates, distributing CSR funds has createdsocial tensions. In the West Sumbawa district where the Newmont
Nusa Tenggara gold mining company operates, residents feel they mustcompete with local government for the company’s CSR funding. CSR isa complex issue, and it is no surprise that the political climate in areas
where extractive industries operate is usually not conducive to resolving
it.
III. Project strategy(i) Project approach and strategy
The “Strengthening Local NGOs in Areas where Extractive Industries
Operate” project sought to strengthen trust-building and promote greater
cooperation among local governments, NGOs, and extractive industries
by strengthening the capacity and credibility of NGOs as partners in
CSR policies, through: 1) NGO diagnostic review and needs assessments
in terms of CSR and community development (CD) programs in each
district; 2) interaction and information-sharing among local governments,
NGOs, and extractive industries to identify and forge joint partnerships
for common CSR strategic planning to alleviate poverty and further thegender equity agenda in each district; 3) training and capacity-building
for NGO actors tasked with formulating and implementing NGO pilot
projects for poverty reduction; and 4) promoting CSR partnership models
to inluence CSR practices.
IRE had been working on an important community engagement component
in the decentralization and local governance sector. Nonetheless, this was
the irst time that it had worked on CSR issues. The project proposed207to work with three types of stakeholders: (i) local governments; (ii)extractive companies; and (iii) NGOs/CBOs. The ive targeted districts
covered a wide range of extractive sectors and a multitude of companies.
Table 1: Type of extraction and companies operating in four provinces
selected by IRE
Province and District
Type of Extraction
Company
1. East Java and Central JavaBlora
Oil drilling
Exxon Mobil, Petrochina,
and Pertamina
Bojonegoro
Tuban
2. West Nusa Tenggara provinces (West Sumbawa)
West Sumbawa Barat
Gold mining
Newmont Nusa Tenggara(NTT)
3. East Kalimantan
Kutai Timur
Coal mining
Kaltim Prima Coal
(KPC)
Kutai Kertanegara
Oil and gas drilling
Chevron and Total
4. Kepulauan Riau, Sumatra
Kepulauan Anambas
Oil drilling
Premier Oil

The project had a three-stage strategy to be implemented at the local
and national level. At the local level, IRE directly engaged researchers,
facilitators, trainers, and organizers to work in the ive targeted districts
to ensure that the project would run smoothly. Here, the strategy was
designed to (i) identify local stakeholders’ needs; (ii) encourageinteraction and cooperation among local NGOs, local governments, andextractive industries; and (iii) organize local workshops, NGO training,a microprojects competition among 20 local NGOs, and implementation
support for 12 microprojects. At the district level, a wide range of NGOs
from every social and economic sector was selected to guarantee adequate
stakeholder involvement and input.

208

IRE headquarters staff, 2012 (Source: F. Burban)

At the headquarters level, IRE set up a permanent team in Yogyakarta to: (i)support and monitor the ive IRE district teams; (ii) consolidate the informationand knowledge obtained at the local level; (iii) validate IRE district needs
assessment indings; (iv) enhance and propose CSR partnership models throughlocal and national workshops attended by national and local authorities,
companies, and NGOs; (v) tailor partnership cooperation models to thestakeholders’ situations by creating permanent forums for all local and national
stakeholders; (v) promote CSR policy reforms by issuing laws, policy papers,
and a book. IRE proposed to raise awareness and engage in advocacy (policy
papers and draft regulations) to persuade the national government to develop
guidelines for collaborative CSR programs. Publishing the book and policy
papers on best practices and lessons learned was expected to provide a modelthat could be replicated across Indonesia. Furthermore, the draft regulations
were expected to furnish additional guidelines for the use of CSR funds.

209

Although IRE worked directly in ive districts, project management was
implemented centrally, with programmatic details decided largely at IRE
headquarters. All methodological, needs assessment, workshop guidelines,
training content, and policy papers were developed at headquarters. This wasa deliberate approach that IRE felt would increase the visibility of the overall
project.
Activities per
districtBojonegoro

Proiles and number of IRE staff/district
West
East
Kutai
Sumbawa
Kutai
Kartanegara

Anambas

1. Needs
Assessment
2. Localworkshop
3. Training
and provisionof intensive
assistance tolocal NGOs in 5
districts

1 Senior Researcher, 1 Researcher, 1 Local Researcher 1 Senior
Facilitator, 1 Co-facilitator 1 Local Organizer/district

4. LocalWorkshop“Promoting
Partnership
Programs
for Poverty
Reduction
in Extractive
Areas:
5. Training
for Capacitybuilding:“Strengthening
the Role ofLocal NGOs”
6. Facilitation of
the pilot project(proposal,
budget, project
management,
monitoring,evaluation)

1 Evaluator, 1 Staff Program/district

7. FGDs andield observation

210

Activities atnational level

Proiles and number of IRE staff/district

1. National
Workshop I
2. National
Workshop II
3. National
Workshop III

1 Project Manager, 3 Program Staff, 1 Secretary, 1 Finance Manager, 1Keynote Speaker, 4 Senior Researchers, 4 Researchers, 3 Consultants, 2
Program Staff, 1 Researcher, 1 Senior Writer, 15 Writers

4. Program roadshow
5. Writing ofpolicy paper
6. Workshop
on policy paper
writing, draft
regulation
7. Writing andpublication ofbook
8. Seminar forlaunching the
published book

The project began with a needs assessment in the ive targeted districts
to develop a diagnosis on CSR services and needs and identify the issues
confronting local NGOs in their dealings with local authorities andextractive industries. Local IRE staff worked through the CSR networks
created by extractive industries and local governments to identify local
NGOs that could be beneiciaries. IRE trained the 40 NGOs/CBOs it
considered the most skilled.
At the conclusion of the training activities, IRE held a microprojectcompetition in which 20 NGOs participated. Twelve projects, includingNGOs and NGO forums, were selected to receive subgrants ofapproximately US$1,500 (15 million rupiahs) to conduct their own pilot
project over a 6-month period.

211

During this process, four workshops-three national and one local-wereheld in each district to strengthen a collaborative partnership forum aimed
at promoting exchanges among the authorities, extractive companies, andlocal NGOs/CSOs. It was assumed that the workshops would serve as thefoundation for permanent stakeholder forums.
As part of this process, IRE published the book “Strengthening Partnerships
for Accelerated Poverty Reduction in the District Mining and Oil and
Gas Industry” and distributed several policy papers to policymakers andextractive companies to encourage other parties working in extractive
regions to replicate similar IRE activities. A documentary by UNTV wasposted on the Internet. The draft regulation that was to be submitted to
the Ministry of Environment as an umbrella regulation was not produced.
Instead, recommendations issued promoting NGO involvement andpartnership models were issued. The evaluators were given a numberof reasons why this part of the design had not been implemented, butbasically, the project’s objectives were ambitious and national project
staff felt that meeting the objectives required more time, attention, andresources than they had at their disposal.
(ii) Logical framework
The table below summarizes the project’s logical chain from activities to
outputs, contributing to the ultimate development objective. The table isbased on the original logical framework provided by IRE.
The logical framework does not clearly indicate the nature of theinteractions among local governments, extractive industries, and NGOs
that were expected to enhance NGO credibility and trust-building among
stakeholders. There was an assumption that national and local collaborative
forums (in the form of workshops) and NGO capacity-building (throughtraining and microprojects) would strengthen sustainable partnerships. It
is unclear, however, how the activities would enable local actors to play
an acknowledged advisory role in local and national CSR policy changes,
nor how connecting through multistakeholder workshops would tackle
poverty reduction and gender equity policy issues.
212

Projectactivities andoutputs

Intended outputs

Medium-term
impacts/outcomesLong-term
development
objective

1. NEEDS ASSESSMENT: ROADMAP – LOCAL LEVEL•

Needs
assessment
throughsurvey, FGD•

Discussionof researchindings••

A roadmap
of program
activities toincrease thenumber of local
NGOs engaging
in CD/CSR
programs from
1-2 into 10-12
Units

A roadmap
of program
activities topromote good
relations among
local NGOs,
companies,
and local
governments.

• The project
has engaged instrategic planning
to increase NGO
capacity-building,poverty alleviation,and gender equity
and adopt thebest approachto developing
partnershipprograms• The stakeholders will
have had guidance
in developing
partnerships
programs• The stakeholders will
have trusted eachother to participate
in the project• Local NGOs havegreater capacity interms of producing
proposals,managing
organizations,cooperation,
networking,fundraising, andorganizing CD and
CSR programs

2.ROADMAP – NATIONAL LEVEL•First
NationalWorkshop••

The multiple
stakeholders
representing
the ive districts
have a common
interest in
developing
poverty
reduction andgender equity
programs.

• Corporate and local
governments trust
and assist local
NGOs/CBOs with
CD/CSR programs• Stakeholders havebeen committed
to implementing
workshop
recommendations

The multiple
stakeholders
have engaged
in strategicplanning topromote poverty
reduction andgender equity

213• Stakeholders will
have committed toestablishing a forumin the respective
local governments

3.COOPERATION AMONG COMPANIES, LOCAL GOVERNMENTS, AND LOCAL NGOS IN
ORGANIZING CSR/CD PROGRAMS•

Local
workshop•

Agreement to set
up participatory
and partnershipforums topromote poverty
alleviation andgender equity•

Strategicplanning to
implement
the promotionof poverty
reduction andgender equity• Stakeholders havebeen committed tosetting up a work
plan on developing
partnershipprograms• Stakeholders will
have committed tosupporting training
programs for local
NGOs and CBOs

• Good cooperationand trust among
local governments,
local NGOs andcompanies because
they support
each other inpromoting theirsocial development
visions, missions,and programs

4. STRENGTHENING NGO AND CBO CAPACITY•

Training
for capacity
building•

Capacity of
40 local NGOs
(320 people)
and 120 CBOs
(4,600 people)
in ive local
governments
to implement
CSR/CD
programs
to empower
women andreduce poverty
has been
increased•

Capacity inorganizing CSR/
CD programsand developing
organizationalsustainability•

Local governmentand companies
annually increase(20%) thebudget for CD/
CSR programs
involving local
NGOs to organize
programs in the
ield.

214

•

Companies andlocal governments
have greater trustin local NGOs and
CBOs and arewilling to cooperatewith them inorganizing poverty
reduction andgender equality
programs

5. TRUST-BUILDING, COOPERATION, AND JOINT VISIONS AMONG COMPANIES,LOCAL GOVERNMENTS, AND LOCAL NGOs•

SecondNational
workshop•Greater sharing
to develop the
program•Establishmentof partnershipprogram atnational level•

Presence of longterm programplan on CSR/
CD that fosters
poverty alleviationand gender equity
at national level•

The size of the
CSR budget
before, during,
and after project
implementation•

Stakeholders will
have encouraged
local NGOs / CBOs
to conduct CSR/CD
programs

6. FACILITATING IMPLEMENTATION OF CD/CSR PROGRAMS BY LOCAL NGOs•

10
cooperative
CSR/
CD pilot
programs•

Strengthened
local NGOs/
CBOs
conducting
pilot projects
of CSR/CD
programs
supportedby localgovernments
and companies•

More than 20
local NGOs and
80 CBOs havesecured theopportunity to
conduct the 10
pilot projects
of CSR/CD
programs•

Best practices
and lessons
learned forthe future
partnershipprograms••

Number of local
NGOs entrusted
by companies
to organize
annual CSR/CD
programs

Lower poverty andgreater gender
equity215•

Greater trust
among local NGOs,
local governments,
and companies•

More equitablesocial development
policies

7. DEVELOPING MULTISTAKEHOLDER PARTNERSHIP FORUMS TO PROMOTE CD/
CSR PROGRAMS•· ThirdNationalWorkshop• Sharing andconsolidationof development
program• Establishmentof National
forum topromote poverty
alleviation,
gender equity,and engagementof local NGOs
in CD/CSR
programs• Presenceof national
multistakeholder
partnershipforum for poverty
alleviation andgender equity• Change CD/
CSR program
orientation andimpact upon
poverty alleviation• Promotionof the forum
as a meansof learning,communication,and cooperation
amongdevelopment
programstakeholders
and involving
local NGOs•

The forums
have long- term
action programs•

Local districts
have supported
the forums

216•

Stakeholders will
have promoted
a national
multistakeholder
partnership forum8. FACILITATING THE FORUM’S ABILITY TO ADVOCATE FOR NEW REGULATIONSFOR INVOLVING LOCAL NGOs IN CSR POVERTY ALLEVIATION AND GENDER
EQUALITY PROGRAMSAdvocacy
through:•

Workshopfor drafting
policy paper,•Workshopfordeveloping
draft
regulations•

National
seminar•

The government
has taken
ownershipof strategicplanning
to develop
collaborative
CSR programs•

The government
has promoted
collaborative
CSR programs
acrossIndonesia•

National
government andlocal governments
have passed
umbrellalegislation tofacilitate creationof the stakeholder
forum

•

Presence of public
support for the
project agenda•

Creation of otherforums outside
the project’s target
areas

•

Greater public trustin the project’s
performance

9. MONITORING, EVALUATION, AND AUDITING•

FDGs
and ieldobservation•

Report on
monitoring andevaluation andaudit results•

Recommendations
for better project
performance andsustainability•

Greatersustainability

10. PUBLICATION OF A BOOK ON BEST PRACTICES AND LESSONS LEARNED•

Writing andlaunch of
the book•

The book (1,500
copies)•80 seminar
participants
appreciating thebook•

The book serves
as a guide forlarge-scale
stakeholders
to develop
partnershipprograms
for poverty
eradicationand gender
equity in areas
where extractive
industries areoperating.

217•

Over 60%of extractive
industries havelaunched poverty
alleviation andgender equity
partnershipprograms involving
local NGOs/ CBOs

IV. Evaluation indings(i) RelevanceThe project objective was fully consistent with the CSR legal and iscal
requirement that 40% of residents of extractive areas be living in poverty.
The project strategy was also suited to the need to engage NGOs/CBOs
in CSR programs, as it is widely recognized that better CSR performanceis intrinsically linked to better civil society involvement and moresustainable partnerships among stakeholders. According to oficial
statistics, the ive target districts were among the poorest in Indonesia andhad previously encountered problems with civil society organizations.
Table 2: Percentage of Poor Citizens in Districts selected by IRE(Source: IRE Needs Assessment Manual)
No. Province and District

East Java and Central Java
1. Blora
2. Bojonegoro
3. TubanWest Nusa Tenggara
4. Sumbawa Barat
East Kalimantan
5. Kutai Timur
6. Kutai Kertanegara
Kepulauan Riau, Sumatra
7. Kepulauan Anambas

Number of Poor
Citizens

Percentage (%) ofPoor Citizens

Percentage(%) of Poor
Citizens in
Extractive
Areas

-

35.1
45
27.1

65
75
45

(6,726 families)

24.4 (2008)

53

31,700 people
70,385 people

17.5 (2008)12.8 (2005)

Fewer
Fewer

11,69 people

32.2 (2009)-

The project’s strategy of identifying local NGOs/CBOs in the district
and working directly with them brought project activities closer to thebeneiciaries, giving such efforts more direct meaning in their daily
lives. The project was also relevant in that its design included workshop
activities to discuss the concerns of local governments and privatecompanies. Both groups need to pool local civil society resources if they218are to have a visible impact on the communities they engage with. Most
NGO participants said it was the irst time they had had the opportunity
to meet directly with companies and local authorities.
The approach of strengthening interactions among multiple stakeholders
made the project relevant from a CSR social development standpoint.
Meetings among all related parties were an important irst step in building
interparty trust to facilitate a common understanding of CSR challengesincluding civil society engagement. Most project interviewees, including
private companies, national and local authorities, and NGOs, expressed
great interest. Several of the participants interviewed attributed this to theneed to ind alternative ways of implementing CSR funds.
A number of strategic design weaknesses, however, ultimately undermined
the project’s relevance (as well as its effectiveness). Speciically, theproject modalities were in some ways disconnected with the statedobjectives:•

Links between activities were not explored, and each wasaddressed in isolation. While the project document stated that thepermanent local and national forums would serve as a reference
for policymakers and NGO partnerships, the project document
did not specify how the workshops’ recommendations would be
used to support civil society engagement to inluence CSR policy
and ultimately reduce poverty. The logical link between NGO
capacity challenges and the expected project outcomes, including
CSR practices and policy reforms, was not made clear. While theproject document stated that the NGO training and pilot projects
would help boost NGO capacity, it did not specify how NGOs’
abilities would be used to steer CSR performance policies in the
direction of poverty alleviation and gender equity.

•

The risks confronting the project and the dificulties involved
in working at the district level were not adequately identiiedin design or addressed during implementation. The project219

document was not speciic about the overall legal framework,
including CSR and decentralization regulations. The IRE project
document and needs assessment did not capture the local context
or the speciic information needed to implement the project.
There was no information on CSR budget allocation per district,the level of CSR integration in local development planning, thenature of civil society engagement with stakeholders, budget
allocation to NGOs, etc. For instance, the needs assessment madeno reference to the existing CSR forum operating in Kutai Timurand the value added that IRE could bring to this project.
•

The speciied outcomes were ambitious in terms of the outputs
expected to contribute to them. It appears to have been assumed
that putting stakeholders together and sharing knowledge throughworkshops and NGO training activities would be suficient tochange CSR policies and practices. The project document also
assumes that NGO capacity and permanent forums would besuficient to establish NGO credibility. However, the project
document did not make clear the extent to which extractive
companies and local governments were ready to accept NGOs as
CSR advisors to inluence CSR policies.

NGO training (Source: IRE milestone report)220

When the project was drafted, the approach of starting with a participatoryneeds assessment of NGO issues with CSR programs in each district
was consistent with gaining a better understanding of the situation ineach district and identifying the main stakeholders. However, the needs
assessment focused almost exclusively on the justiication of partners’
collaboration in engaging local NGOs, given the social and economic
realities and CSR legal requirements, diverting the focus from theexpected outcome of district diagnosis and NGO needs.
The project’s strategy of working with selected NGOs/CBOs undermined
the overall coherence of IRE and offered no response for multistakeholder
partnership-building. The training program designed and implemented
in ive districts to improve the ability of NGOs/CBOs to manage theirorganizations when preparing proposals for microprojects did notstrengthen civil society’s ability to discuss CSR performance policies
with local governments and extractive companies, as outlined in the
expected outcomes.
IRE’s “one-size-its-all” approach also detracted from its programmatic
relevance beyond providing project workshop guidelines and serving asa grants manager for local NGOs.
Although the project document made it clear that the local dimension isessential for inluencing CSR partnerships and civil society engagement,
the absence of a multifaceted approach tailored to the local situationand stakeholders’ needs lessened the coherence of the overall approach.
For instance, IRE did not distinguish between districts that already had
permanent multistakeholder forums and others that did not. Since Kutai
Timur already has such a forum, it obviously has different partnershipbuilding needs than other regions. It appeared during the ield missionthat the performance of existing forums is not yet optimal. It wasreported that the Kutai Timur forum is being used as a vehicle for
local elites to secure access to CSR funds. The forum in Kutai Timur isdistrusted by the local government and companies alike because of its
lack of transparency in managing CSR funds. Furthermore, IRE did not221consider the speciic issues affecting NGOs in each district. According
to observers, the educational level in NGOs in Java (Bojonegoro, Tuban,
and Blora) is slightly higher than in the other regions, as these areas arecloser to Jakarta. NGOs in Kutai Kartanegara and Kutai Timur in East
Kalimantan are highly fragmented. The West Sumbawa district in theWest Nusa Tenggara region is politically unstable, and the Kepulauan
Anambas district on Sumatra has been taken over by elites.
(ii) EffectivenessAll planned activities were implemented on time and according toschedule. The capacity of 40 NGOs was enhanced, and 12 CSR
microprojects were implemented. Interaction among companies, local
governments, and local NGOs took place at the local and national
levels. Three national workshops were successful in bringing together
decisionmakers from the respective extractive companies, local
government authorities-especially those responsible for empowerment
and development, namely Bapermas and Bappeda2- and local residents.
Most participants said that this project offered good prospects forpartnership-building. Meeting with all parties involved was an important
irst step in building interparty trust and partnership. Participants in local
and national workshops said that the events had been effective in terms ofimproving interaction and knowledge about corporate CSR requirements
and NGO and local government concerns. According to the interviewees,
the presence of multiple stakeholders with differing proiles created an
excellent atmosphere for discussion and the exchange of views. The IRE
project had support from BP Migas, the Ministry of Environment, andthe National Team of Poverty Reduction Programs (TKPK). According
to the IRE staff interviewed, strategically including major extractive
companies and national authorities in discussions where the Ministry ofEnvironment was also present was important for ensuring that awarenessraising was injected into the political process.
2

Bappeda is a local board responsible for local development planning. “Bapermas dan Pemdes,” usually“Bapermas,” is a local government ofice whose main task is to empower villagers and government.

222

Its cascading nature made it easier for the project to reach the grassroots
level. This system enabled selected NGOs/CBOs to learn more about
CSR requirements in their districts and improve their ability to use CSR
inancial resources as the companies required.
The project produced more materials for dissemination than anticipated.
A book, a television program, and several policy papers were distributed
to academia, national and local policymakers, and extractive companies(see Table 3).
Table 3: Inventory of post-project publications
Book(200 copies)· “Strengthening Partnerships for Accelerated Poverty
Reduction in the District Mining and Oil and Gas Industry,”3
February 2012

Policy papersoPolicy Paper, “Being a Catalyst of Change:
Repositioning CSR for Poverty Reduction in theContext of Decentralization”4oPolicy Paper, "Poverty Alleviation through theStrengthening of Local NGOs by Regional Oil and thePartnership Approach"5 Policy PaperoBulletin FLAMMA, 33rd edition, January-March2010 "Poverty Partnership Initiatives in Regional
Exploration, Mining, and the Oil and Gas Industry"6
www.ireyogya.org/id/lamma/lamma-33-sengkarutpenanggulangan-kemiskinan.html

Articles3

Original Indonesian title, “Kemitraan Penanggulangan Kemiskinan di Daerah Pertambangan dan MIGAS”
Original Indonesian Title, “Menjadi Katalis Perubahan: Reposisi CSR untuk Penanggulangan Kemiskinan
dalam Konteks Desentralisasi”
5
Original Indonesian title, “Penanggulangan Kemiskinan di Daerah Migas Melalui Penguatan LSM Lokal
dan Pendekatan Kemitraan”
6
Original Indonesian title; “Inisiatif Kemitraan Penanggulangan Kemiskinan di Daerah Eksplorasi Industri
Pertambangan dan Migas”
4

223

o

Bulletin FLAMMA, 34, March – May 2012, “CSR ProPoor,”
www.ireyogya.org/id/lamma/lamma-edisi34-csr-pro-poor.html

o2 Contributions to book entitled “CSR; Commitment toCommunity Empowerment7•

Bambang Hudayana “CSR Partnerships, Local
Authorities. and Local NGOs in Poverty-Reduction
Agenda: Experience of IRE-UNDEF Action,8•

Krisdyatmiko,“Government-Private-Public
Partnership in the Framework of the Multistakeholder
CSR Forum”9oBambang Hudayana, article “Poverty Partnership
Initiatives in Regional Exploration, Mining, and Oiland Gas Industries10 “http://www.ireyogya.org/id/
program/project-undef-ire.html

However, the IRE project did not achieve
the outcomes anticipated in the project
document. In general, no consideration wasgiven to determining how activities wouldalign with CSR performance in poverty
alleviation and gender equity throughbetter stakeholder cooperation. Theseweaknesses detracted from the relevanceand effectiveness of the project. The needs assessment was not eficiently
used to identify key local issues and NGO priority needs in terms of
the expected results. This was due mainly to the lack of methodologicalguidance and the absence of information for ensuring transparency and7“CSR; Komitmen untuk Pemberdayaan Masyarakat”“Kemitraan CSR, Pemerintah Daerah dan LSM Lokal dalam Agenda Penanggulangan Kemiskinan:
Pengalaman Program Aksi IRE-UNDEF”
9
Kemitraan Pemerintah – Swasta - Masyarakat dalam Bingkai Forum Multi Stakeholders CSR”, di tulis
oleh Krisdyatmiko dalam buku berjudul “CSR; Komitmen untuk Pemberdayaan Masyarakat” (File buku
terlampir).
10
Indonesian title: “Inisiatif Kemitraan Penanggulangan Kemiskinan di Daerah Eksplorasi Industri
Pertambangan dan Migas”
8224

accountability.
•
•

•
•

No contextual information was provided on companies’ CSR
policies or local governments and NGOs based in those extractive
areas;
There was no overview of:• baseline data on CSR programs;• the districts’ overall legal framework;• CSR budget allocation for local government• development planning;• the proportion of the CSR budget allocated directly to
CBOs;
There was no detailed data on speciic CSR practices to assess
what had been achieved so far and what was needed for local
NGOs to increase their credibility and dialogue with stakeholders;
CSR performance in terms of poverty and gender equity issues
was totally ignored.

As result, the overall challenges to NGOs acting as advisory bodies were notwell-documented, and local government and company responsibilities andpriorities were not identiied. Transparency and accountability are a sinequa non for strong partnerships, and the issue is contentious in areas withextractive operations. This should have been one of the NGOs’ identiiedneeds, as well as a prerequisite for building a transparent, accountablepartnership. Since CSR is part of governance because it involves publicmonies, information from companies with CSR programs and from local
authorities to ensure transparency and accountability is key to building
strong partnerships around CSR issues. The absence of clear regulatory
information made it hard to identify the priority skills needed by NGOs
and determine how to develop them. IRE did not pressure companies andpolicymakers by stressing the legal mandate of civil society engagement
to create conditions for trust-building among stakeholders. In this respect,several companies conirm that collaboration with NGOs is essential to
make CSR useful and visible. As one company interviewee said, “NGO
advocacy on CSR policy is rather disturbing.”
225

Project activity was treated as a “standalone” activity, and the indings fromthe needs assessment were not used
to drive NGO activities and develop
an agenda for action. The intent of theIRE district approach was to strengthen
NGO ownership and capacity to cooperate with local governments
and extractive companies in drafting and implementing CSR povertyalleviation and gender-equity projects. The training activities andmicroprojects generated useful inputs for enabling local NGOs to meetextractive companies’ requirements for granting CSR funds. However,NGO participants did not appear to embrace CSR policies for developing
CSR performance. Most NGOs took the view that “being a partner”
means having access to CSR funds, because companies usually prefer to
use international or national NGOs. In Kutai Kartanegara, for instance,
Chevron conirmed that it preferred national NGOs and the university to
implement CSR programs through a subcontracting mechanism for CSR
management.
NGO capacity-building activities were not effective for cooperation with
CSR stakeholders. Project training activities focused primarily on NGO
entrepreneurial skills, NGOs, and project management aligned with theextractive companies’ criteria. The modules in the training program forcapacity-building were geared mainly to:• Advocacy techniques, lobbying, and CSR fundraising(networking)• NGO organization and management• Design of project proposals• Project management (management of the project cycle, work
plan)
• Project monitoring and evaluation.
This was effective for preparing project proposals and tailoring them to226the local context. In some respects, it enabled participating NGOs access
CSR programs more effectively. However, it was ineffective in boosting
the NGOs’ credibility and fostering partnerships to discuss CSR povertyreduction challenges. This lack of NGO advocacy services did not
help local actors make their voices heard by the authorities and privatecompanies. Most of the NGOs interviewed considered themselves passive
beneiciaries of CSR funds rather than community advisors or genuine
company and local government partners in improving CSR performance.
The IRE tactic of using NGO microproject approaches similar to those of
extractive companies resulted in the duplication of efforts with no value
added. The nature of the microprojects funded by IRE did not produce
any changes in the extractive companies’ practices with respect to NGOs.
Moreover, this approach did not enable more NGOs to learn about the
CSR project competition organized by the companies. During the ield
missions it appeared that two out of three of the NGO beneiciaries met
had already worked with extractive industries and local governments on
CSR projects.
The 12 NGO microprojects for creating local NGO forums did not entail
any local government or company involvement. An FKPMKK member
stated that while four meetings had been held during the projects, theCSR action agenda had not been a priority in the discussions. Most of
the microprojects involved business opportunities in agroindustry andfarming (see Table 4). All the business project stakeholders that wereinterviewed considered the amount of funds donated too low and a
6-month period to run a business too short.
Table 4: Inventory of IRE-funded microprojects
District
BLORA (Java)

IRE-fundedNGO
SepakatJaya Group

Title and Nature of Project
Funded• Boosting business capital tomarket agriculture products(empowering bamboo workers andcraftsmen)227

Bojonegoro (Java)• Development of bottled drinks
and snacks made from star fruit

BKAD*
AnimalHusbandryGroup

Tuban (Java)

Ronggolawe

Sumbawa Barat(West Sumbawa)

Pelangi Nusa
Lakmus• Assistance to livestock producers(goats). Goat-farming, called“ETAWA”• Strengthening home foodindustries in villages around Petro
China Oil company (Basic healthservices support)• Boosting the capacity of women
weavers in Sumbawa barat

PeceloBorneoGapura• Improving community healththrough healthy behaviors• Strengthening the economy by
improving the agribusiness chain in
East Kutai. (patchouli business)

Kutai Timur
East Kalimantan

Kutai Kertanegara(East Kalimantan)

FMPP**
FKPL***FKPMKK

Riau Island(Anambas)

IKKNA• Strengthening village governanceto create a participatory programin Kutaî Timur (Development ofEnvironmental Issues Forum)• Training and mentoring of goatfarmers in Tenggarong Seberand(forum)• Developing self-help for refuse
management in East Kutai• Promoting partnership initiatives
for poverty reduction (community
forum)• Preserving Coral Reefs (1scholarship)* BKAD is an intervillage group** Forum for community responsiveness in development*** Environmental Emancipation Forum

The NGO-based approach did not make NGOs more credible in theeyes of extractive industries and local governments. It did not help
NGOs forge eficient partnerships with stakeholders. Several beneiciaryNGOs confessed that they needed to know more about their rights
and responsibilities when it comes to CSR governance and wanted tobe connected to more extensive information and knowledge networks
228

working on these issues. There was no speciic mechanism to include theresults of the NGO microprojects in workshop discussions. The absenceof a connection between NGO and workshop activities reduced theeffectiveness and coherence of the overall push for NGO recognition andadmission to collaborative CSR partnerships. Recommendations focusedon the speciic concerns of local governments and extractive companies.
However, it was reported that workshop discussions failed to specify
how CSR should be governed in civil society engagement or how NGO
actors should be involved as CSR partners to improve public welfare. As
a result, there were no joint initiatives.
The project was unable to provide CSR branding to identify best
partnership practices in order to make the collective voice of local
NGOs heard in extractive areas. Although the project took advantageof the Internet and the media to promote project visibility and a sharedsense of the need for a CSR partnership, the draft regulations mentioned
in the project document that were to be submitted to the Ministry ofEnvironment were replaced with recommendations on how NGOs canmake better use of CSR funds.
(iii) Eficiency
The view of persons interviewed was that project was implemented
eficiently, making good use of time and resources. Although the funds
were well-managed, covering a wide range of local activities, a morecritical view would question the selection of the extractive areas. The
complications involved in reaching each district and the distance between
each Indonesian island and district required a large travel budget forbeneiciaries and IRE staff in comparison with that for the CSR activities
in the ield. Apparently, IRE initially wanted to target the most isolatedareas. However, travel costs should have been better anticipated. IRE’scentralized approach did not offer the opportunity to properly appreciate
the local situation and create NGO cooperative approaches tailored tothe situation in each district. Eventually, travel costs need to be weighedagainst the value added of the different local partnership models.
229

There was also a question about the wisdom of recruiting human resourcesfrom Yogyakarta for district support. Directly assisting human resourcesfrom the district might have been less expensive and more sustainable.
By working directly with local actors on training methodologies, NGO
support activities would have facilitated a greater sense of ownership.
There were also concerns about the funds provided to NGO projects(US$1,50011 per project) in comparison with the overall budget(US$350,000). Only 5% of the overall budget was allocated to NGO
projects.
(iv) Impact
The project identiied the key district stakeholders in local government,
the private sector, and civil society organizations, potentially providing
a knowledge base for CSR initiatives in those areas. IRE has developed
good institutional relations with interrelated parties, local NGOs, local
authorities, and companies based in the selected districts. The project’s
visibility as a result of the book, policy papers, and media presence has also
raised IRE’s proile. In interviews, NGOs stated that they had improved
their project organization and management skills to compete for CSR
funds. In Kutai Timor, a local NGO activist said that his organization
is now better organized, with regular meetings and activities devoted
to CSR. NGOs also have better operating standards for organizational
management, although very simple. Nevertheless, it was clear thatdeveloping skills to compete for CSR funds did not reduce the NGOs’
fragmentation or help them think more strategically about cooperation
among themselves and with stakeholders. During the interview in Kutai
Kartanegara, it was clear that local FMPP
and FKPMK forums compete with eachother for CSR donations. They still do notconsider themselves potential advisors to
extractive companies and local government
11

15 million rupiahs per project230

on CSR policy changes. The IRE project did not change NGOs’ perceptionof CSR but rather, reinforced current company practices in which civilsociety empowerment is viewed as donations to NGOs.
With the project completed, there is no evidence to date that IRE
activities have had a demonstrable impact on the ground. At the end of
the microproject process, NGOs were unsuccessful in leveraging funding
from other sources and several business projects. No companies or local
governments are involved in local forums, and the mission found that the
CSR agenda for action is not the priority. After the workshops, there was
no joint strategic CSR planning among NGOs/CBOs, local governments,and extractive industries, nor was there evidence that the project hadchanged stakeholders’ initial perceptions about NGO roles.
IRE did make an effort to conduct an ex post evaluation, but there was noreal indicator at the start of the project or in the needs assessment. Under
these circumstances, the evaluation was unlikely to capture impact interms of the expected results at the end of this project. This evaluation
did not include information on the degree of NGO engagement toimprove economic and social welfare services, NGO perception of CSR
collaborative approaches and advocacy, NGO knowledge about CSR
practices in their own districts, CSR iscal requirements, NGOs’ right toinformation, and how to express their demands to local government andextractive companies. The evaluation and inal report focused primarilyon activities and outputs, and the indicators provided were neither
veriiable nor detailed enough to extrapolate impact.

IRE Project managers and FKPMK andFMPP members in Kutai
Kertanegara, 2012 (Source: F. Buerban)
231

(v) Sustainability
Wide dissemination of the book’s recommendations, the policy papers,
and the documentary posted on UNTV ensures that the project’s
outcomes will last beyond the lifetime of the project itself. Assessmentof the project’s sustainability would require systematic tracking of therelationship between each NGO beneiciary and the extractive industries
and government authorities to assess the extent to which interactions
among stakeholders contribute to trust-building and partnerships.
The evaluators, however, doubt that this project will be able to effect any
sustainable changes. It did not touch on the strategic issue of CSR impact
on poverty reduction, dealing with practical issues instead. Indeed, it wasa zero-sum game, because there has been no change in the perception of
CSR or practice among stakeholders. Local government and companies
do not see the advantage of strengthening local NGO decision-making.
There is no understanding among NGOs that having backgroundknowledge about CSR will improve their ability to communicate withstakeholders and the wider public in their districts. Better coordination
among NGOs so as to play a more effective role as advisors to local
stakeholders did not occur.
V. Conclusions
Based on the evaluation indings, the team concludes that:i. As designed, the focus of the project was relevant andimportant, given Indonesia’s social and democratic context. It
addressed CSR legal and iscal requirements and put into perspective
CSR social and economic welfare issues in extractive areas and the lackof participatory processes where civil society has an integral role to playalongside government and industry. However, the absence of an in-depth
analysis of a package of legal mechanisms linked to local governmentand corporate legal responsibilities, as well as detailed analysis of thesocial context in the respective districts made it hard for IRE to capture
232civil society capacity-building needs. The project needs assessment did
not fully grasp either the complexity of the corporate CSR programs,
which are patchy and based on the sector and political climate in eacharea where extractive industries operate, or how this affected NGO/CBO
participation and collaborative CSR approaches. This detracted fromits relevance in the districts and selected NGOs, limiting its potential
impact. This conclusion is based on indings related to relevance andeffectiveness.
ii. Using the local-national level to implement CSR activities
was an effective approach for CSR stakeholder interactions, as it
offered an opportunity for companies, local governments, and NGOs
to share their concerns. However, the disconnected activities, which
focused on corporate CSR grant requirements rather than improving
civil society’s knowledge about CSR processes and its inluence on
CSR policies, limited the usefulness of this approach. This led to the
duplication of extractive companies’ practices with NGOs/CBOs, isolated
NGO project activities, and lack of CSR ownership and collaborative
initiatives on CSR. Lack of coherence and mechanisms to connect NGO
activities with national workshops was also a missed opportunity to build
broader support for the changes advocated at the local and government
level. This conclusion is based on the inding related to effectiveness.
iii. The overall intervention strategy made a difference
for individual participants. However, it lacked the coherence andeffectiveness necessary to satisfy NGOs’ collective interests andbetter enable them to affect CSR performance, resulting in a weak
impact. Although anecdotal information suggests that the project has
had a positive impact (especially for individual NGO participants) interms of better relationships between companies and local governments,
it did not improve the NGOs’ ability to inluence joint CSR initiatives.
Activities focused primarily on upgrading NGO entrepreneurial skills
and meeting the demands of the companies’ CSR programs, diverting
the focus from the NGOs’ ability to affect CSR policy performance.
233

The absence of a mechanism to connect such activities with stakeholder
workshops detracted from the effectiveness and coherence of the overall
effort to gain recognition for NGOs in collaborative CSR partnerships.
As a result, stand-alone NGO activities and stakeholder workshops do notseem to have been successful in fostering NGO inclusion in joint CSR
approaches. This conclusion is based on indings related to effectivenessand impact.
iv. The use of diagnostic needs assessment, ex post evaluation,and publications for advocacy purposes was a good programmatic
technique. However, it required a focus on indicators at the start ofthe project to measure change and impact indicators. The diagnostic
review and needs assessment yielded statistical data on district poverty
rates but did not provide an indicator correlated with the main goal ofstrengthening local NGOs or signiicant data on the demand for CSR
partnerships. Since speciic data and indicators were not identiied in
the needs assessment, the process could not guarantee the credibilityof the data and indicators submitted by the evaluation and report. Thisconclusion is based on indings related to impact and sustainability.
v. UNDEF funding gave IRE and project activities morecredibility and visibility with government oficials and companies.
CSR policies are sensitive issues in Indonesia, and having the UN logo
attached to the project helped present it as an apolitical, neutral exercise.
However, the IRE project focused on NGOs’ capacity to implement
projects funded with CSR donations, which diverted the focus from theexpected outcomes spelled out in the project document. Ultimately, theUN logo was used to promote practices similar to those already employedby extractive companies, whose inability to reduce poverty and increase
gender equity has already been demonstrated.

234

VI. Recommendations
To strengthen similar projects in the future, the team recommends:
i. Pressing more forcefully for information to guarantee local
CSR program transparency and accountability. Such information is asine qua non for strong partnerships, especially when this is a contentious
issue in extractive areas. Since CSR is part of governance because it
involves public monies, the information provided by corporate CSR
programs and local authorities to guarantee transparency and accountability
should be considered a prerequisite for building partnerships around CSR
issues. Although the regulations governing CSR (Law No. 40 of 2007
and Government Decree No. 47, 2012) do not clearly state how CSR
involving local participation should be governed, several regulations
on decentralization (Law No. 32, 2004 on Local Government and Law
No. 14, 2008 on Freedom of Information) stress the need for public
participation in local governance processes, providing an opportunity for
public monitoring of the activities of state and other public institutions
in governance processes that impact communities. In addition, knowing
what has worked and what has not is very important for promoting further
discussions with stakeholders on how to develop NGO skills. Better
information on the costs and beneits of implementing CSR at the districtlevel and an inventory of extractive industry practices could help IRE
identify NGO capacity constraints and priority needs and tailor different
partnership models to the district reality. Transparent information could
also help NGO participants understand their roles and responsibilities in
the CSR system and how they can hold local government and companies
accountable for the design and implementation of CSR activities. This
recommendation is based on conclusion (ii).
ii. Formalizing stakeholders’ commitment to building
ownership under an integrated framework involving all stakeholders.
In a partnership and trust-building project such as this one, IRE should
bring the various implementers together under one integrated program,designing activities, producing joint strategic planning initiatives/projects,
235and developing product branding to lay the foundation for common
understanding and practices by agents of change. It should also leveragecomparisons among existing partnership models to improve the projectand its outputs. Highlighting existing models could strengthen partnershipmodels. For example, presenting lessons learned in the Bandung or WestJava forums, established as a government-private sector consensus thatjointly identiied CSR funds to allocate to a speciic development sector,
could be a valuable asset for improving the operations of the Kutai Timur
forum. This recommendation is based on Conclusions (ii) and (iii).
• Encouraging concerted coordination by civil society
groups in joint NGO capacity-building initiatives. Changes
in CSR governance will not come to pass without concerted
advocacy by civil society groups that come together with anunderstanding of CSR challenges for society as a whole. Project
activities should be modiied and linked to the anticipatedobjectives. The kinds of activities carried out by NGOs could
be used in enhancing information about CSR to raise awareness,
facilitate dialogue, and improve advocacy skills to address
CSR performance in reducing poverty. A wide range of topics,
including an understanding of CSR policies and practices, could
be addressed in NGO training activities (budget analysis andmonitoring of oil and mining industry operations; laws, contracts,
and taxation; public information on government revenues andpayments by the extractive industry; information on other CSR
networks, etc.). Grants and capacity-building activities could be
used to build NGO coalitions among fragmented local actors andimprove communication, NGO coordination, advocacy, etc. It
could give NGOs greater representation in CSR systems and theopportunity to develop joint programs and share their individual
expertise with other groups. This recommendation is based on all
the Conclusions above.
• Preparing a results-based project performance andmonitoring plan at the start of the project to follow the progress236

made toward achieving the outcomes and measure results. This
plan should be used to track the expected results of activities, notsimply activity outputs. Examples of performance indicators could
include: the number/type of CSR policy changes resulting fromproject activities, the nature of the partnership models developed,
NGO knowledge about CSR practices and iscal requirements,
etc. This recommendation is based on Conclusion (iv).
• Controlling use of the UN logo for disseminating
information on best practices and lessons learned after a project’s
completion. UNDEF should monitor UN publications and media
products more carefully to maintain the UN branding image and
UNDEF value added.

237