THE IMPLEMENTATION OF PARTNERSHIP PROGRAM IN GRESIK REGENCY BASED ON GOVERNANCE PERSPECTIVE (Case Study in PT Petrokimia Gresik)
Susilo Wati, Soesilo Zauhar, Ike Wanusmawatie Department of Public Administration, Faculty of Administrative Science, University of Brawijaya, Malang E-mail: [email protected]
Abstract: The Implementation of Partnership Program in Gresik Regency Based on Governance Perspective. Governance concept offers interactions between three main actors in policy implementation, the actor are government, society and private known as the iron triangle. This journal will discuss three actors synergies in the implementation of partnership programs conducted by PT Petrokimia Gresik in developing small enterprises in Gresik regency based on governance perspective. Based on the conducted research, the findings showed good synergy between the private (PT Petrokimia Gresik) and the community (partner member) in the implementation of the partnership program, unfortunately the synergy with government was less maximum, particularly with the Department of Cooperatives, Small and Medium Enterprises, Industry and Trade in Gresik regency this is caused by some reasons, so at the end of this journal researcher give recommendations as alternative to address the existing problems.
Keywords: governance, synergy, partnership program
Abstrak: Implementasi Program Kemitraan di Kabupaten Gresik Berdasarkan Perspektif Governance. Konsep governance menawarkan interaksi antara tiga aktor utama dalam implementasi suatu kebijakan, aktor tersebut adalah pemerintah, masyarakat dan privat yang dikenal dengan iron triangle. Jurnal ini akan membahas sinergi ketiga aktor dalam implementasi program kemitraan yang dilaksanakan oleh PT Petrokimia Gresik dalam mengembangkan usaha kecil di Kabupaten Gresik berdasarkan perspektif governance. Berdasarkan penelitian yang dilakukan, terdapat sinergi yang baik antara privat (PT Petrokimia Gresik) dan masyarakat (mitra binaan) dalam implementasi program kemitraan, sayangnya sinergi dengan pemerintah masih kurang maksimal, khususnya dengan Dinas Koperasi, Usaha Kecil Menengah, Perindustrian dan Perdagangan Kabupaten Gresik yang disebabkan oleh beberapa alasan, sehingga pada akhir jurnal ini peneliti memberikan beberapa rekomendasi sebagai alternatif untuk menyelesaikan masalah yang ada.
Kata Kunci: governance, sinergi, program kemitraan
Introduction average small enterprises can absorb 3-5 Empowering small enterprises are workforces. With the addition 3 million very important and strategic effort to small enterprises unit, in the last two years, strengthen the structure of the national could absorbed until 15 million people. economy. A large number of small In fact there are many problems enterprises bring their own impact on the faced in the development of small Indonesian economy. Strategic position of enterprises. Such as weaknesses of small enterprises not only because of their technology and information access and the large number, but also in terms of workforce expansion of market share, capital, absorbance. According to Aria (2013) in management of the organization, as well as Majalah UKM Indonesia, the number of weaknesses in the establishment of business small enterprises reached 52.8 million units networks and partnerships which lack of in 2011 increased to 55.2 million units. The competitiveness, both in the local as well as
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national and international market. To between governments and companies in overcome these problems of course is not developing small enterprises. Based on the easy, it needs cooperation of various parties description from staff of Department of in order to realize the success of economic Cooperatives, Small and Medium development. In accordance with the theory Enterprises, Trade and Industry in Gresik of governance, to achieve success in Regency from previous survey in 2012 said development in terms of achieving social that this department is rarely involved in welfare. There are three main actors who partnership program of PT Petrokimia have worked together which are state, civil Gresik particularly associated with small society, and the private sector. All three enterprises in Gresik regency. A represent- sectors have to work together in order to tative from this agency was only invited in create welfare among society. In this case major events, such as anniversary of PT focus on the synergy of three stakeholders in Petrokimia Gresik. This happened because the implementation of partnership program the fear of the company if involves the conducted by PT Petrokimia Gresik in Department of Cooperatives, Small and developing small enterprises in Gresik Medium Enterprises, Trade and Industry in Regency. PT Petrokimia Gresik is a Gresik Regency will hamper the perfor- company engaged in the fertilizer industry mance‘s company because of complicated which is currently the largest fertilizer government bureaucracy. producer in East Java. The problem also rises from The implementation of the community, especially small enterprises partnership program in the company based which are also less active in seeking on the Regulation of Minister of State information related to the development of Owned Company No. PER-05/MBU/2007 their business and many small businesses are about the Partnership Program of State reluctant to come out from their comfort Owned Companies with Small Scale zone, meaning the lack of initiatives to Business Units and the Environmental expand their business independently despite Development Program, which was there has been training from PT Petrokimia previously based on the Decree of the SOEs Gresik and government. Minister No. Kep-236/MBU/2003, June 17, From the problems that have been 2003. PT Petrokimia Gresik has been described above can be seen the problem committed work in hand with small related with the synergies between enterprises to solve existing problems. governments, private and society in Related with partnership program, from year developing small enterprises, particu-larly in to year, the number of partners built by PT Gresik. In this paper will be explain more Petrokimia Gresik has increased signify- about the synergy of iron triangle cantly. According to the Annual Report of (governments, private and society) in the PT Petrokimia Gresik In 2011, up to 2011, implementation of partnership program of the number of partners reached 4720 PT Petrokimia Gresik. members, in the earlier year 2010 reached 4128 members and in 2009 reached 3730 Theoretical Review members. The commitment of conducting 1. Governance partnership is also proved by the increasing New relationships between the state, fund allocated in this program as shown in private and society, known as governance the table below. The achievement of the PT concept makes a lot of discussion between Petrokimia Gresik received positive the linkages of three actors in achieving appreciation from the Department of common goal. The concept of governance Cooperatives, Small and Medium facilitates the synergy of various parties in Enterprises, Trade and Industry because of addressing an issue. Governance according its seriousness in developing small to Osborn (2010) facilitates an under- enterprises. Between its successes, the standing of power penetrates the spaces implementation of partnership program also policy, processes and practices, and the face problem related with the synergy formal and informal institutional
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arrangements which contribute to a "matrix goal, there is a consensus and need each of governance" or "choreo-graphies of other. governance", the ensemble of norms, patterns of behavior , networks and other 2. Small Enterprises institutions, and the power play between There are several definition about involved stakeholder. It is in line with the small enterprises meaning, according to opinion of Islamy (2007), who argued that Statue No. 9 year 1995, Small Business is the concept of policy implementation is the economy activity of the people who has essentially the collaboration between the maximum annual sales 1 billion IDR and has bureaucratic, market and community (iron a net property, excluding land and buildings, triangle). While governance definition from maximum 200 million IDR. According to Endarti (2005) stated the equality, Ministry Decree of SOE No.05/MBU/2007, cohesiveness and balance of role also about The State Partnership Program with control among three actors (government, Small Enter-prises and Environmental society, and private). Assistance Program, the small enterprises Governance has variations, such as who can participate in the partnership good corporate governance, sound program are, have net property of IDR governance, deliberative governance, meta- 200.000.000,- (two hundred million governance, governmentality, etc. The Indonesian dollars), not including the land branch of governance which is closely and building or has annual sales under IDR related to this study is the Good Corporate 1.000.000.000, - (one billion Indonesia Governance (GCG). Applying GCG means dollars); belong to Indonesia citizen; companies must maintain good relations independent, not subsidiaries or branches of with all involved stakeholders in company‘s companies owned, controlled by, or activities. One of the GCG practices adopted affiliated directly or indirectly with medium by the company to cooperate with or large business enterprises; individual stakeholders can be implemented in the businesses, business that is not legal entity, Corporate Social Responsibility (CSR). or legal entities, including cooperatives. Corporate social responsibility according to Aras and Crowther (2008) Research Method refers to the relationship between global This study used qualitative approach and corporations, Governments of countries and use case study. The focus in this research is citizens. More locally, the definition is synergy between government, private and concerned with the relationship between a society in the implement-tation of corporation and the local society in it resides partnership program of PKG based on or operates. Another definition is concerned governance perspective. Location of the with the relationship between a corporation study is Gresik because central office of and its stakeholders. The company's PKG located in Gresik regency. Data types relationship with other stakeholders in the used is primary and secondary data, while implementation of CSR in this case is data collection used is interview and focused in partnership program. So from the documentation. This research use interactive partnership program can be seen the models in analyzing data because this model interaction between private, governments can make researcher easy to conduct and society. Sulistyani (2004) stated that research. The steps consist of data partnership can be interpreted as a form of collection, reduction, presentation, alliance between two or more parties who conclusion and verification. form a bond agreement and cooperation on In accordance with the concept of the basis of mutual interests in order to governance, where the government is not a improve the capacity and capability of the single actor in dealing with the problem. business sector or specific purpose to obtain There is a responsibility of the private sector better results. Partnerships conducted by two and communities to work together in finding people or more, have a common vision of the best solution. According to Wahab, et.al (2002) synergy is an interconnection and
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integration between public and private unification of the number of entities to be actors, along with the balance of the division attached to deal with the public interest. of tasks between the bureaucrats and the Stakeholder participation in the local communities that have been previously implementation of the partnership program agreed. The concept of governance can is a form of democracy that is done by the facilitate the synergy of various parties in company. To make easier in analyzing the addressing an issue. According to Osborn role of involved actors, in this case focus on (2010) governance facilitates an under- the synergy of iron triangle, which is private standing of power penetrates the spaces (KBL department), community (partners), policy, processes and practices, and the and government (local government Gresik) formal and informal institutional because basically, on the implementation of arrangements which contribute to a "matrix partnership programs, this three actors who of gover-nance" or "choreographies of play important role. This is similar to the governance", the ensemble of norms, previous concept of governance. patterns of behavior, networks and other While the concept of governance institutions, and power play between presented by Endarti (2005) there is involved stakeholders. It is in line with the alignment process, equality, cohesion and opinion of Islamy (2007), who argued that balance of role and control performed by the concept of policy implementation is three components, government, society and essentially the collaboration between the private. The concept of governance in fact bureaucratic, market and community (iron not always happen in the practice, in this triangle). case the synergy between government, While Howlett and Ramesh (1998) society and private sector in the said actors in the implementation of a implementation of partnership program program may be individuals or groups, in conducted by KBL department of PKG. On which engage in certain condition as a the implementation of the partnership subsystem of a program. There are five program, there are alignments and actors in a policy, elected official, appointed similarities role of each actor. This is official, interest groups, research because policy as guidelines from the organizations, and the mass media. In the beginning does not require companies to implementation of partnership program establish cooperation with local govern- conducted by KBL Department of PKG, ments. In addition, the partnership program minister of SOEs is elected officials chosen policy is top-down policy from the minister by central government to make policies of SOEs directly to all SOEs, so the most regarding with partnership program. responsible in the implementation is SOEs Companies in this case KBL Department as and the most dominant role is also belong to officers appointed by minister of SOEs to be SOEs. So parallels and similarities role fully responsible in the implementation of cannot be imposed, because if this happens, partnership program, and interest groups it is possible if planned program cannot run here are very flexible, depending on the properly because of the different programs, such as the trainer provider characteristic between the government and designated by the company to provide the company training, local government who became KBL department as a major actor in partner in conducting training, and so forth. the partnership program has central role. Interest groups can be seen from the role of KBL department hold control since planning partners who have interest in partnership until implementation and evaluation. As the program. Research organizations can include main actor, KBL department also non-govern-mental organizations who responsible for the success or failure of the engaged in research. And the mass media partnership program. PKG holds commit- are used to provide information for outside ment to the stakeholders outside the parties related with partnership program Company mentioned on the Corporate conducted by KBL department. Govern-ance Social Responsibility program that will be refers networking which describes the recorded to support economy growth and
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implementing sustainable developments companies with reference to Regulation of initiative in order to assist in creating Minister of State Owned Company No. community welfare. In running partnership PER-05/MBU/2007. The regulation has program, KBL department recognize the described the outline program to be important of synergy and participation from implemented by the SOEs in carrying out society for the sake of getting maximum partnership program with small enterprises. result. Thus in planning process just involve This supports the idea Wamsley and internal actor in company. Stakeholder Wolf (1996) stated the importance of society participation occurs at the implementation involvement in providing a service. Cultural which is expected to create synergy. values and lifestyle of the society, especially According to Lasker and Weiss (2003) small enterprises often have a significant partnership creates synergy by combining impact on the partnership program is being the complementary knowledge, skills, and carried out. In the implementation of the resources of different people and partnership program implemented by KBL organizations. department involving the role of society and The role of the society, in this case other actors in running the program. The is partners plays a very important role statement also supported by Denhart and because without the initiative of partners to Denhart (2003) who reveals the existence of develop their business despite there are new public services perspective, the owner various programs offered by KBL of the public interest is society, so public department will not run properly. High service providers should focus on the motivation and strong desire from partners is responsibility of serving and empowering a key in successful implementation of society. Although the partnership program is partnership program. Many partners get fully designed by KBL department, but success after joining partnership program, basically, the partnership program has been including business of embroidery woman‘s adjusted with the conditions of small praying veil, woven sarongs, farmers' enterprises. The program been analyzed by groups, and many others. But there are also experts to be able to answer the problems many partners who are not experiencing faced by small enterprises. According to the significant growth though has participated in development guidance of Role and various programs that have been granted by Participation of Society, Institute for Global KBL department. The difference success of Environment Strategies in Dwiyanto (2009) partners caused by possible factors, the most describes several levels of meaning of the important is the willingness of partners to participation of high level to a low level, expand their business, other factors are namely mobility on their initiative, market conditions, the ability to manage partnership, conciliation, negotiation, existing resources, both financial and human collection of information, giving information resource, creativity, and the ability to market When referring to the level of products, as well as other factors. stakeholder participation above, partici- Government's role in the implement- pation of stakeholders in partnership tation of the partnership program so far only program is categorized in partnership stage, voluntary instrument. Voluntary instrument especially relationship between companies is a category that shows the role of the with partners. Basically stakeholder government is low. It happens when participation can be divided into three families, communities, organizations, and categories, which are in program the private can solve problems by formulation, implementation and evaluation. themselves so did not involve the role of Based on the interviews with KBL staff government. This supports the idea of showed that at the stage of program Osborne and Gebler (1992) which says that planning, there were less partners and the government in the future only serves as government participation. Programs have steering, not the drivers and not the single been planned by KBL department, which actor. Nowadays government is not the only means that planning is purely in the hands of one actor in implementing policy. Go-
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vernment could delegate the implementation Semampir, rattan craft centers in Menganti, to other actors outside government, so there and other centers spread in Gresik. It is not is the decreasing role and involvement of denied even in Gresik there are a lot of small government, known as —hollow state“, where enterprises centers but not all of them get the according to Frederickson (2012).state and training, there are still many areas that have local governments have diminished the not been trained because of lack budgets. capacity for contract management and With the lack of available budget of course oversight and are gradually being hollowed programs offered is not as much as offered out. Hollow state is a metaphor for by company. Government is not able to government that contracts public service provide a loan that is the fundamental provision out to networks of (mostly) problem faced by small enterprises, while nonprofit organizations and reduces its role large companies are able to provide them. as a direct supplier of public goods. This is one factor that makes the Based on interviews with some government‘s role less visible in the informants, both from KBL department, development of small enterprises that exist partners and the Department of Coope- in Gresik regency. ratives, Small and Medium Enterprises, From these explanations, can be Trade and Industry in Gresik acknowledge seen the governance practices between the role of local government in partnership company, partners and government. In the program is still low. Representatives from concept of governance, the three actors are the local government only invited to special in the same line. But unfortunately, based on events held by the company. This is because observations, the role of companies and the KBL department does not give a huge partners is more dominant, while the role of portion for the Department of Cooperatives, local government is less significant. This is Small and Medium Enterprises, Trade and because the portion of the government's Industry Gresik to participate in implement- involvement was little under the reason of ting the partnership program. Based on time and cost efficiency predicted by the reason where the partnership program company. From the statement of the KBL implemented independently it will be more staff stated that there will be possible time effective than any interference from the and cost and inefficiency which would government. In addition, KBL department hamper the company's program if it involves also do not want to give the responsibility to local government because convoluted another party because the most responsible bureaucracy and less performance. In party for implementing the partnership addition, there is no obligation that requires program is KBL department. the company to collaborate with the local Based on findings in the field, until government in implementing the partnership now government of Gresik only acts as a program. While not giving huge portion to bridge between small enterprises with SOEs government involvement in the planning, and private enterprises in Gresik. In implementation and evaluation of the addition, existing small enterprises in Gresik partnership program, KBL department regency is also less dependent on the always tried to establish good relations with government in developing their business, local government. It is a form of Good because the Department of Cooperatives, Corporate Governance (GCG) which is Small and Medium Enterprises, Trade and implemented by PKG. Davies (2006) stated Industry Gresik regency is rarely conducting GCG is a system by which companies are small enterprises development program for directed and controlled. Broad of directors individual. Staff from cooperative are responsible for governance of their department has their own reason in companies. Applying GCG means responding this condition. So far, the companies must maintain good relations department provides training to cluster with all involved stakeholders in company‘s system, that is, coaching is not done for activities. PKG as State Owned Enterprises individuals who have special potential. For have an obligation to implement corporate the example they coach weaving centers in governance principles such as transparency,
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equity, accountability, responsebility, of the regulations that require each company independence and fairness, then compiled to contribute to the surrounding environ- CCG (Code of Corporate Governance) ment, especially Regulation of Minister of implementation guidelines that periodically State Owned Company No. PER- performed refinement in order to improve 05/MBU/2007 about the Partnership and adjust to existing regulations so it will Program of State Owned Companies with be a more constructive and flexible for the Small Scale Business Units and the companies. GCG can be seen in company's Environmental Development Program. By relationship with outsiders, especially implementing corporate social respon- partners and local government in Gresik sibility, PKG trying to make good corporate regency. governance. If KBL department is able to The company's relationship with implement partnership program properly and partners who realized through a partnership optimally, the implemented programs can program conducted by KBL departments is have positive impact for the community, one manifestation of the social responsibility especially the partners, they can develop from company to the society. Company is their business. If small enterprises in Gresik responsible to hold the society growing up are able to develop independently, it will with the company, including economic reduce the government's burden in empowerment in the partnership program. overcoming the existing small enterprises Corporate social responsibility based on problem in Gresik. The success of the Aras and Crowther (2008) refers to partnership program also will bring good relationship between governments of image for the company which is very useful countries, global corporations, and for the survival of company due to the individual. More locally, the definition is company's image is closely associated with concern with the relationship between a public trust. The trust from the public will corporation and the local society in which it help companies run their activity as resides or operates. Another definition is expected. concerned with the relationship between a corporation and its stakeholder. Conclusion Basically CSR is a form of social There is good synergy between responsibility as a manifestation of good private with society, in this case PKG and corporate governance. On this side, CSR is partners. But synergy with government, seen as application of the corporate especially Department of Cooperatives, existence as a social element that is part of Small and Medium Enterprises, Trade and business ethics. In this case, the Industry in Gresik regency is still not implementation of CSR refers to broader maximal yet. Based on governance and global concept. According to Carroll, perspective, there is synergy between there are four categories of CSR, legal, government, private and society in economic, ethical and philanthropic. At the overcoming problem. This synergy will be level of legal responsibility, CSR applied happen if there is trust and good solely to comply with regulations, then, on communication from involved stakeholders. the economic level, CSR is applied in order Usually, there is good relation between to obtain the benefit of the company because company and their partners because in this they believe that CSR can improve the case, company as the executor of partnership competitiveness of company. While at the program and the partners as object, this level of ethical and philanthropic, corporate close relation create good relation in both conduct CSR based on awareness for the parties. Unfortunately, partnership program creation of harmony between the company still doesn‘t involve government because and values also unwritten law in the society there is opinion if government performance to create a mutually beneficial relationship. is low with complicated bureaucracy then it Based on the results of interviews with KBL might hamper the company‘s performance in staff, CSR which has been conducted by running their program. The government role PKG is classified as legal category because right now seems as voluntary instrument,
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means the government‘s role less significant The recommendation is local because there is belief if private and society government should strengthen their role in are able to solve their own problem without developing small enterprises, does not mean government assistance or involvement. local government intervene the program From the finding, researcher also conducted by company. Local government criticize governance concept stated by should play their role well as facilitator, as a Endarti (2005) related with the equality, bridge between private and small cohesiveness and balance of role also enterprises. Unfortunately, local government control among three actors (government, does not play this role well so it seems they society, and private). This concept is ideal do not have responsibility to small condition and it is very difficult to be enterprises in their area. Facilitator role implemented. In practice, there is no should be done and be strengthened so the equality, cohesiveness and balance of role development of small enterprises can be from those three actors because each of them maximized. has different characteristic. There could be the condition where one of the actors is more dominant than other and vice versa.
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