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COLLABORATIVE GOVERNANCE TO ALLEVIATE POVERTY IN KULON PROGO

Felix Aglen Ndaru1 and Teguh Kurniawan2

1. Faculty of Administration, University of 2. Faculty of Administration, University of Indonesia

[email protected], and [email protected]

ABSTRAK

Abstract. Poverty is a common problem that faced by all countries, including Indonesia. Indonesian Government still continues to decrease poverty rate. At the same time, Governments−both at the Central and Local levels−have limited funds to launch poverty alleviation programs, because they allocate most of their budget to pay personnel salary. To help reduce poverty, Government needs to collaborate with external actors, especially private sector. This study uses post-positivist approach to describe collaborative governance to alleviate poverty in . Kulon Progo Regency becomes the poorest and has the highest personnel salary ratio in Special Region of Province. To help overcome poverty, Kulon Progo Regency Government involves the private sector through One Village One Sister Company Program. The result shows that collaborative governance to alleviate poverty in Kulon Progo Regency has three dimensions, those are: discretions, Government efforts to deal with information shortfall, and Government risk of involving private sector in public goal achievement. Kulon Progo Regency Government should establish a Corporate Social Responsibility (CSR) Forum which include all actors to ease communication and coordination.

Keywords: Collaborative Governance, Poverty Alleviation, Private Sector.

ABSTRACT

Abstrak. Kemiskinan merupakan masalah yang dihadapi setiap negara, termasuk Indonesia. Pemerintah Indonesia terus berupaya untuk menanggulangi kemiskinan. Di saat yang sama, Pemerintah di tingkat Pusat dan Daerah memiliki keterbatasan dana untuk mendanai program penanggulangan kemiskinan karena besarnya alokasi belanja pegawai. Pemerintah perlu berkolaborasi dengan aktor eksternal, terutama sektor swasta untuk membantu menanggulangi kemiskinan. Penelitian ini menggunakan pendekatan post-positivist untuk mendeskripsikan collaboratve governance untuk penanggulangan kemiskinan di Kabupaten Kulon Progo. Kabupaten Kulon Progo merupakan daerah termiskin dan memiliki rasio belanja pegawai tertinggi di Provinsi Daerah Istimewa Yogyakarta. Untuk membantu menanggulangi kemiskinan, Pemerintah Kabupaten Kulon Progo melibatkan sektor swasta melalui program One Village One Sister Company. Hasil penelitian menunjukkan bahwa collaborative governance untuk penanggulangan kemiskinan di Kabupaten Kulon Progo memiliki tiga dimensi, yaitu: diskresi, upaya Pemerintah mengatasi keterbatasan informasi, dan resiko Pemerintah melibatkan sektor swasta dalam pencapaian tujuan publik. Pemerintah Kabupaten Kulon Progo perlu membentuk Forum Corporate Social Responsibility (CSR) yang beranggotakan setiap aktor untuk memudahkan komunikasi dan koordinasi.

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Kata Kunci: Collaborative Governance, Penanggulangan Kemiskinan, Sektor Swasta. INTRODUCTION Poverty is a development problem which occurs in all countries. Poverty could depicts public welfare and indicates failure of development (Sitorus, 2008: 1). The global effort to fight poverty has reach its culmination when 189 state leaders signed Millenium Development Goals (MDGs) agreement in 2000. Poverty alleviation becomes the first goal of MDGs (Whitman, 2008: 27). Indonesia is one of the countries that signed MDGs agreement. The aggrement signed by President Abdurrahman Wahid to overcome poverty escalation caused by the 1997/1998 economic crisis. Entering the Reform era, Indonesia has succeed to reduce poverty rate. Poverty rate has fell from 23,43 percent in 1999 to 10,96 percent in 2014. Despite poverty rate has fell, there are still three problems about poverty in Indonesia, those are: (1) deceleration of poverty rate reduction, (2) increased inequality, and (3) high proportion of people with economic and social vulnerability (The SMERU Research Institute, 2015: ii). Indonesia still has problems about poverty, so that the Government always make poverty as a priority agenda. In Kabinet Kerja Regime period, poverty alleviation becomes National Priority Program of Joko Widodo-Jusuf Kalla Administration 2015-2019 (National Development Planning Board, 2015). That effort indicates Government commitment to tackle poverty in Indonesia. At the same time, Government has limited funds to launch poverty alleviation programs. Government has limited fiscal space in 2015 State Budget which caused by high personnel expenditure (Kompas Daily, 2014). Personnel expenditure consumes 41 percent of Government expenditure. The narrowness of fiscal space reduces fund allocation for poverty alleviation programs. To overcome budget constraint, Government tries to involve private sector in poverty alleviation effort. That initiative has been declared by Puan Maharani as Coordinating Minister for Human Development and Culture. Puan Maharani said that CSR funds from private companies could help Goverment effort to alleviate poverty (Coordinating Ministry for Human Development and Culture, 2015). Government initiative to involve private sector in poverty alleviation has become a trend in some countries. The initiative was pioneered by Department for International Development (DFID) in 1997 (Jenkins, 2005: 530). DFID is a Ministry in England that has

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 3 task to alleviate poverty. The method utilized by DFID to alleviate poverty was involving the private sector through CSR program. Entering governance paradigm era, government could not become a single actor in development affairs. Government needs to involve external actors to launch development programs. The concept is known as collaborative governance. Collaborative governance is a condition when government tries to achieve their public goals by collaborating with private companies, social groups, or individuals (Donahue and Zeckhauser, 2011: x). Collaborative governance becomes more significant to overcome budget constraint experienced by Indonesian Government. Similar to Government at the Central level, Local Governments are also experiencing fund limitation to alleviate poverty. Local Governments have limited fiscal space caused by high personnel expenditure. There is a data about top ten Provinces in Indonesia with the highest personnel expenditure ratios:

52.7 52.7 52.9 53.8 54.3 54.4 54.6 54.6 58.9 [VALUE]

Lampung NTB Bali Jateng DIY Sumbar Sulsel Gorontalo Sulut Sulteng

Chart 1. Personnel Expenditure Ratios toward Total Province and Regency/City Expenditure Source: Ministry of Finance (2011: 28). Special Region of Yogyakarta (Daerah Istimewa Yogyakarta/DIY) Province has the highest personnel expenditure ratio in 2011. Personnel expenditure ratio in DIY Province had reached 61 percent. That high personnel expenditure ratio was also contributed by five Regions in DIY Province, those are: Yogyakarta City, Sleman Regency, , , and Kulon Progo Regency. Among five Regions in DIY Province, Kulon Progo Regency becomes the Region with the highest personnel expenditure ratio. On average, from 2011-2014, Kulon Progo Regency spent 67,7 percent of their budget for personnel expenditure. At the same time, Kulon Progo Regency becomes the poorest Region in DIY Province, as the data below: Table 1. Poverty Rate of Regency/City in DIY Province from 2008-2013 Regency/City Poverty Rate (percent) 2008 2009 2010 2011 2012 2013 Yogyakarta 10,81 10,05 9,75 9,62 9,38 8,82 Sleman 12,34 11,45 10,7 10,61 10,44 13,89 Bantul 18,54 17,64 16,09 17,28 16,97 16,48

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Gunung Kidul 25,96 24,44 22,05 23,03 22,72 21,7 Kulon Progo 26,85 24,65 23,15 23,62 23,32 22,27 Source: The Author’s Processed Data (2015). Recognizing the budget constraint, Kulon Progo Regency Government tries to collaborate with the external actors to alleviate poverty. That collaboration is embodied in a program, named One Village One Sister Company (OVOSC) program. In OVOSC program, Kulon Progo Regency Government invites the private sector to become Foster Father for poor Villages through CSR program (Kulon Progo Regency Government, 2012). OVOSC program is a poverty alleviation program which focused to empower Villages. In this program, Kulon Progo Regency Government and the private sector collaborate together to give economic parenting and enhancement of life quality to the Village inhabitants. OVOSC program aligns with Central Goverment vision and mission which attempts to develop Indonesia from the Villages. OVOSC program is also succeed in enforcing business ethics in DIY Province. It can be seen from Private Ombudsman Institute (Lembaga Ombudsman Swasta/LOS) Award 2013 given by DIY Province Government. OVOSC program has succeed in connecting the company with the poor people, so that business ethics can be enforced (Kulon Progo Regency Government, 2013). To describe collaborative governance to alleviate poverty in Kulon Progo Regency, the author uses collaborative governance theory. There are three dimensions of collaborative governance. The first dimension is discretion (Donahue and Zeckhauser, 2011: 46-60). Collaborative governance requires discretion distribution among all actors. There are three kinds of discretion: production discretion, payoff discretion, preference discretion. In production discretion, external actors have freedom to produce goods/services they want. In payoff discretion, all actors have rights to gain benefit from collaborative relationship. In preference discretion, the actors are free to have different preferences. Usually, it happens when there are for-profit actors and nonprofit actors who united in one collaborative forum. The second dimension is Government efforts to deal with information shortfall (Donahue and Zeckhauser, 2011: 212-222). Government include external actors, so that Government has lack of information about external actor activities. To overcome that problem, Government could adopt two ways, those are: monitoring and motivate. Monitoring could be done in four methods: (1) in-house monitoring, in which all actors submit accountability reports, (2) beyond-the-bureau monitoring, in which overarching departments use central monitoring units responsible for all the bureaus within the department, (3) broad- spectrum monitoring, in which broad-spectrum monitoring operations oversee the agents of

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 5 the entire federal government or a comparably broad swath of a state or local government, and (4) third-party monitoring, in which outside contractors are hired to do the monitoring. Monitoring activity also should complemented with motivation. government could give incentive to the actors who work properly, or impose sanction to the actors who neglect the rules. The third dimension is government risk of involving private sector in public goal achievement (Donahue and Zeckhauser, 2006: 507-508). There are four government risks in collaborative governance. The first risk is dilluted control, because government is no longer monopolizes all administration affairs. The second risk is higher spending, because of transactional cost, diminished government span of control, or because external actors seized government resources. The third risk is reputational vulnerability, if external actors make some mistakes. The fourth risk is diminished capacity, because government depends heavily upon external actors to do certain activities.

RESEARCH METHODS This research uses post-positivist approach. The author compares collaborative governance theory with empirical evidence in Kulon Progo Regency. The research was conducted from November 2014 to July 2015 in Kulon Progo Regency. The data analysis technique used is the ideal type (Neuman, 2003: 450), in which the author compares empirical evidence with the theory as an ideal condition. Analysis is based on primary data and secondary data. Primary data were collected through in-depth interviews with Hasto Wardoyo (Kulon Progo Regent), Sutedjo (Kulon Progo Deputy Regent), Agus Langgeng Basuki (Head of Local Development Planning Board of Kulon Progo Regency/Bappeda), Triyanto Raharjo (Head of People’s Welfare Division of Kulon Progo Regency), Himawan Fuady (Operational Coordinator for Local Advocation of National Team for the Acceleration of Poverty Reduction /TNP2K), and Yaury Tetanel (policy analyst from Nonprofit Organization (NPO) of Strategic Alliance for Poverty Alleviation/SAPA). The secondary data were obtained by collecting the literatures about OVOSC program and poverty condition in Kulon Progo Regency.

RESULT AND DISCUSSION Collaboration between Kulon Progo Regency Government and the private sector has been initiated since 2011. In that year, Kulon Progo Regency Government did a poverty sensus in order to make a Poverty Album. Poverty Album is a database which records in detail about

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 6 poor households and diagnosis about the causes of poverty. Poverty Album showed that Kulon Progo Regency had relatively high poverty rate. There were still 34.089 poor households (24,64 percent) and 111.756 poor people (23,71 percent) in 2011. Poverty Album was also indicated that there were some Villages where poverty rates remains high. Poverty Album then dissected and translated into strategic steps of poverty alleviation. Kulon Progo Regency Government were formulating strategic steps to alleviate poverty based on the results of Poverty Album. Recognizing that there were still some Villages with high poverty rate, Kulon Progo Regency Government focuses to alleviate poverty in the smaller scope, which is Village. At the same time, Kulon Progo Regency has limited funds to launch poverty alleviation programs. Sutedjo admits that Kulon Progo Regency Budget is not capable to finance poverty alleviation programs. Compared to the other Regions in DIY Province, Kulon Progo Regency Budget becomes the smallest. From revenue aspect, Kulon Progo Regency Government is still not able to optimize their Local Own-source Revenue (Pendapatan Asli Daerah/PAD). Kulon Progo Regency is also rely heavily from Fiscal Balance Transfer (Dana Perimbangan) as the main source of revenue. Here is a table about PAD ratio and Dana Perimbangan ratio of Kulon Progo Regency in recent years: Table 1. PAD Ratio and PD Ratio of Kulon Progo Regency in 2011-2014 Year PAD Ratio (%) Dana Perimbangan Ratio (%) 2011 7,6 78,8 2012 6,8 75,5 2013 7 73,5 2014 9 68,5 Source: The Author’s Processed Data (2015). From 2011 to 2014, PAD ratio of Kulon Progo Regency always ranked under 10 percent. According to Ministry of Internal Affairs and criteria (1991), PAD ratio of Kulon Progo Regency could be categorized as the lowest category, that is Very Less (Prabowo, 2013: 31). Moreover, transfer from Central Government−that is Dana Perimbangan−becomes a dominant source of Kulon Progo Regency revenue. Recognizing the budget constraint, Kulon Progo Regency Government looked for alternatif source of financing. Hasto Wardoyo as the Regent initiated private sector involvement to help alleviate poverty. There are the potencies of CSR funds from private companies that could help Kulon Progo Regency Government effort in poverty alleviation. Then, Kulon Progo Regency Government formulated a collaborative program with private companies named OVOSC program. OVOSC is a regional program which focused to

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 7 alleviate poverty in Village area. In this program, private companies are expected to foster poor villages in Kulon Progo to be free from poverty. Collaborative governance through OVOSC program is also an embodiment of local wisdom adhered by Kulon Progo Regency people. Hasto Wardoyo said that OVOSC program is derived from “Gentong Rembes” (Mutual Assistance Movement of People Unite/Gerakan Gotong-royong Rakyat Bersatu) philosophy. In that philosophy, all components−those are Government, private companies, and society−cooperate together in development affairs. OVOSC program has been launched on November 7, 2012. In the beginning, OVOSC program only includes private companies. In the implementation, there are also university and individual who join the program. Until July 15, 2015, there are fourteen parties−consisted of twelve private companies, one university, and one individual−who join the program, as the data below: Table 3. External Actors who Join OVOSC Program No Name Origin No Name Origin 1. Jogja Magasa Iron, Kulon Progo 8. Petra Konsulindo DKI Jakarta Ltd Regency Utama, Ltd Province 2. Karya Hidup Kulon Progo 9. Sriboga Flour Mills, Semarang Sentosa, CV Regency Ltd City 3. K-24 Indonesia, Kulon Progo 10. SGM Sari Husada, Ltd Yogyakarta Ltd Regency City 4. Sinar Waluyo, Ltd Kulon Progo 11. Jaya Makmur Prayoga Kulon Progo Regency Sentausa, Ltd Regency 5. Natasha Skin Care Sleman 12. Surya Watu Kencana, Kulon Progo Regency Ltd Regency 6. Grafitecindo Bekasi 13. Gadjah Mada Sleman Ciptaprima, Ltd Regency University Regency 7. Sansico Natura DKI Jakarta 14. Mr. Bambang Sleman Resources, Ltd Province Sukmonohadi Regency Source: The Author’s Processed Data (2015). External actors in OVOSC program is not only from Kulon Progo Regency, but also from other Regions. To recruit those actors, Kulon Progo Regency Government promotes OVOSC program through mass medias and communicates directly with the actors. Kulon Progo Regency Government informed their poverty problem and asked the actors to help alleviate poverty. In addition, Kulon Progo Regency also has Local Regulation Number 22 Year 2012 on Corporate Social Responsibility (Local Regulation on CSR) and Kulon Progo Regent Regulation Number 30 Year 2013 on Guideline of Kulon Progo Regency Local Regulation Number 22 Year 2012 on Corporate Social Responsibility (Regent Regulation on CSR) as legal foundations of CSR implementation for companies in Kulon Progo Regency.

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In internal scope of Kulon Progo Regency Government, there are some Agencies who handle OVOSC program, those are: Bappeda; Agency of Social, Labor, and Transmigration; Agency of Cooperation and Micro, Small, and Medium Enterprise; Board of Society Empowerment, Village Administration, Women, and Family Planning; along Sub-district Administration and Village Administration where Foster Villages are located. Bappeda is a conseptual actor and becomes the main Agency in OVOSC program. The other Agencies are technical Agencies who accompany the external actors in Foster Villages. Collaborative governance between Kulon Progo Regency Government and the external actors could be formal (using Memorandum of Understanding/MoU) and/or informal (not using MoU). MoU sets the rules of collaborative relationship. There are four external actors who signed MoU with Kulon Progo Regency Government, they are: Sriboga Flour Mills, Ltd, SGM Sari Husada, Ltd, Jaya Makmur Prayoga Sentausa, Ltd, and Surya Watu Kencana, Ltd For external actors who not using MoU, collaborative relationship is regulated by unwritten agreement and/or follows rules in Local Regulation/Regent Regulation on CSR. In OVOSC program, external actors are expected to give assistance to Poor Villages with a minimum duration of three years. The duration could be longer or less than three years, depends on external actors willingness. Through this program, Kulon Progo Regency Government could optimize CSR funds of at least 100 million rupiah/year from one company. Assistance is done by providing economic parenting and enhancement of life quality programs, as the data below: Table 4. Type of Activities in OVOSC Program No Activities Details 1. Family-Based Aid and Decrepit Aid, Disability Aid, Old Age Assurance, Social Protection Educational Assurance, Health Assurance. 2. Enhancement of Basic Village Roads; House Surgery; Freshwater; Economic, Infrastructure Educational, and Health Facility. 3. Society Empowerment Skill Training, Group Management, Group Aid, Society Institutional Strengthening. 4. Economic Empowerment Credit Access Opening; Business Management: management, production, packaging, marketing; Partnership; and Job Creation. Source: The Author’s Processed Data (2015). The enhancement of life quality program is consisted of Family-Based Aid and Social Protection, Enhancement of Basic Infrastructure, and Society Empowerment. Those three programs are addressed to give basic services to enhance life quality and to improve skills. Economic empowerment program is focused to give business access for the community, such

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 9 as capital and business management training. Those programs are suitable with causative factor of poverty in Kulon Progo Regency. Poverty in Kulon Progo Regency, among others, is caused by lack of entrepreneurial culture, limited job opportunity caused by low level of education and skills, and limited access for the people to get capital aid (Special Region of Yogyakarta Governor Regulation Number 56 Year 2011 on Local Action Plan of the Millenium Development Goals Achievement Acceleration). In this context, poverty alleviation effort in OVOSC program has aligned with causative factor of poverty in Kulon Progo Regency. Kulon Progo Regency Government gives discretions to the external actors in OVOSC program. The discretion facilitates the external actrs to launch poverty alleviation programs in Foster Villages. There are five discretion owned by the external ators. The first is a discretion to choose Foster Village. Refers to collaborative governance theory, this discretion is categorized as production discretion. Agus Langggeng Basuki said that the decision to choose Foster Village is in the hands of the external actors. The external actors could also choose more than one Foster Village, based on their willingnesses. Before the external actors choose the Foster Village, Kulon Progo Regency Goverment facilitates them with giving recommendation of some Villages. The external actors could conduct a survey before they choose Foster Village. There are three schemes about Foster Village election, those are: Scheme 1 • External actors choose the poorest Village in Kulon Progo Regency Scheme • External actors choose the Village which has the same characteristic with 2 the external actors Scheme 3 • External actors choose the Village where their business are located

Figure 1. Schemes of Foster Village Election in OVOSC Program Source: The Author’s Processed Data (2015). In the first scheme, external actors choose the poorest Village based on the recommendation from Kulon Progo Regency Government. Kulon Progo Regency Government prioritizes the poorest Villages to get assistance from the external actors. For the example, Sriboga Flour Mills, Ltd has chosen Sidorejo Village as the Foster Village based on Kulon Progo Regency Government recommendation. Sidorejo Village was the poorest Village in Lendah Sub-district which had poverty rate of 27.09 persen in 2013. In the second scheme, external actors choose Foster Village which has the same characteristic with their business fields. Kulon Progo Regency Government does not recommend the poorest Villages, but poor Villages which has the same characteristic with

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 10 external actor’s business field. For the example, K-24 Indonesia, Ltd has chosen Sukoreno Village as a Foster Village. K-24 Indonesia, Ltd and Sukoreno Village have a same characteristic. K-24 Indonesia, Ltd actives in pharmacy field and Sukoreno Village has a herbal farming potency. Eventually, K-24 Indonesia, Ltd chose Sukoreno Village to be created as a Herbal Tourist Village. In the third scheme, external actors choose the Village where their businesses are located. This scheme is used by local companies, such as: Jogja Magasa Iron, Ltd, Karya Hidup Sentosa, CV, Sinar Waluyo, Ltd, Jaya Makmur Prayoga Sentausa, Ltd, and Watu Surya Kencana, Ltd. According to Agus Langgeng Basuki, this scheme is suitable with Javanese philosophy, that is: “luwih becik pager mangkok tinimbang pager tembok” (bowl fence is better than ring fence). In accordance with the philosophy, companies should do good to the community around, in order to increase community ownership upon the companies. The second disretion owned by the external actors is a discretion to choose program in the Foster Village. This discretion is also categorized as production discretion. The external actors are expected to give empowerment programs, just not charity programs. Empowerment programs could be useful to make people independent in raising their revenues. Before choosing the program in Foster Village, external actor is expected to conduct a survey, in order to find causative factor of poverty and economic potency of the Village. Survey could be conducted through Focus Group Discussion (FGD) between the external actor with Kulon Progo Regency Government, Sub-district Administration, Village Administration, public figure, poor householder, NPO, and another parties. The survey is conducted in order to conform the program with the condition of the Foster Village. In addition, OVOSC program is a poverty alleviation program that is participatory, in which the people can participate directly in poverty alleviation effort. There are four schemes of program election in Foster Village, those are:

Scheme 1 • External actors choose program which suitable with the condition of the Foster Village

Scheme 2 • External actors choose program which suitable with their business field

Scheme 3 • External actors continue their CSR program which they have done in the other Regions

Scheme 4 • External actors choose program based on the Activities in OVOSC program concept

Figure 2. Schemes of Program Election in Foster Village

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Source: The Author’s Processed Data (2015). There are four schemes of program election in Foster Village. In the first scheme, external actors choose the program which is suitable with the condition of the Foster Village. Empowerment program is adapted with causative factor of poverty and/or economic potency of Foster Village. As an example, K-24 Indonesia, Ltd has chose establishment of Herbal Tourist Village in Sukoreno Village. That program is suitable with herbal farming potency owned by Sukoreno Village. In the second scheme, external actors choose program which aligned with their business fields. Through this scheme, Kulon Progo Regency Government utilizes the specialization owned by the external actors to improve Village economy. For the example, Sriboga Flour Mills, Ltd is a company engaged in flour production. In OVOSC program, Sriboga Flour Mills, Ltd has chose program that suitable with their business field, that is flour-based baking training in Sidorejo Village. In the third scheme, external actors are allowed to continue their CSR programs which they have done in the other Regions. This scheme is used by SGM Sari Husada, Ltd. Before joining OVOSC program, SGM Sari Husada, Ltd ever did CSR program in the form of maternal and infant nutrition improvement in , Central Province. SGM Sari Husada, Ltd then continues that program in their Foster Village, that is Kembang Village. In the fourth scheme, external actor chooses CSR program based on the Activities in OVOSC program concept (see table 4.). This scheme is mainly used by the company that do not have an image about CSR activities. For the example, this scheme is used by Natasha Skin Care. Natasha Skin Care had not an image about the program which will be launched in their Foster Village. After did a consultation with Kulon Progo Regency Government, Natasha Skin Care decided to choose Enhancement of Basic Infrastructure program in the form of House Surgery. The external actors are also given the time latitude to launch their programs. The external actors are free to implement the programs at any time based on their capacities. Kulon Progo Regency Government does not provide time certainty to the external actors to implement their programs. The third discretion owned by the external actors is a discretion to obtain informations from Kulon Progo Regency Government. The informations that can be given to the external actors are all informations about poverty condition, Village economic potency, or the other informations about OVOSC program. Those informations could be useful for the external

Collaborative governance..., Felix Aglen Ndaru, FIA UI, 2015 12 actors to take decisions. There are also some secret informations owned by Kulon Progo Regency Government which need to be given to the external actors. Those informations detailing the personal biodatas of poor households and diagnosis about the causes of their poverty. Kulon Progo Regency Government obliges the external actor to make a waiver in order to avoid the external actors abusing those informations. The fourth discretion owned by the external actors is a discretion to conduct cooperations with the third party. This discretion is mainly used by the company that do not has CSR team or the company that needs third party support to launch their programs. According to Yaury Tetanel, this discretion is a good thing in CSR activity. Companies need to expand their CSR activity by cooperating with the third party, such as social groups. Cooperation with the third party is needed to identify the community needs, so that CSR program could suitable with the community condition. There are two companies that using this discretion, those are: Sriboga Flour Mills, Ltd and SGM Sari Husada, Ltd. Sriboga Flour Mills, Ltd cooperates with a university−that is Gadjah Mada University−to help deliver flour- based baking training program in Sidorejo Village. SGM Sari Husada, Ltd cooperates with NPO−that is Yayasan Ikrar−to help provide entrepreneurship training in Kembang Village. The fifth discretion is profit discretion. This discretion is categorized as preference discretion. Basically, OVOSC program is nonprofit, but the companies are allowed to gain profit. According to Taylor (2013: 43), there are two values about CSR. The first, companies do CSR as a moral awareness to provide community needs. The second, companies do CSR to enhance their profits in the future. The statement indicates that occasionally companies do CSR not purely to fulfill community needs, but to enhance profits. Sutedjo also said that some companies in OVOSC program do not give CSR for free, but they also expect certain rewards. In OVOSC program, the companies are allowed to promote their products in order to get profits. Triyanto Raharjo said that private companies still need product marketing in order to keep their business running. In promoting their products, the private companies have to obey two rules, those are: (1) not forcing people to buy their products and (2) the products they offered are not products that are prohibited by law. As a result of involving external actors, Kulon Progo Regency Government has information shortfall about the external actor activities. To deal with the information shortfall, Kulon Progo Regency Government imposes monitoring. There are two methods of monitoring utilized by Kulon Progo Regency Government, those are: in-house monitoring and beyond-the-bureau monitoring. In the method of in-house monitoring, Kulon Progo

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Regency Government instructs the external actors to submit activity reports. The activity report submitted every six months. Kulon Progo Regency Government refers to a format from Global Reporting Initiatives as a standard in making the activity report. In the method of beyond-the-bureau monitoring, Kulon Progo Regency Government utilizes their internal Agency−those are technical Agencies−to inspect the external actors. Technical Agencies conduct monitoring with two ways, those are: (1) conducting evaluation meeting with the external actors every six months or any time as needed and (2) accompanying the external actors directly when they doing activities in Foster Villages. Kulon Progo Regency Government is also motivating the external actors who have been done their tasks properly. There are three incentives given by Kulon Progo Regency Government to the external actors. The first incentive is giving award sertificates. Award sertificates are given once in a year. Kulon Progo Regency Government is also building the inscription for all external actors in their Foster Villages as a form of appreciation. The second incentive is publishing the contribution of external actors through mass medias. That publication could raise the external actor images in society, so that their business continuities could be maintained. The third incentive is giving business ease facilities. This incentive is mainly granted to the companies operating in Kulon Progo Regency. There are three business ease facilities granted, those are: (1) arranging business licences faster, (2) ease of land acquisition, and (3), handling the problems if the companies have problems in their business locations. The involvement of external actors has helped Kulon Progo Regency Government's efforts in poverty alleviation. On the other hand, there is risk faced by Kulon Progo Regency Government when involving the external actors, that is higher spending. In OVOSC program, the external actors have relatively large discretions, so that Kulon Progo Regency Government control are reduced. The external actors are prone to abuse profit discretion, so that they exploit OVOSC program as a medium of product marketing and business continuity. Based on field findings, not all companies that join OVOSC program have voluntary sense to alleviate poverty. One of the companies professed that they are joining OVOSC program not voluntarily because of the mandate from Local Regulation on CSR. That company admits that they join OVOSC program in order to get business ease facility from Kulon Progo Regency Government. There are also some companies that displaying their logos when doing assistance program in Foster Villages. In addition, Hasto Wardoyo admits that there are some companies who asked dispensations when their business licenses run out.

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Private companies in Indonesia often use CSR programs as mediums of marketing their products and business continuity, not to empower society. That statement was revealed by Himawan Fuady who expressed that some companies even prioritize product marketing when they doing CSR. That is usually done by the companies that who do not understand the essence of CSR. In contrast to the companies that already understand the essence of CSR, they do CSR to build positive images and to empower community.

CONCLUSION Kulon Progo Regency Government conducts collaborative governance to overcome their budget constraint and as an embodiment of local wisdom. Collaborative governance is reflected through OVOSC program, in which poverty alleviation effort is focused in Village scope. OVOSC program guarantees the identification of poverty causative factor and public participation in poverty alleviation effort. Collaborative governance to alleviate poverty in Kulon Progo Regency has three dimensions. The first dimension is discretion. There are some discretions owned by the external actors, those are: production discretion, preference discretion, discretion to obtain informations, and discretion to conduct a cooperation with third parties. The second dimension is Government efforts to deal with information shortfall. Kulon Progo Regency Government imposes monitoring to the external actors with two methods, those are: in-house monitoring and beyond-the-bureau monitoring. Monitoring is complemented with motivation by giving three incentives, those are: giving award certificates, publishing the contribution of external actors through mass medias, and giving business ease facilities. The third dimension is Government risk of involving private sector in public goal achievement, that is higher spending.

RECOMMENDATION The collaborative governance conducted by Kulon Progo Regency Government still has weakness, that is lack of common vision from each actors to alleviate poverty voluntarily. The external actors are prone to exploit OVOSC program as a medium of product marketing and business continuity. To overcome this problem, Kulon Progo Regency Government should establish a CSR Forum which include all actors in OVOSC program. CSR Forum could useful to facilitate communication and coordination, so that the vision of all actors could be aligned. CSR Forum is also useful to ensure the sustainability of collaborative governance in the future.

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