ESG REPORTING QUALITY AND PERFORMANCE: A CASE STUDY OF PT

ANEKA TAMBANG TBK

 CHAPTER I
INTRODUCTION
1.1. Background of The Study
Indonesia's abundant natural resources have succeeded attract companies to engage in
the mining sector. Production of minerals such as coal, mining, copper, tin to bauxite which
are still active in making Indonesia a major player in international mining industry. Interest in
mining-type minerals even more increasing with the discourse that will use Mining is the
dominant component in the production of electric vehicle batteries. As the largest mining
producing country in the world, this momentum is real can be used as a way for Indonesia to
increase income and foreign exchange country. Of course, the company's high interest in
mining cannot be separated of the myriad benefits possessed by mining-type minerals.
In Indonesia, mining is often used by various industries as a material stainless steel
base, steel alloy, monel alloy, stainless steel coating to the catalyst industry Apart from that,
the increase in interest in mining is also caused by the emergence of discourse on the
production of vehicle batteries electricity which makes mining as the main component.
Business opportunities mining which is quite promising is of course the attraction of mining
for companies seeking profits sourced from the mining business. The legality of mining
mining activities cannot be separated from this construction law that allows companies to
perform mining activities. As stated in Article 36 Paragraph (1) Letter B Law Number 3 of
2020 Juncto Article 76 Paragraph (1) Letter B Law Number 4 of 2009 concerning Mining
Minerals and Coal.
A quo provisions stipulate that the authorities to carry out construction, mining,
management, and refining, as well as the transportation and sale of mining products, namely
companies that have Mining Business Permits (IUP) or Permits Special Mining Business
(IUPK) production operations. Other than that based on Article 96 Letter B Juncto Article
123 A Paragraph (1) of Law Number 3 of 2020 concerning Mineral and Coal Mining which
expressively verbally state that the holder of an IUP or an IUPK required to carry out
management and monitoring activities mining environment, which includes reclamation
activities and/or post-mining up to 100% (one hundred percent) before return the Mining
Business Permit Area (WIUP) or Area Owned Special Mining Business Permit (WIUPK).
Construction The law serves as a validation for the company to continue doing business
mining mining in Indonesia while managing environmental quality as well the ecosystem of
the area around the mine so that it can function again accordingly designation.
Contrary to expectations, at the implementation level this practice actually has a bad
impact on Indonesia. On In 2014 – 2019 there were 143 people who were dominated by
children have become victims of ex-mining pits that have not been reclaimed, even in 2019
there were 3,033 ex-mining pits left without rehabilitation. Mining business activities closely
related to the surrounding environmental conditions have had an impact on environmental
damage that causes a decrease in quality environment such as air pollution due to dust and
smoke as well aswater pollution due to mine waste containing substances toxic. Apart from
that, in fact as a whole, there is 55,000 hectares of abandoned former mining land current
reclamation has only reached 1.25% or around 6,500 hectare.
 As a non-renewable natural resource, of course mining has limited availability to be
utilized either for the benefit domestic or overseas, if mining is not used properly then it is
not impossible that domestic mining reserves will run out and will have a major impact on
decreasing the country's foreign exchange sourced from mining significantly. It becomes an
anomaly when the government does not provide deterrent sanctions for holders of mining
business permits or miners without permits in managing mining with all impacts and risks
arising from mining activities. Whereas in fact the law should provide welfare, benefit,
safety, and protection for all nations Indonesian and investors are no exception. Various state
efforts to increase revenue and attract investors through activities mining mining based on
benefits should be reference for the state to provide benefits and welfare for communities
around the mining area and also mining businessmen.
By therefore the state obliges mining companies to carry out mining management
based on environment social governance so that the role of law is able to deliver impactful
mining managementpositive for the environment, community welfare and business
governance. This is also in line with the mandate of Article 28 H Paragraph (1) of the Law
The 1945 Constitution which legally ratio states that everyone has the right live in physical
and spiritual prosperity, have a place to live, and earn good and healthy living environment.
Apart from that management mining-based environment social governance also continues to
encourage the state to increase the country's foreign exchange sourced from the sector
mining, because through the concept of environmental social governance companies will put
forward green investments that ultimately don't not only provide benefits for the company but
the state can also feel the benefits.
The purpose of applying the concept is also in line with those outlined in Article 33
Paragraph (3) of the Constitution 1945 that the natural wealth contained in Indonesia should
be used for the greatest prosperity of the people. The disparity that occurs between the reality
of harmful mining practices society with laws that must provide benefits lead to the
understanding that a law should be able to provide the safety and usefulness that should be
reflected also in the mining mining business. This is also in line with the point Jeremy
Bentham thought that an action can be called good, if it is able to create benefit to the great
majority society. Awareness of world business people in carrying out practices and
implementing production activities to better support environmental sustainability,
environmentally friendly, and a positive impact on social activities in the last two decades
increased. Business activities are not only oriented to large economic benefits alone, but pay
more attention to aspects environmental damage.
One of the causes of environmental damage that occurs because the utilization of
resources that are carried out is not appropriate and does not follow rules or norms that apply
so that it has an impact on social conflict. As happened in several moving companies in the
mining industry commodity Quarry A which is the prima donna or excavation strategic where
there are private companies digging for coal in several areas regions in Indonesia have not
been able to fulfill obligations during pre and post Mine Reclamation, land
acquisition/compensation conflict with the community local community, social conflict due
to air and water pollution during outreach pre-mining and post-mining, a lot of land is not
productive as a result the emergence of a new lake from the results of puddles of rainwater
that is accommodated in the former mining excavation, conflicts of interest of regional
apparatus, social funding issues companies, social conflicts over local employment, tailings
effects (excavation results that have no economic value), and many more concrete examples
production activities and business processes that give rise to social conflict and
environmental pollution.
Several things can be taken from these issues among other things, we as individuals
and social beings are the successors to the human generation more oriented towards long-
term impacts, namely environmental sustainability and nature so as to create a decent life for
successors sustainable human generations. The company's current performance can be
measured from the ability in aspects financial, the size of the company's contribution to
environmental sustainability, and the welfare of the surrounding community. The same is
supported by research that Elkington has done, that the main idea is to measure performance
the company is contained in three criteria, namely the Tripple Bottom Line, namely People,
Planet, and Profit. A company can be said to be successful if it fulfills three elements namely
Economic, Environmental, and Social (Elkington, 1998).
Companies should pay more attention to social and environmental responsibility in
order to obtain legitimacy for social roles and environmental concerns that has been done by
the company, so the company will get the trust and support of the community. The trust and
support obtained from the community can have a good impact on survival company in the
future (Gray et al., 1995), environmental assessmentthe performance of a company will have
a significant positive effect on companies value (Eccles et al. 2012). Environmental issues
have become a sensitive matter in the last two decades, as was the case that occurred during
the divestment process of PT Freeport Indonesia (FI) by PT Indonesia Asahan Aluminum
(Inalum), quoted from cash news in 2017 that the findings of the Supreme Audit Agency
(BPK) there is a loss of IDR 185 trillion caused by PTFI mining activities.
These losses come from damage to the ecosystem so that costs are needed
rehabilitation around the mine environment. Inalum needs a loan from foreign banking
syndication and disbursement of loan funds suspended due waiting for this environmental
issue to be resolved. The Indonesian government also realizes the importance of
responsibility social and environmental aspects that must be carried out by a company
through regulations issued through Law No.40 of 2007, regulation regarding ESG (Corporate
Social Responsibility) in a Limited Liability Company. In the other hand, the Ministry of
Industry and the Ministry of Environment will provide incentives from the allocation of
APBN funds for the 10 best companies that included in the environmental care criteria.
Incentives are given in the form credit assistance for company system repair and machine
revitalization budget to reduce greenhouse gas emissions from the industrial sector.
With awareness of environmental issues and social responsibility by business actors
in carrying out their business practices are also followed the emergence of the same
movement from the investment world, today is often calledas a green investment (Green
Investment). Investors are increasingly interested invest money in companies that fall into
that category environmentally friendly. The important thing to pay attention to is a person's
point of view investors, that are always profit oriented and the time period is correct long.
Profit and the future are uncertain, these two things is the risk faced by investors and the
consequences of that investment Alone. Therefore, investors will issue analytical skills and
tools the best detection they have to be more thorough so that investment risks can be
minimized.
 Companies can be analogous to a car that will be bought, investors will first observe
and check the condition of the car in three dimensions (exterior condition, interior, and
durability). This is done because of this car later that will bring investors to reach their
destination, with different time periods for each investor, depending on the type of person
address that risk. From the story analogy, it can be concluded that investors have the right to
know the actual condition of the company, such as
a) Internal; Conditions of implementation of Corporate Governance (Corporate
Governance), Financial Condition, Corporate Values and Culture (value) and Human
Capital Management
b) External; Market expansion, Responsibility to the environment and social community
(Environmental and Social) Durability; Internal (CG) + External (E,S) =
Sustainability; Continuity life and sustainability of the company in the future.
In recent years, there has been a new trend that investors are investing in measuring
company performance must consider environmental, social, and corporate governance or
what is often called ESG (Environmental, Social, and Governance). Reciprocal relationship
between the company's performance appraisal of ESG perspectives with investment returns
are difficult to analyze holistically theoretical and empirical because the concept of ESG
itself is very multi-dimensional. On the one hand, investors see that the benefits of ESG are
not too important and the costs are issued too high. Most empirical evidence proves that
issuers that are "good" will have a high ESG value, meaning that ESG is comparable directly
with the level of return on investment (Derwall et al., 2005; Statman & Glushkov, 2009) and
company profitability ratios (Hassel 2020).
Market will rate and expect higher to invest because of tata performance good
corporate governance, so that the company's share price also rises (Jackling & Johl 2009).
However, there are companies with low ESG scores, which have an advantage good
investment too, this is related to ethical beliefs. For people ethical investors who subscribe to
ESG values will steer clear of companies that ignore the ESG value (Manescu, 2011). For the
case of Corporate implementation Governance in Indonesia, the above description implies
that reform in the field of Corporate Governance must consider the characteristics specific
from business practices, adopted laws and social conditions existing society. Differences in
cultural (environmental) contexts, legal and statutory aspects, the dominant pattern of
business in a country is the main factor that deserves to be considered in in identifying
systems and models of Corporate Governance in a country, regardless of the perspective used
in understanding corporate practice the Governance.
Thus, the effectiveness of various devices governance itself, especially governance
best practices, is very important depending on the regulatory and enforcement environment in
a country. The characterization of governance in developing markets in Indonesia itself
adheres to this patterns that are generally found in Continental European countries
(Lukviarman 2006). In Indonesia itself, the majority are Muslims with a strong eastern
culture and full of norms of civilized life, of course, has its own character for Corporate
Governance. There are some business industries that will be ignored by investors who are
considered unethical. Ethical Investment is more adherent Governance concept in accordance
with the norms and culture of the surrounding community, social care and environmental
sustainability.
 Aneka Tambang (Persero) Tbk,(Antam) or (ANTM) was established under the name
"Perusahaan Negara (PN) Aneka Tambang" on 05 July 1968 and started commercial
operations on July 5, 1968. Antam's head office is located at the Aneka Tambang Building,
Jl. Lt. Gen. T.B. Simatupang No.1, Lingkar Selatan, Tanjung Barat, Jakarta, Indonesia. PT
Aneka Tambang Tbk (ANTM) stated activities gold mining in Cikotok, Lebak district,
Banten has ended. Citing information disclosure to the Indonesia Stock Exchange (IDX)
Director Public and ESG of PT Aneka Tambang I Made Surata said Cikotok gold mining has
become a part of history the Indonesian nation when it was occupied by colonialists in 1936
until it finally became state company in 1960 and became part of Antam in 1968. After more
than 40 years, PT Aneka Tambang Tbk carried out the process Cikotok mine closure as part
of practice implementation good mining.
The company was founded with the aim of maximizing value company, maximizing
profits, creating prosperity for stakeholders, creating corporate image, increasing
responsibility social. One way for companies to achieve their goals is by issuance of shares.
Stocks are one form of several types investment that can be obtained by investors in the
capital market (Agustin, 2014). Companies must have sound and efficient financial
performance to gain profits and improve company performance. Because of Therefore,
financial performance is important for every company in Indonesia business competition to
maintain the continuity of the company. Financial Statement Analysis is an identification
process the company's financial characteristics obtained from accounting data as well other
financial reports. The purpose of financial statement analysis is basically to assess the
company's past, current, and financial state possibility in the future.
Information on financial position in the future then often used as the basis for
predicting financial position in the future which will come. In addition, the purpose of
financial statements also provides financial information as a source to support reinforcement
in decision making, especially from the company's financial side (Dewa and Sitohang, 2015).
The company's financial performance is the result of operational activities company,
operational activities within the company are addressed by achievement of net profit. Profit is
the difference between revenue and expenses. The activity of maximizing revenue is also
called an increase company's ability to generate profits, while pressing Expenses are also
called efficiency improvements. For a company to maintain and improve performance
finance is a must for these shares to exist and remain interested by investors.
Financial reports issued by the company is a reflection of the company's financial
performance. Financial information It has a function as a means of information, means of
accountability management's answer to the owner of the company, description of indicators
of company success and as material for consideration in decision-making. Capital market
participants often use information as benchmarks or guidelines in doing buying and selling
transactions of a company's shares (Rengga and Sukamulja, 2020). Analysis of financial
statements is an analysis that compare the items in the form of numbers in the report
financial, in the analysis of financial statements the information needed depending on the
problem that there is a need for use of the report Each of them has different interests.
Investors have an interest in financial statement information, among others to make
decisions to buy, sell, or hold shares on the company concerned. Creditors have a tendency to
repay the loan and pay interest when it falls time while managers are interested in report
information financial statements to assess the company's ability to pay dividends as well
availability of funds to develop the company's business in the future future (Afandi, 2020).
Financial performance analysis is a process of selection, relationship, and evaluation. The
most effective ratio used in the interpretation of reports financial statements when compared
to standards or norms. That single ratio itself does not indicate favorable conditions or not
profitable. It must be compared with a benchmark or standard before commenting on ratios.
Ratio analysis is the process of determining and interpret numerical relationships
based on financial statements. This helps to summarize large amount of financial data and
create qualitative assessment of the company's financial performance. Ratio analysis finance
is the study of ratios between various items or groups of items within financial statements.
Financial analysis is an identification process the company's financial strengths and
weaknesses (Jami and Bahar, 2016). Financial reports are one of the tools used by company
in describing how its financial condition is on certain period. Thus the assessment of the
company's financial condition can be seen from a financial report that has been implemented
by companies to produce useful information for all parties both external and internal parties
in decision making to be implemented by the company.
For investors as a party externally, financial reports play an important role in
providing an overview of financial activity both in financial performance and company
operations. One of the things that investors see in investing is the company's financial
performance as measured by the report company finance. Therefore the company will always
be publish its financial reports so that potential investors can know how the performance of
the company and the prospects of the company forward. In other words, a financial report can
be used as material considerations for potential investors when making investments.
Companies that are listed on the stock exchange usually have financial statements transparent
or published to the public as investors. Whereas on the internal side can identify the
weaknesses that exist in a company so that it can immediately take action to overcome
existing weaknesses by doing decision making regarding strategy and policies will be taken
appropriately and achieve the target.
Information obtained from financial reports is very important in know the financial
position, results achieved and failures that accepted by the company. Therefore analysis of
financial reports very important in determining what to do in next period. Financial reports
can have levels of information which is good if a comparison is made between two years or
more financial reports using financial analyses will describe the policies of the company and
how company acts (conservatively or aggressively) as well as its results obtained by the
company that will help or support the decision which will be carried out by external and
internal parties (Natan and Setiana, 2010). Finance is very interesting and probably one of
those concepts most commonly used benchmarking.
This is mainly caused by the attractiveness of financial-accounting performance
measures. added convenience comes from the fact that the whole process can be done without
knowledge that is real and permits from ner part benchmarking, due in part much of the
information required for analysis is publicly available, because company given the possibility
to benchmark with almost every people in the world, in a relatively simple way and without
investment financial reporting requirements of the regulatory framework (Vasilic, 2014). In
the modern economic world, intellectual capital is becoming a main resource for competitive
advantage between firms. Also, intellectual capital plays an important role in the fundamental
factors of production and trade according to the new knowledge economy.
Thus, identifying components of intellectual capital as resources to create value for
the company. Companies with a higher level of human and intellectual capital has a more
desirable financial performance. During the last decade, many researchers have discussed
intellectual capital as the main source of competitive advantage that is the result non-obvious
asset organization. Much experimental research was carried out in domain of management
and capital markets to investigate the relationship between intellectual capital and
performance in various countries. works that significant work has been done to identify,
measure and report this relationship. Companies should consider competitive advantage for
their strategic survival. Since that markets, production, competitors and societal provisions
are fast changing, Continuous innovation and knowledge enhancement makes it possible
them to maintain a stable competitive advantage.
Therefore, current managers consider the knowledge, ability to create and utilize
knowledge as the ultimate resource essential of a stable competitive advantage; because,
knowledge considered as an asset and the business is in line to manage knowledge and use of
intellectual capital is accompanied by success significant relation to directing the
organization. in the present era, with economic growth based on knowledge or knowledge
oriented, obscure corporate assets and intellectual capital they are the key to achieving a
stable competitive advantage. Because of this, attention to goods is not clear in variety
contexts such as accounting and strategic management were developed widely (Chopani and
Ehtesham, 2010).
The financial crisis forced many investors to reconsider various sectors of the
economy and to evaluate economic strength and financial performance. we are trying to
check whether the agribusiness is showing strong sector performance when compared to the
rest of the firms in the economy. Objective we are to provide an unbiased examination of
agribusiness compared with all companies based on these common performance indicators
will be allows us to objectively examine financial performance history of public agribusiness
(Katchova and Enlow, 2020). The financial market has undergone exciting changes and
opening excellent business and investment opportunities in the financial sector, a lot of the
financial services sector is growing and the public is more aware about it product finance.
The growth and evolution of financial markets led to well structured capital market
development with opportunities attractive investment for individual investors. Capital market
development has led to the development of a changing regulatory body new laws for financial
services provided in accordance with market needs, as well as the development of various
sub-markets called as an index, an index that provides authentic information to investors
(Chetna and Mitual, 2012).
1.2. Problem
Identification
Most International and domestic public (and many private) companies are being
evaluated and rated for their environmental, social and governance (ESG) performance based
various third-party reporting and rating providers. Instutional investors, assests amangers,
financial institution and other stakeholders increasingly rely on these reports and ratings to
assess and measure company’s ESG performance over time and compared to its peers. Based
on the description of the background of the problems that have been researchers described
earlier, then the points of the problem can be drawn to evaluate the environmental, social and
governance (ESG) performance of PT. Aneka Tambang (Antam Tbk), or ANTM.

1.3. Problem Limitation

Based on the background and problem identification that has been researchers describe, to
avoid widening the interpretation of research this, the researcher makes limitations on the
description of the background which has been described above. It is of course based on
consideration of the affordability of data and the ability of researchers. Thus, this thesis
research will only analyze issues related to mining management based on social environment
governance by mining companies in Indonesia.
1.4. Problem Formulation
Based on the limitations of the problems above, research problem, the issue raised is
related to the implementation of the social environment concept governance in the
management of mining-by-mining companies in Indonesia. To reinforce the discussion
related toproblem, the researcher describes this research through details research problems in
two main questions, namely how is the implementation of ESG in PT Aneka Tambang
(Antam Tbk) Indonesia?

1.5. Research Objectives

Based on the background of the problem and the formulation of the problem above, the
purpose of this research is to analyze how ESG implements in PT Aneka Tambang Indonesia.
Theoretically, the benefit of this research is to enrich the body of knowledge about
environmental law and its dynamics for all civitas academics who study science in the field
of law in general, as well as in the field of law within the company mining specifically.
Practically, namely material consideration for the Government as policy makers (policy
makers) to be able to create benefits in laws and regulations based on constitutional mandate.
 BAB II
THEORETICAL APPROACH
2.1. Grand Theory
a. Signaling Theory
Signaling theory developed by Ross (1977) emphasizing the importance of
information issued by an entity to outsiders, in particular for investors to make investment
decisions. Signaling theory explains that entities voluntarily present good financial reports to
the capital market investors want to invest their funds so that the value of the shares increased
(Irfan, 2002 in Ansor, 2009). If company report increased earnings on the financial
statements, then Such information is a good signal because it will encourage investors to buy
shares of the company so that stock price increases. Conversely, if the company reported
declining profits, can be interpreted as the condition of the company is not good so that the
information is categorized as a bad signal. Signal theory was first put forward by Spence in
1973. Signals defined as an attempt to describe the provision of information to other party or
recipient.
This theory hints at how important information is given by the company to investment
decisions by outsiders companies (Ross, Westerfield et al., 2003). Usually, the sender must
select and communicate (or signal) that information, and the receiver must choose how to
interpret the signals received (Connelly et al., 2011). Signal theory classifies the information
(news) conveyed by company into two, namely good news and bad news (Su et al., 2016).
Signaling theory is used to describe behavior between parties related to the existence of
information even though each party has it different access to information (Connelly et al.,
2011). The usual signal is given by the board of directors when they decide to make an
upgrade company share ownership. In addition, the principal also has an interest in signals in
terms of dividend distribution or company profit sharing.
According to Spence signaling theory or signaling theory basically focuses in
reducing information asymmetry between the two parties (Spence, 2002). Theory signaling is
concerned with how to deal with problems that arise and information asymmetry in social
settings. This shows information asymmetry actually can be reduced if the party who has the
information can send a signal to related parties. A signal can be described as an observable
action, or observable structure, used to indicate the characteristics or quality of the signaler.
Delivery signal is usually based on the assumption that it must be profitable for signaler (eg.
indicating higher quality and product compared to its competitors). The signaling timeline
includes two main actors, namely the signaler (signaler) and receiver (signal receiver), and
the signal itself. The whole process chain.
The transmission of this signal is greatly influenced by the signaling environment.
Signalers are insiders - for example, executives or managers – who obtain information about
individual (Spence, 2002) products (Kirmani & Rao, 2000) or organizations (Ross, 1977) that
are not available to outsiders. On a broader level, insiders obtain information, some of which
are positive information, and some negative information, which will be useful for outsiders
(Connelly et al., 2011). This information includes, specifically about a product or service.
Some information can also be about initial results and divisions research and development
(R&D) or final sales information reported by the sales agent. Insiders also obtain information
about other aspects and organizations such as pending lawsuits or union negotiations.
The receiver or receiver of the signal is the third element in signaling timeline.
According to the signaling model, receivers are less outsiders’ information about the
organization but expect to get information. At the same time, signalers and receivers also
have an interest conflicting interest (conflict of interests) so that they are often signalers lying
even at the expense of the receiver. Signaling theory that emphasizes how important
information is issued by this company will influence the decision of investors in invest.
Information is one of the important elements for investors and business people because
information can present information, notes or descriptions past or future circumstances for
continuity life of a company and how the effects it causes. Very important for investors in the
capital market to obtain complete, relevant, accurate and timely as an analytical tool for
making investment decisions.
Published information will be viewed as an announcement which will provide a signal
for investors in making investment decisions. When the information is announced and has
been received by market participants, they will analyze and then interpret the information as a
good signal (good news) or bad signal (bad news). If the announcement is good thing,
hopefully the market will give a good reaction at the moment the announcement was accepted
by the market. (Jogiyanto, 2005). One form of information issued by the company and can
used as a signal for external parties, especially investors annual report. The information
presented in the annual report can be in the form of accounting information, namely
information relating to financial statements and non-accounting information, namely
information that is not related to the report finance.
The annual report must contain correct and relevant information as well as disclosing
information deemed important to be known by the user. Bapepam-LK has regulated what
matters disclosed in the annual report. Capital market provisions and regulators known as
mandatory disclosure. This theory also reveals that companies are of high quality will tend to
signal their superiority to the market. On the contrary, companies with not too good capacity
will tend to disclose only mandatory information. In short, this personal information provides
insiders with perspective special regard to the quality that underlies some aspects and
individuals, products, or organization. Insiders get both positive and negative information,
and then they must decide which information to communicate to outsiders. Signaling theory
focuses mainly on conveying positive information as an effort to obtain positive
organizational attributes as well (Connelly et al., 2011).
Several experts have researched the actions taken by the insiders communicate
negative information about organizational attributes. In general insiders do not send negative
signals to outsiders with the aim of reducing information asymmetry, however, but this is
often the unintended consequence wanted by insiders. Signaling theory focuses primarily on
the actions of insiders to intentionally communicate positive information. During signal takes
place, the signaler must benefit by some action and receiver that the receiver will not if it is
not done (ie, the signal must strategic effect).
b. Legitimacy Theory
 According to Suchman (2014) legitimacy is a general perception or assumption that
an entity's actions are desirable, appropriate, or appropriate in some systems socially
constructed norms, values, beliefs, and definitions. This legitimacy states that the company
must pay attention to everything activities in accordance with the values and social norms
prevailing in society where the company is located so that the company gains legitimacy from
public. But it cannot be denied that there will always be differences the values held by the
company with the values held by the community. The difference between these values is
called the "legitimacy gap". Affect the company's ability to continue or carry out activities his
efforts. One way that companies can do to reduce.
The legitimacy gap is by making disclosures accountability for environmental, social,
and corporate governance practices. Organizations (companies) are part of the social system
of society so that, companies must strive to create harmony between social values and norms
that exist in social life in society (Dowling & Pfeffer 1975). That way the company will gain
recognition from the community on the creation of alignment of values and norms owned by
the company with those of the company owned by the community where this will have an
impact on sustainability company so that superior performance is obtained (Safriani &
Utomo, 2020). In addition, David said that in legitimacy theory there are "contracts social”
which stimulates every action taken by the company to be accepted socially by external
parties or in other words "legitimize" actions companies (Caesaria & Basuki, 2017).
Furthermore, the "social contract" according to defined as something that binds the
company to the community of place companies operate and use economic resources (Ghozali
et al., 2014). This “social contract” encourages companies to engage in activities sustainable
development along with increasing public interest in sustainability business. By fulfilling
these expectations, stakeholdersIn Scott's (2015) book on accounting theory, theory
legitimacy implies that an entity will continue its existence if the public realizes that the
company's value system is in line with the norms and rules applicable. Retno and Denies
(2012) argue that legitimacy is a management system for the company which focuses on
alignment with the community and individual government.
c. Stakeholder Theory
The company is recommended to convince community that its activities and
performance are in accordance with regulations that apply through their annual report reflects
the impression of environmental responsibility, so their existence is acceptable to society.
One way to apply legitimacy in the world business is the presentation of reports related to
environmental performance and social activities carried out by companies (Sari et al., 2017).
Disclosure of environmental and social performance is a means to legitimize the company's
operational activities in the eyes of community because it can describe the level of
compliance a company against the rules that apply in public. The organization will try to
increase the profit and value of the company to respond to stakeholder expectations, by
identifying, assessing, and evaluate stakeholders who provide impact and or stakeholders
who affected by the company's business activities (Freeman, 1984).
In the State of the art of stakeholder theory it is explained that stakeholders are
individuals or groups that can influence or be affected by performance and achievement of a
company. The company will try to establish good relations with stakeholders through
meeting the needs of good performance financial and non-financial as well as strengthening
relationships of mutual trust to long-term interests of the company (Freeman, 1984).
Stakeholder theory is one issue strategically concerned with how the company manages its
relationship with stakeholders where companies are required to pay attention and provide
benefits to stakeholders because their existence can be influenced or influence the policies
taken by the company in its business activities (Bani-Khalid et al., 2017).
Stakeholders in question are not only focused on shareholder only. Donaldson &
Preston (2016) suggests that theory stakeholders provide extensions to all stakeholders
instead only to owners or investors on organizational responsibility. Stakeholder theory
contrasts with the classic principal agent theory because company is part of society which
means that it produces public value is in principle measured by the fulfillment of certain ESG
expectations. Unfortunately, stakeholder interests are heterogeneous and dynamic so
management must resolve this conflict of interest (eg by select key stakeholders as
employees, suppliers, and customers) (Ross, 1977). The inclusion of public expectations in
strategic decisions requires. Stakeholder formation and sustainability management.
One of a major part of sustainability management is stakeholder communication
beneficial interests for decisions with a combined view of the problem financial and non-
financial in line with the triple bottom line concept (Roberts, 1992). If the stakeholders are
satisfied with the stakeholder relationship concept corporate interests, ESG reporting and
better corporate governance will be associated with increased sustainability performance
(Clarkson et al., 2008). Finally, increased financial performance (eg in the stock market) with
reputation better company and by attracting new shareholders (sustainable) must be the
consequence. The development of sustainability and ESG reports stems from theoretical ideas
stakeholders by R. Edward Freeman in 1984 (Velte, 2017).
Mentioned that shareholders are not the only important entity that must attention, but
there are also other stakeholders such as employees, community, citizen, etc. This statement
is supported by research Donaldson & Preston (2016) which states that the company is also
responsible responsibility for entities other than shareholders. The entity referred to as
Stakeholders are employees, customers, suppliers, investors, communities, governments,
political parties, trade associations, and sometimes competitors (Freeman, 1984). According
to Dahlberg & Wiklund (2018), maximizing well-being stakeholders related to ESG factors
will generate prosperity maximum financial relationship between the company and its
shareholders. Revelli (2017) revealed that companies that do not take into account the
interests of shareholders will be faced with the risk of failure and withdrawal of capital higher
by investors.
Therefore, the company must be transparent disclose company data, which reduces
information asymmetry and leading to higher trust by investors. Based on a survey carried
out by CRMS in 2019, stakeholder demands is a major trigger for companies to integrate
ESG into business processes in the organization or company. Stakeholders (stakeholders) are
defined by the Global Reporting Initiatives (GRI) as an individual or entity that is expected to
be able to influence significant to the activities, products, and services of the organization, as
well as individuals or entities whose behavior is expected to be capable affect the company's
ability to run strategies to achieve its goals, including those that has legal rights against the
organization under law or international conventions (GRI, 2002: 10).
 Stakeholders have an important role in supporting company survival. Syafrullah and
Harjum (2017) argued an organization or company carry out its business activities not only
solely for its own sake, but also must contribute and be accountable to company stakeholders,
which include investors, creditors, consumers, suppliers, government, society, and other
parties. Companies must accommodate the needs of stakeholders, especially stakeholders
who have power over activities company operations with the aim of maintaining relationship
with stakeholders. The stakeholder theory put forward by Freeman (1984) aims to assist
company management in increasing the value of the company as a result of operational
activities carried out by the company as well as minimizing losses that arise for stakeholders.
One of the ways that companies can do these maintaining relationships with its
stakeholders is by publishing a Sustainability Report. Publishing a Sustainability Report is
one of them active strategy that the company can do with reveal aspects that are not only
characteristic economic but also other aspects such as social aspects and environmental
aspects (Caesaria and Basuki, 2017). This is expected to be able to meet the information
needs required by stakeholders so that para-Stakeholders will always provide support to
company for the survival of the company. Agency TheoryAgency theory was first coined by
Jensen and Meckling (1976) is the underlying theory corporate governance discussion. This
theory emerged when Shareholders employ other parties to manage the company it owns.
Fatchan and Rina (2016) explain that theory agency is a contract between the owner
(principal) with the manager (agent), namely the company manager in manage the company.
Owner will delegate decision-making authority to internal managers run and manage the
company. In general, an owner will want to increase affluence, but a manager tends to be take
action to maximize interests personal and sacrificing the interests of shareholders. With this,
an agency problem arises. Agency problems can be overcome by implementation of GCG.
GCG provides guarantees to shareholders that the funds it invests in the company will be
managed properly and with existence implementation of GCG, it is expected that the
management can fulfill its responsibilities in connection with shareholder interests.
2.2. Sustainability Report
a. Definition of Sustainability Report
In general, the company will report implementation of ESG that has been done
through reports annual report and sustainability report (sustainability report). Sustainability
report is a form of sustainability report developed by an independent organization founded in
1997 in United States, namely the Global Reporting Initiative (GRI). GRI himself defines the
sustainability report as a tool in describing and measuring the company's activities as a form
of responsibility to relevant stakeholders’ organizational performance to achieve
development goals sustainable. Elkington (1997) defines a sustainability report as a report
that does not only present information company's financial performance but also present
information non-financial enabling companies can grow sustainably. Based on the two
definitions above, researchers concluded that the sustainability report is a reports that don't
just report performance information corporate finance but also non-financial performance as
form of responsibility to stakeholders to achieve sustainable development goals.
b. Benefits of Disclosure of Sustainability Report
 According to the World Business Council for Sustainability Development (WBCSD)
in 2002, the benefits of which obtained from the disclosure of the sustainability report, among
others:
1) Sustainability reports can create transparency because provide information to
company stakeholders such as investors, governments, creditors, etc. so that the
prospect company increases.
2) Sustainability report as a means that can provide contribution to increase corporate
value, price market, and customer loyalty in the long term.
3) Sustainability report can be a reflection of the company in managing the risk.
4) Sustainability reports can stimulate leadership thinking and performance supported
with passion competition.
5) Sustainability report can facilitate implementation of a better management system in
managing environmental, social, and economic impacts.
6) Sustainability report can be a reflection of capabilities company to meet the wishes of
investors to long-term.
7) Sustainability report can build the interest of the participants investors and help
increase the value of the company related to social and environmental issues.
c. Disclosure Principles Sustainability Report
According to the 2020 G4 Global Report Initiative (GRI), the principles used in the
disclosure sustainability reports namely:
1) Balance: A report needs to describe aspects positive and negative of the company's
performance to assess overall company performance.
2) Comparability: Companies need to report information regularly consistently so that
stakeholders can carry out the analysis to changes in company performance from time
to time and can support the analysis relative to the company other accuracy. A report
must display that information complete and accurate so that stakeholders can judge
company performance well.
3) Punctuality, a report must be presented in a timely manner according to a
predetermined schedule stakeholder needs in making decisions appropriate.
4) Clarity: The reports presented by the company should be easy understandable and
easily accessible to stakeholders using reports.
2.3. Corporate Governance
a. Definition of Corporate Governance
The term Corporate Governance (CG) for the first time coined by the Cadbury
Committee in 1992. The Committee describes CG as a tool for control and direct the entity to
achieve balance between the powers of authority required company in ensuring the continuity
of its existence and accountability to stakeholders. Sudana and Putu (2011) define corporate
governance as a system to direct and control the company's business activities. corporate
structure governance regulates the division of rights and responsibilities in between the
various parties involved in the company, such as boards of directors, managers, shareholders,
and other stakeholders. In protecting the interests of investors as company owners and
creditors as providers of funds externally, GCG becomes a form of corporate management
which is good because GCG can regulate the relationship between investors, corporate
management, creditors, government, employees, as well as other stakeholders related to their
rights and obligations (Sukamulja,2014).

b. Disclosure Principles of Corporate Governance

Here are some principles in disclosure corporate governance according to KNKG
(2006):1) Information Disclosure (Transparency) Companies are required to submit
information material and relevant regarding the company to its stakeholders. Disclosure of
the information in question are financial condition, financial performance, and company
management. Disclosure of this information aims to investors and other stakeholders know
the condition of the company. There is clarity of function, structure, system, and
accountability between shareholders, board commissioners, and the board of directors so that
management company can be implemented effectively. In running its business, the company
must complies with and is in accordance with applicable laws and regulations, such as
compliance in paying taxes, environmental protection, maintenance conducive business
environment with the community and etc.
In carrying out its business activities, the company professionally manages his
business and without any conflict of interest or intervention from any party which do not
comply with applicable regulations. Companies are required to continue to provide
recognition to the rights of stakeholders specified in company laws and regulations. Equality
or Fairness This principle demands fair and equal treatment at in fulfilling the rights of
stakeholders that arise based on agreements and statutory regulations apply. Implementation
of this principle in the company will minimize the disgraceful practices committed by
insiders who harm other parties. Firm value or corporate value is the perception of the
shareholders on the level of success of the company usually associated with stock prices.
High stock price make the company value high and increase market confidence of the
company's prospects in the future. According to Retno and Denies (2012), company value
represents the company's selling value or growth value for investors, where the value of the
company will be reflected through the market price of its shares. If the stock market price has
increased, then the value the company will also increase which means it will also increase
prosperity of investors. In achieving corporate value, para Investors hand over the
management of the company's business to the investors professionals who are positioned as
managers or commissioners.
2.4. Environmental, Social and Governance (ESG)
Conceptually environment social governance is a company standard in carrying out
investment activities consisting of three criteria, namely environment (social), and
governance company (governance). The purpose of the existence of the concept of social
environment governance is to create sustainable economic development sustainable. Today,
investors tend to make criteria environment social governance in making decisions to invest
in a company. Therefore, the company which since the beginning has implemented a social
governance environment in business processes to operational as a whole tends to be
successful to attract investors. The application of the concept of environmental social
governance has closely related to the sustainability of the company. As for the three factors
main company in implementing the concept of social environment governance, namely:

a. Environmental Criteria
This criterion discusses the consideration of investors on company performance,
through friendly mining activities environment such as energy use, waste handling,
conservation of natural resources, and behavior towards flora and fauna mining activities.
Apart from that, the company's commitment to meet these criteria will have a positive
impact on company and for the environment as it gets sustainability in its business
operations if environmental conditions kind and supportive.
b. Social Criteria
Social criteria in this case include corporate relations with external parties,
society, community, media, and entities other related directly or indirectly. The presence
of social criteria in mining companies can have a positive impact on the company's
financial performance mining, because the company's image will be influenced by
whether or not the company in positioning itself on social problems that occur, as well as
companies that active to resolve the rights and constraints experienced by company
employees.
c. Criteria for Corporate Governance
On this criterion the company will focus on how the company has good
governance and internally sustainable. Governance criteria in terms of this includes
transparent, non-violating company finances ethical rights of workers, and have the
legality of activities that done. company that has good governance of course Conceptually
environment social governance is a company standard in carrying out investment
activities consisting of three criteria, namely environment (social), and governance
company (governance). The purpose of the existence of the concept of social environment
governance is to create sustainable economic development sustainable.
Nowaday, investors tend to make criteria environment social governance in making
decisions to invest in a company. Therefore, the company which since the beginning has
implemented a social governance environment in business processes to operational as a
whole tends to be successful to attract investors. The application of the concept of
environmental social governance has closely related to the sustainability of the company. As
for the three factors main company in implementing the concept of social environment
governance. This criterion discusses the consideration of investors on company performance,
through friendly mining activities environment such as energy use, waste handling,
conservation of natural resources, and behavior towards flora and fauna mining activities.
This includes transparent, non-violating company finances ethical rights of workers, and
have the legality of activities that done. company that has good governance of courseThis
meaning refers to the term social welfare (social welfare) as a condition of fulfilling material
and non-material needs material. In practice social services include five forms, namely social
security, health services, education, housing and personal social services. This allowance is
enforced in the United States of America given to the poor, most of the beneficiaries these are
the poor, the disabled, the unemployed. However, this circumstance actually gives a negative
connotation to the term well-being such as poverty, laziness, and dependency which is
actually more accurately called "social illfare" compared "social welfare".
The meaning of welfare is often carried out by individuals, social institutions,
communities and government agencies to improve the quality of life through provision of
social services and social benefits provided by country. The ideal of a welfare state that
mandates the active role of the state to regulate the economy which stated "to protect the
entire Indonesian nation and throughout Indonesia's bloodshed and to promote prosperity in
general, educating the life of the nation and participating in world order based on freedom,
eternal peace and social justice". In addition, the concept of a welfare state also exists on the
fifth precept Pancasila which reads "social justice for all The ideal of a welfare state that
mandates the active role of the state to regulate the economy has been set out in Paragraph IV
preamble to the Constitution of the Republic of Indonesia Year 1945 which stated "to protect
the entire Indonesian nation and throughout Indonesia's bloodshed and to promote prosperity
in general, educating the life of the nation and participating in world order based on freedom,
eternal peace and social justice". In addition, the concept of the welfare state also exists on
the fifth precept Pancasila which reads "social justice for all people of Indonesia". The
meaning contained in the constitution and Pancasila explains that the state has an important
role to play provide a decent living and the people are entitled to treated economically fairly
and can feel access well-being in his life.
2.4. Environmental Sovereignty
Amendments to the Constitution of the Republic of Indonesia 1945 has given birth to
new thinking in the field of environment life that changed a new outlook in implementation
state administration in Indonesia. According to Prof. Dr. Jimly Asshiddiqie God created
nature and everything in it, including humans, so that human life must be in balance with the
universe or natural environment, and nature must be seen as having rights in the context of
power. Equalizing environmental sovereignty position between humans and nature as
subjects has brought logical consequence that nature also holds power in the field or in
certain matters of a fundamental nature. Technological development those who carry out the
processing of natural resources must remain pay attention to the balance and preservation of
nature so that the source Natural resources will continue to benefit future generations.
The idea of environmental sovereignty has actually been outlined as well in the
Indonesian state constitution in Article 28 H paragraph (1) of the 1945 Constitution of the
Republic of Indonesia which reads "Everyone has the right to live in physical and spiritual
prosperity, to have a place live, and get a good and healthy living environment as well
entitled to health services”. Likewise in Article 33 Sodikin, “The Idea of Environmental
Sovereignty in the Constitution and Its Implementation In Environmental Preservation”,
paragraph (4) of the 1945 Constitution of the Republic of Indonesia which mandates the
importance of the principles of development sustainable development and development
principles environmentally sound. The right to a good and healthy environment is the most
important right essential that cannot be reduced, because without this right human cannot
enjoy a good and healthy life.
Moreover, the environment is an ecological unit is a cycle of life in which humans
exist inside it. In relation to Article 33 paragraph (4) of the Constitution Republic of
Indonesia Year 1945 which reads "earth and water and the natural wealth contained therein is
controlled by the state and used for the greatest prosperity of the people. Thread red from the
constitutional verse means that earth, water and natural wealth contained in it which includes
space outer space is a unified living environment should be maintained and developed for
later use for the benefit of the people. Therefore in resource management natural resources
which include earth, water and other natural resources required to pay attention to the
ecosystem and be principled sustainable and environmentally sound so that natural wealth is
contained in Indonesia's homeland continues to provide benefits to society while protecting
the environment in order to remain sustainable Corporate Social Responsibility (ESG) is
promoted as wrong a form of corporate participation in the business world to carry out
sustainable development so that the company can develop awareness programs for the
surrounding community through creation and maintenance of balance between profit, social
functions and maintenance of the environment According to Ernst and Young in
implementing ESG, The company has four main responsibilities, namely to employees,
consumers, society, and the environment.
This becomes the basis for consideration for the company to be able implementing
ESG specifically. There are nine work programs companies can do in carrying out ESG
activities
among others:
a. Employee Programs; the company pays attention to competency development and
employee welfare starting from the side of health insurance, safety to the expansion of
other programs such as work life balance program and decision making empowerment
program.
b. Community and Broader Society; One of the company's activities carried out in this
area is through community empowerment that makes individuals, groups or
communities trying to control their lives themselves and strive to shape the future
accordingly to their liking. Implementation of empowerment community is done
through development projects that enable community members receive support to
meet their needs Campaigns and social actions that enable needs can be met by other
responsible parties answer like a company
c. Environment Program; this program deals with environmental maintenance, such as
how the company produces a product that is safe, harmless to health and
environmentally friendly
d. Reporting and Communications Program; In this program the company issues or
reports results its ESG activities through the annual ESG Report so that it can proven
real company participation in carrying out responsibilities social responsibility
e. Governance or Code of Conduct Programs The company focuses on social activities
carried out based on a system regulated by the government. The main thing carried
out in this program is how stakeholders, government, society and the business world
are able to create mutually agreed regulations to make the program effective ESG
 f. Stakeholder Engagement Programs; This program is the main key pursued by the
company to create an “effective engagement program” so that company is able to
achieve the success of ESG strategy
g. Supplier Programs; Fostering good relationships on the basis of trust, commitment,
information sharing between the company and its business partners
h. Customer/Product Stewardship Programs; the company pays attention to consumer
complaints and product quality assurance produced by the company
i. Shareholder Programs; This program is carried out to increase the "share value" for
shareholder, because shareholder is a priority for company.
Companies in carrying out nickel management practices not only obliged to provide
benefits through programs that have been designed by the government, but companies as well
required to maintain environmental sovereignty through the program ESG. The essence of the
theory of environmental sovereignty above explains that in the context of making use of
natural resources contained in Indonesia, whether the state, government, entrepreneurs or
society still has to place the environment as supreme authority in the life of the Indonesian
constitution. Country permitted to carry out processing of natural resources, however the state
must also protect the environment as an equal subject have the right to life. The idea of
environmental sovereignty is enshrined in the Indonesia Constitution is implemented into
several regulations Legislation to give such shades of green fulfillment and protection of
human rights and development economy through sustainable development and insight into
the archipelago which is the limit of environmental management in the region Indonesia.
Based on the search that the researcher has done, the research that examines the distortion
of the principle of benefit in nickel management based on reclamation by mining companies
in Indonesia already has been carried out by a number of circles, but studies these have
differences in the focus of research when paired with the researcher's writing. There are a
number of studies that found by researchers are thesis was written by Dwi Indah Lestari. This
thesis discusses the responsibilities of business actors in the mining sector is then associated
with pollution environment. The similarity with the thesis that the researcher will design,
namely jointly discuss the environmental impact due to the activity mining. However, this is
the focus of this thesis, apart from environmental pollution, this thesis also discusses
concerning the legal consequences for business actors in the event of pollution environment
from mining activities carried out.
Whereas the thesis that the researcher will design will be focused on efforts carried out by
mining companies in conducting mine management. The thesis was written by Alauddin
Rusdin. This thesis discusses social responsibility and environment of gold and nickel
mining business actors in the province my north shame. The similarity with the thesis that the
researcher wants to design lies in the social and environmental responsibility of top mining
mining activities carried out by business actors. Although thus, the focus of this thesis is
more on management mineral and coal mining which refers to the principle participation,
transparency, and accountability. While that will design researchers will focus on nickel-
based management environmental social governance by mining companies. The thesis was
written by Angela Pingkan Kuluq.
This thesis discusses the implementation of damage reclamation environment of ex-coal
mining excavation in Kutai Regency West. The similarity of this thesis with the thesis that
the researcher will design, that is, both discuss efforts to return ex-mining areas for reuse.
however which being the main focus in this thesis is more to the constraints that occur the
process of reclamation of ex-mining excavations. While the script which the researcher will
design will focus on utilization nickel management based on environment social governance
by mining companies in Indonesia. Journal article written by Asti Amelia Novita. This
journal article discusses collaborative governance and environmental management in mining
areas. Similarity in the thesis that the researcher will design, namely discussing together
regarding efforts to improve internal environmental governance ensure the environment in
the mining area. But on the article.
This journal focuses more on the implementation of environmental guarantees security
and implementation of sustainable development goals. While the script which the researcher
will discuss will be focused on the concept of social environment governance on nickel
management carried out by the company mining. Journal articles written by Zulkifli and I
Made Putrawan.This journal article discusses policy evaluation management of the mining
environment on Obi Island, Maluku Province North. The similarity with the thesis that the
researcher will design, namely together to discuss environmental management in particular
mining. Even so, this journal article is more focused how to evaluate mining management
policies. Whereas the thesis that the researcher will design will focus on the efforts that will
be carried out by mining companies to protect the environment in the management of nickel
mining materials.
This journal article discusses corporate responsibility on the reclamation of ex-mining
land. The similarity with the script the researcher will design, namely both discussing the
steps mining companies to restore the function of former excavations mine so that it can be
used according to its designation. But aside from Therefore, this journal article focuses on the
level of research regulation and accountability of mining companies to reclamation of
excavated mines. while the thesis will be the researcher the design will focus on the
company's social governance environment mining on nickel management.
2.5. Management of Mining Companies in Indonesia
Laws and Regulations Related to Mining Activities 1. Law Number 11 of 1967
concerning Principles Mining. The concept of mastery as stipulated in Law Number 11 of
1967 concerning Principles of Mining is mastery over all minerals contained in the mine
Indonesian mining jurisdiction which covers natural deposits as a gift from God Almighty
Mastery over These mines have become the national wealth of the Indonesian nation and
therefore controlled and used by the state for give as much as possible to the interests of the
people. The presence of arrangements regarding the principles of mining aims to accelerate
the implementation of economic development towards a just and prosperous Indonesian
society based on Pancasila and the mobilization of all funds and resources to cultivate
potential economic power in the field of agar mining become a real economic power.
On mastery practice mining, this rule divides minerals into 3 (three) group, namely
strategic mineral class, class of mineral material vital, and non-strategic and non-vital mineral
groups. Differentiation of Law Number 11 of 1967 with regulations before lies in the basic
principle of giving opportunity to private companies engaged in mining and new
arrangements regarding the reduction of mining concessions directly by the state, so that the
state functions only as supervisors and providers of guidance and direction to the perpetrators
mining business. Apart from that, in this rule mining authority is a permit granted by the
minister to carry out activities mining. When compared with the Indische Mijnwet Staatblad
of 1899 Number 214 the mining authority referred to in this rule is almost the same as the
concession, which has the same permits, but the two are still different because of mining
authority only the power to carry out mining business and not assign mining ownership to the
power holder mining, while concessions are broader licenses and strong and direct
concessionaires have the result the mining concerned.
New arrangements regarding later work agreements in the form of a KK or mining
PKP2B is also present in the regulations In this case, KK and PKP2B arrangements become
agreements for the government Indonesia with contractors in working on mining general. The
contractors in the field of mining business include domestic investors and foreign investors.In
terms of mining principles, criminal provisions also only apply to everyone who carries out
mining business activities without holding mining concessions. Law Number 4 of 2009
concerning Mineral Mining and Coal The issuance of Law Number 4 of 2009 concerning
Mineral and Coal Mining is gaining momentumrenewal of mining law changes in Indonesia.
Atmosphere The inner formation of this law is also reflected in section consideration of Law
Number 4 of 2009 concerning Mineral and Coal Mining. Based on that consideration mature,
the formation of this regulation wants:
a. Management of mineral and coal mining must be mastered by the state to provide real
added value to national economy to achieve prosperity and the welfare of the people
in an equitable manner
b. Mineral and coal mining has an important role to add real value to growth national
economy and regional development in a sustainable manner
c. This regulation is expected to be a guide in managing and independently exploit
mineral and coal potential, transparent, reliable, competitive, efficient and insightful
environment, in order to guarantee national development as a whole sustainable.
Minerals and coal contained within the jurisdiction Indonesia's mining is a non-renewable
natural wealth as a gift from God Almighty who has a role important in fulfilling the needs of
many people's lives, therefore management must be controlled by the state and insightful
environment. Nickel management by mining companies applying the concept of
environmental social governance is an effort to support nickel management with an
environmental perspective, because the concept will encourage mining entrepreneurs to take
the benefits derived from nickel steadily minimize the environmental impacts it causes when
mining activities are carried out.
Nickel mining activities carried out by the company mining in potential mining areas
nickel reserves, both above ground and underground, located in the land area or sea area.
which region determined as a mining area has the following criteria:
a. Indication of mineral-bearing rock formations
b. Mining resource potential in solid form and/or liquid
Determination of mining areas, regulated in the regional plan mining as outlined in the
form of a mineral potential map derived from data and information on the results of
investigations and mining research carried out by the Minister, Governor, Regents/Mayors
that must be processed into mineral potential maps and/or coal. Explicitly regarding
management authority mineral and coal mining in Law Number 4 2009 concerning Mineral
and Coal Mining, This authority is given to the Central Government, Provincial Government,
and Regency/City Government. Arrangement This authority is a new breakthrough for the
administration governance within the framework of strengthening regional autonomy,
because before the enactment of the mineral and coal law authority to manage mineral and
coal mining tend to be centralized. But Law Number 4 Year 2009 only lasted 11 years,
because this regulation has not yet been issued respond to developments, problems, and needs
law in the implementation of mineral and coal mining. Law Number 3 of 2020 concerning
Mineral Mining and Coal In order to answer developments, problems, and legal requirements
in the implementation of mineral mining and coal, the government took a step to improve
regulation of minerals and coal in order to make a real contribution to Indonesian society.
Referring to the principle of benefit, be insightful environment, legal certainty and
accountability within the sector mining, into legal politics to change the law mineral and coal
mining in Indonesia. In line with the provisions of Article 33 paragraph (3) of the
Constitution Republic of Indonesia Year 1945 which reads "Earth, water and the natural
wealth contained therein is controlled by the state and used for the greatest prosperity of the
people "had bring logical consequences that the state is responsible for regulate, supervise,
and manage natural resources contained in the homeland for the creation of the prosperity of
the Indonesian people. There are a number of important points contained in the Act Number 3
of 2020 concerning Mineral and Coal Mining, that is:
1) Licensing management authority agreeing that control of minerals and coal held by
the government through the functions of policy, regulation, management,
management and mastery.
2) Regarding the extension of the operating license that guarantees existence
continuation of the operation of the contract of work/work agreement coal mining into
IUPK as a continuation of operations.
3) Government efforts to increase added value or downstream which is regulated
through the management and refining activities of the results mining excavations in
the country and obliges entrepreneurs mines to build refinery facilities.
4) Regarding diversification of shares which obliges the holder mining business permit
or special mining business permit at the stage of production operations whose shares
are owned by foreign companies to divest shares of 51% in stages to the central
government, regional government, BUMN, BUMD, and/or National Private Business
Entity. fifth, provides a maximum area of 100 hectares of land that owns Logan
mineral reserves with a maximum of 100 meters for the area people's mining.
Environmentally friendly and sustainable conception in activities mining as stipulated
in Law Number 3 Years 2020 concerning Mineral and Coal Mining seems to be in
line with the concept of nickel management based on social environment governance.
Because the concept of environmental social governance in Nickel management will
prioritize environmental aspects as well minimize the impact of the damage caused by its
presence nickel mining activities, so that nickel-based management environment social
governance is able to implement the mandate of the Law on deep mineral and coal mining
framework of sustainable and insightful nickel mining activities environment. The
application of the environmental social governance concept is of course be an endeavor of the
government and also entrepreneurs to go to sustainable development in the mining sector in
Indonesia.
2.5. Nickel is Part of The Mineral Reserves that Become Wealth
Non-renewable natural resources (non-renewable resource bases), therefore
management must be maximized in order to produce added value bigger for the country.
Mistakes ever made by Indonesia as a resource owner is to only sell nickel the form of ores or
raw minerals (ores/concentrates) that cause incurring losses due to the low value of nickel ore
and for correcting this mistake, today the government through Law Number 3 of 2020
concerning Mineral and Coal Mining began to oblige mining companies to process the results
mining in the country and prohibit mining companies to export nickel ore. Based on a survey
conducted by the United States Geological Survey (USGS) in January 2021, Indonesia has
been designated as the world's largest nickel producing country.
In 2021 Indonesia has produces 760,000 metric tons of nickel which beats the
Philippines, Russia, New Keledonia, Australia and other countries. The report launched by
the Central Bureau of Statistics noted that in 2017 nickel production reached 20.96 tons, 2018
reached 38.33 tons and 2019 reached 60.94 tons which reached the nickel production figure
the highest in Indonesia in the last 4 years, but in 2020 Indonesia's nickel production has
decreased so that in 2020 Indonesia's nickel production only reached 48.04 tons. The
transportation sector as the highest carbon contributor has succeeded in changing the sector
that previously used fossil energy switch to electricity. The need for nickel today is at the
electric car segment is around 100,000 tons to 200,000 tons, even in the future, the demand
for nickel in the electric car segment is projected reached 1.7 million tons.
This becomes very reasonable when Indonesia is eyed by many investors, because
Indonesia is one of them a country that has abundant nickel reserves. The high number of
nickel production in the mining business is becoming evidence of the high demand for nickel-
type minerals. Moreover discourse on the presence of nickel as the main component of
vehicle batteries electricity. The use of nickel-based batteries does not only become world
discourse, but it is also an Indonesian discourse to utilize nickel resources, this can be proven
through the issuance of Regulations President Number 55 of 2019 concerning the
Acceleration of the Vehicle Program Battery-Based Electric Motorized (Battery Electric
Vehicle) for road transportation. The ecosystem of the electric vehicle industry in Indonesia
is wrong the other was worked on by a consortium consisting of LG Energy Solution, LG
Chem, Posco and Huayou Holding and also involved PT Battery Industry Directorate
General of Mineral and Coal, Mineral and Coal Grand Strategy: Direction of Upstream
Downstream Main Mineral and Coal Development Towards Advanced Indonesia, 2021.
Indonesia, which has four BUMN members consisting of Inalum, Antam, Pertamina
and PLN. The existence of nickel is increasing after the discourse the use of nickel as the
main component in electric vehicle batteries. But long before that, in Indonesia nickel had
become a valuable material has many benefits for the domestic industry. Starting from the
industry automotive, building construction, military, to components on tools electronics often
use nickel as a component in industry. In the automotive industry, Nike is often processed
into steel stainless steel used to make the vehicle frame, then in the building industry nickel is
trusted as a metal material for be made part of the building that is not flammable. Plus, nickel
also often used by the electronics industry by processing nickel to be found in a number of
devices such as smartphones and nanocomponents in electronics. Implementation of nickel
management based on social environment governance by mining companies will certainly be
a part supporter in order to optimize the utilization of nickel resources in Indonesia. Because
through the concept of environmental social governance Mining companies will process
nickel using technology and methods effective and efficient so that its management can be
minimized the impact of environmental damage on the mining activities carried out by
mining companies. This is certainly not only beneficial for company but also will have a
positive impact on society located around the mining area.
2.6. The Principle of Legal Benefits in Nickel-Based Management Environment Social
Governance
Talking about law is inseparable from benefits law that participates when a rule has
been promulgated. Benefits law which is the aim of law has brought logical consequences
that everyone has expected the perceived benefits after the formation of a rule and being able
to eliminate the unrest in the community. Justice is indeed a value main, but expediency is
also part of the pillars of law formation which should be prioritized. Therefore, in order to
carry out the law in a country, the comparison between benefits and sacrifices must be
proportionally so that the applicable law can reflect justice, legal certainty and benefits.
Mineral and coal reserves which are natural resources non-renewable energy has encouraged
the state to manage it optimally, efficiently, transparently, sustainably, and insightfully
environment, and obtain maximum benefits for prosperity people in a sustainable manner.
The principle of benefit in this case corresponds to concept developed by Jeremy
Bentham that puts benefits as the main purpose of law, which depends on the discussion
about whether the law formed can give happiness to humans or not. Normatively in Article 2
letter (a) Law Number 4 of 2009 concerning Mineral and Coal Mining has outlined that
mineral and coal mining is managed based on benefit, fairness and balance. If taken thread
red from the sound of the article above, it can be interpreted that management mining, in this
case the management of nickel must be carried out with attention to several aspects such as
economic, social, cultural, environment, and others. Maximum application of the principles
management of this nickel mutatis mutandis can give birth effective, sustainable, insightful
management of nickel environment and able to support and develop nickel mining in order to
be more competitive at the national and international levels international.
The concept of nickel management principles outlined in regulations Mineral and coal
mining actually contains principles mining that is good and right and has aims and objectives
with broad dimensions, such as:
1. Controlling the distribution of nickel utilization with top priority for the benefit of the
nation and state
2. Increase mining recovery or the acquisition of nickel minerals as much as possible
3. Increasing efficiency in the use of nickel minerals to support efforts to save long-term
dimensions of basic industrial materials or savings for the benefit of future
generations . Increasing the country's foreign exchange earnings in the mining sector
because of the mining recovery that seeks to improve the amount of minerals obtained
and extend the life of nickel mining. Based on data reported through the Mining
 Advocacy Network National, that in 2020 conflicts between mining companies with
the community around the mine still often occurs.
The National Mine Advocacy noted that there were 45 mining conflicts consisting of 22
cases of environmental pollution, 13 cases of expropriation land by mining companies, and 8
cases of criminalization against residents who oppose mining activities. Read more JATAM
Nasional found that until 2020, there were 3,092 abandoned mining pits pollution
Environment 51% deprivation land 30% criminalization reject citizens mine 19% open
without any process of reclamation or restoration of ex-excavated areas mine. Nickel mining
activities that do not apply the principles of and Good and correct mining principles will
certainly have an impact bad for the environment, society and also the country. Nickel
management Not paying attention to the environment will damage the environment impact on
the losses experienced by the surrounding community nickel mining areas such as
environmental destruction and decline in the quality of life of the local population.
If only nickel management maximally without efforts to protect the environment, it will
have a long-term impact on declining state revenues nickel mining sector. Nickel
management carried out by mining companies which does not pay attention to natural
conditions and does not minimize the impact mining activities mutatis mutandis have been
contradictory mandate of Article 2 letter (a) of Law Number 4 of 2009 concerning Mineral
and Coal Mining. Due to company action Such mining will hinder sustainable development
in mining sector and damage the environment around the area nickel mining which if these
mistakes continue to be made, then it is impossible for the community around the nickel mine
to have their rights to obtain a good and healthy living environment.
Guarantee for the provision of a good and healthy environment has actually been
regulated in Article 28 H paragraph (1) of the Constitution Republic of Indonesia Year 1945
which reads "everyone has the right to live in physical and spiritual prosperity, to have a
place to live, and to receive a good and healthy living environment and the right to receive
services health". The constitutional mandate has given that meaning the state is responsible
for providing guarantees for the environment good and healthy life for every citizen. Mining
activities nickel management by mining companies is actually not permissible escaped the
mandate of the constitution, because even though the management of nickel carried out by
the company, the role of the state in the activity mining is by providing regulations that are
able to comply constitutional rights of citizens, especially the right to obtain a good and
healthy living environment for the people around the area mining.
State, Government, and all stakeholders have obligation to protect and manage the
environment life in the context of implementing Indonesia's sustainable development, so that
the environment can remain a resource and support life for the people of Indonesia. In order
to carry out the development sustainability in the nickel mining sector, the state began to take
firm steps to take action against miners who do not heed the principles of mining
management contained in Article 161 B paragraph (1) Law Number 3 of 2020 concerning
Mineral and Mining Coal by imposing a maximum criminal penalty of 5 (five) years and a
maximum fine of IDR 100,000,000,000.00 (one hundred billion rupiah) to any person
holding a mining business permit or license special mining business that does not carry out
reclamation and/or post-mining, or placement of reclamation guarantee funds and/or funds
post-mining guarantee. At the regulatory level, mineral and coal mining rules not only giving
criminal sanctions to everyone who violates legal provisions in carrying out mining activities
in Indonesia, but Law Number 3 of 2020 concerning Mining Minerals and Coal can also
provide administrative sanctions in the form of written warning, fine, partial or complete
suspension exploration activities or production operations, and/or revocation of IUP, IUPK,
IPR, SIPB, or IUP for sales if it violates the provisions of the provisions contained in these
rules.
Determination of the sanctions in practice mining activities become a state effort to give a
bluff to mining business actors to always restoring the environmental conditions of former
mining areas has been processed in order to provide benefits to be reused by communities
around the mining area. Various efforts have been made by the state to create sustainable
development in the mining sector, especially mining nickel. But to achieve this goal the state
also needs cooperation assistance mining entrepreneurs in order to be able to achieve goals
the. The spirit of sustainable and insightful development environment in the nickel mining
sector is the company's reason Mining began to apply a new concept, namely the social
environment governance on nickel management. These three central factors will used by
companies to measure sustainability and ethical impact from a mining activity or investment
of a company mining.
The concept of environmental social governance is the standard companies in carrying
out nickel mining practices actually become efforts of miners towards sustainable nickel
management and environmentally conscious. Mining companies that apply the concept of
environmental social governance will prioritize management nickel in an environmentally
friendly manner and technology, such as the use of efficient energy, waste handling of mining
activities as well behavior towards the flora and fauna around the mining area. At the
regulatory level, mineral and coal mining rules not only giving criminal sanctions to everyone
who violates legal provisions in carrying out mining activities in Indonesia, but Law Number
3 of 2020 concerning Mining Minerals and Coal can also provide administrative sanctions in
the form of written warning, fine, partial or complete suspension exploration activities or
production operations, and/or revocation of IUP, IUPK, IPR, SIPB, or IUP for sales if it
violates the provisions of the provisions contained in these rules.
Determination of the sanctions in practice mining activities become a state effort to give a
bluff to mining business actors to always restoring the environmental conditions of former
mining areas has been processed in order to provide benefits to be reused by communities
around the mining area. Various efforts have been made by the state to create sustainable
development in the mining sector, especially mining nickel. But to achieve this goal the state
also needs cooperation assistance mining entrepreneurs in order to be able to achieve goals
the. The spirit of sustainable and insightful development environment in the nickel mining
sector is the company's reason mining began to apply a new concept, namely the social
environment governance on nickel management.
These three central factors will used by companies to measure sustainability and ethical
impact from a mining activity or investment of a company mining. The concept of
environmental social governance is the standard companies in carrying out nickel mining
practices actually become efforts of miners towards sustainable nickel management and
environmentally conscious. Mining companies that apply the concept of environmental social
governance will prioritize management nickel in an environmentally friendly manner and
technology, such as the use of efficient energy, waste handling of mining activities as well
behavior towards the flora and fauna around the mining area.
Nickel Added Value Through Smelters Abundant mineral resources cannot be managed
optimally to increase state revenue and the welfare of the people of Indonesia which comes
from mining minerals contained in the groundwater. Because most of the companies mines in
Indonesia often operate upstream, with exporting ores (raw minerals) that have a low selling
value. For more than 40 years, Indonesia has implemented this practice until earned
Indonesia the nickname as the exported of law material specialists. As a country rich in
mineral resources already the mining sector, especially minerals, should be able to
contributed greatly to state revenues, however at the practical level the contribution is still
relatively small. This matter proven by the Indonesia Mining Association (IMA) which
statesthat in the last 10 years (2005-2012), the average acceptance countries sourced from
general mining only reaches approx. Rp. 60.42 trillion or only 6.16% of total state revenue.
Viewed from the state revenue side, raw mineral export activities have played an
important role in development Indonesia, but over time the government became negligent and
allowing the exploitation of natural mineral resources to occur exports which ultimately cause
environmental damage, diminishing reserves and disruption of mineral resilience. In order to
take decisive action as a result of such over-exploitation, the government began enacting a
mineral export ban policy raw starting January 12, 2014. The logical consequence of the ban
the export is to make a mining company to process all raw mining products in the country
through the smelter built by a mining company. The main reason for its formation
stipulations for companies to manage minerals caused by mineral ore exports which have
continued to increase since 2008 however its existence does not trigger the development of
the downstream mining sector.
In other words, Indonesia as the owner of nickel resources will experienced losses due to
depleted nickel reserves and low selling value unable to increase state revenues, but the state
is importing Indonesian nickel actually experienced a significant advantage double. Based on
the Regulation of the Minister of Energy and Mineral Resources Number 11 of 2019
concerning the Second Amendment to Ministerial Regulations Mineral Resources Energy
Number 25 of 2018 concerning Exploitation Mineral and Coal Mining, as of 1 January 2020
Indonesia has fully reinstate the nickel ore export ban. This policy stems from Law Number 4
of 2009 concerning Mineral and Coal Mining which is obligatory for every mining
companies to increase added value minerals through the management and refining of
minerals in the country.
Mineral management policy reform is intended to encourage the transition of mineral
management from upstream to downstream. Besides impose obligations on mining
companies to perform management, this rule also requires business license holders and
holders of contracts of work to build domestic smelters, as well prohibit companies from
exporting raw minerals. However, at the practice level, the downstream policy in Indonesia is
not working good, because the mineral downstream policy is still experiencing problems for
integrating upstream mining operations and management operations downstream minerals,
both technically and financially. There are no obstacles to the successful implementation of
downstream in Indonesia only arises from the mining company side, but from the side the
government has been inconsistent in implementing policies is the reason that downstream in
Indonesia has not run optimally.
Regulatory inconsistencies regarding the export of raw minerals in Indonesia Regulation
The minister of Energy and Mineral Resources Number 7 of 2012 has contained an export
ban unqualified raw mineral (totally export tires), but in Regulation of the Minister of Energy
and Mineral Resources No. 11 of 2012 the government opens return to the faucet to export
raw minerals with conditions (conditional export). Then the government issued a regulation
Minister of Energy and Mineral Resources Number 20 of 2020 to change regulations
previously contained a conditional export prohibition to country. Deliver right plan work or
cooperation in management and/or purification in domestic.
Signed change pact integrity pay off, obligation finance to country arrive right plan work
or cooperation in management and/or purification in domestic sign just pact integrity
management in the country. Pointed a seriousness for build facility purification Good direct
or cooperation. Fulfill performance environment the good one, in this rule the government
allows the export of minerals raw materials up to a specified time. Then since the enactment
of Government Regulation Number 1 of 2014 and Regulations Minister of Energy and
Mineral Resources Number 1 of 2014, the government officially banned it mining companies
to export minerals raw materials contained in Indonesia.
The government's main foothold is to impose an export ban raw mineral, especially nickel
caused by the losses experienced Indonesia. Decades of nickel resources in Indonesia are
only taken and sold at a lower price and higher profits instead obtained by the state that
manages the raw nickel ore exported from Indonesia. therefore, in order to improve nickel
added value the government began to move to stop fully on exports of nickel ore in
Indonesia. But spirit Indonesia to earn more income against nickel is not fully running well,
because there are some obstacles in efforts to increase the added value of nickel, including:
1) Lack of awareness of the benefits and importance of improvement efforts added value
of nickel in the country by stakeholders.
2) There is not yet available a comprehensive study of demand chains and supply of
materials for the production of finished goods in Indonesia
3) Lack of information regarding opportunity assessments that can be carried out for
nickel mining materials in Indonesia to then be increased added value.
Efforts to increase the added value of nickel are endeavors government to carry out
further processing of raw nickel ore into semi-finished or finished products so that the nickel
value is already processed can increase the country's foreign exchange earnings. In in order to
increase the added value of nickel, the government uses nickel downstream mechanism so
that nickel management from upstream to downstream can be run sustainably and bring a
positive impact to the country and also a mining company. As for downstreaming or what is
known as downstreaming or value-adding is an effort to reduce exports raw materials and
encourage domestic industry to use materials in order to increase domestic added value. In a
word on the other hand, downstream is a techno-economic transformation of conditions
initial mineral and commodity resources to condition with value that is greater than the
economy, utilization, and usability before which contributes to a positive impact on the
economic, social, and culture.
 Domestic downstream nickel aims to increase value added to nickel minerals,
strengthening the industrial structure, and being able create jobs and business opportunities in
the country. Through downstream policy, the value generated from nickel minerals will
certainly be doubled compared to just exporting in the form of more raw nickel. Based on
data reported by the Ministry of Energy and Mineral Resources since the implementation of
the downstream value of nickel has increased every year The downstreaming of the nickel
sector has been pursued by the government has given good results, proven in the last 5 years
period the price of nickel as a reference mineral continues to increase significantly each year
the year. The Ministry of Energy and Mineral Resources notes on In 2018 the nickel
reference mineral price reached USD 11304.55/ton, on in 2019 it reached USD
12832.73/Ton, and in 2020 it increased
to touch the price of USD 15059.57/Ton.
Then in period 5 in the last year, the highest nickel reference mineral price occurred in
April 2022 which reached a price of USD 35995.30/Ton. Through the published data by the
Ministry of Energy and Mineral Resources that in term In the last 5 years, Indonesia has
begun to successfully carry out downstream the nickel mining sector which also had a
positive impact on increasing added value in the nickel mining sector in Indonesia.
Indonesia's success in downstreaming the sector Nickel mining certainly cannot make the
government satisfied with it nickel management, because efforts to downstream nickel must
still be carried out sustainable and integrated to downstream the nickel mining sector always
able to support and give strength to the industry domestic. Apart from increasing the added
value of nickel, downstream is also necessary endeavored so that domestic companies have
power to produce its own raw materials that are in the country and not depend on imported
materials from other countries.
In the mineral mining industry, management is through a smelter is part of the mineral
production process that is mined from nature which is still mixed with other materials so
needed further management. While the smelter itself is a facility to manage useful mine
results to increase metals such as nickel, tin, gold, copper and silver. Law Number 4 of 2009
concerning Mineral and Coal Mining has mandated the government to consistently
implement obligation to build a mineral mining smelter to the company mining that has a
production operation mining business license specifically for management and refining. With
the existence of a smelter built in Indonesia, will certainly provide benefits for development
mining sector in Indonesia. The advantages of building a smelter built domestically, namely:
construction of smelters in Indonesian mining areas will be more provides an advantage over
selling only raw nickel ore abroad with low prices.
Increase the added value of nickel minerals, because it is through a smelter mining
companies will carry out the management and refining of nickel which converts the raw
material in the form of ore into a nickel metal end product. Construction of smelters by
mining companies will help government in reducing unemployment in Indonesia, because
communities residing around the mining area have opportunity to get a job. Have a positive
impact on improving industrial performance national mining, because the obligation to build
a smelter will increase the added value of national exports, and reduce the deficit increased
trade, and increased welfare public.
2.7. Relevance of Nickel Management to the Welfare State
 The concept of a welfare state adopted by Indonesia, has directs the state to organize
and integrate across policies towards achieving national goals.20 In line with the concept
According to Horold J. Laski, the function of the state is: 21 "creation of those conditions
under which the members of the state may attain the maximum satisfaction of their desire”
that opinion implies that the state has an obligation to create happiness for community
through the fulfillment of community desires to the fullest. In line with the state's obligation
to create prosperity, The Indonesian Constitution has put it into Article 33 paragraph (3) The
1945 Constitution of the Republic of Indonesia which states “earth and water and the natural
resources contained therein it is controlled by the state and used as much as possible
prosperity of the people", the mandate of the article has become the foundation philosophical
and juridical concept of state control to do management of natural resources in Indonesia.
Government as entity who run the constitutional system have the authority to carry
out the management of natural resources with the argument of mastery the state, but this
mastery certainly cannot be separated from the principal benefits that must be given to the
people in doing so natural resource management. Therefore, in doing state control, the
government must make the welfare of the community as the main goal in managing natural
resources contained in Indonesia. Benefits derived from nickel management by the company
Mining is not only enjoyed by companies those who carry out mining activities, but nickel
management must in such a way as to make a real contribution to economic growth
Indonesian nation. Nickel as a non-renewable natural resource of course it is the
responsibility of the state to create policies that provide benefits to all parties involved in the
activity nickel mining, both the state, mining companies, and the community must benefit
from nickel management carried out by mining companies as a principal implementation the
benefits of nickel management itself. Based on data reported by the Ministry of Finance
Republic of Indonesia in 2021, minerals and coal have become the second contributor to
Non-tax State Revenue donate Rp. 44,835 T, non-tax state revenue in 2021 has experienced a
2-fold increase compared to 2020 which only donated Rp. 21,178 T.
Mineral and mining sector Coal has shown its essence through a rapid increase in a
period of one year and has succeeded in defeating state revenues non-tax sourced from
geothermal, natural gas, fisheries and forestry. Increasing sources of income from the sector
mining has brought a logical consequence that mining has a major role for Indonesia's state
revenue. If sector mining continues to be utilized and managed properly, the sector Mining,
especially nickel, will certainly increase state income which ultimately makes the country
capable provide welfare for all Indonesian people as has been stated in the fourth paragraph
of the Constitution of the State Republic of Indonesia in 1945. Environmental social
governance based nickel management by Mining companies are certainly an attempt by
mining business actors to carry out nickel management that is effective, efficient,
environmentally sound so that the management of these mineral resources can be sustainable.
The concept of environmental social governance that attention to the environment,
social, and corporate governance in Nickel management not only provides benefits for the
company attract investors, but the positive impact of this concept will give also benefit the
community around the mining area. As the right to the environment that has been guaranteed
in The Indonesian Constitution Article 28 H paragraph (1) of the Basic Law Republic of
Indonesia Year 1945 which gives rights to everyone to live and have a good and healthy
place to live, of course can be implemented through environment-based nickel management
social governance by mining companies, because the company mining will carry out
monitoring of the environment, carry out reclamation and/or post-mining activities so that the
surrounding area. Mining can be reused by local residents and can used properly. In addition,
the concept of social environment governance will also improve relations between parties
involved or in contact with mining activities Based on data reported by the Ministry of
Finance Republic of Indonesia in 2021, minerals and coal have become the second
contributor to Non-tax State Revenue donate Rp. 44,835 T, non-tax state revenue in 2021 has
experienced a 2-fold increase compared to 2020 which only donated Rp. 21,178 T.
Mineral and mining sector Coal has shown its essence through a rapid increase in a
period of one year and has succeeded in defeating state revenues non-tax sourced from
geothermal, natural gas, fisheries and forestry. Increasing sources of income from the sector
mining has brought a logical consequence that mining has a major role for Indonesia's state
revenue. If sector mining continues to be utilized and managed properly, the sector Mining,
especially nickel, will certainly increase state income which ultimately makes the country
capable provide welfare for all Indonesian people as has been stated in the fourth paragraph
of the Constitution of the State Republic of Indonesia in 1945.
Environmental social governance-based nickel management by Mining companies are
certainly an attempt by mining business actors to carry out nickel management that is
effective, efficient, environmentally sound so that the management of these mineral resources
can be sustainable. The concept of environmental social governance that attention to the
environment, social, and corporate governance in Nickel management not only provides
benefits for the company attract investors, but the positive impact of this concept will give
also benefit the community around the mining area.As the right to the environment that has
been guaranteed in The Indonesian Constitution Article 28 H paragraph (1) of the Basic Law
Republic of Indonesia Year 1945 which gives rights to everyone to live and have a good and
healthy place to live, of course can be implemented through environment-based nickel
management social governance by mining companies, because the company mining will
carry out monitoring of the environment, carry out reclamation and/or post-mining activities
so that the surrounding area Mining can be reused by local residents and can used properly.
In addition, the concept of social environment governance will also improve relations
between parties involved or in contact with mining activities.
2.6. Definition of Sustainability Report
In general, the company will report implementation of ESG that has been done
through reports annual report and sustainability report (sustainability report). Sustainability
report is a form a sustainability report developed by an independent organization founded in
1997 in United States, namely the Global Reporting Initiative (GRI). GRI himself defines the
sustainability report as a tool in describing and measuring the company's activities as a form
of responsibility to relevant stakeholders’ organizational performance to achieve
development goals sustainable. Elkington (1997) defines a sustainability report as a report
that does not only present information company's financial performance but also present
information non-financial enabling companies can grow sustainably.
Based on the two definitions above, researchers concluded that the sustainability
report is a reports that don't just report performance information corporate finance but also
non-financial performance as form of responsibility to stakeholders achieve sustainable
development goals. Benefits of Disclosure of Sustainability Report According to the World
Business Council for Sustainability Development (WBCSD) in 2002, the benefits of which
obtained from the disclosure of the sustainability report, among others:
1) Sustainability reports can create transparency because provide information to
company stakeholders such as investors, governments, creditors, etc. so that the
prospect company increases.
2) Sustainability report as a means that can provide contribution to increase
corporate value, price market, and customer loyalty in the long term.
3) Sustainability report can be a reflection of the company in managing the risk.
4) Sustainability reports can stimulate leadership thinking and performance
supported with passion competition.
5) Sustainability report can facilitate implementation of a better management system
in managing environmental, social, and economic impacts.
Risks and controversies related to governance, environment and social can be reduced
companies by increasing transparency and oversight, by disclosing ESG (MSCI, 2012). The
results of a review of previous studies conducted by Rahman and Alsayegh (2021) also shows
that ESG disclosure can increase transparency, reputation, brand value, employee and
customer loyalty, cost reduction, business practice better, and gain legitimacy from society.
This legitimacy is a social contract that must be met by the company when operating. This is
in line with Deegan (2007) which explains the theory of legitimacy, namely the norms and
values that have been built by society must have alignment with the company's operating
activities, so that social contracts can be fulfilled. Companies that violate this contract get the
negative consequences of stakeholders, such as society. The negative consequences received
by the company are product boycotts which causes a decrease in sales so that profits also
have a downward impact. Besides that, other negative impacts are resource use violations,
increased litigation costs, and the emergence of public demands for polluting the environment
around the community.
In Indonesia's government and regulatory agencies have made several regulations
which the company is obliged to account for its operating activities that have an impact on
governance, environment, and social, so that legitimacy is fulfilled as expected stakeholders.
Government regulations, namely rules and laws regarding responsibility for Environmental,
Social and Governance contained in regulation no. about the Company Limited, Government
Regulation No. 47 article 4 paragraph 1 of 2012 concerning Responsibility Social and
Environmental Limited Company (Indonesia, 2012). Law Number 25 article 15 of 2007
concerning investment (Indonesia, 2007). But it turns out several regulations and laws issued
by regulatory bodies along with the government does not necessarily make companies,
especially in Indonesia obedient to manage them company well, and socially and
environmentally responsible.
For example on environmental permits and gold added business permits that have
been obtained by mining companies Mas Sangihe (TMS) turned out to have an impact on
forest destruction, bird habitat disrupted, and the supply of clean water for the community is
threatened (Lumbanrau, 2021). A food and beverage company in Bekasi City, West Java also
polluted it river by dumping hazardous waste. The company got the letter reprimand from the
Bekasi City Environmental Management Agency (BPLH) (Nugroho, 2017). Results a survey
conducted by the East Java Integrated Water Patrol Team found that there were seventeen
companies, including PT Mandalindo, PT Rama Emerland, PT Sumber Agung, PT Karmaji
Inti Utama, PT Indo Oli Perkasa, PT Keramik Diamond, and PT Gaweredjo did not manage
their waste properly so that it pollutes the environment around the company (Kominfo, 2019).
Apart from being responsible for the environment, there are other responsibilities that
must be carried out the company concerns employee social problems, such as problems in the
plantation sector Palm oil. The social problem that occurs in this sector is that workers are not
given decent worker rights, such as low wages, insecure places to work, unstable continuation
of work, no protection at work, and incapacitated support the household (Hardum, 2021).
Governance or givernance issues should also be considered by the company in order to
maintain the legitimacy of stakeholders. However it turns out, there are still a number of
companies that have not good governance, such as AISA, which has been in legal trouble, is
the Lippo Group, including LPKR and LPCK GCG is not implemented properly. Poor GCG
implementation can be seen in the transfer of ownership of Meikarta secretly, then the case of
SMCB shares went up significant without openness (Binsasi and Rahmawati, 2018).
Apart from violation cases ESG that occurred in Indonesia, the results of observations
on the Bloomberg database for public companies that have registered on the IDX in 2012-
2019 concerning ESG disclosure, only 92 companies made disclosures out of 799 companies.
The phenomenon of the Environmental, Social, and Governance (ESG) gap that occurs
attracts researchers to examine what factors influence companies to disclose ESG. This
research was conducted because the researcher wanted to fill in the gap of previous research
only focuses on the impact of ESG on financial performance, firm value, market information
asymmetry, etc. some of these topics were researched by Triyani, Setyahuni and Kiryanto
(2020); Castro and Arino, (2010); De Lucia, Pazienza and Bartlett (2020); Buallay (2019);
Friede, Busch and Bassen, (2015); Duque-Grisales and Aguilera-Caracuel (2019); Siew,
Balabat and Carmichael (2016); Shakil et al. (2019); Atan et al. (2018); Aboud and Diab
(2018); and Brogy and Lalasio (2019).
Environmental damage is a fairly serious problem with the growth and development
of companies in every country. Wrong one of the causes of environmental damage is the use
of natural resources conducted in an inappropriate way to gain economic advantage the big
one. In addition, the company's production activities can also cause environmental pollution
which will have an impact on social conflict. Companies should pay more attention to social
and environmental responsibility in order to gain legitimacy for the social role and
environmental concern that has been done by the company, so the company will get the trust
and support of the community. The trust and support obtained from the community can have
a good impact on the survival of the company in the future (Gray, et al., 1995). Corporate
social responsibility program applications can be developed by using the Triple Bottom Line
concept introduced by Elkington (1998), namely People, Planet, and Profit.
All three are very aspects important to measure whether the company can be said to
be successful through three criteria, namely: economic, environmental, and social. Elkington
initiated the concept of the triple bottom line when business people Carry out company
activities only for profit. Performance The company can not only be measured through the
profits earned by company, but the success of a company is also measured by how big it is
the company's contribution to environmental sustainability and social welfare around.
Elkington (1998) states:
―focuses not just on the economic value a company or project add, but also on the
environmental and social value they add – or destroy. At its narrowest, the term ‗triple
bottom line‘ is used as a framework for measuring and reporting corporate performance
against economic, social and environmental parameters. At its broadest, the term is used to
capture the whole set of values, issues and processes that companies must address in order to
minimize any harm resulting from their activities and to create economic, social and
environmental value. This involves being clear about the company‘s purpose and taking into
consideration the needs of all the company‘s stakeholders –shareholders, customers,
employees, business partners, governments, local communities and the public.-
The government also assumes social and environmental responsibility is a very
important thing that must be done by the company. Matter This can be proven by the
emergence of regulations issued by the government through Law Number 40 of 2007
concerning "Limited Liability Company" (hereinafter referred to as the Company Law). In
the Company Law, there are regulations regarding ESG in Article 74. This article confirms
that the Company carries out the activities his business in the field of and/or related to natural
resources is obliged to implement Social and Environmental Responsibilities, for which these
obligations are budgeted and calculated as the cost of the company whose implementation is
carried out with attention to decency and fairness. If the obligation is not carried out,
sanctions will be imposed in accordance with the laws and regulations applicable (Adhari,
2015).
In addition, good corporate governance (good corporate governance) is an important
factor in measuring the level company success. Good Corporate Governance (GCG) can be
defined as a set regulation governing the relationship between shareholders, administrators
(managers) companies, creditors, government, employees, as well as all relevant stakeholders
regarding their rights and obligations. Research has discussed a lot the influence of good
corporate govermace on company performance, but deep in recent years, a new trend
emerged, where investors considering environmental, social, and corporate governance
factors with using Environmental, social, and governance (ESG) scores. ESG score practices
and disclosures assist investors in doing so transactions in the capital market. Investors see
abnormal returns as an indicator can be used to see the state of the market that is happening.
research that been done mostly just focusing on one variable, no covers all of the indicators in
the ESG.
Within the CFA Institute (2008, p.6) explains the indicators contained in the ESG
variable (Environmental, Social, and Governance) by considering various aspects in it. The
company's environmental performance indicators are measured using environmental
disclosure score as seen from the company's operational activities and their impact on the
environment, such as carbon emissions, greenhouse gas emissions, disclosure or
measurement, reporting, climate change (risks caused by operations companies), changes in
ecosystems, facilities that can cause damage environment, granting business licenses,
pollution, renewable energy, resource depletion natural resources, waste disposal, use of toxic
chemicals, and others. Corporate social performance in this study was measured using social
disclosure score as seen from several indicators, such as welfare environment (in this case
animals), child labor, discrimination, diversity (employees/board diversity), facilities that
may pose social risks, issues of employee wages, political contributions and risks, sexual
harassment, slavery, the election of the advisory board on executive compensation, and
others.
While corporate governance in this study is measured by using the governance
disclosure score as seen from several indicators, such as executive compensation, the
relationship between the company's stakeholders (stakeholders), rights of stakeholders
(stakeholders), division of positions, setting the authority of directors, managers,
shareholders, and other parties. The CFA Institute conducted a survey in 2015 regarding
investors what ESG factors are most widely used in considering decisions invest. Out of
44,131 respondents, only 27% said that they does not consider the ESG factor in investing.
While 73% of respondents consider environmental, social, governance factors, even a
combination of these factors in investing. Of the 73% of respondents who considering ESG
factors, the majority consider governance as Currently, the capital market in Indonesia and
Malaysia is still not efficient because capital markets in Indonesia and Malaysia are still less
sensitive to information according to the efficient market hypothesis. An efficient market is a
market that can quickly obtain relevant information (Fitriani and Hartini, 2014).
The more faster new information is reflected in security prices, the more efficient the
market will be the capital. In an efficient market it is not possible to obtain abnormal returni,
although in practice there are anomalies, namely things that deviate where events or events
are not anticipated and which are offered opportunity for investors to obtain abnormal
returns. Anomalies may occur all forms of market efficiency, both weak, semi-strong, and
strong forms. This anomaly can be used to generate abnormal returns. Abnormal return can
be calculated using several models, such as the market model/single index model and the
capital asset pricing model (CAPM). Abnormal returns are usually caused by several factors,
for example announcements dividends, productive company announcements, increasing
interest rates, demands law, and others.
Investors do not like something that is unexpected or outside of hope. Abnormal
return is something that happens beyond the expectations of investors. Abnormal returns can
be positive, where the returns that occur are more greater than investors' expectations.
Abnormal returns can also be valuable negative if the yield (return) that occurs is lower than
investors' expectations. This research will look at the influence of environmental, social, and
performance governance (ESG) on abnormal returns in Indonesia and Malaysia. Election
countries of Indonesia and Malaysia because it is still rare to find research that discusses the
environmental, social, and governance (ESG) performance of abnormal return by using
environmental disclosure score, social disclosure score, and governance disclosure score. In
addition, in 2010-2015 the world economy is unstable which also has an impact on price
fluctuations shares in Indonesia and Malaysia.
Fluctuating stock prices can cause abnormal returns, both positive and negative.
Previous studies have discussed how ESG score can explain the influence of the company's
level of sustainability on abnormal returns. Statman and Glushkov (2009) conducted research
on companies in the DS 400 and S&P 500 that have a high level of sustainability and
companies that have a low level of sustainability based on Kinder, Lydenberg, and Domini
Research & Analytics (KLD) from 1992 to 2007. This study uses the CAPM model, the
three-factor model and the four-factor model factor. From this study it was found that there
were abnormal returns positive and significant in both types of companies. Manescu (2011)
examined the relationship between ESG scores and returns based on data from Kinder,
Lydenberg, and Domini Research & Analytics (KLD). 1992 through 2008 includes all S&P
500 and DS 400 companies. Regression cross Fama MacBeth (1973) proves that only
companies that have a relationship with the community that has a positive influence on
returns.
ESG score as a whole shows no effect on returns. In addition, there are changes in the
effect of employee relations, where from July 1992 to June 2003, employee relations have a
positive effect on stock returns. However, from July 2003 to June 2008, there were negative
influence between employee relations and stock returns. Company with low scores on public
relations have expected stock returns higher than companies that have relationship scores
high society. Lee, et al (2020) examined the performance of companies in America based on
the ESG score on Sustainable Asset Management (SAM) from 1998 to 2007 using the four-
factor Carhart model. From research it was found that there was no significant difference to
performance companies in companies that have high ESG scores and companies those with
low ESG scores. However, this study found little evidence where there are differences
between companies that have ESG scores with a company that has a low ESG score, namely
at company size, book-to-market or momentum factor.
However, research it only calculates the ESG score as a whole and not on each
indicators in ESG. The single factor that stands out the most is distinguishes between
companies that have high ESG scores and companies that have a low ESG score apart from
performance company is market risk. Eccles, et al (2014) identified 180 companies in
America, of which 90 companies have a high level of sustainability and 90 companies have
low level of sustainability using the ESG score on ASSET4 and Sustainable Asset
Management (SAM). In addition, the research also research and conduct personal interviews.
The research results reveal annual abnormal return reached 4.8% from 1993 to 2010.
Halbritter and Dorfleitner (2015) examined the relationship between social performance
companies and the company's financial performance on the American market from 1991 until
2012 based on the environmental, social, and Governance (ESG) score by using the four
factor model of Carhart (1997) and Fama cross regression MacBeth (1973).
This study is the first study to compare the impact of the level of sustainability on
companies using the three ESGs rating providers, namely ASSET4, Bloomberg, and KLD.
This research is not found significant differences in returns between companies that have
ESG high scores with companies that have low ESG scores. However, the results of the Fama
MacBeth cross-regression (1973) found a significant effect on several variables. Effect of
Company Size on ESG Disclosure Company size is the size of the company which can be
seen from various aspects such as total assets, profitability, equity, etc. In addition, company
size is also often associated with the company's ability to disclose information (Pangaribuan,
2018). Stakeholder demands to obtain information in a transparent manner (mandatory
information and voluntary) will increase when the company gets bigger.
Great company more able to disclose information voluntarily greater because of such
disclosure require high costs, while small companies assume that disclosure Voluntary
actions can threaten companies in competition (Scaltrito, 2016). Large companies are usually
watched a lot by stakeholders and are even in the spotlight government investigations
(Bhattacharyya and Agbola, 2018). Strict supervision and referrals investigations make large
companies must provide information that is transparent and accountable to the company's
stakeholders, one of which is information disclosure volunteer. The statement is in line with
the results of Scaltrito's (2016) research that Firm size has a positive effect on voluntary
disclosure. Large companies who voluntarily add information will obtain, retain, as well as
increasing the legitimacy of the company in the eyes of stakeholders (Scaltrito, 2016).
One of voluntary information disclosure is ESG. The ESG Disclosure done by the
company to make stakeholders easily get related information company's concern for
Environmental, Social, and Governance (ESG) Effect of Company Age on ESG Disclosure
The age of the company is the page where the company operates and has activities in a
certain area place. Company age is the number of years since the company was built and
started operating in the business market (Uche, Ndubuisi and Chinyere, 2019). Older age
Companies, especially companies that are listed on the stock exchange, will have more and
more demands from stakeholders to disclose information, both mandatory and voluntary
transparent and accountable. Talpur, Lizam and Keerio (2018) show that age company can
affect the level of disclosure because of the age of the company considered as a stage of
growth and development of the company. Ansah (1998) companies that have been operating
longer will disclose more information in reports annually than younger firms.
2.9. The Effect of Industry Type on ESG Disclosure
The type of industry is an industry that is divided according to the sector according to
the situation and the conditions that exist in the country's stock exchange. In Indonesia there
are nine industrial sectors, viz agriculture, mining, basic industry and chemical, various
industries, consumer good industry, property and real estate, transportation, finance, trade,
services, and investment (sahamok.net, 2021). Each industry has its own characteristics of
operations and activities that affect disclosure practices. Wallace (1988) shows that the firm
within an industry that specifically influences its disclosure practices, for example there are
significant differences in reporting practices between the manufacturing industry and industry
finance. This statement explains that the type of industry affects disclosure. One of them is
ESG Disclosure Effect of Ownership Structure on ESG Disclosure The ownership structure is
the shares owned by the entity or individual have the right to vote when making company
decisions (Pangaribuan, 2018).
This ownership structure can affect the operations and activities of the company.
according to Khan, Chand and Patel (2020) ownership structure influences voluntary practice
disclosure. One of the ownership structures in the company is institutional ownership.
Institutional ownership is the percentage of shares owned by the institution divided with the
number of outstanding shares (Barako, Hancock and Izan, 2006). Ownership percentage The
large share makes institutional investors have the power to control practice company
disclosure (Putra, Kusuma and Dewi, 2020). The higher the ownership institutional, the
higher the voluntary disclosure, such as ESG. The world economy is already interconnected
through trade and investment, then issues regarding what reporting should be disclosed by the
company to the stakeholders become an important matter (Buallay, 2019). On progress,
disclosures regarding financial reports are now deemed insufficient to meet the needs of the
public company stakeholders related to information, this is what then becomes attention for
the management of the company as a form of concern and service to stakeholders.
A successful stakeholder management strategy must leading to better environmental
performance, social performance along with governance performance and may also be related
to future financial performance (Velte, 2017). In recent years the ESG score has become a
new trend for inside investors determine investment decisions. Even though this problem
appeared a decade ago, but until 2016, the Indonesia Stock Exchange (IDX) had not offered
written guidelines for ESG reporting, training related to ESG, and not yet requiring ESG
reporting as one rules for companies to be listed on the stock exchange. But things are
different with United The Nation Sustainability Exchange expects for all companies listed on
there discloses the impact of environmental, social, and governance practices by 2030
(Sustainability Stock Exchange, 2015). Company performance can be measured using
financial measures such as profitability ratios, market value, and so on. Performance
measurement viewed from the financial side becomes a the important thing in assessing the
success of the company is whether it has been running according to the target expected or
not. A form of disclosure made by an entity either in the form of Financial and non-financial
disclosures are of course now an important indicator in assessing as well as evaluate the
company's performance, whether the disclosure can affect the company performance or not.
With the disclosure of environmental, social and governance responsibilities The
company is expected to create a good reputation for the company. Upgrade The company's
earnings are ultimately based on increasing levels of reputation as well consumer trust in the
company so that it has an impact on the acquisition of loyalty towards the company itself.
(EY, 2020). In maintaining the existence of the company from business competition in In this
free market era, companies must have the right strategy to continue to increase the value of
the company itself. along with the development very fast business, every business activity is
required to not only concerned only with company profits, companies must see the impact
that will arise as a result of the course of the company's operational activities (Safriani, M. N
and Utomo, 2020).
Not infrequently the activities of a company have a bad impact for the environment.
Thus forest destruction is a form of decline from the environmental aspect, even though the
economy has increased (Husada & Handayani, 2021). Based on Indonesian Environmental
Statistics (2020), One of the challenges in sustainable development is con observation efforts
natural resources. If you look at the 2020-2024 RPJMN, the issue regarding The environment
is also a national priority. Therefore the Stock Exchange Indonesia (IDX) calls for the
implementation of Environmental, Social, and Governance (ESG) or environmental, social
and governance aspects for existing business actors in Indonesia as an effort to support
sustainable finance in the capital market. The application of sustainable financial reports aims
to maintain economic stability and inclusiveness, one of which is by creating synergy
between economic, social and environmental aspects (Husada & Handayani, 2021).
So far, the industrial sector that has a high risk, such as plantations palm oil can
operate because financial service institutions participate in providing support in the form of
funding. In other words, financial services institutions such as banks indirectly have a role in
the occurrence of damage environment (Husada & Handayani, 2021). Seeing this, it is
important for the perpetrator efforts in all fields to maintain the best possible relations
between the economy, environmental, social, and governance. In this way, the company that
properly disclosing ESG will be more attractive to financial investors and other stakeholders,
as well as financially profitable in the long term because of the increased relationship
between the company and various parties (Li et al., 2018). ESG is an index ESG is a non-
financial indicator of a company that includes matters related to sustainability, social, and
corporate governance capabilities (Melinda & Wardhani, 2020).
The Financial Services Authority as the regulator issues Financial Services Authority
Regulation Number 51/Pojk.03/2017 concerning Implementation Sustainable Finance for
Financial Services Institutions, Issuers, and Companies Public. In article 1 it is stated that
products and/or Sustainable Financial Services are financial products and/or services that
integrate economic, social, and Environmental, as well as governance in its features.
Furthermore Article 10 explains that Financial Services Institutions, Issuers and Companies
The public is required to prepare a Sustainability Report. The report is mandatory submitted
to the Financial Services Authority annually according to the limit when the annual report is
submitted that applies to each FSI, Issuers, as well as Public Companies. Currently, the
Indonesia Stock Exchange (IDX) has launched a new index, namely the IDX ESG
(Environmental, Social, Governance) Leaders. As one attempt towards a better sustainable
investment in the capital market, IDX announce the determination of shares that have
environmental, social, Good Governance through Stock Announcement No.
Peng-00363/BEI.POP/12- 2020.
IDX collaborates with Sustainalytics to conduct an assessment the company's ESG
performance, the stock with the best rating will be selected into IDX ESD Leaders.
Companies with a higher rank in the index ESG has a higher enterprise value, by linking ESG
on company value, the ESG index will allow investors to earn major role in driving the
company which will then improve transparency and disclosure, so their reporting will also be
increased (Aboud & Diab, 2018). By making disclosures environmental, social and corporate
governance responsibilities are expected to create a good reputation for the company
(Safriani, M. N and Utomo, 2020). Indonesia is still lagging behind in the application of
conservation principles environment, social responsibility, and good governance while
running business. Even Indonesia is ranked ESG below the Philippines, Singapore, Malaysia,
and Thailand. Based on the Corporate Knights rating, at In 2019 the Indonesian capital
market ESG was ranked 36th out of 46 capital market in the world.
Meanwhile, the Financial Services Authority will require para business actors
registered on the IDX to report environmental performance Social Governance starting in
2022. Alfaruq, N. (2021, March 30). Investor.id [Web page]. Accessed from
https://investor.id/market-and-corporate/indonesiatertinggal-di-dinding-esg. In order to meet
OJK's target of requiring all business people report their ESG performance, it is necessary to
prove that ESG implementation does have a positive impact on the company as well as
investors. Judging from previous research, each pillar in ESG has a designation which are
shorter include environmental (ENV), social (SOC), and governance (GOV). Research on
Environmental Social Governance (ESG) still relatively few in Indonesia, both separately
from each pillar or in combination. Research results are still varied, research previously
indicated that indirectly environmental performance affect the value of the company through
the company's financial performance (Maryanti & Fithri, 2017).
 It is concluded that ESG has a significant effect against the value of manufacturing
companies that are not included in the IDX list directly through financial performance.
Furthermore, it is said that the value of the company owned by companies on the ESG index
list are higher in comparison with other companies (Aboud & Diab, 2018). In addition, the
correlation matrix shows a positive relationship between company value and ESG ratings.
This statement is supported by research which states that ESG, ESG Combined, ENV, SOC,
GOV, and controversy have a positive effect on corporate value (Melinda & Wardhani,
2020). Contrary to statement mentioned, environmental aspects and social aspects in the
sustainability report are not significantly affect firm value (Sari et al., 2017). However, by
together economic, social, and environmental aspects as independent variables in his research
stated to have a significant influence on value company.
The writer chose this title because he wanted to test the effect of application
Environmental Social Governance (ESG) in companies listed in IDX ESG Leaders on each
company's values. There is several companies whose shares have been selected into the IDX
ESG Leaders who became the sample in this study. Proxy used for describes the value of the
company, namely Tobin's Q. Then, the size is measured as a log of total assets and leverage
as measured by total debt divided by total assets will be the control variable (Li et al., 2018).
Return on Assets (ROA) as a proxy for financial performance that divides income by total
assets as well became the control variable in this study (Aboud & Diab, 2018). In the year of
2020 Indonesia's economic conditions are facing very serious challenges due to presence of
the Covid-19 pandemic.
However, companies can take advantage of the conditions pandemic to increase ESG
adoption. Therefore, in this research there are two calculation models based on the dummy
period. on models one will use the pre-covid-19 period and for model two using the post-
covid-19 period. By having an understanding of positive impact obtained from the
implementation of Environmental Social Governance It is hoped that all business people in
Indonesia can take more initiative to participate and actively support sustainable development
through performance improvement ESG based. As explained (Xie et al., 2019) that increases
corporate awareness to implement sustainability strategy and perform disclosure of
environmental, social, and governance (ESG) information, giving impact of fundamental
changes in management and business models.
In recent years, ESG information has become more and more everyone's attention
because of the potential long-term impact it provides to the investment of stakeholders rather
than just being limited to shareholders. There are many names given to ESGs, but they are
not limited to Corporate Social Disclosure (CSD), Corporate Social Responsibility Disclosure
(ESGD), etc. (Buniamin et al., 2015). It is a practice to measure, disclose, and be accountable
to all stakeholders both inside and outside the company. A company's ESG score reports their
performance against sustainable development goals. ESG Report includes resource use,
natural resources, human rights, and levels corporate corruption, how they invest in public
relations, etc. Shareholders often view ESG reports because they relate company strength,
risk management, and its effectiveness (Almeyda & Darmansya, 2019).
In Indonesia, ESG is getting more and more attention after the government Indonesia
stated its commitment to achieve 17 Sustainable Development UN Goals (SDGs) by 2030
(Bappenas, 2019). Hence, goals Sustainable development is carried out through the 5Ps,
namely:
1) People; Determined to end poverty and hunger. in everything shape and
dimensions, and to ensure that all humans can fulfill their potential in a dignified
and equal manner, and in a favorable environment Healthy.
2) Planets; Determined to protect the planet from degradation, incl through
sustainable consumption and production, managing natural resources in a
sustainable manner sustainable and take urgent action on climate change, so to
support the needs of present and future generations.
3) Prosperity; Determined to ensure that all humans can enjoy a prosperous and
satisfying life and that of economic, social progress and technology occurs in
harmony with nature.
4) Peace; Determined to promote a peaceful, just and society inclusiveness that is
free from fear and violence. There will not be sustainable development without
peace and there is no peace without sustainable development.
5) Partnerships; Determined to mobilize the necessary means for implement this
agenda through the Revitalized Global Partnership for Sustainable Development,
based on the spirit of global solidarity strengthened, especially focusing on the
needs of the poorest and most vulnerable and with the participation of all
countries, all stakeholders and all Integrating ESG aspects as the main dimension
of development sustainability into corporate strategy theoretically provides
benefits in terms of reputation, customer trust and loyalty, cost savings, access
capital, human resource management, innovation capacity, and management risk
(Ferrero-Ferrero et al., 2016).
This is also supported by ESG Indonesia Capital Market which describes the benefits
of ESG for companies as maintain reputation with increasing concern regarding social and
environmental issues, companies can maintain their reputation by demonstrating a strong
commitment to inclusion of ESG practices on operational and strategic agendas. Practice
implementation this can be supported by periodic disclosure of ESG information using
generally accepted standards. Information disclosure reporting can strengthen the sense of
trust with investors, customers and parties other interested. Manage risks and take long-term
opportunities beforehand not taken into account ESG risks can include things like lack of
management environment, local community conflicts, and changing rules and regulations,
and are often not considered in depth because they cannot be measured as easily as any other
commonly used financial metric.
However, with the increasing criticality of ESG issues and their direct impact,
companies can protect themselves by implementing a risk management system that is can
identify, measure, and respond to ESG risks in a timely manner adequate. ESG also presents
business opportunities that can be taken by company. Implementation of strong ESG
practices can improve efficiency, lower costs, increase productivity, and encourage
innovation, such as encouraged companies to expand to sectors with high growth potential,
such as technology or clean energy. Align conditions with investor demand With the onset of
the COVID-19 pandemic, investors are increasingly aware of the importance of resilience in
times of crisis, and have started to divert funds to investment that produces a good impact in
the long term, both financially financially as well as socially and environmentally.
 Companies can attract more many investors by implementing ESG initiatives and
make regular reports. Besides that, the company can also be interesting long term investors,
because ESG focused investors in general aims to invest for value creation in the long term.
Prepare for changes in rules and regulations Regulators in various jurisdictions have started
to issue regulations for support sustainable finance and ESG-based investment activities. In
general, the issuance of regulations begins with reporting obligations companies. In
Indonesia, OJK has also issued OJK Regulations No. 51/POJK.03/2017 concerning
Implementation of Sustainable Finance for Institutions Financial Services, Issuers and Public
Companies, and Financial Roadmap Sustainable Phase II (2021-2025).
And in the future the regulator in the Capital Market Indonesia will continue to work
on issuing other ESG regulations which can support the development of the Indonesian
Capital Market towards sustainable finance. By integrating ESG principles into strategy and
company operational activities proactively, the company can prepare yourself for the
changing regulatory landscape, and even can be superior to other competitors in the face
change(Market, 2022). ESG disclosure is a form of dialogue between the company and the
stakeholders involved. The company will try provide disclosure of information on the
company's business activities to be able to change the perceptions and expectations of
stakeholders. Besides that, the company also use ESG disclosure as a tool to gain legitimacy
strong in the eyes of society and all stakeholders.
With thus it is hoped that a good image for the company can be created for a company
disclosures that have been made. Non-financial disclosures such as ESG are expected to
becomesocial investment in order to satisfy the interests of stakeholders who will contribute
to improving company performance. Actions sustainability carried out by the company will
create demand for it higher and greater growth for the company (Buallay, 2019). Therefore, it
is necessary to carry out a good disclosure of information that is financial and non-financial
to be able to answer the demands given by stakeholders so that stakeholders can know how
the performance a company that cares about the environment, the social condition of society
as well employees, also implement good corporate governance. Something ESG disclosures
that contain environmental care practices, social, as well as governance carried out by the
company is a signal that the company can provide to investors. The company will try provide
the best information about the condition of the company as a signal signal positive for
investors. The most ESG performance measurement widely used in previous research is the
index of reputation and content analysis. Notable examples of indices are Bloomberg,
Thomson Reuters, and KLD.
 CHAPTER III
RESEARCH METHODOLOGY
3.1. Method
One type of descriptive qualitative research is research with the method or approach to
the case study (Case Study). This research focus intensively on one particular object that
studies it as a case. The case study method allows the researcher to remain holistic and
significant. According to Arikunto (2020), the research method is the methods used by
researchers in collecting research data. Research conducted by the author with the title
Process Development Analysis the micro elements of Concept Design in Start Up Companies
are research qualitative descriptive with a case approach. Qualitative research is one research
that produces data that is descriptive (description that in the form of written or oral words
from every behavior of people who observed). Nawawi (2003) suggests that "case study data
can be obtained from all parties concerned, in other words the data in this study collected
from various sources”.
As a case study, the data collected from various sources and the results of this study are
valid only in the cases investigated. Arikunto further (1986) argues that "The case study
method as a type of descriptive approach, is intensive, detailed and in-depth research on an
organism (individual), institution or certain symptoms with area or narrow subject”. Case
study is a research strategy that focuses on understanding dynamics present in a single
setting. Example of case study research including Selznick's (1949) description of TVA,
Allison's (1971) research about the Cuban missile crisis, and Pettigrew's (1973) research on
decision making in UK retailers. Case studies can involve one or several cases, and many
levels of analysis (Yin, 1984). As an example, Harris and Sutton (1986) studied 8 dying
organizations, Bettenhausen and Murnighan (1986) focuses on the emergence of norms in 19
groups laboratory, and Leonard-Barton (1988) tracked the progress of 10 projects innovation.
In addition, according to (Yin, 1984) case studies can use embedded design, that is, multiple
levels of analysis in a single study single.
For example, Warwick's study of competitiveness and change Strategic planning in the
UK's major corporations is carried out at two levels analysis: industry and company
(Pettigrew, 1988), and Mintzberg and Waters (1982) studied Steinberg's electrical research.
some changes strategy within a single company. One type of descriptive qualitative research
is research with the method or approach to the case study (Case Study). This research focus
intensively on one particular object that studies it as a case. The case study method allows the
researcher to remain holistic and significant. According to Arikunto (2020), the research
method is the methods used by researchers in collecting research data. Research conducted by
the author with the title Process Development Analysis The micro elements of Concept
Design in Start Up Companies are research qualitative descriptive with a case approach.
Qualitative research is one research that produces data that is descriptive (description that
in the form of written or oral words from every behavior of people who observed). Nawawi
(2003) suggests that "case study data can be obtained from all parties concerned, in other
words the data in this study collected from various sources”. As a case study, the data
collected from various sources and the results of this study are valid only in the cases
investigated. Arikunto further (1986) argues that "The case study method as a type of
descriptive approach, is intensive, detailed and in-depth research on an organism (individual),
institution or certain symptoms with area or narrow subject”.
Case study is a research strategy that focuses on understanding dynamics present in a
single setting. Example of case study research including Selznick's (1949) description of
TVA, Allison's (1971) research about the Cuban missile crisis, and Pettigrew's (1973)
research on decision making in UK retailers. Case studies can involve one or several cases,
and many levels of analysis (Yin, 1984). As an example, Harris and Sutton (1986) studied 8
dying organizations, Bettenhausen and Murnighan (1986) focuses on the emergence of norms
in 19 groups laboratory, and Leonard-Barton (1988) tracked the progress of 10 projects
innovation. In addition, according to (Yin, 1984) case studies can use embedded design, that
is, multiple levels of analysis in a single study. For example, Warwick's study of
competitiveness and change Strategic planning in the UK's major corporations is carried out
at two levels analysis: industry and company (Pettigrew, 1988), and Mintzberg and Waters
(1982) studied Steinberg's electrical research. some changes strategy within a single
company.
3.2. Types of research
3.2.1. Causal (Explanatory) Case Study
Explanatory or explanatory research aims to explain the relationship between two or more
symptoms or variables. This research focuses on the basic question "why". People are often
dissatisfied with simply knowing what happened and how it happened, but also want to know
why it happened. To explain the cause of an event. It is necessary to identify various
variables outside the problem to confirm the cause of a problem. Therefore, explanatory
research is also referred to as confirmatory research and is increasingly known as
correlational research. Causal research, also according to Kotler, p. 122, is "research aimed at
testing (testing) hypotheses about cause and effect relationships." In practice, causal research
is usually carried out by experiment. There is one thing that is being tried to be applied
(called treatment, treated as an independent variable which is symbolized X) to be tested
whether it causes something to happen (effect, effect, is treated as the dependent variable,
symbolized Y). In short, does X cause Y. Through this explanatory research, it can be seen
how the correlation between two or more variables, whether the pattern, direction, nature,
shape, or strength of the relationship. This correlational research begins with an implicit or
explicit question: "Is there a relationship between X and Y?" Answers to these questions can
only be obtained through explanatory or correlational research.
3.2.2 Descriptive Case Study
Descriptive method is a method of examining the status of a group of people, an
object, a set of conditions, a system of thought or a class of events in the present. The
purpose of this descriptive research is to make descriptive, systematic, actual and
accurate descriptions of the facts, characteristics and relationships between the
phenomena investigated. According to Whitney (1960), the descriptive method is
finding facts with the right interpretation. Descriptive research studies problems in
society, as well as procedures that apply in society and certain situations, including
relationships, activities, attitudes, views, and ongoing processes and effects of
phenomena.
 3.2.3 Exploratory case study
Exploratory research is research that aims to test a theory or hypothesis in order to
strengthen or even reject existing research theories or hypotheses. Exploratory research is
fundamental in nature and aims to obtain information, information, data on matters that are
not yet known. Because it is fundamental in nature, this research is called exploratory.
Exploratory research is carried out if the researcher has not obtained initial data so that he
does not have a complete picture of the matter to be studied. Exploratory research does not
require a specific hypothesis or theory. Researchers only prepared a few questions as a guide
to obtain primary data in the form of information, as the initial data needed. According to
(Mintzberg 1979) “Initial definition of the research question is, in at least broad terms,
important in the theory building of the case study”. noted: “no matter how small our sample
is or what is interesting we always strive to fit into an organization with a well defined focus
on collecting certain types of data in a systematic way”.
The rationale for defining the research question is the same as in hypothesis testing
research. Without a research focus it's easy to become overwhelmed by the volume of data.
For exams, (Pettigrew. et. al 1988) defined their “research questions in terms of strategic
change and competitiveness in large British firms”, and (Leonard Barton 1988) “focused on
viable technological innovations”.
3.2.4. Testing Theory
Case studies are generally used in conjunction with survey research for triangulation
purposes in theory testing research. According to (Voss et al., 2002) “Despite the limited use
of case studies in theory testing there are examples of application areas such as
implementation strategy.” Theory development is a central activity in organizational research.
In case study research, the initial definition of the research question, at least in broad terms, is
important in building the theory of the case study. (Mintzberg 1979) noted: “No matter how
small our sample is or what our interests are, we always try to go into organizations with a
well-defined focus on collecting specific types of data in a systematic manner.” The rationale
for defining research questions is the same as in hypothesis testing research. Without a
research focus, it's easy to become overwhelmed by the volume of data.
For example, (Pettigrew. et. al 1988) define their “research questions in terms of strategic
change and competitiveness in large British firms”, and Leonard-Barton (1988) “focus on
technical innovation of feasible technologies”. As stated by (Christensen and Sundahl 2001,
Eisenhardt 1989 and Whetten, 1989) "in theory development researchers make iterative
observations and clarifications with the intention not only to prove what is in the literature
but also to look for anomalies between existing theories and practice in the real world”.
Almost the same opinion was put forward by (Eisenhardt & Graebner, 2007) by stating "the
process of theory development occurs through a two-way "dialogue" between the data
obtained from the data collection and the developing theory, and then compared with the
existing literature.
3.2. Data Collection Process
Case study According to (Yin 2011), "the implementation of data collection has six
sources, namely: documents, archive recordings, interviews, direct observation, participant
observation, and physical devices". The case study research process according to (Yin 2011)
is:
a. “Defining and designing research. Researchers conduct studies on the development of
theories or concepts to determine cases and design data collection protocols.
b. “Preparing, collecting, and analyzing data. Researchers carry out the preparation,
collection, and analysis of data based on research protocols that have been designed
previously.
c. “Analyze and conclude. In a single case, the research results are used to check back
on the concepts or theories that have been built in the first stage of the research.The
data collected in this case study are interviews and direct field observations.
Also at least three members of the organization were interviewed for data triangulation.
Collecting data in this study were interviews and direct field observations: Interviews are
activities to obtain information from informants by meeting directly or face to face. Interview
guidelines are prepared in advance and can be developed according to the conditions in the
field. Someone who is involved in the environment or organization being studied is taken as a
sample because the researcher thinks that this person has the information needed for the
research.
This technique makes it easy for researchers to determine the informants to be
interviewed according to the research objectives. Direct observation to the field According to
(Yin 2011), "Observations or observations are useful to provide additional information about
the topic to be studied. Observations on the social or organizational environment will add
new dimensions, to understanding the context and phenomena to be studied. Observations or
direct observations in this study were carried out by looking at the current condition of the
organizational environment at the KDI startup company.
3.3. Data analysis
The essence of qualitative research is the techniques and methods of qualitative data
analysis. According to (Miles & Huberman, 1994) "The process of analyzing qualitative data
is the most difficult stage in designing case study research for several reasons. Unlike
quantitative research which has more regular research stages starting from the stages of data
collection, data selection, data analysis to drawing conclusions, in qualitative research the
whole process runs simultaneously. According to (Yin 2009). "Some of the techniques
available in the data analysis stage are pattern matching, explanation building, time series
analysis, logic models, and cross case synthesis. The data analysis technique in this study
uses the following analysis techniques:
a. Descriptive analysis is by describing the development of the micro concept design
elements of the KDI startup company.
b. Pattern matching analysis. This analysis, according to Yin (2011) is "comparing
patterns based on empirical with predicted patterns. If these two patterns have
similarities, the results strengthen the internal validity of the case study concerned.
Pattern matching analysis in this study is to compare initial predictions or assumptions
that will occur with the actual facts on the ground.
 CHAPTER IV
RESULTS

4.1. General Description of The Company

4.1.1. Brief History of PT ANTAM
The company's business activities began in 1968 when the company was established
as a State-Owned Enterprise through the merger of several government-owned mining
companies and mining projects, namely the General Management Board of State-Owned
Mining Companies, Indonesian Bauxite Mining State Company, Tjikotok Gold Mining State
Company, Precious Metals State Company, PT Nickel Indonesia and the Diamond Project.
The company was established under the name "Perusahaan Negara (PN) AnekaTambang" in
the Republic of Indonesia on July 5, 1968 based on Government Regulation No. 22 year
1968. The establishment was announced in Supplement No. 36, BNRI No. 56, July 5, 1968.
On September 14, 1974, based on Government Regulation No. 26 of 1974, the status of the
Company was changed from a State Company to a Limited Liability Company ("Company
Company").
On December 30, 1974, ANTAM changed its name to a Limited Liability Company
with the Deed of Establishment of the Company No. 320 dated December 30, 1974 made
before Warda Sungkar Alurmei, SH, at that time as a substitute for Abdul Latief, formerly a
notary in Jakarta jo. Deed of Amendment No. 55 dated March 14, 1975 made before Abdul
Latief, formerly a notary in Jakarta regarding changes to the status of the Company in order
to implement the provisions contained in Law no. 9 of 1969 concerning Stipulation of
Government Regulations in Lieu of Law No. 1 of 1969 (State Gazette of 1969 No. 16.
Supplement to State Gazette No. 2890) concerning forms of State Business to become Law
(State Gazette of the Republic of Indonesia of 1969 No. 40), Government Regulation No. 12
of 1969 concerning Limited Liability Companies (Persero). State Gazette of the Republic of
Indonesia of 1969 No. 21 and Government Regulation No. 26 of 1974 concerning the Change
of Form of the Aneka Tambang State Enterprise to a Limited Liability Company (Persero),
State Gazette of the Republic of Indonesia of 1974 number 33 jo.
Decree of the Minister of Finance of the Republic of Indonesia No.
Kep.1768/MK/IV/12/1974, concerning Determination of PT Aneka Tambang Company
Capital to become a Limited Liability Company under the name PT Aneka Tambang, which
has been approved by Menkumham in its Decree No. YA5/170/4 dated May 21, 1975 and the
two Deeds mentioned above have been registered in the register book located at the Jakarta
District Court Office successively under No. 1736 and No. 1737 dated 27 May 1975 and has
been announced in Supplement No. 312 BNRI No. 52 dated July 1, 1975. To support the
financing of the ferronickel expansion project, in 1997 the Company offered 35% of its
shares to the public and listed them on the Indonesia Stock Exchange. In 1999, the Company
listed its shares on the Australian Stock Exchange and then became a full member of the
Australian Stock Exchange in 2002. 1736 and No. 1737 dated 27 May 1975 and has been
announced in Supplement No. 312 BNRI No. 52 dated July 1, 1975.
To support the financing of the ferronickel expansion project, in 1997 the Company
offered 35% of its shares to the public and listed them on the Indonesia Stock Exchange. In
1999, the Company listed its shares on the Australian Stock Exchange and then became a full
member of the Australian Stock Exchange in 2002. 1736 and No. 1737 dated 27 May 1975
and has been announced in Supplement No. 312 BNRI No. 52 dated July 1, 1975. To support
the financing of the ferronickel expansion project, in 1997 the Company offered 35% of its
shares to the public and listed them on the Indonesia Stock Exchange. In 1999, the Company
listed its shares on the Australian Stock Exchange and then became a full member of the
Australian Stock Exchange in 2002.
4.1.2. PT. ANTAM Operational Activities
ANTAM's main activities include exploration, exploitation, processing, refining and
marketing of nickel ore, ferronickel, gold, silver, bauxite, coal and precious metal refining
services. ANTAM also made acquisitions from companies that have mining business
licenses, and established partnerships by forming joint ventures to develop mining activities
in Indonesian territory. In 2014, the Company will start selling the new commodity chemical
grade alumina (CGA) in line with the start of operations for the CGA processing plant in
Tayan, West Kalimantan. In addition, the Company is also developing a power generation
business. In 2020, the Company had 5 business units namely the Southeast Sulawesi Nickel
Mining Business Unit (UBPN), North Maluku UBPN, Gold Mining Business Unit (UBP),
The Precious Metals Processing and Refining Business Unit (UBPP) and the new Bauxite
UBP were formed in 2020 to support the planned operation of the Tayandi CGA factory in
the second half of 2014 by the Joint Controlling Entity PT Indonesia Chemical Alumina (PT
ICA).
The Company also has a Geomin Unit which focuses on the Company's exploration
activities. To anticipate the mandate of Law no. 4 of 2009 specifically related to the
obligation of domestic mineral processing and refining activities and the ban on the export of
raw materials, especially nickel and bauxite. With the sales composition of nickel ore and
bauxite around one-third of the Company's revenue, management has anticipated this by
having a mature plan to increase the sales volume of other core commodities such as
ferronickel, gold and coal. Geomin from cost center to profit center. In addition, ANTAM
will also accelerate the completion of the Pomalaa Ferronickel Plant Expansion project. The
company is also of the view that this clause can have a positive impact in the long term
considering that local mining companies that currently only export ore can become suppliers
of raw materials for the Company. The limited supply of raw materials will increase the price
of the commodity itself, and this will eventually occur.
ESG is ANTAM's commitment to be accountable for the impact of its operations in
social, economic and environmental dimensions and to continuously ensure that these
impacts contribute benefits to society and the environment. ANTAM believes that hoping
solely for financial health will not guarantee the company can grow in a sustainable manner
(sustainable). The company's sustainability will be guaranteed if the company pays attention
to other related dimensions, including the social-environmental dimension. In this case,
ANTAM publishes a sustainability report as a form of corporate responsibility towards the
environment and the surrounding community. This is clearly seen in ANTAM's sustainability
report.
Sustainability Report 2020 PTANTAM (Persero) Tbk, or ANTAM, includes the
implementation of the fulfillment of social responsibility by the Company (sustainability
report 2020h.33). ANTAM believes business success is not only determined by economic
indicators. For this reason, ANTAM always tries to balance environmental, social and
governance activities, in order to maintain sustainability, which is not only limited to the area
around the operation (sustainability report 2019h.1). Disclosure of information about an
organization's impact – be it positive or negative – on the environment, society and the
economy in a sustainability report (SR) must be accessible and comparable, thereby
providing information to stakeholders to make decisions. As stated by Darwin (2008) that a
sustainability report must be accessible so as to provide comprehensive information to
stakeholders. G4). This 2020 Sustainability Report refers to the sustainability reporting
standards from GRI version 4 or G4 which were launched in 2020 (sustainability report 2020
h.33). Analysis in ANTAM's sustainability report includes three main categories that can
measure company performance in fulfilling corporate social responsibility or corporate
responsibility. The three categories are economic, environmental and social. Each category
serves to measure and evaluate the extent to which the company's performance is in
implementing its ESG.
4.2. Economic Categories
According to Kartini (2009: 38) many companies are also observers who emphasize
ESG on purely social aspects. In fact, most of the literature on ESG now agrees that ESG
includes economic, social and environmental aspects. Therefore, the implementation and
disclosure of ESG must also cover these three aspects. Regarding the economic aspect, the
GRI guidelines state that the dimension of economic sustainability is related to impact
organization to the economic situation for its stakeholders, and to the economic system at
local, national, and global levels. The economic category describes the flow of capital among
different stakeholders, and the main economic impact of the organization on all levels of
society. GRI Guidelines version 4 divides this category into four aspects, namely aspects of
economic performance, market presence, indirect economic impacts and procurement
practices.
Based on ANTAM's 2020 sustainability report, ANTAM has fulfilled 3 of the 4
aspects in the economic category as required by G4. These three aspects are economic
performance, indirect economic impacts and procurement practices. Economic Performance
Aspects ANTAM has fulfilled all indicators contained in the aspect of economic
performance. Fulfillment of indicators of direct economic value generated and distributed can
be included in ANTAM's sustainability report. Likewise, the total economic value distributed
as a whole. However, when viewed from the category of funds distributed for employee
salaries and the PKBL community and ESG, there is an imbalance between the two
categories. As can be seen, the amount of funds distributed to employees in the last 3 years
has continued to increase, but the amount of funds distributed to the PKBL community and
ESG continues to decrease. This indicates that ANTAM has not fully created prosperity for
all stakeholders, because great attention is still given to employees. In addition, to create
welfare for employees, ANTAM hasdisbursed pension funds as described in its sustainability
report.
All ANTAM employees are included in the pension program, as a form of guarantee
for their survival when they are no longer employees at the Company. The amount of the
pension fund paid in 2020 amounted to IDR 12,124,777,245 for 63 permanent employees
who have retired. (sustainability report 2020 p.83). This aspect also shows the resilience of
ANTAM's performance and economic growth in facing economic challenges such as global
economic challenges. Even though it is known that ANTAM does not receive financial
assistance from the government, ANTAM can overcome these economic challenges with
funds. Results of ANTAM's own activities, as stated by ANTAM in sustainability report in
2020.
Entering the age of 45 since its founding, ANTAM continues to show tough
performance and economic growth, even though in 2020 the Company faced unfavorable
global economic conditions. All revenues in 2020 came from the results of the Company's
business activities and no financial assistance from the Government. The amount of
expenditure is intended for business development and fulfillment of the Company's
obligations, as well as increasing the welfare of stakeholders (sustainability report 2020h.76).
ANTAM is not only faced with global economic challenges but also faced with weather
anomalies. However, all of these challenges do not have significant implications for
ANTAM's finances. as explained by ANTAM in its 2020 sustainability report.
During the reporting period, ANTAM was also faced with weather anomalies as a
result of climate change phenomena, which directly or indirectly affected the Company's
operations. However, this does not have significant financial implications for the Company
(sustainability report 2020 p.78). ANTAM's economic resilience has not fully had a positive
impact on all stakeholders as can be seen from ANTAM's contribution to the state through
taxes and PNBP which decreased from the previous year. This can be seen in the attachment
to ANTAM's Sutainability Report.
4.2.1. Aspects of Indirect Economic Impacts
Another aspect that is required by GRI to be disclosed in the economic category is the
indirect economic impact. This aspect illustrates that ANTAM's existence brings benefits to
local residents through job creation. However, limited employment opportunities mean that
not all local residents can be accepted to work as employees of the Company. For this reason,
several programs and activities have been carried out by ANTAM as an effort so that the
company's presence can bring indirect benefits for improving the welfare of local residents
such as the construction of a Solar Power Plant (PLTS), Sangia Ni Bandera Airport in Kolaka
Regency, BAHTERAMAS Regional General Hospital in Kendari. ANTAM has disclosed
these programs and activities in its sustainability report
For 2020, ANTAM provided 500 PLTS units for people who have not enjoyed PLN
electricity. The PLTS units are spread across 12 sub-districts throughout Kolaka Regency.
The PLTS-SHS assistance is expected to provide information assistance for people who have
not received electricity from the Government through PLN. In addition to the Sangia Ni
Bandera Airport terminal, public facilities built with ANTAM's participation are the
BAHTERAMAS Regional General Hospital in Kendari which was established on the
initiative of the Southeast Sulawesi Provincial Government… (sustainability report
2020p.63). Nurkolis (2014) argued that indirect economic impact is an important part in the
economic context of sustainable development. This is realized by ANTAM, one of the
manifestations of ANTAM's awareness is to carry out a fruit center area development
program. This program aims to improve the welfare of the residents around the operating area
and while maintaining biodiversity as stated in ANTAM's sustainability report.
 Efforts to develop fruit centers were carried out by planting 40,000 fruit trees during
2020. This program was a continuation from the previous year and had planted 25,000 fruit
trees. The plants planted were mangosteen, avocado, jambu jamaika and guava crystal
(sustainability report. 64). Based on the description above, it can be seen that ANTAM has
fulfilled all indicators from this aspect. This proves that ANTAM has played a role as an
agent of socio-economic change, especially in economic development in ANTAM's
operational areas. As explained in the GRI guidelines, fulfillment of this aspect indicates that
an organization has played a role and contributed as an actor or agent of socio-economic
change.
4.2.2. Aspects of Procurement Practices
This aspect is a new aspect included in the GRI guidelines. This aspect only consists
of one indicator, namely the comparison of purchases from local suppliers in significant
operational locations. ANTAM has fulfilled this aspect as stated in the 2020 sustainability
report. We define a local company as a company founded by a local entrepreneur and
domiciled in the same district as the operating area of the Company's business units. Through
this involvement, local companies that are suppliers are expected to develop further so that
they can create jobs for local residents, and contribute to regional original income (PAD)
(sustainability report 2020 p.79). This indicator can reflect ANTAM's support and
contribution to local organizations in the supply chain as explained in the GRI
implementation guide, that the influence that the organization has on the local economy is not
only implemented in the form of direct employment and infrastructure development but also
in the form of contributions to local organizations in the supply chain.
4.2.3. Report Compliance Criteria
Based on the description above, it can be seen that ANTAM has fulfilled 7 of the 9
indicators in the economic category required by the GRI version 4 sustainable reporting
guidelines. The two indicators that ANTAM did not fulfill were indicators contained in the
aspect of market presence. So it can be concluded that in the economic category, ANTAM's
2020 sustainability report included in the standard criteria were partially fulfilled. The
economic aspect is an inseparable part of the concept of ESG as agreed by most of the
literature on ESG. With reference to the GRI guidelines version 4, the contribution of ESG
programs and activities in the economic aspect shows that the contribution to all stakeholders
has not been optimal. This is marked by an increase in spending or funds distributed to
employees and a decrease in contributions to employees and by making a real contribution to
company employees, local communities and the government. This contribution is realized in
the form of providing pension funds to employees, building infrastructure such as Solar
Power Plants and Hospitals in the areas where ANTAM operates.
In addition, Based on the above description, it can be concluded that in the economic
category, ANTAM has made various efforts to implement corporate social responsibility or
better known as ESG. However, the implementation of ESG in 2020 was not optimal. This is
marked by a decrease in funds spent on ESG programs and activities. In addition, these
programs and activities are only focused on inside stakeholders. Therefore, the authors hope
that ANTAM's ESG programs and activities can have a positive impact on inside and outside
stakeholders as well as a positive impact on overall economic development.
4.3. ESG Performance
4.3.1. Environment Category
The environmental category of sustainability describes ANTAM's operational impact
on living and non-living natural systems, including ecosystems, soil, water and air. This
category includes performance related to inputs (e.g. materials, energy, and water) and
outputs (e.g. emissions, wastewater, and waste). In addition, this environment includes
performance related to biodiversity, environmental compliance, and other relevant
information such as environmental expenditure and the impact on products and services.
Referring to the GRI guidelines version 4, ANTAM has fulfilled 7 of the 12 aspects
contained in the environmental category. The seven aspects are as follows:
1. Material Aspects
ANTAM is a diversified and vertically integrated mining company. This makes
the materials used in production activities diverse. In general, the materials used in the
entire series of production processes in all ANTAM business units are stated in the
sustainability report on page 40 as follows.
a. UBP Emas, UBPN Southeast Sulawesi, and UBPN Malut use raw materials in
the form of mineral ores as mining materials.
b. UBPPLM uses dorebullion produced by UBPEmas as raw material.
Besides that, there are also several other materials that act as auxiliary materials.
Some of the materials used, both as raw materials and auxiliary materials, are obtained as a
result of the waste recycling process. This was explained by ANTAM in its 2020
sustainability report on pages 40-41. The recycled material at UBPEMas is sodium cyanide
(NaCN). During 2020 there were 110,265 KgNaCrecycled, an increase compared to 2012 of
102,581KgNaCrecycled. This amount included 21.5% of the total cyanide usage. The
increased volume of NaCrecycled was due to an increase in the pH of the leaching process
which resulted in a stable concentration of cyanide in the slurry.
There are two types of materials that are recycled at UBPN Southeast Sulawesi: Split
metal from slag treatment results, as much as 22,906.8 tons. Efforts to recycle to obtain
materials to replace nickel ore by 5.88% or 83,295.42 tons. As much as 27,394.8 tons of dust
was processed into pellets and wetore mixtures to produce 37,357 tons or 2.64% of nickel ore
replacement material. The recycled material at UBPP LM is salt resulting from the
evaporation of waste water (salting). During 2020, 5,960 Kg of recycled salt or 58.08% of the
total salt needed increased compared to the 2012 recycled yield of 3,140 Kg or 43.37% of the
total salt requirement. This material aspect illustrates that ANTAM uses a recycling system
for materials used in the production process. With this recycling system, ANTAM can reduce
the intensity of materials which can ultimately have a positive impact on the environment.
2. Energy Aspect
As a business entity engaged in mining and in direct contact with the environment,
ANTAM's energy consumption for the company's operational activities as well as
reducing energy consumption is an urgent matter to disclose in a sustainability report.
This is in line with what Tedi (2020) revealed that every mining activity, whatever its
form, cannot be separated from environmental problems. Because, whenever and
 wherever mining activities are carried out, they will definitely come into direct contact
with the environment, both physically and socially. ANTAM has disclosed the total
utilization of energy used for the purposes of supporting operational and production
activities in each business unit. which is attached in the 2020 sustainability report

4.3.2. Social Aspect

Apart from the economic and environmental categories, another category that is
required to be disclosed according to the GRI guidelines is the social category. The social
category contains four sub-categories, namely labor practices and comfortable work, human
rights (HAM), responsibility for products and society. ANTAM has disclosed 3 of the 4
social subcategories. Sub-Category of Employment Practices and Pleasure of Work In terms
of employment, ANTAM develops the capabilities and competencies of the workforce in this
case employees by organizing training. In the 2020 period, the training was held 13,544 hours
and was attended by 1,550 employees. Thus, the average number of training hours per
employee per year is 5.11 hours. This was clearly stated by ANTAM in its sustainability
report.
In 2020 the Company held 13,544 hours of training attended by 1,550 employees.
Thus, the average number of training hours per employee per year is 5.11 hours
(sustainability report 2020 p.84). Efforts to develop the capabilities and competencies of
ANTAM's employees are also carried out through educational programs, namely the
Overseas Development Program (ODP). However, for the 2020 and 2014 periods ANTAM
has not yet implemented the scholarship program. ANTAM elaborated on this in its 2020
sustainability report. Currently the Learning & Development Division of the Head Office is
conducting further evaluation to maximize and perfect the curriculum and teaching materials
for the ODP program so that it conforms to the best practices applied by the Company. Thus,
for the period 2020 to 2014, ANTAM has not implemented the next ODP batch program.
In general, the GRI Guidelines version 4 requires that labor issues be disclosed based
on gender or male and female gender, one of which is regarding compensation. ANTAM
provides compensation for work or remuneration without discriminating between male and
female employees because ANTAM already has provisions regarding salary ranges at each
grade level. Each employee gets a basic salary according to the grade in his position, and
includes payment of benefits, the amount of which is determined by taking into account the
placement location and the conditions of each business unit/unit which can vary. A
description of this is disclosed by ANTAM in its sustainability report ANTAM provides
compensation for employment or remuneration without discriminating between male and
female employees. The Company has provisions regarding salary ranges at each grade level
(sustainability report 2020 p.83).
4.3.3. Governance Aspects
In terms of employment, there are aspects that ANTAM considers to have an
important impact on the company. This aspect is an aspect of occupational safety and health
(K3). This aspect is also one of the areas of the ESG program suggested by Natural Resource
Canada in Rahman (2009: 54). In terms of work safety, ANTAM makes various efforts to
reduce work risk for each business unit. As ANTAM's attachment in the sustainability report.
ANTAM has also signed a memorandum of understanding with General Electric to study
opportunities to develop integrated virtual pipeline power generation in the mining sector and
clean coal-fired power plants. Through this collaboration, General Electric will assist the
Company in conducting studies on renewable energy options such as natural gas, low-calorie
coal and coalbedmethane as energy sources for mining operations (sustainability report
2020h.45).
These efficiency efforts have yielded visible results from the intensity ratio of the
Pure Metal Processing and Refining Business Unit (UBPP LM) which has decreased from the
previous year as explained in the GRI guidelines that in combination with the organization's
total energy consumption, energy intensity helps to put the context of organizational
efficiency. Energy intensity DIUBPPLM can be seen in ANTAM's sustainability report.
Based on the description above, it can be seen that as a business entity that wants to achieve
sustainability, ANTAM realizes that energy is an aspect that must receive attention and must
be used sparingly. Policies for efficient use of energy are continuously pursued and
implemented in various ways, including in collaboration with General Electric to assist the
Company in conducting studies on renewable energy options such as natural gas. However,
optimal results for the efforts made have not been fully obtained by ANTAM as there is still
an increase in energy consumption in several business units.
Thus, ANTAM should be appreciated for the great attention and optimal efforts that
have been made by ANTAM. ANTAM conducts supervision and monitoring to ensure that
the extraction and use of water does not interfere with water sources. As stated in ANTAM's
2020 sustainability report. We make efficient use of groundwater (at UBPEmas and
UBPPLM) and surface water (at UBPN Southeast Sulawesi and UBPN Malut) efficiently for
the purposes of extracting mining materials, production processes and also domestic needs.
To support the optimization of water utilization, ANTAM carries out various water recycling
and reuse systems as attached by ANTAM in the sustainability report.
ANTAM also reports the percentage and total volume of water consumed and reused.
The biodiversity aspect reflects ANTAM's operational management and impact on the
environment, in this case biodiversity and preventing mismanagement. On an ongoing basis,
ANTAM minimizes negative impacts on the environment, including through reclamation of
disturbed land with the aim of restoring environmental conditions and creating a habitat that
supports the biodiversity in it. The reclamation carried out by ANTAM was disclosed by
ANTAM in the 2020 sustainability report as reclamation carried out by the Mining Business
Unit (UBP) Gold. Reclamation in protected areas carried out by UBP Emas in 2020, includes:
1. Arrangement of the area and development of the supporting capacity of the area
around GHSNP.
2. Planting life boundaries with 1,000 Aren and Candlenut trees at the tailings dam
and Cepak Puspa locations on the boundaries of the GHSNP area (sustainability
report 2020 p.54).
3. Reclamation efforts are not only carried out at the gold mining unit but also at the
nickel mining unit as disclosed in ANTAM's sustainability report.
 4. Open pit mining activities also take place in the operational areas of the UBPNS
of Southeast Sulawesi, so that they also have an impact on changes in the
landscape as well as the biodiversity and habitats on it. ANTAM is responding to
this situation by carrying out reclamation efforts, in order to overcome the
negative impacts that arise during mining activities and the period after.
Until the end of the reporting period, the total opening of mining and non-mining
areas within the IUP at UBPN Sultra reached 12.32 Km2. A total of 6.86 Km2 or 55.7% of
which is in efforts to restore habitat through reclamation (sustainability report 2020 p.55).
Management of the impact of ANTAM's mining activities is proven by the absence of a
significant impact on biodiversity. Mining activities carried out at UBPEmas do not have a
significant impact on existing biodiversity and habitat. This is because mining activities are
carried out covered in the ground (Sustainability reporth. 54). The description of the
significant impacts on ANTAM's biodiversity above provides information regarding the
preservation of the integrity of a geographic area either directly or indirectly because GRI
mentions the impact that significance of an organization can undermine the integrity of a
geographic area either directly or indirectly. An important aspect in efforts to protect
biodiversity in operational areas is the preservation of rare and endemic species in an area.
The results of monitoring and identification of endangered species, especially protected
animals, are presented by ANTAM in the attachment to the annual sustainability report 2020.
ANTAM's mining activities have had an impact on the environment, especially on
biodiversity in the areas where ANTAM operates. In general, ANTAM has minimized these
impacts, including through reclamation efforts in areas around ANTAM's mining activities.
This is in line with what was stated by Kurnia (2014) that reclamation is an activity carried
out throughout the stages of the mining business to organize, restore and improve the quality
of the environment and ecosystem so that it can function again according to its designation.
In the GRI guidelines version 4, emission aspects include indicators of greenhouse gas
emissions and ozone depleting substances, NOX, SOX, as well as other important air
emissions. ANTAM has disclosed all of these indicators. This indicates that ANTAM pays
attention to the management of emission impacts. Efforts to reduce emissions such as
greenhouse gas emissions are implemented by ANTAM, among others by planting trees as
stated in the 2020 sustainability report.
ANTAM's seriousness in reducing GHG emissions is realized, among others, by
implementing a commitment to plant 1.43 million trees throughout the Company's
operational areas and in other areas. The existence of these trees is important because they
contribute to the potential absorption of carbon dioxide (CO2) which is included in GHG
(sustainability report 2020p.46). GRI Guidelines version 4 states that greenhouse gas
emissions are the biggest contributor to climate change so that ANTAM's efforts to reduce
these emissions can show ANTAM's contribution in overcoming climate change. In addition,
ANTAM also pays attention to efforts to control emissions that have the potential to contain
ozone-depleting substances (ODS). Sources of potential ODS emissions are the use of freon
made from chlorofluorocarbon (CFC) in air conditioners, and the use of halons for dish
extinguishers (APAR). ANTAM does not produce ODS which is imported or supplied to
other parties. Likewise with other emissions, such as NOx, Sox and particulates coming out
of the chimney.
 ANTAM is committed to continuing to control gas emissions, including through
monitoring and measuring emission levels in chimneys, in order to ensure that the levels are
in accordance with the quality standards set by the government. ANTAM's commitment has
been presented in the sustainability report. ANTAM is committed to continuing to control
Nox and Sox emissions through monitoring and measuring emission levels in the chimney, to
ensure that the levels are in accordance with the quality standards set by the government and
the use of Gas Clean Technology (GCT) devices at the ferronickel plant at UBPN Sultra
(sustainability report 2020 p.48). One important aspect of efforts to preserve the environment
is the reduction of waste generated from production processes and domestic activities.
There are several forms of waste generated from ANTAM's production processes and
domestic activities. For liquid waste, storage and processing are carried out by means of a
wastewater treatment plant (IPAL) to ensure that the quality of waste for each business unit
meets the standards set by the Government. This is clearly stated in the sustainability report
as follows. Each operating ANTAM business unit is equipped with a wastewater treatment
plant (IPAL). The existence of WWTP functions to treat waste water so that the quality of
wastewater when it is released into water bodies has met the quality standards set by the
government (sustainability report. 48). Processing of liquid waste that meets the standards set
by the government above is obtained from the results of monitoring and measurement by
involving independent parties and accredited laboratories. Therefore, during 2020, ANTAM
never received reports and complaints from the public or authorities regarding disturbances to
biodiversity and habitats in water bodies.
Waste processing from ANTAM is not only limited to liquid waste, processing is also
carried out on solid waste. Much produced is tailings and slag. Waste in the form of tailings
is the residue from washing in the form of sludge from the hydrometallurgy process using
water media, while slag is a by-product of separating metal from its ore through a
pyrometallurgy process using heat. The management of these two solid wastes is always
monitored and checked periodically in the laboratory. This information can be seen in
ANTAM's sustainability report. The management of tailings and slag is always monitored
and checked periodically in the laboratory. The utilization of tailings is used as material for
backfilling, with the volume utilized reaching 171,585 Dmt, or 53.31% of the total volume
produced. The rest has been stockpiled in a landfill location that has obtained permission
from the Ministry of Environment. Meanwhile, Slag is utilized for overburden backfilling
purposes as a roadbase, with volume utilized as much as 980.706.53 tons, or 100% of the
volume produced (sustainability report 2020 p.51).
In addition to processing liquid and solid waste, processing is also carried out for
hazardous and toxic waste (B3). B3 waste management is carried out by: Stored in a separate
location in special packaging, with the application of certain security and safety standards,
and equipped with records according to government regulations. ANTAM applies standard
operating procedures and strict supervision, in every stage of management of B3 waste and
other hazardous liquids. Through this policy, during 2020 there were no reports regarding
storage leaks or spills of B3 waste and other hazardous liquids. Based on the GRI guidelines
version 4, this aspect only consists of indicators, namely the total cost of preserving the
environment. This indicator is presented clearly in the sustainability report.
 According to Mazurkiewicz (2011) corporate social responsibility towards the
environment reflects the company's ability to cover the implications the environment that
comes from; operating products and facilities, eliminating waste and emissions, maximizing
the efficiency and productivity of natural resources and minimizing bad practices can affect
the enjoyment of a country's natural resources for future generations. Referring to this
definition, ANTAM has not been maximized to be able to carry out ESG in the
environmental category. This can be seen from the fact that all the indicators required by GRI
have not been fulfilled. ANTAM is included in the partially fulfilled category because
ANTAM only fulfills 26 of the 34 indicators required by GRI with a percentage of 77%.
ANTAM should make maximum efforts to fulfill all the indicators required by GRI because
as a mining company, ANTAM is definitely not free from environmental problems. Because,
whenever and wherever mining activities are carried out.
4.3.4. Comparison of PT Aneka Tambang's Trends in the 2019-2021 Period
PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM), a member of MIND ID
- BUMN Mining Industry Holding, announced that the Company has become part of the
Leading ESG Index on the Indonesia Stock Exchange (IDX). ANTAM shares are listed as
part of the SRI-KEHATI Index, ESG Sector Leaders IDX KEHATI and the ESG Quality 45
IDX KEHATI Index on the IDX for the trading period 2019-2021. The SRI-KEHATI Index
is a stock group index that is considered to have good performance in encouraging
sustainable businesses, as well as having awareness of the environment, social and good
corporate governance or called Sustainable and Responsible Investment (SRI). The IDX
KEHATI ESG Sector Leaders Index is an index that contains groups of stocks with ESG
performance assessment results above the sector average and have good liquidity.
Meanwhile, the IDX KEHATI ESG Quality 45 Index is an index that contains the 45 best
stocks based on the results of assessing ESG performance and the company's financial quality
and having good liquidity. The three indices are managed by the IDX in collaboration with
the Indonesian Biodiversity Foundation (KHATI Foundation).
The inclusion of ANTAM's shares in the SRI-KEHATI Index, IDX KEHATI ESG
Sector Leaders and the IDX KEHATI ESG Quality 45 Index reflects the positive appreciation
of shareholders for the environmental, social and governance performance that the Company
has carried out in a sustainable manner. In addition, currently ANTAM's shares are also part
of the IDX LQ45 Low Carbon Leaders Index on the Indonesia Stock Exchange (IDX) and
remain part of the MSCI Global Standard Index from Indonesia. MSCI is an index published
by Morgan Stanley Capital International. In terms of environmental management, ANTAM is
committed to implementing the use of new and renewable energy in several operational
elements, as well as decarbonization efforts using environmentally friendly fuels in carrying
out operations and production activities. ANTAM has also prepared a decarbonization
roadmap, in line with ANTAM's commitment as a member of MIND ID to run sustainable
operations. This initiative is in line with the target of the Government of Indonesia in efforts
to tackle climate change, namely Net Zero Emissions by 2060.
 Picture 4.1. Income From Various Mines Profit and Loss
Source: Katadata

Aneka Tambang Tbk (Antam) recorded sales of IDR 38.45 trillion with a net profit of
IDR 1.86 trillion in 2021. This performance is the biggest record in the last five years.
Antam's sales increased by 40.5% compared to IDR 27.37 trillion in 2020. Antam previously
recorded sales of IDR 12.65 trillion in 2017, IDR 25.28 trillion in 2018 and IDR 32.72 trillion
in 2019. Meanwhile, net profit increased by 62% from Rp 1.15 trillion in 2020. Previously,
Antam's net profit was recorded at Rp 136.5 billion in 2017, Rp 1.64 trillion in 2018 and Rp
193.85 billion in 2019. In 2021, gold products will be the biggest contributor to sales. Antam
sold IDR 25.94 trillion of gold or 67% of Antam's total sales. Antam sold 28.28 tons of gold
domestically in 2021. This is the highest sales in the company's history.
Table 4.1 Results of PT. Aneka Tambang Tbk First Quarter in
2019-2021

Net profit Total Equity Sale Total assets

2019 171,668,347 19,909,922,744 5,183,941,977 33,598,993,970
2020 281,839,032 18,025,049,22 4,640,707,933 30,771,074,863
2021 630,378,89 9,799,680,634 7,584,965,07 32,690,824,565

The table above shows the results of PT. Aneka Tambang Tbk first quarter in 2019,
2020 and 2021 which has been selected according to the needs in this study. The results of
the first quarter of Tbk's full report for 2019, 2020 and 2021 can be seen in the attachment
section.

Table 4.2 Results of PT. Aneka Tambang Tbk Second Quarter in

2019 and 2020

Profit
Total Equity Sale Total assets
Clean
2019 365,751,174 19,771,175,877 12,053,579,471 33,566,765,371
2020 84,820,75 18,103,650,10 7,917,047,168 30,033,248,781

The table above shows the results of PT. Aneka Tambang Tbk second quarter in 2019
and 2020 which has been selected according to the needs in this study. The results of the first
quarter of Tbk's full report for 2019 and 2020 can be seen in the attachment section.

Table 4.3 Financial Report Results of PT. Aneka Tambang Tbk

Second Quarter in 2019 and 2020

Profit
Total Equity Sale Total assets
Clean
2019 561,192,400 19,947,608,029 20,801,246,785 32,654,878,387
2020 835,772,374 18,929,155,406 15,132,891,683 30,974,035,242

The table above shows the results of PT. Aneka Tambang Tbk third quarter in 2019
and 2020 which has been on selection as needed in this study. The full report results for the
third quarter of 2019 and 2020 can be seen in the appendix.

Table 4.5 First Quarter ROE Calculation Results of PT.

Aneka Tambang Tbk in 2019 and 2020

Year Net profit Total Equity ROE

2019 171,668,347 19,909,922,744 0.86 %
2020 281,839,032 18,025,049,220 1.56 %
2021 630,378,890 9,799,680,634 6.43%
Difference 3.14 %

Based on the table above, it can be seen that in the first quarter of 2019 the company
PT. Aneka Tambang Tbk has a net profit of 171,668,347 and a total equity of
19,909,922,744. After calculating using the formula to find the ROE value, it is found that
the ROE value in the first quarter of 2019 PT. Aneka Tambang Tbk by 0.86%. In the first
quarter of 2020 the company had a net profit of 281,839,032 and a total equity of
18,025,049,220. After calculating using the formula to find the value of ROE and the ROE
value in the first quarter of 2020 PT. Aneka Tambang Tbk by 1.56%. Whereas in 2021 the
company has a net profit of 630,378.89 and a total equity of 9,799,680,634. After calculating
using the formula to find the ROE value, it is found that the ROE value in the first quarter of
2020 PT. Aneka Tambang Tbk by 6.43%. The ROE value has increased in 2020 and 2021
with a difference of 3.14% greater than during the pandemic.

Table 4.6 Calculation Results of Second Quarter ROE PT.

Aneka Tambang Tbk in 2019 and 2020

Year Net profit Total Equity ROE

2019 365,751,174 19,771,175,877 1.85 %
2020 84,820,750 18,103,650,100 0.47 %
Difference 1.38

Based on the table above, it can be seen that in the second quarter of 2019 the
company PT. Aneka Tambang Tbk has a net profit of 365,751,174 and a total equity of
19,771,175,877. After calculating using the formula to find the ROE value, it is found that the
ROE value in the second quarter of 2019 PT. Aneka Tambang Tbk by 1.85%. In the second
quarter of 2020 the company has a net profit of 84,820,750 and a total equity of
18,103,650,100. After calculating using the formula to find the ROE value, it is found that the
ROE value in the first quarter of 020 PT. Aneka Tambang Tbk by 0.47%. The ROE value
decreased in 2020 with a difference of 1.38% greater than the year before the pandemic.

Table 4.7 Calculation Results of Third Quarter ROE PT.

Aneka Tambang Tbk in 2019 and 2020

Year Net profit Total Equity ROE

2019 561,192,400 19,947,608,029 2.81 %
2020 835,772,374 18,929,155,406 4.42 %
Difference 1.60 %
Based on the table above, it can be seen that in the third quarter of 2019 the company
PT. Aneka Tambang Tbk has a net profit of 561,192,400 and a total equity of 19,947,608,029.
After calculating using the formula to find the ROE value, it is found that the ROE value in
the third quarter of 2019 PT. Aneka Tambang Tbk by 2.81%. In the third quarter of 2020 the
company has a net profit of 835,772,374 and a total equity of 18,929,155,406. After
calculating using the formula to find the ROE value, it is found that the ROE value in the third
quarter of 2020 PT. Aneka Tambang Tbk by 4.42%. The ROE value has increased in 2020
with a difference of 1.60% greater than the year during the pandemic

4.3.5. ESG Performance in PT. Aneka Tambang Tbk

Efforts to increase efficiency in energy use are also proven through collaboration with
General Electric to assist the Company in conducting studies on renewable energy options
such as natural gas, low-calorie coal and coal bed methane as energy sources for mining
operations as disclosed by ANTAM in the 2020 sustainability report Various efforts to
maintain the safety of these employees have not yielded optimal results. This can be seen
from the increase in the number of severe category work accidents in 2020 compared to 2012,
where in 2020 there were 2 and 1 serious category work accidents at the Southeast Sulawesi
UBPN and North Maluku UBPN, respectively. Although, the total decrease in work accidents
from all categories has decreased. Data regarding the number of work accidents can be found
from the sustainability report as follows.
With regard to product responsibility, ANTAM only discloses indicators regarding
the sale of prohibited or disputed products and incidents of non-compliance with marketing
communications regulations. Regarding the sale of prohibited products, ANTAM explained
that during the reporting period, no ANTAM products were subject to sanctions such as
prohibition of trading or having to be withdrawn. from circulation. In fact, precious metal
products are the most sought-after products and are purchased by consumers as investment
products, in line with rising prices for precious metals in local and global markets. This was
stated by ANTAM in its 2020 sustainability report.
During the reporting period, no Antam products were subject to trade ban sanctions or
had to be withdrawn from circulation. In fact, precious metal products are the most sought-
after products and are purchased by consumers as investment products, in line with the
increase in precious metal prices in local and global markets (sust ainability report
2020h.80). For issues related to incidents of non-compliance with marketing communications
regulations. ANTAM describes that each product produced has its own consumers who are
bound by a contract buying and selling. Specifically for gold products, ANTAM actively
advertises and promotes information regarding the types and availability of goods, especially
those related to the launching of the LM Gold Boutique. As for nickel and bauxite products,
ANTAM does not carry out any forms of marketing communications that are in the nature of
advertising, promotion or sponsorship cooperation with other parties. ANTAM added that
until the end of 2020 the Company was not faced with incidents or allegations of violations of
marketing communication practices.
Every product produced by ANTAM has its own consumers who are bound by a sale
and purchase contract. We do not carry out any forms of marketing communications in the
nature of advertising, promotion or sponsorship cooperation with certain parties for nickel
and bauxite products while for gold products we actively carry out advertisements and
promotions, especially those related to the launching of the LM Gold Boutique. Until the end
of 2020 the Company was not faced with incidents or allegations of violations of marketing
communication practices (sustainability report 2020h.80). The absence of incidents or
suspicions of violations of marketing communications practices provides an indication of an
increase in the effectiveness of internal control. As stated in the GRI guidelines, compliance
with marketing communications regulations demonstrates the adequacy of internal
management systems and procedures.
4.3.6. SubCategorySociety
The last subcategory disclosed by ANTAM in the social category is Community.
During 2020 ANTAM has held various programs and activities involving local communities
around the Company's location and the post-mining area. ANTAM's presence can improve
the standard of living and community welfare local. The involvement of the local community
is intended so that ANTAM's presence can improve their standard of living and welfare,
through empowerment and improvement of environmental quality. The involvement of the
local community is also the best alternative to minimize the potential social impact arising
from ANTAM's operational activities. Through various social programs held, the community
will benefit from the Company's presence. (sustainability report 2020 p.62). Until the end of
the reporting period, ANTAM held social programs, which included:
1. Partnership and Community Development Program (PKBL), whose
implementation refers to the Regulation of the Minister of BUMN No. PER-
05/MBU/2007 concerning the Partnership Program for State-Owned
2. Enterprises with Small Businesses and the Environmental Development
Program which was last amended by Regulation of the Minister of BUMN No.
PER-08/MBU/2020 concerning the Fourth Amendment to the Regulation of
the Minister of State for State-Owned Enterprises No.PER-05/UMB.
3. Community development programs (community development or Comdev), in
the Company's operating areas as well as mine closure and post-mining areas.
The two social programs are clearly disclosed in ANTAM's sustainability report. This
disclosure shows that the ESGANTAM program contributes to social problems in this case
providing the welfare of local communities as stated by Untung (2008: 34) that ESG must be
able to combat various social problems that are so complicated, especially the problem of
poverty. In addition to community welfare, the social problems disclosed in ANTAM's
sustainability report are issues of corruption. Rahman (2009) includes corruption as one of
the ESG issues that affects the social conditions of society. ANTAM describes in its
sustainability report, that continuously, ANTAM continues to improve the understanding of
Directors and employees on all matters relating to anti-corruption. This is done by
incorporating anti-corruption materials in various training and outreach materials, including
through Program training.
4.3.7. Leadership Development.
Anti-corruption material is also part of the Leadership Development Program training
at both the basic, intermediate and advanced levels (sustainability report 2020p.75). In
addition, ANTAM contributes to providing understanding to external parties about the efforts
that have been made by ANTAM in eradicating Corruption. Understanding is carried out by
carrying out socialization which also invites suppliers and regional government
representatives in each business unit/unit, and participates in the Anti-Corruption Week
Exhibition held by the KPK, the Chamber of Commerce and Industry (Kadin) and the Anti-
Bribery Business Community (KUPAS). In this social category, ANTAM is included in the
partially fulfilled criteria because it only discloses 15 of the 58 indicators required by GRI
with a percentage of 26%. From this total percentage, it is clear that ANTAM has not fully
optimized its role in the social sector which is a form of implementation of the ESG concept.
As explained by Lako (2011: 59) that ESG is an obligation that must be implemented because
the company's role in the social community is not only as an "institution" that only wants to
conquer nature in pursuit of economic goals, but also has to play a role in carrying out social
reform and helping to overcome social problems that are increasingly widespread. The
description of the Lako can be taken as material for consideration for better ESG
implementation, especially in the social field.
4.3.8. The Explanation of ESG Carried Out by ANTAM
Percentage of total workforce represented in formal joint manageme t-worker
committees that help oversee and advise on occupational health and safety programs (G4-
LA5). Disclosed even though. PT. ANTAM's as stated by Carrol, it would sound odd to bring
the terminology of economic responsibility closer to corporate social responsibility, but these
two things will feel close when associated with the pricing mechanism. Carroll added that
pricing, as an economic activity, will synergize with social responsibility if it is based on
good faith to provide probable prices to consumers. That is, the price given is a representation
of the actual quality and value of the services offered.
This is one of the steps that can be taken to synchronize economic functions with
socially responsible activities. Based on the description of Carroll's theory, it can be seen that
ANTAM's ESG implementation, which is reflected in the sustainability report, has met the
aspects of economic responsibility. This can be seen, for example, through product
responsibility, which is one of the social sub-categories in the GRI guidelines version 4.
ANTAM explained that during the reporting period, no ANTAM products were subject to a
ban on trading or had to be withdrawn from circulation. In fact, precious metal products are
the most sought-after products and are purchased by consumers as investment products, in
line with the increase in precious metal prices in local and global markets.
This was stated by ANTAM in its 2020 sustainability report. In fact, precious metal
products are the most sought-after products and are purchased by consumers as investment
products, in line with the increase in precious metal prices in local and global markets. This
was stated by ANTAM in its 2020 sustainability report. In fact, precious metal products are
the most sought-after products and are purchased by consumers as investment products, in
line with the increase in precious metal prices in local and global markets. This was stated by
ANTAM in its 2020 sustainability report. During the reporting period, no Antam products
were subject to trade ban sanctions or had to be withdrawn from circulation. In fact, precious
metal products are the most sought-after products and are purchased by consumers as
investment products, in line with the increase in precious metal prices in local and global
markets (sustainability report 2020h.80).
Based on the description above, it is clear that ANTAM is trying to implement the
ESG concept in accordance with the regulations, for example through environmental
management, namely by making efficient use of production materials and minimizing the
negative impacts of company activities such as waste. However, environmental management
carried out by ANTAM is limited to compliance with applicable laws and/or regulations. This
is proven in the PROPER (Company Performance Rating Program) issued by KLH (Ministry
of Environment) where each ANTAM business unit received a blue proper. This is clearly
seen in ANTAM's sustainability report in the attachment to the appreciation and external
recognition.
As explained in the Regulation of the Minister of Environment RI No. 06 of 2020 that
blue proper is intended for businesses and or activities that have carried out the required
environmental management efforts in accordance with applicable provisions and/or laws and
regulations. Thus, the implementation of ESGANTAM has fulfilled the element of legal
responsibility as stated by Carrol that when a corporate carries out its operations the user has
agreed to enter into a contract with all aspects and legal norms that have existed or will
emerge in the future. Ethical responsibility has implications for corporate obligations to
adjust all of its activities in accordance with applicable social and ethical norms even though
they are not held in formal writing. As stated by Carroll that ethical responsibility guides
companies to a number of unwritten rules that apply in certain areas. In the Indonesian
context, the most common unwritten regulations are found. As stated by Rahman (2009:40)
that almost every region in Indonesia has a number of rules that have been agreed upon by all
levels of society even though they are not formally written.
Based on the above description, the ESG implementation disclosed in the
sustainability report has not fully fulfilled this ethical responsibility. This can be seen from
ANTAM's ESG vision and mission which have not touched on ethical responsibility. As
stated by Rahman (2009: 40), ethical responsibility can be reflected, among others, from the
vision and mission of a company's ESG. In addition, the ESG implementation disclosed in
the sustainability report has not included any ESG disclosures that discuss the positive and
negative impacts of ANTAM's existence. This is also evident from the non-fulfillment of the
customary rights aspect which is included in the Human Rights sub-category required by
GRI.
Carroll defines philanthropic responsibility as a concrete form in the form of physical
development carried out by the corporation towards the community. Carroll added, donating
the profits obtained for the construction of public facilities, improving the quality of life and
inter-faith welfare. Based on this explanation, ANTAM has fulfilled this responsibility. As
we know that ANTAM has built public facilities such as the construction of the Solar Power
Plant (PLTS), Sangia Ni Bandera Airport, BAMBERA Hospital in KERA District This can
be seen from the 2020 sustainability report. For 2020, ANTAM provided 500 PLTS units for
people who have not enjoyed PLN electricity. The PLTS units are spread across 12 sub-
districts throughout Kolaka Regency. PLTS-SHS assistance is expected can provide
information assistance for people who have not received it the flow of electricity from the
Government through PLN.
In addition to the Sangia Ni Bandera Airport terminal, public facilities built with
ANTAM's participation are the BAHTERAMAS Regional General Hospital in Kendari
which was established on the initiative of the Southeast Sulawesi Provincial Government
(sustainability report 2020p.63). In this responsibility, Carroll also explained that
philanthropic responsibility must be interpreted wisely where the corporation does not only
provide a number of facilities and financial support, but is also advised to foster community
self-reliance through this. This is in accordance with what ANTAM disclosed in its
sustainability report. The focus of the strategy is community empowerment towards
economic independence, through public infrastructure development programs and increasing
the skills and welfare of local communities. (sustainability report 2020, p.69).
In general, this philanthropic responsibility has been fulfilled by ANTAM but not
optimally. This can be seen from the decrease in the amount of funds distributed to PKBL
and ESG communities. Efforts to increase efficiency in energy use are also proven through
collaboration with General Electric to assist the Company in conducting studies on renewable
energy options such as natural gas, low-calorie coal and coal bed methane as energy sources
for mining operations as disclosed by ANTAM in the 2020 sustainability report Various
efforts to maintain the safety of these employees have not yielded optimal results. This can be
seen from the increase in the number of severe category work accidents in 2020 compared to
2012, where in 2020 there were 2 and 1 serious category work accidents at the Southeast
Sulawesi UBPN and North Maluku UBPN, respectively. Although, the total decrease in work
accidents from all categories has decreased. Data regarding the number of work accidents can
be found from the sustainability report as follows.
With regard to product responsibility, ANTAM only discloses indicators regarding
the sale of prohibited or disputed products and incidents of non-compliance with marketing
communications regulations. Regarding the sale of prohibited products, ANTAM explained
that during the reporting period, no ANTAM products were subject to sanctions such as
prohibition of trading or having to be withdrawn. from circulation. In fact, precious metal
products are the most sought-after products and are purchased by consumers as investment
products, in line with rising prices for precious metals in local and global markets. This was
stated by ANTAM in its 2020 sustainability report.
During the reporting period, no Antam products were subject to trade ban sanctions or
had to be withdrawn from circulation. In fact, precious metal products are the most sought-
after products and are purchased by consumers as investment products, in line with the
increase in precious metal prices in local and global markets (sust ainability report
2020h.80). For issues related to incidents of non-compliance with marketing communications
regulations. ANTAM describes that each product produced has its own consumers who are
bound by a contract buying and selling. Specifically for gold products, ANTAM actively
advertises and promotes information regarding the types and availability of goods, especially
those related to the launching of the LM Gold Boutique. As for nickel and bauxite products,
ANTAM does not carry out any forms of marketing communications that are in the nature of
advertising, promotion or sponsorship cooperation with other parties. ANTAM added that
until the end of 2020 the Company was not faced with incidents or allegations of violations of
marketing communication practices.
Every product produced by ANTAM has its own consumers who are bound by a sale
and purchase contract. We do not carry out any forms of marketing communications in the
nature of advertising, promotion or sponsorship cooperation with certain parties for nickel
and bauxite products while for gold products we actively carry out advertisements and
promotions, especially those related to the launching of the LM Gold Boutique. Until the end
of 2020 the Company was not faced with incidents or allegations of violations of marketing
communication practices (sustainability report 2020h.80). The absence of incidents or
suspicions of violations of marketing communications practices provides an indication of an
increase in the effectiveness of internal control. As stated in the GRI guidelines, compliance
with marketing communications regulations demonstrates the adequacy of internal
management systems and procedures.
The last subcategory disclosed by ANTAM in the social category is Community.
During 2020 ANTAM has held various programs and activities involving local communities
around the Company's location and the post-mining area. ANTAM's presence can improve
the standard of living and community welfare local. The involvement of the local community
is intended so that ANTAM's presence can improve their standard of living and welfare,
through empowerment and improvement of environmental quality. The involvement of the
local community is also the best alternative to minimize the potential social impact arising
from ANTAM's operational activities. Through various social programs held, the community
will benefit from the Company's presence. (sustainability report 2020 p.62).
Until the end of the reporting period, ANTAM held social programs, which included:
1. Partnership and Community Development Program (PKBL), whose
implementation refers to the Regulation of the Minister of BUMN No. PER-
05/MBU/2007 concerning the Partnership Program for State-Owned
2. Enterprises with Small Businesses and the Environmental Development
Program which was last amended by Regulation of the Minister of BUMN No.
PER-08/MBU/2020 concerning the Fourth Amendment to the Regulation of
the Minister of State for State-Owned Enterprises No.PER-05/UMB.
3. Community development programs (community development or Comdev), in
the Company's operating areas as well as mine closure and post-mining areas.
The two social programs are clearly disclosed in ANTAM's sustainability report. This
disclosure shows that the ESGANTAM program contributes to social problems in this case
providing the welfare of local communities as stated by Untung (2008: 34) that ESG must be
able to combat various social problems that are so complicated, especially the problem of
poverty. In addition to community welfare, the social problems disclosed in ANTAM's
sustainability report are issues of corruption. Rahman (2009) includes corruption as one of
the ESG issues that affects the social conditions of society. ANTAM describes in its
sustainability report, that continuously, ANTAM continues to improve the understanding of
Directors and employees on all matters relating to anti-corruption. This is done by
incorporating anti-corruption materials in various training and outreach materials, including
through Program training.
Anti-corruption material is also part of the Leadership Development Program training
at both the basic, intermediate and advanced levels (sustainability report 2020p.75). In
addition, ANTAM contributes to providing understanding to external parties about the efforts
that have been made by ANTAM in eradicating Corruption. Understanding is carried out by
carrying out socialization which also invites suppliers and regional government
representatives in each business unit/unit, and participates in the Anti-Corruption Week
Exhibition held by the KPK, the Chamber of Commerce and Industry (Kadin) and the Anti-
Bribery Business Community (KUPAS). In this social category, ANTAM is included in the
partially fulfilled criteria because it only discloses 15 of the 58 indicators required by GRI
with a percentage of 26%. From this total percentage, it is clear that ANTAM has not fully
optimized its role in the social sector which is a form of implementation of the ESG concept.
As explained by Lako (2011: 59) that ESG is an obligation that must be implemented because
the company's role in the social community is not only as an "institution" that only wants to
conquer nature in pursuit of economic goals, but also has to play a role in carrying out social
reform and helping to overcome social problems that are increasingly widespread. The
description of the Lako can be taken as material for consideration for better ESG
implementation, especially in the social field.
5.3. To clearly know the ESG carried out by ANTAM
Percentage of total workforce represented in formal joint manageme t-worker
committees that help oversee and advise on occupational health and safety programs (G4-
LA5). Disclosed even though. PT. ANTAM's as stated by Carrol, it would sound odd to bring
the terminology of economic responsibility closer to corporate social responsibility, but these
two things will feel close when associated with the pricing mechanism. Carroll added that
pricing, as an economic activity, will synergize with social responsibility if it is based on
good faith to provide probable prices to consumers. That is, the price given is a representation
of the actual quality and value of the services offered.
This is one of the steps that can be taken to synchronize economic functions with
socially responsible activities. Based on the description of Carroll's theory, it can be seen that
ANTAM's ESG implementation, which is reflected in the sustainability report, has met the
aspects of economic responsibility. This can be seen, for example, through product
responsibility, which is one of the social sub-categories in the GRI guidelines version 4.
ANTAM explained that during the reporting period, no ANTAM products were subject to a
ban on trading or had to be withdrawn from circulation. In fact, precious metal products are
the most sought-after products and are purchased by consumers as investment products, in
line with the increase in precious metal prices in local and global markets.
This was stated by ANTAM in its 2020 sustainability report. In fact, precious metal
products are the most sought-after products and are purchased by consumers as investment
products, in line with the increase in precious metal prices in local and global markets. This
was stated by ANTAM in its 2020 sustainability report. In fact, precious metal products are
the most sought-after products and are purchased by consumers as investment products, in
line with the increase in precious metal prices in local and global markets. This was stated by
ANTAM in its 2020 sustainability report. During the reporting period, no Antam products
were subject to trade ban sanctions or had to be withdrawn from circulation. In fact, precious
metal products are the most sought-after products and are purchased by consumers as
investment products, in line with the increase in precious metal prices in local and global
markets (sustainability report 2020h.80).
Based on the description above, it is clear that ANTAM is trying to implement the
ESG concept in accordance with the regulations, for example through environmental
management, namely by making efficient use of production materials and minimizing the
negative impacts of company activities such as waste. However, environmental management
carried out by ANTAM is limited to compliance with applicable laws and/or regulations. This
is proven in the PROPER (Company Performance Rating Program) issued by KLH (Ministry
of Environment) where each ANTAM business unit received a blue proper. This is clearly
seen in ANTAM's sustainability report in the attachment to the appreciation and external
recognition.
 As explained in the Regulation of the Minister of Environment RI No. 06 of 2020 that
blue proper is intended for businesses and or activities that have carried out the required
environmental management efforts in accordance with applicable provisions and/or laws and
regulations. Thus, the implementation of ESGANTAM has fulfilled the element of legal
responsibility as stated by Carrol that when a corporate carry out its operations the user has
agreed to enter into a contract with all aspects and legal norms that have existed or will
emerge in the future. Ehical responsibility has implications for corporate obligations to adjust
all of its activities in accordance with applicable social and ethical norms even though they
are not held in formal writing. As stated by Carroll that ethical responsibility guides
companies to a number of unwritten rules that apply in certain areas. In the Indonesian
context, the most common unwritten regulations are found. As stated by Rahman (2009:40)
that almost every region in Indonesia has a number of rules that have been agreed upon by all
levels of society even though they are not formally written.
Based on the above description, the ESG implementation disclosed in the
sustainability report has not fully fulfilled this ethical responsibility. This can be seen from
ANTAM's ESG vision and mission which have not touched on ethical responsibility. As
stated by Rahman (2009: 40), ethical responsibility can be reflected, among others, from the
vision and mission of a company's ESG. In addition, the ESG implementation disclosed in
the sustainability report has not included any ESG disclosures that discuss the positive and
negative impacts of ANTAM's existence. This is also evident from the non-fulfillment of the
customary rights aspect which is included in the Human Rights sub-category required by
GRI.
Carroll defines philanthropic responsibility as a concrete form in the form of physical
development carried out by the corporation towards the community. Carroll added, donating
the profits obtained for the construction of public facilities, improving the quality of life and
inter-faith welfare. Based on this explanation, ANTAM has fulfilled this responsibility. As
we know that ANTAM has built public facilities such as the construction of the Solar Power
Plant (PLTS), Sangia Ni Bandera Airport, BAMBERA Hospital in KERA District This can
be seen from the 2020 sustainability report. For 2020, ANTAM provided 500 PLTS units for
people who have not enjoyed PLN electricity. The PLTS units are spread across 12 sub-
districts throughout Kolaka Regency. PLTS-SHS assistance is expected can provide
information assistance for people who have not received it the flow of electricity from the
Government through PLN.
In addition to the Sangia Ni Bandera Airport terminal, public facilities built with
ANTAM's participation are the BAHTERAMAS Regional General Hospital in Kendari
which was established on the initiative of the Southeast Sulawesi Provincial Government
(sustainability report 2020p.63). In this responsibility, Carroll also explained that
philanthropic responsibility must be interpreted wisely where the corporation does not only
provide a number of facilities and financial support, but is also advised to foster community
self-reliance through this. This is in accordance with what ANTAM disclosed in its
sustainability report. The focus of the strategy is community empowerment towards
economic independence, through public infrastructure development programs and increasing
the skills and welfare of local communities. (Sustainability report 2020, p.69). In general, this
philanthropic responsibility has been fulfilled by ANTAM but not optimally. This can be
seen from the decrease in the amount of funds distributed to PKBL and ESG communities.
 Based on the results of sales forecasting for gold bars at PT Antam (Persero) Tbk
using the 6 trend methods that have been applied in this study, it was found that with the
ordinary least square method Obtained gold sales forecast in 2019 of 6721.982 kg with Mean
Square Error is 241671, while from the calculation results with using the semi average
method obtained gold sales forecast in 2019 was 8053.588 kg with an MSE of 214163.11.
Furthermore, calculations using the rate of growth method obtained a total estimate sale in
219 amounted to 8803.685 kg with an MSE of 266414.40. As for the results of calculations
using the Smooth method The Moving Average (SMA) obtained by the first quarter estimate
is 1108.27 kg with MSE 450923.68.
This method has the disadvantage of predicting only one upcoming period. It's the
same with the naive method which is also limited in one future period because the observed
data is quarterly data then only one quarter ahead, namely 1108.27 kg with a sufficient MSE
value high, namely 389962.60. In relatively more decomposition method complicated
because this method combines the seasonal variation index with regression it turns out that
the MSE obtained is relatively greater than the Ordinary Least Square method and also the
Semi Average method. Thus, it can be seen that those with lower MSE values is the Ordinary
Least square (OLS) method and also the Semi Average method. The main goal of the
company is to increase shareholder value stock along with growth effort to make a profit
sustainable. it becomes the main objective of management and is one way to realizing the
vision of PT Aneka Tambang as a mining company international standard that has
competitive advantage in the global market.
This means making PT Aneka Mine as the company more bigger and better. Internal
Strategy, As for the power it hascompanies include:
a. Antam's operational activities diversified by commodity nickel, gold, silver,
bauxite, sand iron, exploration and service activities Precious Metal refining is
spread in remote areas of rich Indonesia of minerals
b. The operating activities vertically integrated. Matter this causes Antam to get
controlling costs and volume production
c. The company structure is relatively straightforward with Antam owning 100%
ownership in two entity associated with funding sector, namely Antam Finance
Limited (Mauritius) and Antam Europe B.V. (Dutch) and one entity named PT
Antam Resourcindo which run iron sands operations and the Cikotok gold mine in
West Java
d. Most of the customers Antam long term, loyal and leading companies in North
Asia, Australia and Europe
While the weaknesses are in PT. Antam, among others:
a. Competitive advantage other companies are commodity diversity generated,
which causes the company has a buffer of commodity price volatility. Matter this
is something it does company owned mining that only have one commodity
b. Antam's main risks are related with fuel prices and commodities and changes in
value Rupiah exchange rate.
c. Mining is a business dangerous as it is safety related risks and occupational health.
Antam have an accident policy nothing. At the time of the accident happened,
 Antam has never lost production volume significantly due to lost hours due to
safety issues and occupational health. Antam too have a risk of change technology
that can lead to competitive rates Antam's operations are reduced.
Opportunities owned by Antam are as follows:
a. The State of Indonesia is mineral-rich country in the whole world. Due to factors
Antam can make use of natural resources already available in the country
Indonesia
b. Commodity products; quality accordingly customer specifications as well timely
delivery causing Antam to own long term, loyal customer as well as good quality
international and domestic
c. Government support reflected in ownership 65% held by Antam by the
government.
While the threat likely to be faced by Antam is a Statutory Regulations especially
with regards to aspects environment and development public.
Natural resources it can only be mined again after decades. Based on the results of the
analysis above, it can be seen that PT. Antam has a business strategy that includes a strategy
to focus on its core business, a strategy to sustain growth through solid development projects,
strategic alliances, acquisitions, and increasing the quality and value of reserves from simply
selling raw materials and shifting to further increase processing activities, as well as strategy
to maintain the company's financial strength. In 2014 and 2015 PT Antam's financial
performance was deteriorating because in that year PT Antam suffered losses, while in 2016
the company's performance improved. Based on the forecasting results, in 2017 PT Antam
will generate sales of IDR 9,371,761,984,000, in 2018 IDR 9,214,576,894,500, and in 2019
IDR 9,057,391,805,000. Based on the results of PBV calculations, the company's shares were
market valued at 0.85 times in 2014, 0.46 times in 2015, and 1.16 times in 2015 compared to
their book value.
 CHAPTER VI
CONCLUSION

6.1. Conclusion
This study aims to analyze the extent to which PT Aneka Tambang Tbk's Corporate
Social Responsibility (ESG) implementation is based on the Global Reporting Initiative
version (GRI) 4 and the level of ESG fulfillment implemented by PT Aneka Tambang Tbk
(ANTAM) and analyze the implementation of PT ANTAM's Corporate Social Responsibility
based on Archie Carroll's theory. From the results of the research and discussion in the
previous chapter, the author can draw the following conclusions: In general ANTAM has
implemented ESG consistently and continuously which can be assessed from the continuity
of disclosure, creation and publication in a sustainability report with consistent reference to
the GRI guidelines since 2003.
With reference to the GRI guidelines version 4, ANTAM meets the three categories
required by GRI, namely the economic category, the environmental category and the social
category. In the economic category ANTAM has fulfilled 7 out of 9 indicators with a
percentage of 78% while in the environmental and social category ANTAM has fulfilled 26
out of 34 indicators with a percentage of 77% and 15 out of 58 indicators with a percentage
of 26%. The three categories are included in the partially fulfilled criteria. This illustrates that
the implementation of ESGANTAM focuses on the economic and environmental fields and
ignores the social sector.
6.2. Suggestion
The limitation of the year of observation caused by the limited number of companies
that have implemented the GRI Standards in companies that follow the 2018-2019 ASRR
causes the research period to be not long enough. Therefore, in future research it is
recommended to add years of observation using a wider and more varied research object.
The measurement of the media exposure variable is only carried out on the company's
official website without considering whether the published news or articles fall into the
category of good news or bad news. Therefore, in future research it is recommended to
measure media exposure variables using company external media such as online
newspapers. In addition, the researcher suggests that future studies use news indicators or
articles that are included in the bad news category to better see how far the effect of media
exposure is on CSR disclosure in sustainability reports.
Corporate governance in this study only used 3 proxies, for further research it is
expected to add to the corporate governance proces in order to obtain better research results.
The measurement of the sustainability report variable in this study only uses the analysis of
the GRI Standards disclosure items reported in the sustainability report without considering
the quality of the disclosure. In future research it is recommended to measure in more detail
the items disclosed in the sustainability report.
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