Abstract

As a major company forming a significant part of the Riau community, PT Caltex Pacific Indonesia (CPI) has been careful to develop and strengthen the social and economic of the surrounding community in its areas of operation through various aspects of its Community Development Program.

Local Business Development (LBD) is an innovative program of CPI's Community Development to offer guidance and to empower local small companies and cooperatives around CPI's operational areas in a mutual and advantageous partnership. Besides answering the locals' demand in this era of local autonomy, LBD is also another manifestation of Caltex's care in boosting the economic development of local residents.

In line with the implementation of local autonomy and the Development Program for People's Economy ("Program Pengembangan Ekonomi Kerakyatan") now being promoted by the government, through its LBD program CPI has developed a special policy to assist local small companies and cooperatives. With this policy they can easily access business opportunities through the goods and services procurement process to support the company's operations.

During the implementation, starting from July 2001 until December 2002, the record shows that the cumulative procurement for goods and services through the LBD program amounts to Rp. 41.8 billion and involved 253 small companies and cooperatives. It is estimated that by the end of 2003 the amount will reach Rp. 80 billion and will involve around 400 LBD vendors.

In the current autonomy and reformation era, CPI's LBD program provides effective steps to foster a sense of belonging from surrounding communities toward large employers. It also provides an alternative way to resolve conflicts between big companies and local communities, especially in the field of employment opportunities, which often disrupt the company's operations.