CORPORATE GOVERNANCE IN PALM OIL COMPANIES IN ACEH PROVINCE

Article Info Abstrak Received :03/12/2020 Approved: 20/12/2020 DOI: 10.24815/sklj.v4i3.19073 Nowadays, companies are not only required to provide information on financial accountability but also about corporate performance related to social and environmental aspects in order to promote shareholder values and sustainable practices, which eventually lead to the concept of corporate governance. This study aims to discuss the implementation of corporate governance, in palm oil companies in Aceh Province. A qualitative research method is applied with an empirical juridical approach. Data were collected by interviewing respondents and analyzing corporate reports. The result found that the implementation of corporate governence by the companies through the availability of code of good corporate governance (GCG) and code of conduct. Although it does not necessarily guarantee the implementation applied properly, but it can show company commitment to run a good business. Some companies also implement corporate social and environmental responsibility in a different approach. However, some of the activities are actually not in accordance with existing regulations, but is only limited to activities that have no direct impact on community.

However, the development of the palm oil industry does not affect community welfare. In Aceh Singkil district, for example, in 2015 there were 15 oil palm plantation companies, with total production reaching 355,366 tons per year. This condition does not have an impact on the increase in welfare of workers and also community living around the plantations. The existence of these plantations actually has positive and negative impacts on communities, such as problem relate to economy, social and the environment, including agrarian conflicts between communities and rights holders. 2 This fact raises questions about the role of palm oil companies in providing benefits to communites and the environment.
Nowadays, companies are expected to balance between economic development, social responsibility and the environmental, and take a role in social and environmental protection with respect to the interests of stakeholders other than shareholders in running their business. 3 This expectation eventually lead to the concept of corporate governance. Corporate governance is the principles that form the basis of company management with due observance of applicable regulations and business ethics. This concept has developed into a key strategy for company to have a good relationship among shareholders, board of directors and employees, and this concept will also incorporate many stakeholders in companies activities mainly dealing with social and the environmental issues.
As one of impotant commodities, palm oil industry in Aceh and their role which is expected to provide welfare to the community and to minimize environmental damage in running their business. It is interesting to further investigate the implemetation of corporate governance in palm oil companies, relating to social and environmetal protection performance. This study aims to discuss the implementation of good corporate governance, in palm oil companies in Aceh Province.

II. RESEARCH METHODS
This research is a qualitative research with an empirical juridical approach. The objects of study are palm oil companies operating in Aceh, namely PT PN I and PT. Mopoli Raya which is located in Aceh Tamiang district, PT, Sucofindo is located in Nagan Raya district, and PT. Asian Agri located in Aceh Singkil district. Data were collected by interviewing, including: director or manager of law and public relations related to the implementation of good corporate govrenance in the companies, an interview guide will be prepared, and by analyzing of company reports published on a company website. All data collected, both legal literature and field data, will be sorted based on the Indonesia's Code of Corporate Governance document contains GCG principles consisting of transparency, accountability, responsibility, independency and fairness. Transparency is the provision of information about company activities through media that is easily accessible and understood by stakeholders in order to maintain objectivity in running a business. The company is also required to be accountable for its performance so that proper, measurable and sustainable company management is the company's obligation for the benefit of shareholders and stakeholders. The company is expected to take responsibility for the community and the environment in order to achieve corporate sustainability and to gain recognition as a good corporate citizen. In addition, independence is one of the important aspects in company management, the company must be managed independently where the company's organs carry out their duties and responsibilities according to their authority and do not dominate and intervene others. Last, the company applies the principles of fairness and equality in doing business for the benefit of shareholders and stakeholders. 5 Indonesia's document's code of corporate governance is not a law; however the code can be a fundamental guideline for companies to achieve long-term goals in implementing good business ethics. The implementation of GCG principles and code of ethic require high integrity for every business actor in order to achieve corporate sustainability and to form a corporate culture as an identity of the company. SOEs. One indicator that shows the company's commitment to implementing good and sustainable corporate governance is the availability of GCG guidelines and code of conduct. Furthermore, the company creates a conducive situation for implementing GCG guidelines and code of conduct. The company is also required to carry out an assessment of the implementation and periodically review the guidelines.
The study found that of the 4 companies studied, only 1 company, PT Mapoli Raya, do not have a Good Corporate Governance guideline (GCG Code). However, 3 other companies, PT PN 1, PT Sucofindo, and PT Asia Agri, had a good corporate management mechanism as a basis for all employees and corporate boards in carrying out corporate activities. PT PN 1 and PT Sucofindo are SOEs, and PT Asia Agri is a private company. Three companies are committed to implementing GCG and believe that GCG is very important for company development in order to achieve company targets.
For PT Sucofindo, the purpose of implementing GCG is to increase company value by taking into account the interests of stakeholders; to encourage professional, transparent, effective and efficient company management; to empower all company capabilities and increase the independence of the company's organs; to apply moral values and appropriateness in decision making by corporate organs; to realize corporate social and environmental responsibility; to increase the competitiveness of companies for sustainability. 6 Moreover, the code of conduct is designed to be applicable to corporate daily operations, and to define guidelines on acceptable and unacceptable behaviour. 7 In 2017 Sucofindo received the title of "very good" with a score of 92,400 in the assessment of GCG implementation in 2017. The score increase of 1,396 points compared to 2016 of 91,004. 8 The increase in score shows that there is consistency and systematic efforts to make improvements in the implementation of GCG. Guided by the Decree of the Secretary of the Ministry of BUMN, the  (5) information disclosure and transparency. PT Sucofindo received a good score in implementing GCG with a score of 6,554 from weight 7. Moreover, there is no information was obtained in the research regarding assessments obtained by other companies.
Companies need to have a GCG guidance and a code of conduct which serves as a guideline for all elements of the company to do activities inside and outside the company. Although the existence of a code of ethics and GCG guidelines does not necessarily guarantee that the company will implement GCG and the company's code of ethics properly. However, the availability of these guidelines will indirectly demonstrate the company's commitment to managing the company in a more transparent, accountable, responsible, fair and independent manner. Moreover, the company's commitment to run business with due regard to governance principles cannot be seen if companies do not have the GCG code.
Guidelines for the principles of good corporate governance contain rules that apply internally that regulate the relationship between the organs in the company. Corporate governance first invited attention when it appeared in the Cadbury Report, which defines corporate governance as "the system by which companies are directed and controlled". Further definitions view corporate governance as relationship among shareholders, management and the board of directors in deciding direction and corporate performance. 11 Other scholar define corporate governance as the way in which power is arranged and shared between corporate entities. 12 The Organization for Economic Co-operation and Development (OECD) defines corporate governance as procedures and processes to direct and controll companies. The corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization -such as the board, managers, shareholders and other stakeholders -and lays down the rules and procedures for decision-making process, through the principles, which are trasparancy, accountability, fairness, and responsibility in corporating corporate governance into corporate activities. 13 However, now, there is a wider concern to see the company's role in the broader environment beyond the internal relationship between the board of directors, the manager and the 10 Miko Kamal, Op.Cit. 11  shareholders and that is the role of corporate governance. Furthermore, initially academic research into corporate governance has been directed to the protection of shareholder interests from selfinterested of executive. 14 In other words, the application of the principles of good corporate governance can create harmony between the entities within the company and the communities living around the company .

The implementation of GCG Principles (transparancy and responsibility principles)
Public There is a shift of paradigm in corporate governance studies from a shareholder-based to stakeholder-based approach. This new approach emphasizes the idea that "short term accountability needs to be matched with long term sustainability" 17 ; this can be achieved through the good quality of relationship between stakeholders to achieve corporate sustainability.
Good corporate governance becomes the target of companies in order to achieve the expectations of shareholders and the interests of stakeholders and businesses need to be socially accepted so they can get the best results. 18 The study conducted by Money about the relationship between corporate governance and CSR concluded that the widespread coverage of corporate The results of the study show that, the companies formulate their CSR programs through company activities that have various social and environmental development goals, such as environmental protection programs, worker welfare, community health, community development programs, and so on. In carrying out this obligation, 3 companies, namely PT Sucofindo, PTPN 1 and PT Asian Agri did not manage their CRS funds through the company's regional branches, but were managed by the company's head office. So that the obligation to carry out corporate social and environmental responsibility, especially to community living around the company area, does not run optimally. The activities carried out are generally still in the form of direct assistance to the community in the form of social assistance for people who have experienced death.
Furthermore, PT Sucofindo, PTPN 1 and PT Asian Agri are a regional branch offices; those companies do not have special department/staff that managed the CSR system and funds, and the companies had not fully carried out their mandate as stated in local laws and regulations. In addition, the company admits that the CSR program carried out by the company is actually not in accordance with existing regulations, but is only limited to activities that have no direct impact on community.
Meanwhile, PT Mapoli Raya has not implemented any programs related to social (community) and the environment in which the company operates. Stakeholder theory is a theory focuses on the relationship between the shareholder-owners, the board of directors, and the managers as coordination and collaboration based on an agreement.
This theory is a commonly mention when schoolars talk about CSR. Aras and Crowther links CSR and sustainability. 20 This theory states that to achieve sustainability, the company does not only pay attention to the interests of shareholders but also pay attention to the interests of the community and the environment.
Sustanability defines as "meeting the needs of the present without compromising the ability of future generations to meet their own needs"; it is, generally, applied to the sustainable manner of the development/company. 21 Sustainability is an approach to incorporate economic, ecological and social aspects in a business strategy. At this stage, CSR has brought a new dimension to the concept of corporate governance by placing the idea of sustainable development into corporate governance by applying the principles of natural resource management that takes into account the needs of future generations. 22 Social and environmental responsibility is a real action to create good corporate governance.
This can be done by including the CSR program as part of the company unit and making the program part of the company culture. It is hoped that this program can run sustainably and in the end can be accepted by the community. In addition, companies must understand that they are operating in a society that has roles and values to follow. This understanding is essential for building social cohesion between companies, governments and communities and without it the company itself cannot be sustainable.

IV. CONCLUSION
Changing perception of company's role became one of the causes of the emergence of corporate governance implementation. At first the company had only one purpose which was to seek maximum profit to shareholders known as shareholder theory. Furthermore, The advent of stakeholder theory focuses on the interests of the company other than the shareholder to form the governance system. This approach affects how the company is run, including how the relationship between companies and community to achieve corporate sustainability.
In term of governance system, three companies established a code of GCG and code of conduct as a guide for companies to interact between shareholders and stakeholders. Moreover, the companies also have activities that defines as corporate social and environmnetal responsibility