Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)

Abstract

Corporate Social Responsibility in Indonesia: Regulation and Implementation Issues

Author(s): Mukti Fajar

This research aims to answer and elaborate the questions as follows; First, which one better, whether the CSR will be the mandatory or voluntary merely ? The second question is how far the scope of CSR in Indonesia ? Third, how is the implementation CSR in Indonesia? The study was analyzed with the reflexive-law theory that used to be handled the limitation of formal law approaching as the intervention of state in the area of private law, including the corporation. The reflexive law theory also trying to find the solution of the limit of law with the self-regulation, hence corporation obliges to report the social reporting to the states. This study is conducted by using normative legal research and socio-legal research. It is committed by reviewing various regulations, concepts, theories and practices of CSR in Indonesia The data were collected through library and field research. This study measures the validity and reliability by using observation approach and documentation study toward various regulations and documents of CSR on MNCs, National Private Corporation and State Owned Corporation in Indonesia. This research found that: first, CSR as the corporation activity can be legally bound by the regulation in Indonesia, based on Constitution of Republic Indonesia 1945 and the moral value. In another side, the research also found that the government needs to support the corporation doing CSR with the tax deduction policy, in order to eliminate operational cost of corporations. Second, within that obligation, the most important thing is that to give an authority to corporations to have self-regulation and to give social reporting toward the society. Third, definition of CSR in the Limited Liability Company Act 2007 and Investment Ac 2007 must be revised with similar concepts and definitions of CSR and more clearly as a reference.