Author(s): Budi Santoso
Since 2007, companies in fields related to natural resources have been obligated by Indonesian legislation to practice corporate social responsibility (CSR). However, in practice, CSR tends to appear voluntary. This study aims to critically review the legislative approach in fostering CSR in Indonesia and focuses on the issues of specific pieces of legislation that have resulted in making CSR practices appear voluntary. This paper presents a detailed analysis of the laws and their underlying principles and demonstrates the ineffectiveness of these rules in mandating CSR in Indonesia. The findings highlight the need for establishing specific rules for mandating CSR, the standards that can be used by companies for CSR implementation, and the need for an authorized agency to ensure legal conformity in the Indonesian context. The paper presents a clear analysis of existing social responsibility mandates and identifies shortfalls in existing regulations against the backdrop of a developing country context.