The Legal Framework of CSR in Indonesia
T. Lambooy, A. Kusumadara, A. Argyrou, M. Istiqomah (eds) CSR in Indonesia: Legislative Developments and Case Studies, Konstitusi Press, Utrecht University and Brawijaya University, Malang, Indonesia, 2013
Posted: 28 May 2013
Date Written: April 12, 2013
Recent developments in the Indonesian legal framework for Corporate Social Responsibility (CSR) focus particularly on the evolution of three laws: the Investment Law (Law No. 25/2007), the Limited Liability Company Law (Law No. 40/2007) and the State-Owned Enterprises Law (Law No. 19/2003). CSR obligations have been introduced in each law.
Article 15 of the Investment Law requires foreign investors to engage in social responsibility. Non-compliance with article 15 can lead to administrative sanctions. The Limited Liability Company Law also contains article 74 (1) which imposes an obligation to engage in environmental social responsibility on companies which carry out activities in the natural resources sector and/or in a related sector; article 88 of the State-Owned Enterprises Law states that Indonesian State-Owned Enterprises (SOEs) must be active in assisting Small and Medium-Sized Enterprises (SMEs), cooperatives and the people.
This article examines the interaction between the CSR legal frameworks and the governmental policy. It also explores the main sets of ideas and the theoretical framework that forms the basis of CSR. The analysis exposes the overlapping norms contained in the three laws and the related regulations.
Keywords: Indonesia, CSR, legal framework
Suggested Citation: Suggested Citation