Analysis of CSR Legislation in Indonesia: Mandate to Business

Abstract

Indonesia was one of the first countries in the world to implement legislation mandating businesses to undertake Corporate Social Responsibility (CSR). Different with other countries with their voluntary approach of CSR, the legislation makes CSR as a mandate to business in Indonesia. Through document analysis method, this study analyses six laws related to CSR in Indonesia to define the mandate of CSR legislation in order to understand the form of CSR should be practiced by companies operating in Indonesia. Indonesia as one of the developing countries may require sufficient fund for their local development. CSR may be seen as a source of fund for local development. Therefore, CSR legislation in the country provides mechanism for wealth or resource distribution of companies for local government to develop local communities.