CORPORATE SOCIAL RESPONSIBILITY IN INDONESIA: The Facet of Government Regulation in Encouraging Corporate Social Responsibilitys Goals Sri Oktavia, SH. MSc. PhD
Department of International Law - Faculty of Law - Andalas University
Abstract
Corporate Social Responsibility (CSR) has become an important area of activity throughout the global business community and actors from Government, business and the broader community are involved with the shaping and implementation of CSR regulation and CSR-related laws. However, how CSR policy and CSR-related laws can be adopted and implemented remains unclear and it is an under-represented area of research.
This study addresses this issue in the Indonesian context and is concerned with two key questions: (1) what are the circumstances of CSR regulation in Indonesia, (2) how are CSR regulation and CSR-related law can be adopted and implemented as business strategy for corporations in Indonesia.
In order to address these questions, this research aims to analyse CSR regulation and CSR-related laws in Indonesia at two level of analysis: institutional (macro level) and organisational (meso) level. At the institutional level, this research has two objectives: (1) to investigate how economy, politics, social and environmental circumstances shaped CSR regulation in Indonesia, (2) to reveal the key motives of Indonesian Government in legislating for compulsory CSR. At the organisational level, it aims to explore how CSR regulation and CSR-related Law are adopted into business strategy and are implemented by Indonesian companies.
This study uses a qualitative approaches with multi methods. Using Indonesia as the context of the study, it applies three dimensional approaches of CSR policy, namely: (1) CSR context-dimension, (2) CSR content dimension and, (3) CSR rationales dimension at the institutional level. Multiple case studies are undertaken as the research strategy at the organisational level of analysis.
This research found that CSR regulation and CSR-related Law in Indonesia are context-related, are shaped and re-shaped by economic, political, social and environmental contexts. It also discovered that the key motive of Indonesian Government in CSR legislation was to ensure that corporations acted responsibly regarding the environmental and social impacts of their activities, which prior to legislation, were generally ignored. Furthermore, although CSR is now mandatory in Indonesia, the research found that CSR policy adoption into business strategy, and its implementation varies and is influenced largely by the ownership structure of the company
Keywords: CSR, CSR Policy, Business Strategy
Topic: Strategic Management, Entrepreneurship and Contemporary Issues
