An evaluation of support infrastructures for corporate responsibility reporting in Indonesia

Abstract

The purpose of this article is to evaluate infrastructures necessary for accountable corporate responsibility (CR) reporting, using Indonesia as a case study. At present, the level and quality of CR reports in Indonesia are relatively low, due to ineffective support infrastructures. To date, there has been no generally accepted CR reporting standard that can be used to guide companies preparing CR reports. Moreover, an external assurance service is advisable to ensure the credibility of CR reports, yet assurance standards are still relatively undeveloped. To support the implementation of a company's CR, a CR committee may be warranted, or a functional expansion of an existing committee, such as audit committee. Indonesia's Corporation Law obliges companies to report their social and environmental activities in their annual reports, but as there is no regulation following up this obligation, a variety of reports are submitted by companies, complicating evaluation. Finally, despite an increase in public awareness of the importance of CR, people do not have adequate power to pressure companies into performing and reporting CR.