Corporate Social Responsibility and Cooperatives Business Sustainability in Indonesia: Legal Perspective

Abstract

Corporate social responsibility (CSR) is the company’s contribution to sustainable development. In Indonesia, CSR is generally implemented by large companies in the form of limited liability companies (LLCs) and state-owned enterprises (SOEs). Regulations do not accommodate other forms of companies, such as cooperatives, to perform such social responsibility, which in terms of cooperatives is known as cooperative social responsibility (CoopSR). Instead, the cooperatives are only viewed as the implementing object by the LLCs and SOEs, while not encouraged to perform their social and environmental responsibilities. This article uses a legal dogmatic analysis research method, with the aim to analyze and assess the prevailing regulations concerning CSR and cooperatives. The study shows that, in Indonesia, there are no comprehensive regulations on CSR, but they are spread across various regulations incompletely based on the type of business entity. In the Indonesian Cooperative Law, there is no provision concerning cooperative values and principles on concern for the community, therefore cooperatives are not encouraged to implement CoopSR. To implement CoopSR, the legal and policy strategy needed is through the amendment to the Indonesian Cooperative Law, including CoopSR in the cooperatives’ articles of association and by-laws, and discussing and agreeing to its implementation at the meeting of cooperatives’ members.