Mandatory or Voluntary CSR? Experience from Indonesia

Abstract

One of the key characteristics of Corporate Social Responsibility (CSR) is the voluntary nature of CSR. Despite originated as a voluntary initiative, recently, the emphasis of CSR as a mandatory movement also gaining popularity. This paper centralised on the question of whether CSR should be voluntary, mandatory, or applied in both manners. Since CSR is context-dependent, the answer to the question of voluntary or mandatory CSR is better viewed by framing the debate in certain jurisdictions and sectors. Given the limitation of space in this paper, the study will be focused on the practices of Indonesia as an anchoring point. I conclude this paper arguing that regulatory mix through the interplay of multiple arrays of CSR forms, in the form of mandatory regulation, private regulation, and indigenous laws such as adat law and Islamic principle to promote CSR better in Indonesian context, at least theoretically. Regardless the approach, the norm of CSR should be understood in a broader sense that involves three aspects of people, planet and profit, rather than mere capital redistribution from the corporation.