Abstract
The research is financed by Ministry of Research, Technology and Higher Education of the Republic of Indonesia No. 180/K3/KM/2014 Abstract The purpose of this paper is to describe the results of the research on the regulation of Corporate Social Responsibility (CSR) in Indonesia as well as its development, as regulated in Chapter V - Article 74 of Law No. 40 of 2007, using the term Corporate Social and Environmental Responsibility (CSER). The research method employed is legal research, which is analyzed prescriptively, to produce novelty about alterations in the concept and regulation of CSER which is in force Indonesia, changed from voluntary (morale obligation) to mandatory (legal obligation). The existence of the CSER regulation, which has been passed by the Government and House of Representatives, is intended to improve the welfare of society in its environment. Moreover, it is intended to create legal certainty regarding the implementation of CSER for limited liability companies running their business activities in the field of and/or related to natural resources. However, the existence of such regulations is not without problems, which will be discussed in this paper. Keywords: CSER, Voluntary, Mandatory, Changing Concept DOI : 10.7176/JLPG/81-09
Highlights
This paper presents the existing weaknesses in the regulation of Corporate Social and Environmental Responsibility (CSER) as results of the study of the authors entitled: “An Inventory of Corporate Social Responsibility (CSR) Regulation as a Legal Obligation for Corporation in Indonesia” (Sri Bakti Yunari & Siti Nurbaiti 2012)
CSER is required as a form of recognition and respect for the customary rights
Whereas the CSER obliged as a form of corporate concern for society and the environment
Summary
At the time of the application of Law No 40 of 2007 on Limited Liability Companies, the obligation of social and environmental responsibility for limited liability companies shall be subsequently regulated in article 74 Law No 40 of 2007, which states that: (1) Corporations doing business in the field of and/or in relation to natural resources must put into practice environmental and social responsibility. (2) The environmental and social responsibility contemplated in paragraph (1) constitutes an obligation of the corporations which shall be budgeted for and calculated as a cost of the Company performance of which shall be with due attention to decency and fairness. (3) Companies who do not put their obligation into practice as contemplated in paragraph (1) shall be liable to sanctions in accordance with the provisions of legislative regulations. (4) Further provisions regarding Environmental and Social Responsibility shall be stipulated by Government Regulation. Based on the elucidation of article 74 Law No 40 of 2007 on Limited Liability Companies,, the provision was intended to maintain relations the harmonious, the company balanced, and in accordance with the environment value, the norms, and the culture of the local community It that the company having its business activities in the field of natural resources is the company which manages and take advantage of natural resources. After the enactment of Law No 40 of 2007 and Government Regulation No 47 of 2012 on Social and Environmental Responsibility of limited liability companies (GR-CSER), it appears that the obligation of CSR addressed to all kinds of companies, but only addressed to limited liability companies (Limited liability companies having is business activities in the field and/or pertaining to natural resources). In its development, the trend in the regulation of CSR envisaged in the legislation into a duty that is potentially additional burdens for entrepreneurs in addition, with other such as a tax bureaucracy straightly, and others
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