Implementation Of Corporate Social Responsibility In Indonesia In The Perspective Of Legal Theory (original) (raw)
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This study aims to build the implementation model of CSR from the existing companies in Manado and Minahasa, North Sulawesi-Indonesia. The research used qualitative method. After data are collected, the analysis process begins. There are three phases to data analysis such as data reduction, data presentation and model building. The collected data are reduced according to the implementation of CSR and bring up many themes. Based on these themes, the data are presented and the process to draw conclusion is begun and finally the model is built. To implement their CSR, companies build the concept themes of CSR implementation, provide the CSR funds, and prepare the programs and reports. Business ethics, good corporate governance, compliance in regulation and benefit to society and environment become the concept of CSR implementation. The programs such as charity, philanthropy and community development activities which are done as routine and non routine activities in the short term or long term programs. The funding of these activities needs to be budgeted from their internal policy. The reports include CSR activity reports, financial and annual reports. Therefore, the model is built from the element of concept, funds, programs and reports on their CSR implementation.
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Indonesia was one of the first countries in the world to implement legislation mandating businesses to undertake Corporate Social Responsibility (CSR). Different with other countries with their voluntary approach of CSR, the legislation makes CSR as a mandate to business in Indonesia. Through document analysis method, this study analyses six laws related to CSR in Indonesia to define the mandate of CSR legislation in order to understand the form of CSR should be practiced by companies operating in Indonesia. Indonesia as one of the developing countries may require sufficient fund for their local development. CSR may be seen as a source of fund for local development. Therefore, CSR legislation in the country provides mechanism for wealth or resource distribution of companies for local government to develop local communities.
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The purpose of this research is to analyze and determine the meaning of corporate social responsibility as a legal obligation to the company according to Article 74 of Law No. 40 of 2007 concerning Limited Liability Companies (UUPT). This type of legal research is doctrinal research using the short term (statute and pro) and short concept (conceptual and pro). From the results of the research, it can be found that philosophically the existence of corporate social responsibility (CSR) as stipulated in Article 74 paragraph (1) of Law Number 40 Year 2007 concerning Limited Liability Companies is very closely related to the goals and functions of the Indonesian state in a form that is expressly stated in paragraph IV of the Preamble of the 1945 Constitution of the Republic of Indonesia, one of which is to advance public welfare. To achieve that, all the Indonesian Nation is guided by Pancasila as the Nation's Life View. The Indonesian people will not be able to achieve the goals they have dreamed of without the noble values that they uphold as a way of life, namely Pancasila. In this case, the implementation of CSR obligations is carried out to realize the objectives and functions of the state under Pancasila. Socially, the existence of CSR is a legal responsibility that is based on the values of benefits that will be accepted by the community. CSR can be used as a means to empower the poor. Even the implementation of CSR to the community through the utilization of potential social capital can be used as an alternative to empowering the poor in Indonesia.
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The measure of a Company's success should be determined by not only reporting a profit, but also by its Corporate Social Responsibility (CSR) implementation, such as good governance, social responsibility, ethical behavior, environmental initiatives, and ways of creating long term sustainable development. CSR is a concept that all entities themselves must conduct responsibly, with consideration for the communities they operate in. It encourages companies to transition from the mandatory usual business practice to corporate citizenship with the right to "do good and do no harm." As problems with economic inequality are unresolved, how does mandatory CSR allow more pro-active implementation by corporate to solve the inequality and economic gap? How can governance help in assembling CSR programs that could improve existing situation to achieve national development goals?
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The existence of CSR institutions and associations coherent with several laws and regulations concerning CSR applied in Indonesia indicates that Indonesia gives more attention to the importance of CSR. The increasing number of parties who appreciate CSR performance also motivates companies to commit to implementing CSR. However, the next question is related to whether the public (market) responds to the efforts of the government, companies, and all parties involved in the progress of CSR in Indonesia or not. Specifically, the question lingers around whether the Indonesian market is aware of the importance of CSR or not. Departing from the two questions, the study aims to determine the response of the Indonesian market after the CSR-related information has been identified since market responses will show awareness of the importance of CSR. The data that have been used in the study are the secondary ones and include the stock prices that come from 5 days before and 5 days after the an...