Has Indonesia's unique progressivism in mandating corporate social responsibility achieved its ends?

Abstract

It has been a decade since Indonesia implemented its first mandatory CSR requirement through its company law and capital investment act. The time is ripe for the discussion: Has it success-fully brought social and economic justice by enforcing this radical progressivism or utilitarianism? In other words, has Indonesia attained its ends by mandating companies publicly answer for environmen-tal problems, insufficient attention to public welfare, development of local communities and growing cleavage between rich and poor? To begin to address these questions, this paper first examines Indo-nesia's unique features that strengthen CSR as a legal obligation and analysis the current regulatory frame of CSR. Then, it discusses whether these laws and regulations have actually worked as a practi-cal tool to encourage and enforce companies to perform CSR activities. This research concludes that Indonesian company law can achieve its ends only on certain conditions despite its thoroughgoing failure so far due to a number of problems in and out of the positive law. It suggests how it can specif-ically structure the CSR regulations and seeks attention to the more structural reform from the longer-term goal of developing a national mechanism.