Corporate Social Responsibility Initiatives in a Regulated and Emerging Country: An Indonesia Perspective

Abstract

As a country with a number of dynamic issues, Indonesia has given immense attention to Corporate Social Responsibility (CSR). CSR is also perceived as substantial practices as it is now regulated at both national and local levels. Unfortunately, there is still a common misunderstanding about CSR in Indonesia; that it has always been linked to social programs, philanthropy and donation activities. Hence, this paper aims to explore CSR implementations, challenges, key initiatives, and methods which are used by several leading organisations in the country. Supporting information was undertaken through literature reviews, desk study, and simple unstructured interviews from CSR practitioners. Samples were randomly selected from 10 leading companies participating in the 2014 CSR Award. Descriptive and comprehensive analyses were then, conducted to understand the phenomenon of CSR implementation in Indonesia. Government initiatives and regulations are inevitably found as the most determinant driving factors in Indonesia for business to conduct CSR, followed by business organization and local CSR networks. Further, multinational companies (MNCs) are more likely in bringing the CSR context that refer to sustainability development, while the majority local companies are still considering CSR as philanthropy activities. Other than that, understandly the state owned enterprises (SOEs) seem to be the one which adhere strickly to Governments’s regulations. To sum up, CSR implementation in Indonesia is still in the early phase of development and less likely related to corporate sustainability strategies. However, rapid development in CSR practices since the political change of 1998 have resulted in CSR being strategically and ethically understood in business. By that time, the government faced a number of challenges in its attempt to refocus CSR practices into the more ‘moral obligation’ strand rather than the ‘regulation-abiding’ strand of CSR.