Recommendations for Increasing CSR in Indonesia

Oct 13, 2025 by vinooalluri.com 92 views

Introduction

In today's business world, Corporate Social Responsibility (CSR) has become an essential aspect that is increasingly receiving attention in Indonesia. As stated in Article 74 of Law No. 40 of 2007 concerning Limited Liability Companies, CSR is not only a legal obligation that must be obeyed by the company, but is also a collaborative effort between stakeholders to achieve broader social goals. This study aims to analyze the regulation of CSR in the Indonesian Law and assess the extent of PT. Tirta Investama applies its CSR obligations.

CSR Settings in Indonesia

The regulation of CSR in Indonesia has a strong philosophical basis taken from the Preamble of the 1945 Constitution, especially Article 33, which emphasizes the importance of social welfare. In addition, CSR is regulated in more detail in several laws, such as:

UU no. 25 of 2007 concerning Investment, Article 15
UU no. 19 of 2003 concerning State-Owned Enterprises, Article 2 Paragraph (1)
UU no. 40 of 2007 concerning Limited Liability Companies, Article 74
PP No. 47 of 2012 About Social and Environmental Responsibility

However, this arrangement is still considered imperfect and often leaves doubts among companies about the implementation of CSR. This shows the need for revision of regulations to provide clarity and legal certainty for companies that want to carry out their social responsibilities.

Theoretical Framework

This study uses the theory of utilitarianism developed by Jeremy Bentham and the theory of justice proposed by John Rawls as the theoretical framework. Utilitarianism is a moral theory that suggests that actions are right if they promote the greatest happiness for the greatest number of people. On the other hand, John Rawls' theory of justice emphasizes the importance of fairness and equality in the distribution of resources and opportunities.

Methodology

This study uses a qualitative analysis of secondary data obtained from literature studies and direct interviews. The data was collected from various sources, including company reports, academic journals, and government documents. The data was then analyzed using the theoretical framework of utilitarianism and John Rawls' theory of justice.

CSR Implementation by PT. Tirta Investama

PT. Tirta Investama, as a company engaged in the natural resource sector, has shown a commitment in carrying out its CSR obligations. In 2009, the company budgeted funds of Rp. 10 billion for the CSR program and increased to Rp. 12 billion in 2010. The CSR Implementation Report was published in a sustainable report in 2010, which explained the CSR activities that had been carried out during the fiscal year.

Although PT. Tirta Investama has fulfilled most of its obligations, it is important to note that the effectiveness of this CSR program still needs to be improved. Deeper analysis of the programs applied and their impact on the local community can help in identifying areas that need to be improved.

Case Study: PT. Tirta Investama

PT. Tirta Investama is a company engaged in the natural resource sector that has shown a commitment in carrying out its CSR obligations. The company has implemented various CSR programs, including education and training, health and sanitation, and environmental conservation. However, the effectiveness of these programs still needs to be improved.

Recommendations for Increasing CSR in Indonesia

Based on the results of this study, several recommendations can be submitted:

Revision of CSR Regulation: There is a need for clearer and detailed arrangements regarding the implementation of CSR, including the provisions regarding the amount of funds that must be allocated by the company based on the percentage of the annual budget.
Tighter Supervision: More stringent supervision and control are needed for companies, especially those engaged in the natural resource sector, to ensure that they fulfill their social responsibility.
Capacity Building: Companies need to be equipped with the necessary skills and knowledge to design and implement effective CSR programs.
Stakeholder Engagement: Companies need to engage with stakeholders, including local communities, NGOs, and government agencies, to ensure that their CSR programs are relevant and beneficial to the community.

Conclusion

In conclusion, this study has shown that CSR is an essential aspect of business operations in Indonesia. However, the regulation of CSR in Indonesia is still imperfect and often leaves doubts among companies about the implementation of CSR. This study recommends that the government revises the CSR regulation to provide clarity and legal certainty for companies that want to carry out their social responsibilities. Additionally, companies need to be equipped with the necessary skills and knowledge to design and implement effective CSR programs.

Limitations of the Study

This study has several limitations. Firstly, the study only focuses on PT. Tirta Investama and does not provide a comprehensive analysis of CSR implementation in Indonesia. Secondly, the study relies on secondary data and does not conduct primary data collection. Finally, the study only uses a qualitative analysis and does not provide a quantitative analysis of CSR implementation.

Future Research Directions

Future research directions include:

Comprehensive Analysis of CSR Implementation: A comprehensive analysis of CSR implementation in Indonesia, including a comparison of CSR implementation among different companies and sectors.
Quantitative Analysis of CSR Implementation: A quantitative analysis of CSR implementation, including the use of statistical methods to analyze the impact of CSR on the local community.
Case Study of Other Companies: A case study of other companies in Indonesia to provide a more comprehensive understanding of CSR implementation in the country.

References

Bentham, J. (1789). An Introduction to the Principles of Morals and Legislation.
Rawls, J. (1971). A Theory of Justice.
UU no. 25 of 2007 concerning Investment, Article 15.
UU no. 19 of 2003 concerning State-Owned Enterprises, Article 2 Paragraph (1).
UU no. 40 of 2007 concerning Limited Liability Companies, Article 74.
PP No. 47 of 2012 About Social and Environmental Responsibility.

Note: The references provided are a selection of the sources used in the study and are not an exhaustive list.

Introduction

Corporate Social Responsibility (CSR) has become an essential aspect of business operations in Indonesia. However, there are still many questions and concerns about CSR among companies, stakeholders, and the general public. This article aims to provide answers to some of the frequently asked questions about CSR.

Q: What is Corporate Social Responsibility (CSR)?

A: CSR is a business approach that aims to create value for society by operating in a responsible and sustainable manner. It involves a company's efforts to improve the social, environmental, and economic well-being of the communities in which it operates.

Q: Why is CSR important?

A: CSR is important because it helps companies to:

Improve their reputation and brand image
Enhance their relationships with stakeholders, including customers, employees, and investors
Reduce their environmental impact and improve their sustainability
Contribute to the social and economic development of the communities in which they operate

Q: What are the benefits of CSR?

A: The benefits of CSR include:

Improved reputation and brand image
Enhanced relationships with stakeholders
Reduced environmental impact and improved sustainability
Increased employee engagement and motivation
Improved access to new markets and customers
Reduced risk and improved resilience

Q: What are the types of CSR?

A: There are several types of CSR, including:

Philanthropy: charitable giving and donations to support social causes
Corporate Philanthropy: corporate giving and donations to support social causes
Volunteering: employee volunteering and community service
Sustainability: efforts to reduce environmental impact and improve sustainability
Community Development: efforts to improve the social and economic well-being of local communities

Q: How can companies implement CSR?

A: Companies can implement CSR by:

Conducting a CSR audit to identify areas for improvement
Developing a CSR strategy and policy
Implementing CSR programs and initiatives
Monitoring and evaluating CSR performance
Reporting CSR progress and achievements

Q: What are the challenges of CSR?

A: The challenges of CSR include:

Lack of resources: limited budget and personnel to implement CSR programs
Lack of expertise: limited knowledge and skills to develop and implement CSR programs
Lack of engagement: limited employee engagement and motivation to participate in CSR programs
Lack of measurement: difficulty in measuring and evaluating CSR performance
Lack of reporting: difficulty in reporting CSR progress and achievements

Q: How can companies measure and evaluate CSR performance?

A: Companies can measure and evaluate CSR performance by:

Setting CSR goals and targets: establishing clear and measurable CSR goals and targets
Conducting CSR audits: conducting regular CSR audits to identify areas for improvement
Monitoring CSR progress: regularly monitoring CSR progress and achievements
Evaluating CSR impact: evaluating the impact of CSR programs on the community and the environment
Reporting CSR performance: reporting CSR performance and achievements to stakeholders

Q: What are the benefits of CSR reporting?

A: The benefits of CSR reporting include:

Improved transparency: increased transparency and accountability in CSR reporting
Improved stakeholder engagement: improved engagement and communication with stakeholders
Improved reputation: improved reputation and brand image
Improved access to new markets: improved access to new markets and customers
Improved risk management: improved risk management and resilience

Conclusion

In conclusion, CSR is an essential aspect of business operations in Indonesia. It helps companies to improve their reputation and brand image, enhance their relationships with stakeholders, reduce their environmental impact and improve their sustainability, and contribute to the social and economic development of the communities in which they operate. By understanding the benefits and challenges of CSR, companies can develop effective CSR strategies and policies that meet the needs of their stakeholders and contribute to the well-being of the communities in which they operate.

References

Bentham, J. (1789). An Introduction to the Principles of Morals and Legislation.
Rawls, J. (1971). A Theory of Justice.
UU no. 25 of 2007 concerning Investment, Article 15.
UU no. 19 of 2003 concerning State-Owned Enterprises, Article 2 Paragraph (1).
UU no. 40 of 2007 concerning Limited Liability Companies, Article 74.
PP No. 47 of 2012 About Social and Environmental Responsibility.

Note: The references provided are a selection of the sources used in the study and are not an exhaustive list.