The politics of corporate social responsibility in Indonesia

Andrew Rosser, Donni Edwin

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

In July 2007, Indonesia became the first country to introduce mandatory legal requirements for corporate social responsibility when the Indonesian parlia-ment passed Law 40/2007 on Limited Liability Companies. This paper examines the political dynamics that shaped this and subsequent regulatory developments re-lated to corporate social responsibility and assesses the likely future direction of Indonesia's corporate social responsibility policies. We argue that policy de-bates over corporate social responsibility in Indonesia have reflected a strug-gle between the dominant sections of Indonesia's capitalist class, local commu-nities that have been negatively affected by corporate activity and their allies in the non-governmental organization movement, and predatory elements in the political parties and bureaucracy for control over the economic resources gen-erated by the activities of major corporations in that country. We argue that the dominant sections of Indonesia's capitalist class have so far won this strug-gle in large part because of their instrumental connections to senior Golkar figures within the government. With respect to the future direction of corpo-rate social responsibility policy, we argue that much will depend on the out-come of future presidential elections. If these elections produce a political leadership that supports a mandatory approach to corporate social responsi-bility, there is some chance that mandatory requirements for corporate social responsibility in Law 40/2007 will be implemented. If they result in the election of a leadership that does not support a mandatory approach to corporate social responsibility, by contrast, such a change is unlikely.

Original languageEnglish
Pages (from-to)1-22
Number of pages22
JournalPacific Review
Volume23
Issue number1
DOIs
Publication statusPublished - 1 Mar 2010

Keywords

  • Business
  • Corporate social responsibility
  • Csr
  • Indonesia
  • Politics

Fingerprint Dive into the research topics of 'The politics of corporate social responsibility in Indonesia'. Together they form a unique fingerprint.

  • Cite this