Showing posts with label csr. Show all posts
Showing posts with label csr. Show all posts
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Longing for Corporate Social Responsibility's (CSR) implementing regulation

Wednesday, August 22, 2007

Now that corporate social responsibility (CSR) is obligated under the new company law (for companies which its core business is Natural Resources or in one way or another related to the environment), business community in Indonesia awaits its implementing regulation. There are still some confusion about the nature of CSR obligation. For example, how should "Natural Resources or in one way or another related to the environment"be defined?

Noke Kiroyan explained this complexities on his article:
Almost as an afterthought, in verbal explanations by lawmakers, those industries producing hazardous waste such as hospitals are also included. What about state-owned and other hospitals that are not incorporated as limited liability companies, as the law regulates this legal form only?

Everyone is entitled to make up his or her own definition, but why go to the trouble of doing comparative studies outside the country if we end up going our own merry way?

Article 74(2) of the Company law specifically stated that the CSR will be accounted as a "cost". This may not be a good news for public service companies which are related to the environment. The cost will be reflected in the price, and thus the price of universal services (such as water and energy) might raise.

I'd say that the government must exclude USO companies from CSR obligation in its implementing regulation. I don't think it's a good idea to raise water, electricity and health bills in a country where these services remained poor.

(For a comparison, check also the Investment law's CSR clause)


What 'natural resources'? CSR clause in the new Company Law

Saturday, August 18, 2007

Just to start the conversation, there's a nice article from CSR Asia discussing the controversy surrounding the Corporate Social Responsibility (CSR) clause under the newly enacted Company Law. Here's a snippet:
Indonesian company law states that companies with an impact on natural resources must implement CSR which is to be budgeted for as a cost. Beyond that we await further regulations – both to define CSR in this context and to determine how it should be implemented and to clarify which companies are actually affected. Currently the law applies to companies ‘engaged in natural resources or those in business in connection with natural resources’, but it isn’t clear what is covered by the term ‘natural resources’.

Click here to read.