Judicial Review

Regulation Needed to Clarify Law on CSR

VIVAnews – Some view that a government regulation (PP) is necessary to define in detail a law that regulates sensitive issues, such as article 74 of Law no. 40/2007 which regulates Corporate Social Responsibility (CSR).

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A lack of government regulation can cause conflicting interpretations in the law’s implementation. In addition, government regulations would be able to define several terms that are not specifically noted in the statute.

During a plenary session of the Constitutional Court regarding a judicial review of Law no. 40/2007 on Limited Companies, International Law expert, Prof. Hikmanto said that up to this day there has not been a detailed explanation of such law. As a result, in its implementation, the different regions have applied different interpretations.

Regional governments have already prepared regional regulations regarding CSR according to their own interpretations. “Therefore a governmental regulation is necessary because there are several terms that haven’t been defined,” said Hikmanto.

Hikmato added that there are several crucial issues that need to be standardized in the government regulation to determine whether or not a company has the obligation to perform CSR, such as the definition of employee and the minimum number of employees. “If a company has 2,000 employees, would it be considered a public company because it has more than 300 employees, and so on,” he said.

Similarly, the term ‘commitment’ needs further explanation. In Hikmanto’s opinion, it should be defined as a voluntary commitment and not a mandatory commitment.

Meanwhile, a government representative, the Director of Litigation at the Department of Justice and Human Rights, Qomaruddin opines that such commitment refers to a state commitment and not an individual commitment to protect the interests of individual communities.

Qomaruddin said Indonesia is different than most other countries that tend to be imperialist. He said that the government had previously conducted a scientific study to support the enactment of the CSR law. He then asked the Constitutional Court to make a wise decision regarding the judicial review of article 74 of Law no. 40/2007.

The Constitutional Court will continue on with a second meeting to hear from two experts and four witnesses from the petitioner’s side, scheduled to be held on 18 February.

Translated by: Ramona Sofianne Dewi

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29 Maret 2024