The Urgency of Sanctions for Violators of Corporate Social Responsibility (CSR) for Improving of The Welfare of Society

Abstract

- The Impossing of sanctions to companies that do not implement CSR is still only a threat. Legal instruments are still too weak in facing business corporations. The implementation of CSR is not only useful for sustainable environmental sustainability, it also has a positive impact on improving community welfare, therefore is important to know connection between the sanction and CSR implementation for improving of the welfare of society. In Indonesia, the implementaton of CSR in Limited Company based on Article 74 The Law No. 40 of 2007 regarding Limited Liability Company, this article obliges companies whose activities related to natural resource management to implement Corporate Social Responsibility (CSR). This is the starting point of mandatory CSR program in Indonesia. CSR is a commitment to improve community well-being through discretionary business practices and contributions of the company's resources. The method of this researh is empiric/nondoctrinal. Based on the result of this research that CSR in Indonesia can essentially be directed at strengthening the people's economy is based on small and medium enterprises as well as improving the quality of human resources through improved public education facilities and infrastructure. The problem is the absence of sanction. The existence of legal substance of CSR will not succeed if there is no legal sanctions. The Law and Goverment regulation on CSR are not set on sanctions for the corporation that non-performance in CSR implementation. Many companies will ignore the CSR implementation when there are no rules forcing them.