Corporate Social Responsibility Regulation in Indonesia and a Critique of the Milton Friedman Theory

Academically, there is no agreement on corporate social responsibility (CSR) regarding whether managers are subject to shareholder or stakeholder theories. Academics, judicial officers, regulatory agencies, and professionals have long debated the meaning of corporations and their goals. This study examines the norms of CSR in Indonesia and serves as a critique of Milton Friedman's theory. The study used normative legal research method. The data were collected through related literature and divided into three legal materials, namely primary, secondary, and tertiary. The legal materials obtained were analysed and presented qualitatively to answer the problem. CSR in Indonesia is regulated in several existing arrangements, especially in the law on limited liability companies, investment, plantations, oil and gas, mineral and coal mining, geothermal, and state-owned enterprises. These regulations confirm that CSR is mandatory in companies, and companies that do not comply will be given strict sanctions. The regulations for CSR in Indonesia are in contrast to Milton Friedman's theory, which states that CSR is solely seeking for company profits or shareholder wealth maximization.