Two recent articles point to some interesting developments - from some unlikely sources - regarding corporate social responsibility (CSR) and regulation.

In the UK, a report commissioned by Tomorrow’s Company concluded that companies should push for CSR laws. Ethical Performance noted in July that the report says that “while voluntary initiatives are the best way forward, ‘they subsequently need to be translated into national regulation that is then rigorously and uniformly enforced’.” Ethical Performance goes on to emphasize that most of the ten people on the panel that undertook the inquiry were from the business community, not from non-governmental organizations (NGOs).

Also this month, Indonesia passed a law making CSR - broadly understood as the implementation of “environmental and social responsibility programs” - mandatory for companies, apparently becoming the first country to do so. Erin Lyon wrote in CSR Asia Weekly that business opposition to an earlier draft had led to a narrowing of the bill to cover only “companies with an impact on natural resources”.

Lyon was skeptical of the new law, citing questions about how such a law would be implemented, how the government would actually sanction violators, and whether it would be “a new avenue for corruption”. She also expressed concern that the financial sector was to be explicitly exempt from the CSR law, a move that would weaken its effect given that sector’s crucial role in advancing the incorporation of environmental and social factors in corporate activities.

Indonesian business consultant Noke Kiroyan wrote in the Jakarta Post that the law was “a manifestation of the muddled thinking around CSR”, and argued that the term CSR had not even been defined clearly in the legislation.

There seem to be serious reservations about the new Indonesian law. At the very least, though, will the developments in the UK and Indonesia advance the debate on whether CSR can or should be mandated?

Or will legal requirements implemented in the absence of any kind of clear consensus or understanding of what CSR entails do more harm than good?