Beschrijving

National economic development carried out on the basis of economic democracy according to the principles of togetherness, justice-based efficiency, sustainability, the environmental perspective, independence as well as preservation of the balance of the national economy’s growth and unity aims to achieve the prosperity of the people. The increase in national economic development needs to be supported by a law on limited liability companies to assure a conducive business environment. The law regarding limited liability companies was previously regulated by Law No. 1 of 1995 regarding Limited Liability Companies, replacing legislation which originated from the colonial era. However, given current development, the provisions of the previous law are deemed to no longer conform to developments in the law and the public’s needs due to the rapid growth of economy, technology and information especially in the era of globalization. In addition, the increase in the public’s demand for fast service, legal certainty and the increase in the business community according to the principles of good corporate governance require the improvement of Law No. 1 of 1995 regarding Limited Liability Companies.

The Law provides for Corporate Social and Environmental Responsibility with a view to realizing sustainable economic development to enhance the quality of life and the environment which is beneficial to the Company, local communities and the public in general. This requirement is intended to support the establishment of a harmonious and balanced relationship between the Company and the environment, the values, norms and culture of local communities which is suitable to them, such that a Company whose business activities are in the field of and/or related to natural resources must implement Corporate Social and Environmental Responsibility. In order to implement this obligation, activities related to Corporate Social and Environmental Responsibility must be budgeted and accounted for as a corporate cost, while adhering to the principles of fairness and appropriateness. These activities must be included in the annual report of the Company. If a Company does not implement Corporate Social and Environmental Responsibility, the Company will be liable to the sanctions provided in the prevailing laws and regulations.