INDONESIA Law and Practice Contributed by: Ira A Eddymurthy and A Charlie R Malessy, SSEK Law Firm
Finally, a notable improvement in the ESG per - formance of Indonesian companies occurred over the past year, as evidenced by several pres - tigious awards acknowledging these efforts. For example, at the Global ESG Awards in Dubai, PT Bukit Asam Tbk received multiple honours, including platinum awards for its education and awareness programme and renewable energy integration, as well as gold awards for support - ing economically weaker sections and terrestrial biodiversity conservation. PT Kalimantan Prima Persada received several awards at the Global CSR & ESG Awards 2025, including the silver award for environmental excellence and the platinum award for the empowerment of wom - en. Pertamina International Shipping was also recognised on several occasions for its dedi - cation to women’s empowerment, winning the gold award at the Global CSR & ESG Awards 2025. Other prominent companies that received recognition in the ESG sector include PT Per - tamina Hulu Mahakam, Pertamina EP Zona 7, and PT PLN Indonesia Power UBP Surabaya. These awards reflect the growing commitment of Indonesian companies to advancing sustain - ability and promoting social responsibility. 2.2 ESG Considerations Private Companies For private companies in Indonesia, ESG report - ing generally aligns with the requirements out - lined in the Company Law and Government Regulation No 47 of 2012 concerning the Social and Environmental Responsibilities of Limited Liability Companies ( “GR 47/2012” ). However, it is essential to note that these requirements are relatively basic and not comprehensive. In fact, Article 74 of the Company Law specifically mandates that companies engaged in natural resource-related business activities implement sustainable economic practices to enhance the quality of life for communities and the envi -
ronment (corporate social and environmental responsibility). This suggests that only compa - nies operating in this sector have an obligation to fulfil corporate social and environmental respon - sibility. There have been no significant develop - ments in this regard. The Company Law does not stipulate further requirements or considerations concerning the implementation of corporate social and environ - mental responsibility, except for requiring com - panies to allocate budgets for these obligations and to ensure that reports on the implementation of corporate social and environmental respon - sibility are included in every company’s annual reports, as stipulated in Article 74, paragraph 2 and Article 66, paragraph 2 of the Company Law, respectively. Similarly, Article 3, paragraph 1 of GR 47/2012 only mandates that companies involved in nat - ural resources implement corporate social and environmental responsibility. There are few dif - ferences regarding corporate social and envi - ronmental responsibility requirements under the Company Law and GR 47/2012. GR 47/2012 essentially reinforces provisions previously established in the Company Law, such as: • requiring the BOD of relevant companies to allocate funds for the implementation of corporate social and environmental responsi - bility in the company’s annual work plan and execute corporate social and environmental responsibility as outlined in the annual work plan approved by the BOC or general meet - ing of shareholders (GMS), as determined in the company’s articles of association (as per Article 4 of GR 47/2012); and • ensuring that reports on the implementa - tion of corporate social and environmental responsibility are included in the com -
380 CHAMBERS.COM
Powered by FlippingBook