Social and Environmental Responsibility of a Limited Liability Company
By ILIGRA Legal Team
A limited liability company does not pursue profit alone. In running its business, it also has an obligation to help build and improve the welfare of society, which is known as social and environmental responsibility (TJSL).
Article 1 paragraph (3) of Law Number 40 of 2007 on Limited Liability Companies defines TJSL as the Company's commitment to participate in sustainable economic development in order to improve the quality of life and the environment in ways that benefit the Company itself, the local community, and society in general.
Who Must Carry Out TJSL
Government Regulation Number 47 of 2012 on the Social and Environmental Responsibility of Limited Liability Companies sets out the obligation. Article 2 provides that every Company, as a legal subject, has social and environmental responsibility. Article 3 paragraph (1) makes it a mandatory obligation for a Company that conducts business activities in the field of, or related to, natural resources under the law.
The purpose of TJSL is for the company to maintain a harmonious and balanced relationship with its local environment and community.
Sanctions
Article 7 of Government Regulation Number 47 of 2012 provides that a Company that does not carry out TJSL is subject to sanctions in accordance with the provisions of laws and regulations.
Accordingly, a limited liability company is obliged to carry out social and environmental responsibility, and failure to do so may result in sanctions.
- Law Number 40 of 2007 on Limited Liability Companies, Article 1 paragraph (3).
- Government Regulation Number 47 of 2012 on the Social and Environmental Responsibility of Limited Liability Companies, Articles 2, 3 paragraph (1), and 7.