Opinion: Indonesian Bill on Corporate Giving Makes No Sense

An opinion article in The Wall Street Journal criticizes a measure about to become law in Indonesia that would require natural-resources companies to adopt corporate social-responsibility programs.

The legislation, known as Article 74, does not clearly delineate how much money a company has to give, what it should give to, or how it will be taxed. Furthermore, the legislation does not define what is a natural-resources company.

In citing its reservations about the measure, the_ Journal_ says, “the most important way most companies serve their communities is by creating jobs and contributing to economic growth.” It adds: “The late Nobel economist Milton Friedman once argued that the social responsibility of a firm is to make a profit. A corporation, after all, is just a legal designation; it’s individuals, not paper firms, who have moral responsibilities.”

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