Corporate Social Responsibility and Its Implementation in the Tourism Industry Anak Agung Bagus Ngurah Agung Surya Putra
Kadek Sarna (Supervisor) Renee Sarah White
Abstract
The concept of Corporate Social Responsibility (CSR) has been widely spread to developing
countries. Most scholars argue that the CSR will give economic benefit to the local
communities surrounding the company. Indonesia and Australia have adopted the concept of
CSR into some legislation and regulation. When the law of CSR was implemented in the field
of tourism, some companies thought that they do not have any legal obligation to obey it. In
practice, local communities have used CSR to demand the tourism industries to provide any
social, cultural and economic facilities. This research has two main purposes, first whether
tourism industries have legal obligation to implement CSR to the local communities. In
addition, this research will find the suitable form of CSR programmes to the local
communities.
I. INTRODUCTION
1.1. Background
Corporate Social Responsibility (CSR) is the Involvement of
Companies to maintain and upgrade the condition of communities and
environment surrounding the companies with regard to social and
environmental development as well as economic empowerment.
The Guidance Standard on Social Responsibility, ISO 260001 has defined the concept as the responsibility held by organisations in regards to
the impacts of decisions and activities on society and the environment.
Through transparent and ethical behaviour companies are expected to address
four key issues. Companies are expected to take into account the expectations
of stakeholders; implement sustainable development policies which include
the health and welfare of society; to act in compliance with any legislation
1
International Organisation for Standardisation, ISO 26000 Guidance of Social Responsibility (2010)
and incorporate internationally expected behaviours and to additionally
integrate these policies throughout the entire company.2
According to the triple bottom lines (Profit, people and planet) the
existence of a company or corporation is not only to gain profit but also
benefiting the surroundings. Bearing in mind those components its
connection to the sustainable development in respective industries of tourism
lies in the very core of the establishment of the industries itself.
Industries of tourism in Indonesia have been established in many
corners. In particular one of the well-known province in the world is Bali,
where most of tourism industries are established in Adat village, the village
which consists of local communities based on Adat Law and particularly on
philosophy of Hindu in Bali.3
The massive development in Tourism Industries as well as all the
efforts to establish the facilities have brought great things to the tourism
sector in Bali. However, the economic growth seems only benefiting the side
of the industries with less consideration to support the existence of local
communities. A lot of Limited Companies have done their effort in
maintaining the wellbeing of environment and social surrounding through
CSR as it is very well regulated in Indonesia’s Law Number 40 of 2007 and
further affirmed in Government Act Number 47 of 2012 concerning Social
and Environmental Responsibility of Limited Companies.
The implementation of CSR in Tourism Industries have been
inconsistent in Bali, since there are no clear ruling enforcing the Industries to
implement CSR to the communities that owns the village they established the
facilities. Even if there are ruling implicitly suggesting Tourism Industries to
implement CSR for the wellbeing of local communities, there are no clear
concept on how they should execute CSR.
This article will also scrutinise the implementation of CSR in
Australia as a mean of comparison to the implementation in Indonesia in this
case Bali. Where in Australia the issue of CRS become an increasingly
relevant topic since its introduction in the early 20th century. The use of CSR
2
Dr. Leeora D. Black, What We Do (29 April 2015) Australian Centre for Corporate Social Responsibility <www.accsr.com.au>.
3
in the tourism industry has become an issue requiring great seriousness and
attention. The Australian Centre for Corporate Social Responsibility
(ACCSR) was formed over a decade ago to work with organisations to
manage impacts and assist in performance reports.4 The ACCSR is not limited to the tourism industry, providing assistance to a wide variety of
organisations. To define the concept of CSR has externally sourced this
information through the International Organisation for Standardization (ISO).
The ACCSR have chosen to use this international definition in an
attempt to bring clarity to a concept that endures much debate in terms of the
definition. These differences can be attributed to several issues; being a
reflection of national and cultural differences in the approach to business
practices and differences in disciplinary actions and perspectives on the
implementation of CSR methods. Additional to this is the differences in
motivation of organisations to become involved in CSR. Many companies
have implemented CSR in the opinion that it is a morally correct practice, in
contrast to this it is also common for organisations to use CSR as a makes
good business sense.5
Therefore, writers come to the conclusion of a research titled
Corporate Social Responsibility for Tourism Industries: Comparative Legal
Study in Indonesia – Australia.
1.2.Legal Issue:
Basing on the background described supra, writers come up with 2
legal issues, inter alia:
1.2.1. Whether there are regulations enforcing Tourism Industries to
implement CSR to Local Communities
1.2.2. What suitable form of CSR is required to be implemented by the
Tourism Industries to strengthen the local communities?
1.3.Purposes
This research aims to dig deeper into Law in Indonesia concerning
CSR and the needs of it to be implemented by tourism industries as well as to
4
Dr. Leeora D. Black, Who We Are (29 April 2015) Australian Centre for Corporate Social Responsibility <www.accsr.com.au>. 6.
5
provide a clear concept on how CSR should be executed by the tourism
industries. The ruling is needed for giving assurance that all tourism
industries will take responsibility to their surroundings and not just treat them
as money machines, as well as to give strength, particularly, to local
communities to face the global economic order.
1.4.Methodology
1.4.1. Type of Legal Research
The research used to support the position of this paper will
be combination of primary and secondary research. It is proposed
that a survey is undertaken on a variety of hotels in Bali; these
interviews will be addressed to owners or managers. If
interviewing management is not possible will endeavour to
interview staff members; this will provide an alternative insight
into the concept of CSR. This research will be supported by
academic journal articles most relevant to the topic. Local
Legislation will be used where applicable to support the topic of
CSR and its use in the Tourism Industry.
To accompany this data will be an Interview with Dr Ni
Ketut Supasti Dharmawan, SH., MHum., LLM., the head of Master
Degree Programme of the Faculty of Law Udayana University. As
the head of this programme the interview with Dr. Supasti is
expected to provide great insight into the academic background of
CSR in Bali. The following questioners will be used while
conducting interviews:
Hotel Interviews
Good Morning/Afternoon, we would firstly like to
thank-you for thank-your time. Any information collected today will be used to
write a research report and will remain anonymous. The purpose of
this interview is to provide an understanding of how local tourism
businesses use and understand the concept of Corporate Social
Responsibility. We would appreciate if you could answer the
1. Do you know what the concept of CSR is in relation to
tourism?
2. Do you know the legal requirements for CSR?
3. Are you aware of the impact this business has on the
local community?
4. In your opinion, is the impact of this business on local
communities of a negative or positive nature?
5. Does this business have any programs in place that are
consistent with the CSR concept?
6. If so, how is the implementation monitored?
7. Do you believe there are any areas that require
improvement in your current program?
8. Are you personally happy with the contribution this
business makes towards CSR and the local community?
We would like to thank-you for your time and assistance in
participating in this survey. We wish you a good day.
Dr. Ni Ketut Supasti Dharmawan, SH., MHum., LLM.
Good Morning/Afternoon Dr. Supasti, firstly we would like
to thank-you for your time. We have compiled a few questions
relevant to the topic of Corporate Social Responsibility and the
Tourism Industry in Bali.
1. How long have you been working at the Udayana
University?
2. What area of law do you specialise in?
3. How long have you (and the university) been involved
in the topic of CSR?
4. In your personal opinion, over the duration of your
work with CSR have you seen an improvement in the
implementation of CSR policies in the tourism
industry?
5. Currently it appears that businesses are using CSR
consideration to social and environmental impacts.
What is your opinion of this current use of CSR?
6. Do you believe law reform would improve CRS? Is this
likely to provide consistency in policy implementation?
We would like to take the opportunity to thank-you for your
assistance and time today. Your answers provided will assist in
providing an adequate background in the use of CSR in the tourism
industry.
The results and information received from these interviews
of the tourism industry will be statistically compiled to best
interpret and analyse the data. A separate analysis will be made of
Balinese and Australian businesses. The two separate analyses will
then be compared to find similarities between Bali and Australia.
1.4.2. Analysis of Findings
This paper will deal with two issues in relation to CSR;
whether clear rulings are present in legislation and what form of
CSR is required to be implemented by the tourism industry to
benefit local communities. Each of these issues will be addressed
with primary and secondary research and critically analysed. Both
issues with will addressed in regard to current research available
for Bali and Australia. These regions will be individually analysed
and will also be compared address any similarities implemented by
both regions.
II. WHETHER THERE ARE REGULATIONS ENFORCING TOURISM
INDUSTRIES TO IMPLEMENT CSR TO LOCAL COMMUNITIES 2.1.Regulation of CSR in Indonesia
Corporate Social Responsibility in Indonesia is regulated under the Law
Number 40 of 2007 concerning Limited Company, particularly in Article 74
paragraph (1)6 which in essence regulates that Limited companies which run their business in the field of or related to the natural resources are obliged to implement
social and environmental responsibility. This Law defines social and
6
environmental responsibility as a commitment of companies to be actively
involved in sustainable economic development in order to develop the quality of
life and environment in which has benefit the companies, local communities as
well as community in general.7 It is further affirmed in the Government Act Number 47 of 2012 concerning Social and Environmental Responsibility of
Limited Company that the above mentioned responsibility is carried by the
Director in accordance with the annual work plan of the Company after consented
by the Board of Commissioners or the General Meeting of the Shareholders in
accordance with the Charter of the Company.8
Law Number 25 of 2007 concerning Capital Investment stipulates that
every investor is obliged to implement CSR.9 What is meant by CSR is the responsibility inherent in each investment firm to keep creating relationships
harmonious, balanced, and in accordance with the environment, values, norms,
and local culture.10 While the definition of investor is an individual or business entity that makes an investment that can be either domestic investors or foreign
investors.11 In addition, Article 16 stipulates that every investor is responsible to preserve the environment.
Government of Badung stipulates, in Local Government Act of Badung
Number 6 of 2013 concerning Corporate Social Responsibility, that Companies
are obliged to establish commitment that CSR is an inseparable part of their
management policy and development programme in the rule of their company.12 In light of explanation supra, it is clearly regulated that all Limited
Companies as well as individual are obliged or have legal obligation to implement
the CSR and those who don’t fulfil it is sanctioned.13 The Law of Limited Company explicitly states that Limited company which doesn’t implement CSR is
sanctioned. However it doesn’t give explanation on what kind of sanction shall be
7
Law of Republic of Indonesia Number 40 of 2007 concerning Limited Company. Article 1 paragraph 3. 8
Government Act of Republic of Indonesia Number 47 of 2012 concerning Social and Environmental Responsibility of Limited Company, Article 4 paragraph 1.
9
Law of Republic of Indoneisa Number 25 of 2007 concerning Capital Investment, Article 15 paragraph b. 10
Law of Republic of Indoneisa Number 25 of 2007, above n 9 11
Law of Republic of Indoneisa Number 25 of 2007 concerning Capital Investment, Article 1 paragraph 4 12
Local Government Act of Badung Number 6 of 2013 concerning Corporate Social Responsibility, Article 9 paragraph C.
13
given to the company, instead the Law have other Regulations to specify the kind
of sanction.14
If we take a closer look at the clause “in the field of natural resources”15 we would immediately think of Industries of gas, oil, mining or any other
companies that directly use the natural resources. Tourism Industries would be
discounted from that clause. The clause “related to natural resources”, in the other
hand, gives the obligation of CSR to the company that do not use natural
resources but the establishment affect the natural resources,16 which means tourism industries are included.
2.1.1. CSR in Tourism
According to Article 1 paragraph 9 of Law Number 10 of 2009
concerning Tourism, the industries of tourism are integrated associations
of tourism business in order to provide goods and/or services to satisfy the
needs of tourism in conducting the tourism. The Article 7 then stipulates
that the development of Tourism includes:
a. Tourism industries
b. Tourism destination
c. Marketing
d. Tourism institution
The Law then explain that the development of tourism industries is the
development of structure (function, hierarchy and relation) of the
industries, competitiveness, partnership of tourism business, credibility of
business, as well as the responsibility with regard to environment and
social culture.17
2.1.2. Current Practices
In an interview with Dr. Ni Ketut Supasti Dharmawan, SH.,
MHum., LLM., she expressed her joy of seeing how well tourism
14
Explanation to the Law No. 40 of 2007 Article 74 paragraph (3) 15
As written in Law No. 40 of 2007. 16
Anak Agung Sri Indrawati, Ni Ketut Supasti Dharmawan, Ida Ayu Sukihana, Implelmentasi Konsep CSR (Corporate Social Responsibility) Pada Perusahaan Industri Pariwisata di Bali. Jurnal Ilmiah Fakultas Hukum, Udayana University. 2012. Pg. 131.
17
industries have committed to implement the CSR programme.18 Her words are affirmed by the practice of Bali Safari and Marine Park which has
implemented the programme of CSR by playing role for public health. The
tourism industries that are located in Gianyar provide medical check for
eye as well as surgery for cataract in December 2013.19 Moving to the southern part of Bali, Melia Hotel, one of the Hotels in Nusa Dua,
implemented its CSR programme by celebrating Universal Children Day
in December 2014.20
2.2.Regulation of CSR in Australia
The Corporations Act 2001 (Cth) in Section 181(1) subsection A states a
director (or other officer) of a corporation must “exercise their powers and
discharge their duties”21 while acting in good faith and in the best interest of the corporation. Subsection (b) states the director must act in relation to a proper
purpose. This provides several issues; the interpretation of ’good faith’ and
‘proper purposes’ and the lack of inclusion for the best interests of the community.
The Act does not define these specific terms22; additionally the Acts Interpretation Act 1901 (Cth) also does not provide for these terms.23 It is then adequate to use the natural meaning of the word (or phrase); the term good faith is defined as the
“honesty of purpose or sincerity of declaration”.24 In interpreting this it is it is important to consider the purpose of the Corporations Act 2001 (Cth); this being
that the Act is not limiting the operation of State or Territory law and is intended
to impose additional obligations, liabilities and powers on organisations.25 Therefore it is adequate to assume the Act is suggesting in section 181 that an
organisation is required to perform its business obligations in an honest and
sincerer manner. The Act fails to specifically mention the need to act in the best
18
Interview with Dr. Ni Ketut Supasti Dharmawan, SH., MHum., LLM (Faculty of Law, Udayana University, Denpasar, 7 December 2015).
19
Bali Safari and Marine Park, Safari Peduli Pemeriksaan Mata dan Operasi Katarak untuk Lansia bersama John Fawcett Foundation
<http://www.balisafarimarinepark.com/news/1395/safari_peduli_pemeriksaan_mata_dan_operasi_katarak_untu k_lansia_bersama_john_fawcett_foundation_.html>
20
CSR Bali, Universal Children Day Celebration At Melia Bali Indonesia. < http://www.csrbali.com/universal-children-day-celebration-at-melia-bali-indonesia.htm>
21
Coprortions Act 2001 S181. 22
Corporations Act 2001 (Cth) s9. 23
Acts Interpretation Act 1901 (Cth) Part 2. 24
Macquarie Online Dictionary (2015) <www.macquariedictionary.com.au>. 25
interests of the local communities (or environment). Subsection (b) referring to the
director of an organisation acting within ‘proper purposes’ is also a section that
can be misinterpreted. This is quite an open phrase, giving organisations a wide
scope while acting within the law.
2.2.1. CSR in Tourism
Since the 1990’s Australia has implemented a certification program
to achieve improvement of standards in the tourism industry. This is
offered through the Nature and Ecotourism Accreditation Program
(NEAP) which provides voluntary accreditation for organisations. This
program is offered by a Non-Government Organisation (NGO) in
conjunction with the Australian Tourism Operations Network.26 The focus is on social, community and environmental benefits while also
incorporating human rights and labour benefits. The program is currently
funded by involved companies with incentives for businesses involving
cost saving and the marketing sectors.27 Random audit checks are carried out by an accredited agency; well defined criteria is set out along with the
use of third party auditors to provide reliable accreditation.28 The purpose behind providing certification for companies is to assure customers and the
Tourism Industry that the company has achieved a minimum set of
standards; additionally this also provides benefits to the local community
and environment.29 As the use of certification grows competing organisations will find themselves in a position requiring them to also
meet these base guidelines to become effectively competitive.
2.2.2. Current Practices
In a report issued by the Business Events Australia, Tourism
Australia in November 2010 it was reported that since the previous Audit
in 2008 participation was rising. In 2010 it was reported that 36% of
organisations (of 347 surveyed) hold at least 1 accreditation for social or
26
Rachel Dodds & Marion Joppe, CSR in the Tourism Industry? The Status of and Potential for Certification, Codes of Conduct and Guidelines (2005) 50.
27
Dodds & Joppe, Above n 23, 16. 28
Rachel Dodds & Marion Joppe, CSR in the Tourism Industry? The Status of and Potential for Certification, Codes of Conduct and Guidelines (2005) 17.
29
environmental responses to CSR. This figure in 2008 was reported as 31%,
showing an increase of 5%.30 Australian convention and exhibition Centres audited reported a 75% accreditation rate; the travel industry reported a
56% accreditation rate with the accommodation organisations reporting at
47%. Both the types of organisations have seen an improvement with the
2008 report finding 46% of transport organisations hold an accreditation
and 39% of accommodation organisations.31
Australia has made great progress over the last few decades with
the growth of organisations voluntarily becoming certified under the
NEAP. The formation of the ACCSR has brought CSR to the forefront in
many business sectors. The Tourism Industry is one of many that have
now started considering the impacts day to day operations have on local
communities in regards to social, economic and environmental factors.
Regardless of these improvement without clarification within legislation
the issue of CSR will possibly reach a standstill in development.
Amending relevant legislation will provide all businesses in the Tourism
Industry with a minimum baseline to work from and will ensure the
protection of social, economic and environmental factors in the local
communities. The continued use of voluntary certification under NEAP
and assistance provided by ACCSR will to assist regulate CSR while the
introduction of CSR into legislation with protect he human rights of the
local communities. Additional to the inclusion of CSR into legislation is
the need to allocate the power the monitor the implementation of CSR; the
decision to form a new agency dedicated to ensuring organisations fulfil
their legislative requirements is the most likely option.
2.3.Right of Local Communities to Enjoy CSR 2.3.1. In Indonesia
Local Community is acknowledged in Indonesia along with their
traditional customary rights as long as it is in accordance with the societal
development and the principles of Republic of Indonesia.32 It is further
30
Business Events Australia & Tourism Australia, Destination CSR: How Australia’s Travelling in 2010, A corporate Social Responsibility Audit of Australia’s Business Events Industry (2010) 6.
31
Business Events Australia & Tourism Australia, Above n 32, 8. 32
affirmed in Article 28i paragraph (3) which stipulates, “The cultural
identities and rights of traditional communities shall be respected in
accordance with the development of times and civilisations”.
In the Laws of CSR, though not generally ruled, local
communities’ rights is ensured in the Article 11 paragraph (3) letter p of
the Law Number 22 of 2001 concerning Oil and Natural Gas which in
essence stipulates that companies in their joint contracts need to include
the assurance of the development of communities especially local
communities.
In addition to that ruling, Local Government of Badung, Bali,
through their Act Number 6 of 2011 concerning CSR, particularly Article
11, stipulates that one of the forms of CSR is Communities Empowerment.
Even though this regulation does not specifically states local communities
it is reasonable to include or the right of local communities is implied
within the abovementioned ruling.
2.3.2. In Australia
The Australian Human Rights Commission is invested in the use of
CSR by corporations to ensure individuals’ basic human rights are not
violated. Local communities should be extended the right to enjoy life
without being influenced by large organisations. Companies often fail to
connect the importance of private decisions on public welfare.33 The ‘triple bottom line’ approach incorporates economic, social and environmental
implications into the one concept. It is important for company directors to
understand that the importance of societies values and interests must be
given importance over those of their own.34 Each of these approaches are relevant in the use of CSR and Human Rights; this is evident in Labour
Rights and the expectation of organisations to pay fair wages to
employees; Human Rights and the right to non-discrimination and the
Human Right to have access to clean drinking water.35 These examples
33
Howard R. Bowen, Jean-Pascal Gond, Peter Geoffrey Bowen, Social Responsibilities of the Businessman
(University of Iowa Press, 2013) 4. 34
Howard R. Bowen, Jean-Pascal Gond, Peter Geoffrey Bowen, Social Responsibilities of the Businessman
(University of Iowa Press, 2013) 4. 35
illustrate how fundamental human rights as expressed in the
Commonwealth of Australian Constitution Act 1901 (Cth) and Australian
Human Rights Commission Act 1986 are incorporated into the
implementation of CSR. Organisations neglecting to operate business
practices with regards to CSR policies are likely to impede on the basic
Human Rights of Australian citizens. Quality of life and satisfaction of life
is likely to decline as a result of companies failing to implement CSR
policies.
III. WHAT IS THE SUITABLE FORM OF CSR IMPLEMENTATION BY TOURISM INDUSTRIES TO LOCAL COMMUNITIES?
3.1.The Concept of CSR
Corporate Social Responsibility is broken down into three issues, this is
most commonly known as the ‘triple bottom line’; being the environmental,
social and economic influences on local communities. The work of Idowa,
Kasom and Yuksel Mermod discussed an alternative view of CSR; People, Profit
and Planet (PPP) which holds mostly the same ideas as the ‘triple bottom line’
approach. PPP academics suggest that the focus of CSR is on the plan of
approach, where in fact there needs to be more attention given to the end
product.36 The PPP approach attempts to explain the developmental aspect of CSR from a conceptual perspective with regard to how the delivery of CSR
impacts stakeholders (such as employees, customers and government and
non-government organisations).37 CSR and PPP has so far allowed for the protection of human rights, response to climate change and addressed the consequences of
globalisation.38 The term Sustainable Development is also often used in Australian jurisdictions with reference to the Tourism Industry. The definition
provided by the World Commission on Environment and Development explains
this term as “forms of progress that meet the needs of the present generation
without compromising the ability of future generations to meet their needs”.39
36
Samuel O. Idowa, Abubaker S. Kasum & Asli Yuksel Mermod, People, Planet and Profit: Socio-Economic Perspectives of CSR (Ashgate Publishing Ltd, 2014) 2.
37
Idowa, Kasum & Yuksel Mermod, above 36 6. 38
Samuel O. Idowa, Abubaker S. Kasum & Asli Yuksel Mermod, People, Planet and Profit: Socio-Economic Perspectives of CSR (Ashgate Publishing Ltd, 2014) 1.
39
This definition has similarity with the values of CSR, with the focus of
sustainable development being on not only environmental impacts of tourism but
also social and economic. The notion of CSR requires the commitment of
companies to conduct their business in an ethical manner while also contributing
to economic growth and improving the quality of life for local communities.40 As research into the topic becomes more readily available the importance of CSR
increases; this is due to the link between economic growth and social and
economic wellbeing is further understood.41 Even with the involvement in CSR practices being voluntary and the concept currently not being regulated;
companies are under increasing pressure from Government and Non-Government
Organisations (NGO) to provide a positive influence to society.42
The implementation of PPP and CSR was a topic at the 2010 United
Nations Millennium Development Goals (MDG’s); 198 words leaders attended
the conference in New York to resolve 8 socio-economic issues.43 These issues involved targets such as poverty, education, gender equality, environmental
sustainability and the development of sustainable global progress of CSR
programs in achieving the required 21 targets.44 The United Nations aimed to have made a reduction to poverty rates, improve community health standards
(including child mortality, and HIV/AIDS) and promote peace, human rights and
gender equality.45
The concept of CSR, ‘triple bottom line’, PPP and sustainable
development are all of parallel ideals and goals. The underlying commitment to
environmental, social and economic development while attempting to build
meaningful relationships within the corporate sector and local communities is a
goal that has received growing momentum.
3.2.The Needs of CSR
The use of CSR programs is designed the primarily benefit the economic,
social and environmental factors of local communities; there also needs to be a
40
Tourism Australia, above n 39 1. 41
Small Business NSW Commissioner, What is CSR? (2014) www.toolkit.smallbiz.nsw.gov.au 5. 42
Small Business NSW Commissioner, What is CSR? (2014) www.toolkit.smallbiz.nsw.gov.au 5. 43
Samuel O. Idowa, Abubaker S. Kasum & Asli Yuksel Mermod, People, Planet and Profit: Socio-Economic Perspectives of CSR (Ashgate Publishing Ltd, 2014) 2.
44
Idowa, Kasum & Yuksel Mermod, above n 43 2. 45
benefit to the company to encourage participation. Many tourists are in current
times much more aware of the ‘footprint’ left by companies; choosing a hotel to
stay with or airline carrier is often influenced on the sustainability of the
business. The implementation of CSR has been found to reduce operating costs,
this is achieved through the minimisation of waste, water and energy
consumption.46 The use of CSR and especially certification in Australian companies will provide a competitive advantage over other businesses as tourists
make the conscious decision to support companies choosing to minimise their
effect on the PPP. Companies with CSR policies are also more likely to attract
and retain highly skilled and valuable staff members, this can be attributed to the
use of CSR programs that protect the rights of employees to receive fair wages,
equal opportunities and gender equality.47 Investors in the tourism industry may also be likely to invest in a company where they can show they have sustainable
plans for the environment, society and economy. CSR plans have the ability to
improve current financial spending along with the future profitability of the
company. Upfront expenses, into such areas as transport costs in current time will
create future saving as the price of petroleum continues to rise.48 Companies using CSR programs are likely to experience a variety of business improvements,
these can be experienced as current benefits to the company and also as long term
improvements.
As with any business concept these is also debate over the validity of
CSR. There is current debate over where the responsibility of a company lies.
One side of this argument sees the responsibility to only extend to those
immediately effected by the company such as the owners, directors and
shareholders. Alternatively, (and in line with CSR values) others have argued that
the responsibility of a company should not be limited. Not only in regards to
current environmental, social and economic concerns but also with regard for all
past, present and future impacts the company may have on these ‘bottom line’
issues.49 The issue has also been raised that the use of CSR principles undermines the fundamental principles of business practices. Economists believe the true
46
Tourism Australia, Benefits of Sustainability? (2013) <www.tourism-australia.com> 2. 47
Human Rights Commission, Corporate Social Responsibility and Human Rights (2008) <www.humanrights.gov.au> 3.
48
Tourism Australia, Benefits of Sustainability? (2013) <www.tourism-australia.com> 4. 49
purpose of business is to provide a profitable company, benefiting the owners and
shareholders. It is argued that the use of CSR is a conflict to the fundamental
purpose of business practices.50
Despite this controversy, it is important to consider that as knowledge
grows into sustainable development of the environment, society and the economy
companies are likely to see a merge in values. Public opinion is a very important
tool while trying to run an effective business, if companies hold to these out
dated opinions of fundamental business practices they will likely loose their
competitiveness in the Tourism Industry.
3.3.The Implementation of CSR
Tourism industries, as in last chapter, have done several notable CSR
programmes. However when it is come to the implementation to the local
communities it needs more than just a financial support, as most of companies in
Indonesia think these days. This doesn’t say that financial support is not needed.
In an interview with the accounting manager and human resource
manager of Puri Dalem Hotel, CSR is not implemented just to gain existence as
most tourism industries would normally do. They don’t even know what CSR is
but they have done notable social programmes. One of the programmes they most
proud of is managing the human resources of local communities in East Sanur.51 There are no clear definition of managing the human resources, however as
practices shown what it does to the human resources is to having them go
through process which consists of planning, organising, leading and controlling.52
IV. CONCLUSION AND RECOMMENDATION
4.1.Conclusion
Corporate Social Responsibility in both Indonesia and Australia is very
well regulated under the law. The main differences is that the Indonesia as the
developing country still needs to apply the concept of CSR mandatorily through
obligation owed in written Laws and regulations. In the other hand, Australian
relies solely on the commitment of the companies to contribute in the
development of their surroundings. With regard to the implementation by tourism
50
Small Business NSW Commissioner, above n 49 4. 51
Interview with Wayan Artayasa (Puri Dalem Hotel, Sanur, 8 December 2015). 52
industries both countries seem to do well in implementing this concept. With a
gradually increasing number of tourism industries take part in realising the
sustainable development, the wellbeing of local communities surrounding the
field of the company will surely be improved.
Its implementation to local communities should never be away from the
basic concept of sustainable development as mentioned supra. People, profit and
planet should be kept in balance, otherwise it could have bad impact not only to
the business but also to the local communities, the communities surrounding
them as well as the environment. Gaining just an image is not encouraged in
sustainable development as companies are needed to show their commitment to
apply the CSR programme not just financially but also in developing the human
resources.
4.2.Recommendation
• Local communities should be thankful and cooperative as of today, there are a lot of tourism industries that has shown their commitment in doing
the CSR programme.
• Tourism industries that are still doing the CSR without considering its basic concept and only for publication should change their way of
thinking that CSR won’t bring loss to their profit instead it will bring
greater benefit
• Even though many tourism industries have committed to do the CSR programme, not all of them know what CSR actually is. This is where
government needs to step in and socialise this programme broadly and
Bibliography Articles, Books, Reports
Anak Agung Sri Indrawati, Ni Ketut Supasti Dharmawan, Ida Ayu Sukihana, Implelmentasi
Konsep CSR (Corporate Social Responsibility) Pada Perusahaan Industri Pariwisata di Bali.
Jurnal Ilmiah Fakultas Hukum (Udayana University, 2012)
Bowen, Howard R., Jean-Pascal Gond, Peter Geoffrey Bowen, Social Responsibilities of the
Businessman (University of Iowa Press, 2013)
Business Events Australia & Tourism Australia, Destination CSR: How Australia’s
Travelling in 2010, A corporate Social Responsibility Audit of Australia’s Business Events
Industry (2010)
Dodds, Rachel & Marion Joppe, CSR in the Tourism Industry? The Status of and Potential
for Certification, Codes of Conduct and Guidelines (2005)
I Gusti Ngurah Gorda, Manajemen Summber Daya Manusia (Astabrata Bali in cooperation
with STIE Satya Dharma, 2004)
I Made Suasthawa Dharmayuda, Desa Adat Kesatuan Masyarakat Hukum Adat di Propinsi
Bali (Upada Sastra Denpasar, 2001)
Idowa, Samuel O., Abubaker S. Kasum & Asli Yuksel Mermod, People, Planet and Profit:
Socio-Economic Perspectives of CSR (Ashgate Publishing Ltd, 2014)
Legislation
Acts Interpretation Act 1901 (Cth)
Constitution of Republic of Indonesia 1945
Corporations Act 2001 (Cth)
Government Act of Republic of Indonesia Number 47 of 2012 concerning Social and
Environmental Responsibility of Limited Company
Law of Republic of Indonesia Number 40 of 2007 concerning Limited Company
Law of Republic of Indoneisa Number 25 of 2007 concerning Capital Investment
Law of Republic of Indonesia Number 40 of 2007 concerning Limited Company
Local Government Act of Badung Number 6 of 2013 concerning Corporate Social
Responsibility
Other
Bali Safari and Marine Park, Safari Peduli Pemeriksaan Mata dan Operasi Katarak untuk
Lansia bersama John Fawcett Foundation
<http://www.balisafarimarinepark.com/news/1395/safari_peduli_pemeriksaan_mata_dan_ope
rasi_katarak_untuk_lansia_bersama_john_fawcett_foundation_.html>
CSR Bali, Universal Children Day Celebration At Melia Bali Indonesia
<http://www.csrbali.com/universal-children-day-celebration-at-melia-bali-indonesia.htm>
Dr. Leeora D. Black, What We Do (29 April 2015) Australian Centre for Corporate Social
Responsibility <www.accsr.com.au>
Human Rights Commission, Corporate Social Responsibility and Human Rights (2008)
<www.humanrights.gov.au>
International Organisation for Standardisation, ISO 26000 Guidance of Social Responsibility
(2010) http://www.iso.org/iso/home/standards/iso26000.htm
Interview with Dr. Ni Ketut Supasti Dharmawan, SH., MHum., LLM (Faculty of Law,
Udayana University, Denpasar, 7 December 2015)
Interview with Wayan Artayasa (Puri Dalem Hotel, Sanur, 8 December 2015
Macquarie Dictionary Online (2015) <https://www.macquariedictionary.com.au/>
Small Business NSW Commissioner, What is CSR? (2014) www.toolkit.smallbiz.nsw.gov.au
Tourism Australia, Benefits of Sustainability? (2013) <www.tourism-australia.com>
