Corporate Social Responsibility in Indonesia

I read in the WSJ that Indonesia is planning a CSR (Corp Social Responsibility) tax to oblige corporations to pay a certain % of profits or revenue to “good causes”. The view that corporations have such wide responsibilities is increasingly accepted by governments and NGO’s. It takes stakeholder theory to its logical limit: making world citizens all equal stakeholders in every corporation. This is a form of Utopia. Milton Friedman stated in the NYT (1970) that "there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game”. Yes we are all stakeholders in our corporations but we do not have equal rights. Owners invest in corporations to make a return. The Agent – Principal relationship must be respected. Agents must act in the interests of their Principals or why would the Principals entrust them with their money? To take CSR too far is to risk the basis of investment in private industry and thus the economy itself. Countries (or Governments) such as Indonesia who insist on their rights before those of Principals will find that the latter group may wish to invest elsewhere. Unfortunately the harm that this causes will affect a wide group of stakeholders - the citizens of these countries.