Current State of CSR. Common to both countries is the strong support of the government in promoting CSR. CSR reporting is also growing development in both countries. . A study conducted in 376 companies listed in the Indonesian Stoc !"change showed that 37# were involved in CSR reporting and only seven companies produce stand$alone CSR reports. %he &uala 'umpur Stoc e"change has also re(uired publicly listed companies to disclose information that has the potential to influence the financial performance of a company. )owever* there is still no re(uirement for companies to disclose their CSR activities. &ey +layers and Current Roles. &ey CSR players in both countries are the respective governments* business organi,ations and local CSR networs. -usiness organi,ations as well as local CSR networs are important players in the practice of CSR in Indonesia and .alaysia. . -usiness organi,ations and non$profit organi,ations have also reali,ed that there is a need to assist S.!s in developing CoCs and implementing CSR programsAI.$R/R Center* 0122 03 Corporate Social Responsibility in Southeast Asia !nablers and Challenges. CSR enablers in Indonesia and .alaysia differ* but the challenges faced by both countries are the same. CSR in Indonesia is driven by globali,ation since there is a considerable amount of .3Cs operating in the country. %hese .3Cs can improve the practice of CSR in small and medium enterprises in their supply chain by encouraging them to implement CSR programs and pro4ects. .3Cs also bring with them international standards and practices. In doing so* they share the nowledge with local corporations. In woring with business organi,ations lie I-'* these .3Cs along with large local companies can help develop the capacity of small and medium enterprises. .3Cs can share best practices with their suppliers to improve the nowledge of small and medium enterprises regarding CSR. CSR development in Indonesia and .alaysia is confronted by the lac of CSR awareness and technical capability among local companies. Indonesian companies also face challenges concerning governance issues and wea implementation of laws. In .alaysia* the main barrier for CSR development is the lac of awareness on CSR. 'ocal .alaysian firms are primarily focused on philanthropic activities as prescribed by law. .alaysian companies focus more on following religious beliefs as opposed to social responsibility. Another barrier is the lac of technical capability in developing and implementing CSR. 5hile some large companies have a solid understanding on the concept* value and importance of CSR* the CSR programs are often scattered and unrelated to the business. As a result* there is a concern that CSR programs may not be sustainable. %he S6..AR7 . Conclusions 6nfortunately* the implementation and understanding of CSR in Indonesia is not ma"imal. As the result* the application of industry couldn8t reach the bottom of the whole society. Some of CSR practices in Indonesia are not represents the ob4ectives of CSR it8s self. %his type is often happened in Indonesia. %he company will conduct a big one day event under environmental topic. -ut . 9or e"ample* +% %oyota Astra .otor had wor together with ++') -ali* local 3:; at -ali$Indonesia which co%he real CSR is about how the company can devote to the community* environmental* and social circumstances. concern on environmental education. . R < * from at least four different perspectives. 9irst* the mandatory nature of CSR strengthens its position as a legal obligation to corporations= not 4ust a statement of goodwill or charity whose implementation depends upon their willing cooperation. It provides a con$ sensus on standards that should be applied through$ out Indonesia. %his* indeed* addresses the problem of diversity of standards and the (uestionable ef>cacy of the soft voluntary mechanism. Second* the adoption of CSR into law enhances its reception and implementation in Indonesia* by dif$ ferent staeholders atdifferent levels.At the corporate level* while the primary target may be corporations that directly or indirectly impact natural resources* such a mandatory nature at the very least promotes a degree of awareness among other corporations to loo beyond motives of pro>t ma"imi,ation. It is not inconceivable that in the future* the same regulation could be applied to all types of corporations and in all sectors. .oreover* the adoption of CSR as a legal norm would re(uire all governmental organi,ations to incorporate it into policy. At the grassroots level* the mandatory CSR would encourage society to focus more attention on the monitoring of corporate behaviors and CSR mechanisms. %hird* the mandatory nature can serve as a pre$ ventive mechanism that eeps companies from unduly bene>ting as a result of the system. In other words* maing CSR obligatory is one way of ensuring that there is no free ride for corporations ?+riyono* 0117@. .oreover* mandatory CSR can be a complement* not a replacement* to other remedial mechanisms. 9or e"ample* in the event that victims of corporations lost a case or were given no >nan$ cial compensation for damage to their living envi$ ronment* they may still bene>t from the AACSR mandatory fund*88 which should be allocated by cor$ poration* through various services. In this case* such CSR may have the effect of actually strengthening and empowering these victims. 9ourth* while a mandatory form of CSR is probably not a favorable approach among states* it does lay down a precedent for other countries to tae similar steps toward institutionali,ing CSR in the form of legal obligations.