Corporate Social Responsibility: Critical Legal Analysis

Abstract

The concept of CSR was developed before four decades ago as a ‘social responsibility of company', but its scope and nature have not unanimously agreed among scholars of different fields including policy makers. Initially, it was invented by business economist to balance companies profit objective against other stakeholders. Among early writers, Carroll, was credited for constructing the ‘dimension' of responsibility of business for its owners, workers and the wider community at large. However, these  ‘dimensions' constructed by Carroll, were controversial whether the company's profit making objective can be taken as a responsibility, besides its in ability to discern traditional duties of business from voluntary act. Currently, there is a tendency to mix this concept with sustainable development, with a new, evolving, general, and complex concept, which rendered the boundary of this concept unlimited, and conceptually vague. This raises many issues about the concept as well as the nature of responsibility. This article tries to revisit the underlying idea of CSR from legal point of view to overcome conceptual intrigue.

After conceptual analysis, this paper concludes that it is a misconception to consider company's profit objective as responsibility. In legal terms, responsibility entails a duty imposed by law towards other which the failure to perform entails liability. Furthermore, the early conception limits the legal dimensions to company's compliance with basic duties of business-like paying taxation, duty of registration, and so on. Though, these duties are imposed by law on every business, other legal duties which termed as ‘ethical responsibility' such as consumer protection, prohibition against fair competition, respect for labour rights and quite recently environmental protection etc, can also be safely categorized under legal duties. In this regard, only charitable activities can be safely categorized as moral or ethical duty.