TJSL and PROPER: Why Social Programs Now Need to Show Measurable Impact

For years, company social programs in Indonesia were judged by what they delivered: scholarships awarded, trees planted, aid packages distributed. TJSL and PROPER now ask a harder question. The TJSL rules for state owned enterprises (BUMN) require programs that are measurable in impact, and PROPER, the government's environmental performance rating, scores community programs on evidence of results

This article explains the rules as of October 2026, the 2025 changes, where SROI fits, and what program managers can do now

What PER-1/MBU/03/2023 Requires of BUMN

Minister of BUMN Regulation PER-1/MBU/03/2023 on special assignments and the TJSL program was issued on 3 March 2023 and took effect on its promulgation on 24 March 2023. It revoked PER-05/MBU/04/2021 on TJSL, as amended by PER-6/MBU/09/2022

The regulation defines TJSL as a BUMN's commitment to sustainable development that benefits the economy, society, the environment, and law and governance, and that forms part of the company's business approach. Article 12 makes the program mandatory, and Article 14 sets four principles:

• Integrated: based on risk analysis and business processes linked to stakeholders
• Targeted: clearly directed toward the company's goals
• Measurable in impact (terukur dampaknya): creating change or added value for stakeholders and the company
• Accountable: open to scrutiny, guarding against misuse and irregularities

Programs rest on four pillars: social, environmental, economic, and legal and governance. Aid and other activities should prioritize education, the environment and micro and small business development, or another policy set by the minister

The directors' TJSL plan must contain at least an estimate of the previous year's results, the program and budget projection, priority Sustainable Development Goals (SDGs) and performance targets, and must weigh the impacts and risks of the company's activities, emerging needs, local strengths and the expected impact. It forms part of the annual work plan and budget (RKAP) approved by the shareholders. Directors evaluate implementation to measure performance and benefits (Article 32), results are reported quarterly and annually in a separate chapter of the performance reports, and TJSL performance measurement is part of the directors' key performance indicators (Article 36). Public communication should put impact as experienced by beneficiaries first (Article 37)

Is PER-1/MBU/03/2023 Still in Force?

Indonesia amended its BUMN law twice in 2025. UU 1/2025, in force since 24 February 2025, wrote the TJSL duty into the law itself: Article 87E requires BUMN, their subsidiaries and the companies below them to carry out TJSL through coaching, training, empowerment and partnership with micro, small and medium enterprises and cooperatives, and through community development that prioritizes communities around BUMN operations

UU 16/2025, in force since 6 October 2025, replaced the Ministry of BUMN with a regulator, the Badan Pengaturan BUMN (BP BUMN), formed by Perpres 105/2025 on 7 October 2025. References to the BUMN minister are now read as the head of BP BUMN, and Article 87E leaves TJSL details to a BP BUMN regulation. The same law authorizes Danantara, the agency that now manages BUMN, to set strategic guidelines for TJSL and ESG programs

As of October 2026, the official BP BUMN legal database (JDIH BP BUMN) still lists PER-1/MBU/03/2023 as in force (berlaku), and we found no BP BUMN regulation or published Danantara guideline on TJSL that replaces it. PER-1/MBU/03/2023 therefore remains the detailed reference, but check the latest text before planning the next cycle

The Ministry's Push for SROI

SROI (Social Return on Investment) is not named in PER-1/MBU/03/2023, but the ministry promoted it. In a December 2023 presentation on TJSL and the SDGs, the Ministry of BUMN made impact a priority of its TJSL transformation, including SROI measurement for flagship TJSL or creating shared value (CSV) programs. Its TJSL KPIs for 2023 work plans targeted at least three programs measured with SROI, in house or with competent partners; for 2024, one of them had to be a CSV program

These were ministry KPI targets for 2023 and 2024, not rules in the regulation, so check which TJSL KPIs apply to your company now. For the method itself, see our guide to SROI

How PROPER Rates Community Programs

PROPER (Program Penilaian Peringkat Kinerja Perusahaan dalam Pengelolaan Lingkungan Hidup) is the government's program for guiding and rating company environmental performance. It is now run by the Ministry of Environment and the Environmental Control Agency (KLH/BPLH), which took over environmental affairs from the former Ministry of Environment and Forestry (KLHK) in late 2024; the 2024 to 2025 cycle covered 5,476 companies. The current rule, Permen LH/BPLH 7/2025, in force since 28 August 2025, replaced Permen LHK 1/2021

Companies become participants after screening, for instance because they export, are listed on the stock exchange, attract public concern or have significant environmental impact, and once selected they must take part. Blue means compliant, red means not compliant, and black means pollution or environmental damage caused by the company's actions or negligence. Green and gold reward performance beyond compliance, while red twice in a row or black leads to law enforcement

Community empowerment is one of the beyond compliance areas. The criteria ask for social mapping no older than four years and updated within the past year, a strategic plan with measurable indicators, an annual work plan, a monitoring and evaluation system with evaluation documents approved by top management, and a community satisfaction index (IKM). They also look for results such as residents lifted out of poverty, higher incomes for target groups and new economic or social institutions

Gold goes further. Among other conditions, a gold candidate needs a flagship social innovation program, and Article 17 states that social innovation is assessed with the SROI method. The assessment covers the initial and expected conditions, the strategy, implementation, triple loop learning and the competence of the report's author. SROI is not new to PROPER: the 2021 rule already used it to measure social innovation

Where Private Companies Stand

For private companies, the general rule is UU 40/2007 on Limited Liability Companies. Article 74 requires companies whose business is in or related to natural resources to carry out TJSL, budgeted as a company cost with due regard to propriety and fairness, and sets sanctions under the relevant laws for companies that do not comply. Every company's annual report must also include a report on TJSL implementation (Article 66)

PP 47/2012 adds that directors carry out TJSL under an annual work plan approved by the board of commissioners or the shareholders' meeting, and that other companies may take part voluntarily. Neither rule prescribes how to measure impact, so for companies rated in PROPER, its criteria set the higher bar

What TJSL and PROPER Mean in Practice

The two systems use different words but reward the same habits, so one well designed program serves both

A short checklist for program managers:

1. Start with a baseline. Record the target group's condition before the program starts, building on social mapping or a community needs assessment
2. Write a Theory of Change. Show how activities lead to outcomes and which assumptions must hold; see our comparison of Theory of Change and Logical Framework
3. Choose a few indicators. Give each outcome an indicator with a target, a data source and a schedule
4. Plan monitoring and evaluation early. Budget for data collection, assign who collects and who reviews, and keep evaluations approved by management
5. Use SROI where it fits. Apply it to flagship or social innovation programs with enough data, and state assumptions openly
6. Report honestly. Include outcomes and what did not work, not only activities and spending, and the beneficiaries' perspective

Conclusion

TJSL and PROPER ask the same question: what changed, for whom, and how do you know? For BUMN, measurable impact is one of the principles TJSL must follow; for companies rated in PROPER, evidence of results shapes how community work scores toward green or gold. A baseline, a clear Theory of Change, a few good indicators and honest reporting answer both

SIDIA's Monitoring, Evaluation & Learning service sets up MEL systems, measures outcomes after programs end using SROI principles and prepares impact reports for programs of this kind