Embracing business and human rights

In 2011, the United Nations Human Rights Council (UNHRC) endorsed the “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework” (UNGP) formulated by John Ruggie, an international affairs scholar who also serves as UN special representative on human rights and transnational corporations.

Allegations of human rights violations by transnational companies are yet to be further investigated or resolved. Photo - Jakarta PostAllegations of human rights violations by transnational companies are yet to be further investigated or resolved. Photo - Jakarta Post

It stands on three pillars: first is a state’s duty to protect human rights through, for example, legislation; second is the corporate responsibility to respect human rights by following relevant regulations and assessing the impact of business activities on human rights; and third is the need to provide an effective remedy when a human rights violation occurs.

Despite being voluntary in its implementation, the UNGP is the first globally agreed instrument – resulting from an intergovernmental process – to set a standard to prevent and mitigate adverse effects on human rights linked to business.

Following up on the endorsement of the UNGP, the UNHRC established an open-ended intergovernmental working group on transnational corporations and other businesses with respect to human rights, the mandate of which is to “elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises.”

This resolution came after Ecuador’s call for the international community to move “toward a legally binding framework to regulate the work of transnational corporations and to provide appropriate protection, justice and remedy for the victims of human rights abuses directly resulting from or related to the activities of some transnational corporations and other business enterprises.” The group has met twice since to discuss the fundamental elements of the instruments, such as the instruments’ scope, extraterritoriality obligations and references to the access to remedy.

The ongoing negotiations on business and human rights (BHR) in the multilateral forum have triggered national discourse on how Indonesia should respond, both domestically and internationally. Answering such questions requires a comprehensive assessment of Indonesia’s current BHR framework.

Currently, no regulations specifically regulate the human rights aspect of business conduct.

However, BHR are indirectly addressed in several laws in Indonesia, such as the 2003 Labor Law, the 2007 Capital Investment Law, the 2007 Corporations Law, the 2009 Mining Law and the 2009 Environmental Protection and Management Law. In addition, the Maritime Affairs and Fisheries Ministry recently issued Regulation No. 35/PermenKP/2015 on human rights and certification in the fisheries business, which sets criteria on compliance with human rights in the fisheries business and requires such companies to conduct due diligence on those rights.

Despite these regulations, the National Commission on Human Rights (Komnas HAM) has reported that of the 7,188 human rights violation reports it has received, 1,030 – the second-largest number – were carried out by corporations, mostly involving infringement of land rights, labor rights and environmental rights.

The discovery of more than 200 victims of slavery by PT Pusaka Benjina in Maluku in 2015 further exposed the government’s limitations in monitoring the conduct of fishing companies.

This is in addition to other allegations of human rights violations by transnational businesses that are yet to be investigated or resolved, such as forest and land fires allegedly set by oil palm plantations in Sumatra that caused trans-boundary haze and violated people’s right to health, or other alleged human rights infringements by big corporations.

All of these have led experts to believe that Indonesia needs to further strengthen and harmonize its regulations on BHR as well as develop a remedy mechanism for those affected.

With its economy and foreign direct investment inflows growing at a promising rate, BHR will only become more relevant for Indonesia.

Implementation of the UNGP principles could help ensure that economic development does not come at the expense of human rights.

Discourse on the BHR issue identifies several challenges for the government, but I will outline the way forward that the government should take in promoting human rights awareness in business activities.

First is the question of a national focal point. The BHR issue transcends the labour, environment, security and health sectors, among others.

A focal point is the first step toward mainstreaming BHR policy in the government and is essential to produce a coherent policy. In this light, the Office of the Economic Coordinating Minister seems to be the most suitable institution to become a focal point in promoting UNGP provisions, because the ministries under its coordination interact directly with businesses.

However, in carrying out this objective, it is important to coordinate closely with other relevant ministries, such as the Law and Human Rights

Ministry and the Foreign Ministry, to ensure that implementation is in line with existing national and international frameworks on human rights.

Second is the importance of continued dissemination of UNGP provisions to all stakeholders in Indonesia, particularly businesses (including small and medium enterprises) to raise awareness, encourage their implementation and prepare for further development of the BHR issue. A multi-stakeholder dialogue could also provide a platform for discussion to identify implementation gaps, share best practices and formulate the way forward.

Third is the need to start developing a BHR framework in Indonesia. I have mentioned that BHR is a cross-sectoral issue and therefore, one big umbrella regulation may not be realized in the short run.

A good first step toward this end could come from incorporating BHR principles into the existing national human rights framework, such as the 2015-2019 National Action Plan on Human Rights. Komnas HAM is also currently in the process of developing a national action plan specifically for BHR.

Finally, Indonesia must pay close attention to ongoing negotiations on an international legally binding instrument on BHR.

Although the necessity of incorporating human rights principles in business conduct is unquestionable, Indonesia should carefully anticipate any provisions toward small and medium enterprises: They comprise more than 90 percent of the Indonesian economy and might not have the same capability as big transnational corporations to implement human rights standards.

Nevertheless, Indonesia should continue its endeavor to discuss and improve its national BHR framework in order to prepare itself for international developments, as well as to ensure that the growth of business in Indonesia contributes to its people’s well-being instead of harming them.

The Jakarta Post


Amanda Himawan is in charge of issues relating to economics, socio-cultural and development rights at the Foreign Ministry of Indonesia.