What if mining companies do not only extract minerals but also benefit the communities around them? What if setting up plantations do not lead to land grabs, deforestation, or modern slavery?

These are just some of the burning questions addressing human rights in the private sector. A recent study and ranking of 100 Indonesian Public Companies by the Foundation for International Human Rights Reporting Standards (FIHRRST) aims to delve deeper into human rights practices amongst the corporate world in Indonesia.

And the results, unfortunately, are not encouraging.

According to the Report, the majority of the Indonesian companies lack an adequate system to respect human rights in their contexts.

”Four companies have adopted the principles of business and human rights while only three companies expressed interests in conducting due diligence,” FIHRRST Director of Operations Bahtiar Manurung said at the launch event.

The study involved 100 Indonesian Public Companies, listed on Indonesian Stock Exchange (IDX) and KOMPAS 100 index (2018).

Much has been discussed about the role of private sector in driving the economic growth. Nonetheless private sector – awash with capital fund – also plays an instrumental role for the 2030 Agenda for Sustainable Development Goals (SDGs). Many businesses have in recent years incorporated SDGs indicators in their strategy and reporting. But some corporations still treat corporate social responsibility (CSR) as business as usual.

Since the adoption of the United Nations Guiding Principles on Business and Human Rights (UNGPs) by the international community in 2011, there has been a growing awareness on the adverse impact of business on human rights. The UNGPs are built on a “Protect, Respect, and Remedy” framework, but the question lies in how responsible business should be done in practice.

Striking a balance between human rights and profit will always be a constant challenge and require collaboration and cooperation from all stakeholders.

Through the Business and Human Rights in Asia project, UNDP has promoted the implementation of the UNGPs in the region by convening governments, private sector actors, civil society for mobilizing collective actions. In Indonesia, UNDP supports the government in the development of the National Action Plan on Business and Human Rights and ensures that the process is done in an inclusive manner and based on international standards.

Led by the Ministry of Law and Human Rights, a baseline assessment on human rights risks in mining, plantation, and tourism sectors reveals how businesses, governments, and communities need to work together to prevent human rights violations. For example, the main issue in Indonesia’s plantation industry is agrarian conflict, caused by lack of clarity in the ownership and the status of the land. According to Consortium for Agrarian Reform Indonesia, two agrarian conflicts occurred daily on average in 2017 and the plantation sector makes the highest contributor to all agrarian conflicts that take place in the country.

Speaking at the launch, Minister of Law and Human Rights Yasonna highlighted their efforts in developing a due diligence toolkit to help companies in palm oil industry to measure human rights risks and set a plan of action to mitigate the risks and provide access to remedy if they occur.

“The Ministry of Law and Human Rights will partner with FIHRRST and other stakeholders to further develop the toolkit and implement due diligence processes,” said Minister Laoly.

When companies conduct environmental impact assessments, they reduce health hazards and promote social and environmental responsibility. When companies integrate human rights standards in their employment processes, they promote non-discrimination, equality, and workplace safety for their workers. In short, embedding human rights in business is key to sustainable development.

“We hope the study and ranking of 100 Indonesian Public Companies will encourage more companies to respect human rights,” said Marzuki Darusman founder of FIHRRST. 

Story by: Priska Marienne and Suryo Utomo Tomi