State, corporate rights obligations

Steven Mere, London | Opinion |Jakarta Post/ Sun, January 06 2013, 10:23 AM

A- A A+

Paper Edition | Page: 4

Corporations have been listed as top perpetrators of human rights violations in this country. From a total of 5,442 reports filed with the National Commission on Human Rights last year, 1,009 cases constituted corporate human rights abuses, only second after state violence involving the police, which reached 1,653 cases (The Jakarta Post, Dec. 11, 2012).

Corporate human rights violations are not new in Indonesia. Some have even become transnational legal and nonlegal issues, as the domestic legal system is unable to regulate and hold corporations accountable. This particularly holds true with regard to the accusations against transnational corporations (TNCs) for extraterritorial human rights abuses by their subsidiaries in this country.

On behalf of plaintiffs in Papua and Aceh, for instance, legal claims have been filed respectively against Freeport with the US District Court of Louisiana, (Beanal vs Freeport McMoRan) and ExxonMobil with the US District Court of Columbia (Doe vs Exxon Mobil).

There are also nonlegal actions through national and transnational consumer boycotts, negative publicity and campaigns against corporate human rights abuses in this country. Nike, for instance, has become the target of such negative campaigns by national and international human rights activists for human rights abuses against child workers allegedly committed by its subsidiary in Indonesia.

In general, however, most of the companies have walked away with impunity. There are identifiable conditions that allow this to happen.

Our government is reluctant to enforce strict human rights obligations and accountability on corporations out of consideration for their vital and influential roles in investment and development.

For their part, the corporations often exercise their financial power to influence the government and legal system to make decisions in their favor. The culture of corruption and the inadequacy of the domestic legal system also contribute to this impunity.

So far the international community has failed to adopt legally binding corporate human rights obligations that can take effect internationally. Instead there are various nonbinding standards, such as corporate codes of conduct and practices.

With the adoption of Law No. 40/2007 on limited liability companies, Indonesia became the first country in the world to introduce mandatory corporate social responsibility (CSR) for companies (in the resources sector and related industries). Government Regulation No. 47/2012 on corporate social and environmental responsibility issued on April 4, 2012 backs up the law.

It is an irony, however, that only five years after the adoption of the 2007 law, private companies are named as major human rights abusers. This demonstrates that merely having regulations in place is not enough. They have to be complemented by concrete implementation and enforcement mechanisms to ensure the effectiveness of human rights protection against abuses by corporations.

To this end, it is high time for Indonesia to turn to the newly adopted UN Guiding Principles (GPs) on Business and Human Rights for guidance. The GPs are the most comprehensive and authoritative nonbinding framework for corporate human rights obligations to date. Since first adopted in 2011, the GPs have been ratified globally.

The GPs mainly rest on a tripartite “protect-respect-remedy” framework: the state “duty to protect” against human rights abuses by third parties, including corporations (pillar one); the corporate “responsibility to respect” human rights (pillar two); and the need for greater “access to remedy” for victims of business-related abuse (pillar three).

Pillar two obliges corporations to: 1) “avoid infringing on the human rights of others and address human rights impacts with which they are involved”, 2) “express their commitment to meet this responsibility through a statement of policy” that “stipulates the enterprise’s human rights expectation of personnel and business partners”, and 3) “carry out human rights due diligence”.

This due diligence should include “assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses and communicating how impacts are assessed”. Human rights due diligence should be undertaken as soon as possible as a precautionary measure before any business activities and relationships begin.

These measures cannot be left to corporations alone. To guarantee their effectiveness, the GPs require the state/government to back up these corporate obligations through appropriate legislation, policies and adjudications.

Here is where the state duty to protect (pillar one) comes into play. This duty includes taking appropriate steps to prevent, investigate and punish corporate entities for wrongdoings and to provide judicial and nonjudicial mechanisms to redress the victims of abuses (pillar three).

So, the state/government remains the primary actor of human rights protection against abuses by others, including corporations within its jurisdiction. This state duty is not only limited to regulating corporate human rights obligations, but also making sure that the corporations are bound by such regulations and take measures that respect human rights.

In this regard, the state/government and the corporations in this country can benefit from the newly adopted UN GPs on business and human rights, as they not only provide core guidance on what the government and companies should do, but also declare how they should act in order to exercise their duty to protect and responsibility to respect human rights at the domestic level.

The writer is pursuing a PhD in business, human rights and the law (international law) at the SOAS, University of London, UK.