Abstract
In doing their business activities, corporations have obligation to comply national and international hard law of human right, respect soft laws and global standards. The United Nations Guiding Principles 2011 on Business and Human Rights (GPs) is expected global standard that directly stipulates corporation need to respect human rights in conducting their business activities. GPs by John Ruggie as the Special Representative of the UN Secretary General that consist of three pillars (the protect, respect and remedy) were unanimously endorsed by the Human Right Council on its resolution 17/4 of 16 June 2011. Minimum protections of human rights, for example as expressed in the International Bill of Human Rights, are required in this GPs. In order to get best practice for business activities in Indonesia, it is important to examine from perspective of Company Law (Act No. 40 of 2007 concerning Limited Liability Company) and Investment Law (Act No. 25 of 2007 concerning Capital Investment) whether those minimum requirements are exist in those national instruments. The type of this study is normative legal research to examine whether Indonesian Company and Investment Law have adopted internationally recognized standards that are constructed in GPs. It can be considered that both the Indonesian Company and Investment Law are not fully adopt the principles that business enterprises should respect human rights in conducting their business as set out in GPs.
Keywords: John Ruggie’s three pillars, human rights, transformation.
Abstrak
Dalam melaksanakan kegiatan bisnisnya, perusahaan memiliki kewajiban untuk mematuhi ketentuan Hak Asasi Manusia (HAM) dalam peraturan yang berbentuk hard law baik itu dalam dimensi nasional maupun internasional menghormati soft law dan standar global. The United Nations Guiding Principles 2011 on Business and Human Rights (GPs) adalah global standar yang secara langsung menentukan bahwa perusahaan perlu untuk menghormati HAM dalam melaksanakan kegiatan bisnis mereka. GPs oleh John Ruggie sebagai Special Representative dari Sekretaris Umum Perserikatan Bangsa-Bangsa (PBB) ini yang terdiri atas tiga pilar ini (the protect, respect dan remedy) secara bulat disahkan oleh Dewan HAM PBB berdasarkan Resolusi 17/4 tanggal 16 Juni 2011. Sebagai contoh, standar minimum perlindungan HAM sebagaimana secara eksplisit tercantum dalam the International Bill of Human Rights dipersyaratkan dalam GPs ini. Oleh karena itu, guna mendapatkan best practice dalam kegiatan investasi bisnis di Indonesia, menjadi penting untuk melakukan studi dari perspektif Hukum Perseroan Terbatas (UU No. 40 Tahun 2007/UUPT) dan Hukum Penanaman Modal (UU No. 25 Tahun 2007/UUPM) mengenai apakah persyaratan standar minimum perlindungan HAM itu eksis dalam dua instrumen nasional tersebut. Tipe studi ini adalah penelitian hukum normatif untuk menguji apakah UUPT dan UUPM telah mengadopsi standar-standar HAM yang telah secara internasional diakui yang terkonstruksi dalam global standar.
Dapat terlihat bahwa UUPT dan UUPM Indonesia tidak sepenuhnya mengadopsi prinsip-prinsip bahwa perusahaan bisnis harus menghormati HAM ketika menjalankan usahanya sebagaimana tercantum dalam GPs.
Kata kunci: Tiga Pilar John Ruggie, HAM, Transformasi.
Putu Aras Samsithawrati1, Ni Ketut Supasti Dharmawan2, Made Maharta Yasa3, Cok Istri Diah Widyantari Pradnya Dewi4
THE EXISTENCE OF JOHN RUGGIE’S THREE PILLARS (THE PROTECT, RESPECT AND REMEDY) ON INDONESIAN COMPANY AND INVESTMENT LAW:
STUDY CONCERNING THE TRANSFORMATION OF INTERNATIONAL HUMAN RIGHTS PRINCIPLES INTO NATIONAL REGULATION
I. Introduction
The borderless world in this globalization era that is supported by a high technology and transportation make the process of mobilization between nations become easier. Along with it, more corporations appear and expand their business with profit maximization as their main goal in running their businesses. Besides profit maximization, there is one issue that often ignored by those corporations but actually fundamentally important that is so-called human right issue in business activities.
It is undeniable that the issue of human rights in business activities related to workers, consumers or society is already exist as a social awareness indicator.5 However, there are still many cases of human rights violation happen in business sector which reflects corporations are lack of responsibility concerning human right issues, especially in preventing and mitigating the adverse human right impacts either through their own activities or as a result of their business relationships with other parties. As one famous example of human right violation by corporation is Bhopal case in 19846.
In general, corporations either in the national or international level indirectly have an obligation to carry out so-called Corporate Social Responsibility (CSR). It is important to perform CSR because besides profit maximization, the sustainability of the corporations intertwined with the wealth of social, environmental and communities around them that they need to put attention upon it. CSR also involves the awareness of corporation towards human right issues. One definition of CSR given by ISO 26000 is the responsibility for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that: contributes to sustainable development, health and the welfare of society; takes into account
1 Putu Aras Samsithawrati is a lecturer of International Law Department at Faculty of Law Udayana University, Bali. She obtained Bachelor of Law (SH) cum laude from Faculty of Law University of Indonesia (2013) and Master of Law (LLM) from Faculty of Law Maastricht University, the Netherlands (2014).
2Ni Ketut Supasti Dharmawan is a senior lecturer of Civil Law Department at Faculty of Law Udayana University, Bali. She obtained Bachelor of Law (SH) from Faculty of Law Udayana University (1985), Master of Humaniora (MHum) from Diponegoro University (1998), Master of Law (LLM) from Faculty of Law Maastricht University, the Netherlands (2009) and Doctoral (Dr) from Diponegoro University (2011).
3Made Maharta Yasa is a lecturer of International Law Department at Faculty of Law Udayana University, Bali. He obtained Bachelor of Law (SH) from Faculty of Law Udayana University (1997) and Master of Law (MH) from Faculty of Law Udayana University (2008).
4Cok Istri Diah Widyantari Pradnya Dewi is a lecturer of International Law Department at Faculty of Law Udayana University, Bali. She obtained Bachelor of Law (SH) from Faculty of Law Udayana University (2005) and Master of Law from Padjajaran University (2010).
5‘Business and Human Rights (Bisnis dan HAM)’ <http://www.elsam.or.id/list.php?cat=bisnis_dan_ham&lang=in>
accessed 19 May 2015.
6This was the worst industrial disaster where over 15,000 people were injured and 3,000 people were killed by the blast of Chemical Methyl Isocynate (MIC) of Union Carbide Chemical Plant in Bhopal, India. See ‘Analysis Case Study: Union Carbide/Bhopal’ <http://www.ou.edu/deptcomm/dodjcc/groups/02C2/Union%20Carbide.htm>, accessed 19 May 2015.
the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behavior; and is integrated throughout the organization and practiced in its relationship7.
There is a lot of initiative both in national and international level in preventing and mitigating the adverse impacts of human right caused by business activities of corporations. One example of global standard that successfully exist is the United Nations Guiding Principles 2011 on Business and Human Rights (GPs). John Ruggie released some guiding principles that help corporations to implement and respect human rights to decrease the numbers of human rights impacts8. GPs by John Ruggie as the Special Representative of the United Nations (UN) Secretary General that consist of three pillars (the protect, respect and remedy) were unanimously endorsed by the Human Right Council on its resolution 17/4 of 16 June 20119. At least minimum protection of human rights as expressed in the International Bill of Human Rights and fundamental principles in the eight ILO core conventions as set forth in Declaration on Fundamental Principles and Rights at Work are required in this GPs.
As one global standard that directly regulates the issues of human right and business enterprise’s activities, GPs is indeed can be considered as practical guidance of business activities in Indonesia. Moreover according to Article 1(1) of Indonesian Law No. 39 of 1999 concerning Human Right, human right is basically a set of rights bestowed by God Almighty in the essence of human beings as creations of God which must be respected, held in the highest esteem and protected by the state, law, government and all people in order to protect human dignity. In relation with that, in order to get best practice of business activities in Indonesia, it is important to examine from the perspective of company law (Act No. 40 of 2007 concerning Limited Liability Company) and capital investment law (Act No. 25 of 2007) concerning Capital Investment) whether those minimum requirements are exist in those national instruments.
II. The Three Pillars of GPs
It is important to discuss the history of GPs in order to give broader view concerning GPs itself. It will be started from the Universal Declaration of Human Rights 1948 (UDHR 1948), the UN Doc. E/CN.4/Sub.2./2003/12/Rev.2 followed by the emergence of GPs. Firstly, as the preamble of the UDHR 1948 stipulates that “every individual and organ of society have to respect human rights regardless to inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom….”, the words “every organ of society” reflect that corporation can be considered as part of organ of society. Therefore, by understanding the essence of UDHR 1948 preamble, corporations as part of organ of society
7‘International Guidelines: ISO 26000 on Social Responsibility’ <
http://webcache.googleusercontent.com/search?q=cache:QYtQOOoidgwJ:https://www.tuv.com/media/india/informa tioncenter_1/systems/Corporate_Social_Responsibility.pdf+&cd=1&hl=id&ct=clnk> accessed 19 May 2015.
8van den Heuvel, Grat and Ni Ketut Supasti Dharmawan. (2014). Corporate Responsibility and Corporate Crime Control in the Tourism Industry, in (2014). Sustainable Tourism and Law. Ed. by Michael Gerbert Faure, Ni Ketut Supasti Dharmawan and I Made Budi Arsika. Eleven International Publishing: The Hague. p.285.
9United Nations Human Rights Council, ‘United Nations Human Rights Office of the High Commissioner, Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy”
Framework’
<http://webcache.googleusercontent.com/search?q=cache:ZRjJqtZu94cJ:www.ohchr.org/Documents/Publications/G uidingPrinciplesBusinessHR_EN.pdf+&cd=1&hl=id&ct=clnk> accessed 19 May 2015.
should respect human rights.10 Secondly, in international level, the UN, Commission on Human Rights, initially started it with Norms on Transnational Corporation and Other Business Enterprises with company’s duties (to promote, secure the fulfillment of, respect, ensure respect of and protect human rights) directly imposed under international law through treaties they have ratified11. However, due to some debates, that proposal was rejected by the Commission. Finally, through many phases and some mandates, in 2008, came up one recommendation by John Gerard Ruggie as the Special Representative of Secretary General (SRSG) on Business and Human Rights concerning the “Protect, Respect and Remedy” framework12 that successfully unanimously endorsed on 16 June 2011 by the UN Human Rights Council13. Nowadays it is known as GPs.
Since 1990s the issue of business and human rights can be seen on global policy agenda14. Human rights violations in relation with business activities conducted by corporations are spreading worldwide. Many corporations have started to emerge and expand but unfortunately they do not really put awareness upon the adverse impacts of their business activities on human rights. In this context, even though GPs is not a hard law nor soft law15, it can be seen as a “global standard of expected business conduct”16 in avoiding, preventing and mitigating those adverse human rights impacts. The GPs by John Ruggie consist of three pillars that supported with 31 guiding principles.
Essentially, the three pillars of GPs are called as the Protect, Respect and Remedy framework in relation with business and human rights. In details, the first pillar is actually the state duty to protect human rights, the second is the corporate responsibility to respect human rights, and the third is access to remedy. Before elaborating those pillars in further, it is important to know what is meant by business and human rights itself. According to John Ruggie, as the SRSG of UN on Business and Human Rights, in a larger crisis of the contemporary governance, he describes business and human rights as microcosm, in which there is gap between the scope, economic actors and impacts as well as how the societies manage the adverse impact itself17.
10 NK Supasti Dharmawan (2009). Suing Exxon Mobil Concerning Human Rights Violation in Aceh Indonesia, Master Thesis, Faculty of Law Maastricht University, the Netherlands, p. 26.
11United Nations Human Rights Council, see note 9, p.3.
12Ibid.
13 John Gerard Ruggie (2014). Global Governance and “New Governance Theory”: Lessons from Business and Human Rights, Global Governance (20), p.5.
14United Nations Human Rights Council, see note 9, p.3.
15 Although there is no uniform definition concerning soft law, shortly, soft law is used to include vague legal norms. If provisions contain techniques that states and international organizations can choose whether to use both the first and second main techniques (fisrt, regarding the definition of obligation that they undertake, the state will retain discretion; second, legal obligations will be avoided by them) then it can be recognized as soft law (See Tadensz Grnchalla-Wesierski (1984). A Framework for Understanding “Soft Law”, McGill Law Journal, p. 39 and p.44). Although soft law is not legally binding, but it can be forced through the consent given by companies, governments and other societies (See Institute for Human Rights and Business, “From Red Flags to Green Flags:
The Corporate Responsibility to Respect Human Rights in High-Risk Countries’ (2011), in Nolan, Justine. (2013).
The Corporate Responsibility to Respect Human Rights: Soft Law or Not Law. Ed. by Surya Deva and David Bilchitz. Cambridge University Press: United Kingdom. p. 144).
16This GPs can be seen as a global standard of expected business conduct but not as soft law because this was not issued under UN procedures, not adopted by the UN but it was unanimously endorsed by the UN Human Rights Council.
17John Gerard Ruggie, see note 13, p.6.
The State duty to protect human rights as the first pillar of GPs is coupled with two (2) main principles, which are: A) Foundational principles and B) Operational principles. In further, the Foundational principles consist of 2 guiding principles (Principles 1 and 2) meanwhile Operational principles consist of 8 guiding principles (Principles 3-10). The first pillar of GPs mainly states that state has duty to protect against human rights abuses within their territory and/or jurisdiction by third parties, including business enterprises, which in this context we are talking about corporations. The way states need to fulfill their duty is by taking appropriate steps both to prevent, investigate, punish and redress the human rights abuses through several instruments such as: legislations, regulations, policies as well as adjudication that suppose to be effectively regulating it. Regarding the human right abuses conducted by corporations, the state itself is notper seresponsible for it; however state can be responsible, if, for example, in fact the state fails to carry appropriate ways to prevent, mitigate and punish with regard to the impacts of corporations’ human right abuses18.
The second pillar is the corporate responsibility to respect human rights that will be more elaborated in the next heading. This pillar is also coupled with two (2) principles, namely: A) Foundational principles (Principles 11-15) and B) Operational principles (Principles 16-24). The Operational principles cover wide range sub-topics including details guiding principles concerning policy commitment of corporations, human rights due diligence that should be carried by corporations, and remediation that should be provided by corporations where they identify that they have caused or contributed to adverse human rights impacts. However, the foundation of this pillar rest in the principles that essentially state corporations should avoid abusing human rights of others and if they involved in causing adverse human rights impacts then they should address it.
The last but not least is access to remedy as the third pillar of GPs. Again, this pillar is also coupled with Foundational principle (Principle 25) and Operational principles (Principles 26-31). The Operational principles consist of various sub-topics such as state-based judicial mechanism, state-based non-judicial mechanism, non-state based grievance mechanisms and effectiveness criteria for non-judicial grievance mechanisms. When victims are faced by adverse human rights impacts caused by business-related human right abuses, then one question arises
“what mechanism can be taken by the victims upon such adverse human rights impacts?”.
Indeed, the third pillar can be the answer for the question as it provides greater access for the victims through judicial and non-judicial mechanism as effective remedy.
Generally, those pillars are intertwined with each other and essential as to avoid, prevent and mitigate the adverse human rights impacts in relation with business activity. They are seen as an integral part of the global standard of expected business conduct to especially overcome the issues on business and human rights.
III. What are the Corporations Should Do to Respect Human Right Particularly Related to GPs?The second pillar of GPs is corporate responsibility to respect human rights. As stipulated in GPs, this kind of responsibility to respect human rights by corporation is not an obligation but for all business enterprises worldwide this is formed as global standard of expected conduct19. However, although this responsibility only as global standard, to be said as a corporation that has Good Corporate Governance (GCG), therefore, this responsibility to respect human rights need
18United Nations Human Rights Council, see note 9, p.7.
19United Nations Human Rights Council, see note 9, p. 13.
to be implemented by the corporations wherever they operate when conducting their business activities. This is also supported by the essential concept of good corporate governance which in achieving sustainability in economic growth, the growth of enterprises that should be supported is enterprises that have responsibility, accountability, transparency, and fairly characteristics that applied to their shareholders and stakeholders in entirely20.
GPs sets out minimum internationally recognized human rights that need to be respected by corporations as their responsibility under Principle 12. This means corporations wherever they operate their business activities need to respect human rights, at minimum, as expressed in:
1. International Bill of Human Rights (including Universal Declaration of Human Rights and main instruments where the human rights have been codified such as the International Covenant on Civil and Political Rights as well as the International Covenant on Economic, Social and Cultural Rights); and
2. The principles concerning fundamental rights set forth in International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.
All corporations from every sectors, sizes, ownerships, operational contexts and structures need to respect human rights as set forth under those instruments in proportional depend on some factors such as their size (whether it is a small enterprises, medium-sized enterprises or large enterprises). Although the responsibility is proportional, however, it fully and equally applies to all corporations21.
There are two requirements need to be conducted by the corporations in respecting human rights as their responsibility under this GPs. Those requirements of the corporations as set forth in Principle 13 GPs are:
1. When conducting their own activities, corporations need to avoid causing and contributing to adverse human rights impact; then when such adverse impacts are occurred, they need to address those; and
2. Both for the adverse human rights impacts that are directly linked to corporations’
operations, products or services by their business relationship, even if they have not contribute to those impacts-the corporations need to seek to prevent and mitigate such impacts.
Furthermore, with regard to those two requirements, the commentary of Principle 13 elaborates that the word “activities” refers to actions and omissions; and the word “business relationship”
refers to relationships with entities, partner, value chain and any other state as well as non-state entity that basically has direct link to its products, services and operations22.
Three aspects that corporations need to pay attention in relation to the responsibility to respect human rights are23:
1. Their policy commitments concerning human rights;
2. Due diligence (DD) of human rights that aims to identify, prevent, mitigate and account their adverse human rights impacts that have occurred; and
3. Any process to provide remediation of their adverse human rights impacts.
From those three aspects, the GPs seems to put more attention on human right DD, this is due to GPs set outs human rights DD in 5 principles (Principle 17-21) meanwhile for policy
20Fernando, A.C. (2009). Corporate Governance: Principles, Policies and Practices. Dorling Kindersley: India. p.
14.21United Nations Human Rights Council, see note 9, p. 14.
22Ibid.
23Ibid., p. 15.
commitments and remediation each only set out in 1 principle (respectively Principle 16 and Principle 22). What is meant by human rights DD can be found as three elements in Principle 17 of GPs that basically states: 1) it should cover the adverse human rights impacts caused or contributed by corporations through their own activities or has direct link to their services, products or operation ; 2) The size, nature, context and risk of corporations will influence the variation of complexity in conducting this human rights DD; and 3) form as an ongoing process because the operating context of corporations and human right risks may change over time.
An important part of the human rights DD pointed out by the GPs is that the completion of this DD will not automatically and fully erase corporations from their liability towards adverse human rights impacts that have occurred. However, this human rights DD can be used to address the legal claims against the corporations in case because they can show people they already conducted reasonable steps to avoid any involvement with those adverse human rights impacts.
Therefore, this mechanism can at least help the corporations when they face legal claims.
One question then arise, what then the corporations should do to identify and asses those adverse human rights impacts that factually happen or potentially will happen? According to Principle 18 of GPs, they can use independent external and/or internal human rights expertise;
they need to join the potential affected groups’ and also their stakeholders’ meaningful consultation activities. The next aims of human rights DD are to prevent and mitigate the adverse human rights impacts. With regard to those aims, corporations should conduct two things, namely: 1) effective integration which means ensure that every levels and functions within one corporation handle such responsibility appropriately as well as ensure the availability of effective responses through the process of good internal decision making, oversight process and proper allocation budgeting; and 2) appropriate action that will depend on several factors, such as: a) the corporation’s involvement upon adverse human rights impacts – do they cause or contribute to it? Or they solely involved in it because such impacts by business relationship have direct link towards their products, operations or services?; b) when addressing the adverse human rights impacts, the extent of their leverage should also be considered.
With regard to human rights DD set out in GPs, the next step of this DD is corporations should track whether they already gave effective responses or not towards such adverse human rights impacts as well as to track whether the human rights policies within their corporations already well implemented or not24. After they conduct tracking, according Principle 21of GPs, corporation should prepare to report externally, in formal ways, how they address their adverse human rights impacts, especially when the affected stakeholders or parties on behalf of those affected stakeholders raise that concern.
Hence, to create a sustainable business environment, according to GPs, a corporation needs to formulate three aspects in their business activities. Both human rights policy, human rights due diligence as well as remediation upon the adverse human rights impact need to be provided and conducted by all corporations all over the world regardless of their size, ownership, structures and operational contexts.
IV. Examining the Indonesian Company Law and Investment Law In Order to Comply Human Rights Especially As Expected in GPs
Indonesia as a member of several international human rights conventions such as International Covenant on Civil and Political Rights (ICCPR) and The International Covenant on Economic, Social and Cultural Rights (ICESCR) already ratified those conventions respectively
24Ibid., p. 19.
through Indonesian Act No. 12 of 2005 and Indonesian Act No. 11 of 2005. The values of human rights stipulated in UDHR 1948 as well as various international human rights convention (such as ICCPR and ICESCR) that have been accepted by Indonesia can be seen in Indonesian Human Rights Act (Act No. 39 of 1999 concerning Human Rights) and Indonesian Human Rights Court Act (Act No. 26 of 2000 concerning Human Rights Court).
Those regulations show that Indonesia already recognized the importance of human rights protection. Those human rights regulations actually do not specifically regulate human rights related to corporations. As we know, in international fora itself, the existence and successfulness to regulate human rights related with business activities and enterprises just came up recently through GPs in 2011, although GPs is not hard law but only a global standard of expected business conduct. In relation with it, Indonesia also not fully and directly regulates matters concerning human rights related to corporations.
In Indonesia, matters related to corporations and investments are specifically regulated in Company Law (Act No. 40 of 2007 concerning Limited Liability Company) and Investment Law (Act No. 25 of 2007 concerning Investment). Both of Indonesian Company Law and Investment Law were enacted in 2007. From the time frame perspective, it can be considered that the reason why Indonesia is not fully adopting the principles that business enterprises should respect human rights in conducting their business is because this idea just came up recently and successfully exists internationally in 2011, meanwhile we note that those two Indonesian regulations specifically regulating Company and Investment were enacted in 2007. Therefore, it makes sense that Indonesia is not fully adopting the principles that business enterprises should respect human rights in conducting their business as set out in GPs, since GPs is not a 2007’s product.
Both in Indonesian Company Law and Investment Law, there are no explicit provisions specifically concerning corporation should has human rights policy commitment, human rights due diligence nor remediation for adverse human rights impacts in conducting business activities. However, we can see some values of respecting human rights in conducting business and investment through several provisions on those instruments. Example of value in respecting human rights can be seen implicitly in Article 74 paragraph (1),(2),(3) and (4) of Indonesian Company Law25 that specifically oblige company, especially company that engages business in the field and/or related to natural resources, to conduct CSR (or in this Act called as Social and Environmental Responsibility). In line with that, with regard to investment activities, Indonesian Investment Law through Article 15(b) stipulates every investor basically have obligation to perform CSR and furthermore coupled it with sanction in Article 34 upon the failure to perform obligations set out in Article 15.
Why then performing CSR can be considered as reflecting the value of respecting human rights in business activities? It is because CSR has wide scope. As the Triple Bottom Line concept of CSR defined by John Elkington, CSR covers the areas of people, planet and profit – where social and environmental performances are also the elements to create business
25Article 74 of Indonesian Company Law stipulates in details that: (1) Company that engages business in the field and/or related to natural resources has obligation to conduct Social and Environmental Responsibility; (2) The Social and Environmental Responsibility as stipulated in paragraph (1) is the obligation of a Company that must be budgeted and calculated as the company’s cost and the implementation of which shall be conducted with due observance to appropriateness; (3) Company failing to conduct obligation stipulated in paragraph (1) shall be imposed with sanction in accordance with the provision and regulation; (4) Furthermore, the provisions concerning Social and Environmental Responsibility will be governed through Government Regulation.
sustainability that actually go beyond financial performance26. Therefore, it can be considered that corporations are respecting human rights by conducting CSR activities especially in the field of “People responsibility”. In line with it, although there is no explicit provisions both in Indonesian Company Law and Investment Law that regulate corporations/investors should respect human rights, through the existence of obligation to conduct CSR (especially in the field of social responsibility that closely related with people), it can be considered that those two instruments already implicitly adopted (although not full) the principle to respect human rights in business activities, just like in GPs. Hence, the company or investor can put the making of human rights policy and remediation upon the adverse human rights impacts of their activity as well as human rights due diligence implementation in their CSR agenda, just like what GPs requires corporation to do to respect human rights.
From the above explanation, we note that Indonesia Company Law and Investment Law are regulations that specifically regulate matters concerning company and investment but not directly stipulate to respect human rights in conducting business/investment activities. However, aside from the company and investment law areas, to give broader view that Indonesia respects human rights, Indonesia actually has Tourism Law (Act No. 10 of 2009) that directly stipulates the principle of human rights in tourism activities. It can be seen through Article 5 letter (b) that stipulates tourism is performed with the principle that upholds the human rights, the cultural diversity and local wisdom.
V. Conclusion
In doing business activities, the corporations all around the world regardless of their size, ownership, structure and operational context need to respect human rights. Human rights and business activities have such a close relationship. Human right is also a factor that determines the sustainability of a corporation. Therefore, in conducting business activities, profit maximization is not merely the only goal of corporation that needs to be achieved. Although Indonesian Company Law and Investment Law do not adopt directly the principles contained in GPs due to the time frame (considering that GPs were established in 2011 meanwhile those Indonesian Acts were enacted in 2007), however one pillar of GPs concerning the corporate responsibility to respect human rights seems exist in the form of CSR (or in those Acts known as Social and Environmental Responsibility) under Article 74 of Indonesian Company Law and Article 15 (b) of Indonesian Investment Law. Implicitly, through the existence of CSR especially for the social part that closely related with people and human rights, it can be considered that both Indonesian Company and Investment Law are respecting human rights. For the future, those Acts need to be revised to get better best practices in relation with the globalization context by putting the provision concerning company or investors should respect human rights in conducting business activities and coupled it with requirements such as making human rights policy, human rights due diligence and remediation of adverse human rights impacts as set out in GPs to create more certainty and sustainability both for the corporations and the societies.
26 Wallace, Bill. (2005). Becoming Part of the Solution: The Engineer’s Guide to Sustainable Development.
Washington DC: American Council Engineering Companies, p. 37.
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