In the medium and long-term development plan 2020-2024, the government aims for an economic growth of 6% in the optimistic phase. Stunting rates remain stubbornly high and educational outcomes are relatively low compared to other countries in the region. Given these challenges, how can we best spend our resources to improve human capital in the country.
SS07 Domestic Institutional Quality and Indonesia's Export Performance in the Global Value Chain Era.
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Modern slavery and business in Indonesia
Introduction
The outlined situation suggests that companies operating in Indonesia will soon be implicated by foreign trading partners' modern slavery due diligence activities. Therefore, it is important that Indonesian business leaders understand what modern slavery is and its potential impact on their business. The paper proceeds as follows: Section 2 examines literature on modern slavery in business as it relates to developing countries and Indonesia; Section 2 provides an overview of the methodology used to analyze the case study; Section 3 gives the results of a questionnaire regarding
Key elements of modern slavery and Indonesia
By forcing organizations to account for the risk of modern slavery, it is hoped that instances of poor conditions and slavery will be identified and remedied. Although most legislation on modern slavery originates from developed countries, their long supply chains and the need to carry out modern slavery risk assessment and due diligence will affect other upstream companies and suppliers (Miller, 2017; Stevenson and Cole, 2018). One of the developing countries with a lot of modern slavery is Indonesia, one of the top ten countries in terms of the absolute number of people in modern slavery (Global Slavery Index, 2018).
The problem of slavery in the Indonesian context has been known for some time, with The Jakarta Post reporting that there were 200,000 victims in 2013 (Jakarta Post, 2013). Although the per capita classification may make the problem seem less pressing, modern slavery is generally under-reported and under-reported, and is of great concern (Roden, 2020; Wilkens, 2018). Additionally, since The Jakarta Post reported in 2013, the estimated number of victims has increased with the latest Global Slavery Index estimating that 1,220,000 people are currently victims of slavery in the country (Walk Free Foundation, 2018).
For example, there are initiatives such as the Joint Anti-Slavery Project developed and implemented by the Global Freedom Network and Paramadine University to provide training on modern slavery and human trafficking for religious leaders and. The government also conducts "train-the-trainer" events and attempts to raise awareness of the issues of human trafficking and modern slavery among the general public, with such efforts recognized by the US Department of State (US Department of State, 2020). Given the identified risk of modern slavery in the Indonesian context, effective steps to eliminate it require an understanding of the current awareness of the problem in corporate supply chains.
Inductive-narrative method
Various regulations have been implemented to protect workers, such as a requirement by the Ministry of Marine Affairs and Fisheries that all Indonesian fishing enterprises comply with international human rights requirements, but such regulations are often not effectively enforced. The coffee supply chain is complex and ranges from growing the green beans to serving coffee in a drinking container (Figure 1). Each of these stages presents a potential opportunity for modern slavery, such as forced or extreme forms of child labour, to become an integral part of the final product.
In Indonesia, the largest group of entities is in the first phase of the supply chain and includes over 2 million small plantations averaging 1 to 2 hectares per plantation, with some larger plantations up to 4,000 hectares (USDA, 2019). Business managers' perceptions were explored via a structured questionnaire (Appendix 1), using inductive analysis to interrogate the data. Interviews were conducted with 16 managers at different stages of the coffee industry supply chain (see Table 1).
The aim was to ensure that perceptions of business managers obtained from each stage of the supply chain were represented in the interviews. Part B, through a further 12 questions, surveyed interviewee perceptions of modern slavery and its occurrence in their business and in the Indonesian coffee industry as a whole. This helped to maintain accuracy and authenticity of the information provided and obtained by an independent interviewer to the interviewees, so that the original meaning was not lost in translation (Welch and Piekkari, 2006).
Unfolding narrative
In general, the respondents showed little or limited understanding of modern slavery and its terms. The interviews indicated a lack of understanding of modern slavery terms across all stages in the coffee supply chain, from small local farmers to a multinational retailer. I am not sure that this example can be considered a practice of modern slavery in the farm.
But they did not appreciate that modern slavery involves extreme forms of child labor and instead focused on tasks such as children working with parents in the coffee farms, which is a common phenomenon (Business 1). Respondents also showed a lack of confidence when asked if modern slavery is a problem in the coffee industry, particularly in the form of debt bondage or forced labour. Therefore, caution must be exercised in the interpretation of this aspect of modern slavery in the Indonesian context.
Only one respondent believed that slave labor in terms of modern slavery exists and is a problem in the coffee industry. One exception is a multinational coffee trading company based in the Netherlands, which has put in place a formal and written policy and practice on modern slavery (business 5). A statement from one executive reflects the company's commitment to preventing the practice of modern slavery.
The lack of attention to regulations on modern slavery and human rights in general is evident among the respondents. Among the few who claimed to be aware of modern slavery regulations, their observation was also limited to the issues of minimum wages and child labor.
Discussion of the narrative and implications
The remaining fourteen respondents confirmed that their local and international partners have never said anything related to modern slavery or human rights. Bond labor as part of modern slavery was not an idea that entered the minds of respondents. Further down the coffee supply chain, interviews also revealed that managers were not concerned about or following government regulations and legislation on modern slavery and human rights issues.
First, between the government policy level and enforcement of legislation and managers in the supply chain. The emerging narrative about the coffee supply chain is that communications about modern slavery activities are either misunderstood by the. Somewhat paradoxically, the interviewees seemed well aware of a number of issues related to poor working conditions in the supply chain.
While discussing modern slavery, many interviewee comments shifted to appropriate and legal working conditions that detract from decent work. Executives from the major businesses deferred to their human resources department when asked for more detailed information, indicating that the department would handle the modern slavery issues in line with existing regulations. Nevertheless, with managers not aware of or acknowledging the existence of forced, bonded or extreme forms of child labor in the coffee supply chain or industry, building awareness of the.
Conclusion
With no formal mechanisms considered to be in place to eradicate and mitigate modern slavery, particularly in the upstream supply chain, two options for awareness would be to build awareness at the village level and to introduce and enforce legislation in developed countries to make companies accountable and bring pressure. to carry upstream. It would initially only be required for large downstream entities as industry awareness builds. In addition, regulation of downstream participants in relation to modern slavery risk requires top-down capacity building, which may also trickle down to earlier stages in the supply chain.
This can help parties upstream in the coffee supply chain to overcome their lack of knowledge, anticipate changes in the development of modern slavery legislation, and avoid any potential shock at all supply chain stages, if modern slavery is discovered or import controls are introduced by large overseas buyers. who have their own reputations to uphold regarding modern slavery. Yet, in the dispersed village context in which coffee beans are grown, a bottom-up approach is also needed to complement knowledge development. Such a two-track policy would enlighten the managers at different stages in the Indonesian coffee supply chain, help build awareness of the potential problems for victims of modern slavery, and integrate thinking from the higher levels of government.
With further research, the perceptions of managers from across the supply chain could be supplemented by collaboration with other stakeholders – e.g. The unified narrative emerging from the perceptions of supply chain managers in Indonesia would be well served by further research into the narratives of other stakeholders. Observational research on similar industries, such as Indonesia's heavily exported palm oil and cocoa, would also provide a useful comparison regarding the upstream awareness and effectiveness of communications in attempts to identify and address the risks of modern slavery.
The Indonesian National Human Rights Commission (Komnas HAM) and the Institute for Policy Research and Advocacy (ELSAM). Monitoring Forced Labor and Slavery in Global Supply Chains: The Case of California's Supply Chain Transparency Act. Mandatory EU environmental and human rights due diligence legislation - What you need to know, The National Law Review, 11(127).
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