Business and Human Rights

Author: Irvan Tengku Harja

Human rights are part of business ethics. At the international level, there are United Nations Guiding Principles on Business and Human Rights (UNGPs) to mainstream human rights issues in the business world.

UNGPs or “UN Guiding Principles on Business and Human Rights” is a framework adopted by the UN Human Rights Commission in 2011. Written by John Ruggie, the UNGPs consist of 31 principles. UNGPs, according to Ruggie, are a transformational roadmap to a world where people and companies alike can thrive and prosper.

The UNGPs lay down three pillars of business and human rights: the duty of the state to protect human rights, the responsibility of corporations to respect human rights, and victims' access to remedies.

When human rights violations occur, the state must ensure access to effective remedies for victims. In addition to the existing legal complaint mechanism, the UNGPs ensure that the state establishes a non-legal complaint mechanism with the following criteria: legal, accessible, predictable, fair, transparent, in accordance with international human rights standards, and can be used as a source of future learning.

As a supporter of the UNGPs, Indonesia has taken several initiatives to match the perception of national law with the UNGPs. As the national focal point for business and human rights, the Ministry of Law and Human Rights (Kemenkumham) has established a National Business and Human Rights Task Force to embody the principles of UNGPs from the central to the regional levels.

In addition, progressive initiatives come from Komnas HAM through Perkomnas Number 1 of 2017 concerning Ratification of the National Action Plan (RAN) for Business and Human Rights. Strictly speaking, Article 1 paragraph (1) states that the NAP on Business and Human Rights is a guideline for preventing, handling, resolving, and recovering human rights violations involving business entities.

Furthermore, the government continues to strive to realize the P5 HAM (respect, promotion, protection, enforcement, and fulfillment of human rights) through RANHAM. First launched in 1998, now RANHAM has entered its 5th generation with the issuance of Presidential Regulation (Perpres) Number 53 of 2021 concerning RANHAM 2021-2025.

Although it does not include business and human rights issues as a strategic target, RANHAM V mentions it in one of the success criteria, “Increasing knowledge and awareness of the business/business sector comprehensively regarding mechanisms for respecting human rights, especially women's rights.”

Corporate Action The company must avoid human rights violations and must address the losses suffered by victims affected by business activities. The first step that the company can take to avoid human rights violations is to make an internal policy as a preventive measure.

Many global corporations have rules of the game regarding human rights. KPMG (international accounting organization) noted that 62% of the top 250 companies (according to Fortune 500 rankings) and the 100 highest-earning firms in 49 countries have internal policies on respecting human rights.

On paper, a business entity's compliance with internal regulations can be seen in the corporate responsibility report (CRR). By region, 75% of European corporations have included human rights issues in the CRR, while in Asia Pacific 72%, in America 69%, and 68% in the Middle East & Africa (KPMG, 2017).

In addition, more than 15.000 corporate leaders in more than 160 countries have committed to advancing the 10 Principles of the United Nations Global Compact (UNGC), which are summarized in four themes: human rights, decent work, environment, and anti-corruption. There are two principles within the human rights corridor: (1) businesses must support and respect internationally recognized human rights protections; and (2) ensuring that businesses are not complicit in human rights violations. In Indonesia, there are 82 companies—consisting of MSMEs and large companies—affiliated with the Indonesia Global Compact Network as UNGC's local network.

In addition to having policies, there are also corporations that have human rights education programs. Among them are Mitsubishi Gas Chemical (MGC) and PT PLN (Persero). MGC provides human rights training for workers and holds Human Rights Week so that its business activities have human rights “chemistry”. To illuminate the company with the light of human rights, during 2021 PLN will hold 943 trainings to increase worker competence on sustainability, including on human rights.

For the sake of transparency and accountability for respecting human rights, companies need to disclose reports on their business operations to stakeholders through annual disclosures.

Due Diligence
In order to ensure the protection of human rights by the state, respect for human rights by business and the fulfillment of the rights of victims, the government needs to establish human rights due diligence as a standard for business practice in the country. Due diligence is needed so that the company has a method of managing the potential and impact of human rights.

There are 4 (four) elements of human rights due diligence. First, identification and assessment of the potential and impact of business activities or company products. Second, conduct an assessment of the existing (alleged) human rights violations and then formulate a solution. Third, evaluate the solutions taken in the settlement of human rights cases. Fourth, communicate the human rights recovery process to stakeholders, especially victims.

By establishing transparent and participatory human rights due diligence as the standard of national business practice, Indonesia can become a role model for other countries while taking advantage of its position as Chair of the 20 G2022 to promote a human rights-friendly international business environment.

Sumber: Sindo News

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