The Jakarta Post has reported that Indonesia’s National Commission for Human Rights (Komnas HAM) is preparing a national action plan containing guidelines aimed at prevent human rights abuses by business actors. According to the Jakarta Post, Komnas HAM considers that traditional corporate social responsibility activities are “too charity-based” and “the action plan is being prepared to make companies responsible for the negative impacts resulting from their operations”.
It is suggested in the Jakarta Post report that the guidelines to be prepared by Komnas HAM will be binding on all companies operating in Indonesia. This may overstate matters because, while Komnas HAM has broad powers to undertake investigations and make recommendations regarding human rights matters, it does not have the power to issue binding regulations. Nevertheless, any guidelines published by Komnas HAM may influence future legislation and regulation Indonesia, particularly given that the government has recently taken a number of other steps to crack-down on irresponsible and abusive business practices, for example by actively investigating and prosecuting businesses alleged to be using forced labour.
Indonesia’s move to prepare national guidelines on business and human rights reflects similar developments internationally. Since the United Nations Guiding Principles on Business and Human Rights (UNGPs) were unanimously endorsed by the Human Rights Council in 2011, a number of governments have prepared national action plans, including the United Kingdom and the Netherlands. Reflecting the fact that the UNGPs are not themselves legally binding, national actions plans have generally comprised of recommendations to business regarding practical steps which can be taken in order to ensure respect for human rights, in particular by adopting corporate human rights policies and undertaking human rights due diligence in connection with new business activities and transactions.
However, the UNGPs are also influencing regulatory policy. Legislation reflecting aspects of the UNGPs has recently been introduced in Europe and the United States, in particular requiring corporations to undertake human rights due diligence and to publicly report on their policies and practices in relation to human rights. It is more likely than not that we will see similar developments in Asia in the near future.
For further information, please contact Antony Crockett, Senior Associate, Hannah Ambrose, Professional Support Lawyer or your usual Herbert Smith Freehills contact.