Section 2.0

Enforcing state’s responsibility to protect human rights

Section 2.1

What does the state do to protect human rights?

Evolutionary policy strategies developed by the States to mitigate adverse human rights impacts of the business world in accordance with the UN Guiding Principles on Business and Human Rights.

UN Guiding Principles on Business and Human Rights

Developing corporates cultures

The state can develop corporates cultures to respect human rights. For examples, states can provide financial incentives for companies to respect human rights, make human rights reporting as a credit prerequisite, enforce fiduciary obligations involving human rights considerations, and include corporate criminal liability for human rights violations.


Align regulations and policies

State can align regulations and policies related to business and human rights through harmonizing enforcements between financial and economic institutions (Ministry of Economy, Ministry of Trade, Financial Services Authority/OJK and Ministry of Finance) with institutions responsible with human rights mandates (Ministry of Law and Human Rights, Komnas HAM, and the courts).


Guidelines and support at the international level

Guidelines and support at the international level by informing best practices, involving business people in the Universal Periodic Review and capacity building assistance through training and workshops.

Special attention to conflict zones

Special attention should be given to conflict zones as the most severe place for human rights violations. The government can provide information and advice for companies operating in conflict zones. The government must urge business operations to not trigger further conflict. For example, the ‘cost’ of security from a business for one party to a conflict can be an incentive to extend the conflict.

Section 2.2

Examples of human rights policy in the world

National Action Plan on Business and Human Rights

UNGPs can be implemented by each country through the National Action Plan on Business and Human Rights (NAP on Business and Human Rights). Until now, there have been 17 countries that already have NAP on Business and Human Rights, and many are currently in the process of drafting their own NAP on Business and Human Rights. NAP on Business and Human Rights aims to reinstate the role of the State to regulate corporations, one of which is by harmonizing policies to be coherent.

French Duty of Care Law (2017)

2017 Duty of Care Law (DCL) covers all aspects of human rights and basic freedoms as encouraged by the UNGPs – including health, safety and the environment. This law also covers all types of business activities, sectors and industries. DCL regulates companies that are established under French law.

Supply Chain Policy (Supply Chain)

Modern Slavery Act 2015 in the United Kingdom

The British government has issued the 2015 Modern Slavery Act y which applies to public and private companies from all sectors. Companies that have a net global turnover of more than £ 36 million are obliged to publish “report statements on slavery and human trafficking” annually. The statement must outline the steps that the company have taken to ensure that slavery and human trafficking do not occur in the supply chain of their business.


Modern Slavery Bill 2018 in Australia

The Australian Government has launched the Modern Slavery Bill 2018. Australia requires other businesses and organizations with a combined revenue of more than A $ 100 million to report annually on the risks of modern slavery in their operations and supply chains, the actions taken to assess and overcome risks, and the effectiveness of their response. While smaller businesses can report voluntarily.

Investment policy

Managing human rights risk through banking regulations in Peru by Bank and Insurance Supervisors and the Private Pension Funds Administrator (SBS)

The Private Pension Fund in Peru (SBS) issued regulations to strengthen environmental and social due diligence in the financial sector. The aim is to respond to the increasing social conflict in Peru in the extractive and forestry industries. SBS found that social conflicts pose risks that burden clients. Risks include reducing the creditworthiness of the project, which is a risk for Peru’s financial institutions and financial systems in general.

This regulation requires financial institutions to ensure that client will assess risk, create management plans, and consider mechanisms to manage community relations and conflict resolution. This regulation also requires periodic reporting regarding social and environmental risks taken by banks. According to Shift, organization advising SBS in drafting regulations, SBS incorporates human rights approach, including community engagement and complaint handling, which reflects important features of human rights due diligence as outlined by the UNGPs.

Section 2.3

Examples of government policies regarding Business and Human Rights in Indonesia

The government has ratified various types of international agreements concerning human rights through various national human rights legislation (Annex A: National Human Rights Legislation).

Good Corporate Governance

GCG has five principles reflected in Law Number 40 of 2007 concerning Limited Liability Companies and regulated by the Bank Indonesia Regulation No. 8/14 / PBI / 2006. The five principles include transparency, accountability, responsibility, independence, and fairness. These five principles must be applied by the company to every aspect of the business. Companies can practice sustainability by taking account various stakeholders’ interests.


In Indonesia, CSR obligations are no longer a moral obligation, but also a legal obligation that has been regulated in a number of laws and regulations, including: Article 74 of Law No. 40 of 2007 concerning Limited Liability Companies; Article 15 (b), Law No. 25 of 2007 concerning Capital Market; Article 68 of Law No. 32 of 2009 concerning Environmental Protection and Management; Article 11 (3) p jo. Article 40 paragraph (5) Law No. 22 of 2001 concerning Oil and Gas.


Ministry of Foreign Affairs Human Rights Guidance

At the national level, the Ministry of Foreign Affairs has pioneered the dissemination of the UN Guiding Principles (UNGPs) to national stakeholders, including through Seminars, Symposiums, and a number of discussions with communities during 2015-2017. The Ministry of Foreign Affairs has initiated a series of meetings between ministries which then agreed to appoint the Assistant Deputy for Forestry Governance, the Coordinating Ministry for Economic Affairs as the national focal point for Business and Human Rights. The Ministry of Foreign Affairs has also drafted a Guidelines on Business and Human Rights.

There are also various policies in the Ministerial level that aligns with the spirit of UN Guiding Principles on Business and Human Rights. Policies can be seen on the following regulations:

  1. The Ministry of Industry has issued a Decree concerning the Steering Committee and the Technical Team for the Implementation of Human Rights Activities in the Industry. Then followed by an Action Plan for Human Rights Activities in Industry;

  1. Decree of the Minister of Marine Affairs and Fisheries concerning Human Rights Regulations in Catch Fisheries and Fishers’ Working Agreement

  1. The Ministry of Environment and Forestry, initiated the National Action Plan for Pollution and Environmental Damage Control due to Mining; Ministerial Circular Number: SE.1 / Menlhk-II / 2015, concerning Handling of Environmental and Forestry Cases;

  1. Encourage discussion between Ministries so that Indonesia applies the Voluntary Principles for Security and Human Rights as guidelines for companies engaged in extraction industries (oil, gas and mining companies).

  1. National Action Plans on Business and Human Rights compiled by Komnas HAM and ELSAM


Pillar 2: Business