How can States ensure that investments respect human rights?

Jakarta, 11 November 2015—Discussions held on the 10th and 11th of November during a workshop and dialogue hosted by the Centre for the Study of Human Rights at the London School of Economics, the HRRC, the National Commission of Human Rights of Indonesia (Komnas HAM), and the Institute for Human Rights Research and Advocacy (ELSAM) focused on the duty of the state to ensure that human rights principles are reflected in investment policy. Entitled “Implementing the UN Guiding Principles on Business and Human Rights State Duty to Protect in Investment Policy – Focus on State Duties,” the workshop and dialogue were held with the aim of enriching the on-going process to develop a National Action Plan on Business and Human Rights in Indonesia. 

During the workshop held on the 10th of November, around 30 participants from various NGOs working primarily in Indonesia came together to pinpoint the priority human rights issues with regard to business activities in the country as well as the causes and circumstances that contribute to their prevalence.


Group discussions during the workshop

Ms. Andrea Shemberg and Ms. Andrea Saldarriaga, who lead the Investment and Human Rights Project at the LSE Laboratory for Advanced Research on the Global Economy, gave a presentation on the implementation of the State duty to protect in the context of foreign investment. Ms. Shemberg highlighted the concept of governance gaps, which are gaps between the scope and impact of economic forces and actors and the capacity of societies to manage their adverse consequences. Shemberg emphasized that a lot of stakeholders are expecting state action and, indeed, there are several positive steps that governments can take to close governance gaps. These could include scrutinizing the structural framework for imbalances in global rule-making that occur when rules intended to widen and deepen global markets are more robust and strongly enforced than rules intended to protect people and the environment.

Governance gaps could also be addressed by ascertaining whether or not there is a lack of policy coherence, such as when there is weak governance
 or a compartmentalized approach to policy making. Governance gaps could also be capacity-related, where the State fails to implement the laws in its book for various reasons, perhaps because it lacks the means, fears the consequences in a competitive global economy, or because its leaders subordinate the public interest to their private gain. Finally, States could look at its policies concerning corporate governance. Shemberg observed that the rules and regulations of corporate governance typically are silent on human rights issues, and even on the broader impact of business on the societies around them.

During the workshop, participants identified land disputes, environmental damage, and violation of labour rights as the top human rights priorities in the area of investment in Indonesia. These issues where attributed to several factors. For example, for land disputes, reasons ranged from unclear status and ownership of the land subject of the dispute, overlapping competences for land permits and land access, and unclear rules about consultation with communities and obtaining “free, prior and informed consent.” With regard to environmental damage, participants cited, among others, lack of regulation for strategic environmental assessment and the absence of an over-all strategy to protect the environment in the context of investment projects. With regard to labour rights, an investment policy based on “flexibility of labour market” as well as lack of implementation of existing laws were some of the factors mentioned.


Presentation of group discussions

During the dialogue held in the morning of the 11th of November, CSO’s and representatives from various government ministries reflected on the challenges and issues highlighted during the workshop and considered their impact on Indonesia’s attractiveness to investors. Thereafter, delegates proposed possible first steps and solutions that are practical and achievable, identifying the best government agencies to take the lead in implementing them.