The human rights jurisprudence discussed at the outset of this article provides very little mention of the problem of private security (either by state actors acting in a private capacity, or by private security companies acting agents for the state), which is surprising given the evidence of such in Indonesia, especially a long history of state security forces effectively hiring themselves out to companies.Footnote 64 Exxon Mobil and Freeport-McMoRan are two high profile MNCs that have caused controversy by making significant payments to the military and police.Footnote 65 Evidence suggests that the payments have been made to both individuals and the institutions; however, this ‘commercialization’ of the state security sector confuses the institutional role of the military and police with a private security function. It also evidences the extent of state capture, referred to above, in which state (predominantly the military) and corporate interests are entangled.Footnote 66 In this context, it should be noted that while Presidential Decree 63/2004 gives the military and police a mandate for protecting national vital objects,Footnote 67 there is no official policy on MNC payments to state security institutions.
Similarly, no attention has been given to the emergence of local private security companies owned by ex-military officials (such as PT Garuda Prima) and the presence of international private security companies in Indonesia (such as G4S),Footnote 68 as the demand for private security increased following the fall of Suharto and with rising instability in the region. There is mention of the problem of violations of rights, including women’s and children’s rights on the larger scale plantations, but again this is not linked to private security.Footnote 69 CSO and media reports implicate private security forces, along with state security forces, in these types of human rights violations although the distinction between the two actors is not always clear.
Significantly, the separation of the military and police in 2000 removed the police from military control following the implementation of Decree TAP MPR No. VI and VII/1999, whereby the function of internal security was reserved to the police, and the military was made responsible for national defence.Footnote 70 State Defence Act No. 2/2002 and the National Police Act No. 2/2002 further defined the respective roles of the military and police and introduced other institutional reforms to increase civilian control over the military.Footnote 71
However, the separation was not complete—Article 41(2) of the National Police Act left room for the military to assist the police and Article 7.2(b) of TNI Law No. 34/2004 subsequently retained a role for the military to deal with a wide range of external and internal threats, including separatist movements, armed insurgencies, terrorist threats, security threats to the nation and its vital resources, natural disasters and acts of piracy, all of which reflect ongoing concerns over the need to protect national unity and a continued military influence in politics.Footnote 72 The military was unwilling to relinquish the primary role it assumed throughout the Suharto administration with regards to internal security, while the police asserted its increased law enforcement powers and interfered with the military’s criminal and business activities. Separating the two security institutions thus increased tensions between them and contributed to rising instability in the country. Whereas the state had restricted private security companies under Suharto, ex-military officials took the opportunity in the reformasi era to establish local private security companies to meet increased demand for private security.Footnote 73
Besides, the involvement of the military in private security is only really hinted at in the reports of the UN and treaty-based human rights bodies discussed at the outset of this article so the line between public and private security, and the human rights implications thereof, are not explored at all. This contrasts with the evidence that it is not just the Indonesian state that is slowly being demilitarized (a process started in the reform period), but also the commercial sector (especially after 2004 and the attempts to restrict military business ownership by virtue of TNI Law No. 34/2004 at least to the extent of establishing some oversight of military businesses).Footnote 74 However, this seems to have just created a space for former military, militias, criminals, businesses and private security actors to exploit.Footnote 75
As has been seen soft law international standards on security and human rights have not had any traction in Indonesia. Similar observations can be made in relation to soft law standards on business and human rights. In an interview with the Business and Human Rights Resource Centre, the Human Rights Commission drew attention to a number of factors impeding the government’s ability to promote business and human rights, including: the lack of resources for enforcement, monitoring and prosecution; opposition by economic interest groups, business associations and influential people outside government; opposition and lack of consensus and awareness in government; political limitations imposed by foreign governments or multilateral institutions; concern about deterring foreign investment; and other challenges in coordinating government and lack of capacity.Footnote 76 A number of reasons, representing the different priorities and competing interests within Indonesia’s post-Suharto democracy thus help to explain the slow progress being made in the development of human rights policy for the country’s corporate sector.
The UNGPs, another non-binding international instrument, were developed by John Ruggie as a global standard for preventing and addressing the risk of adverse impacts of business activities on human rights based on the ‘protect, respect, and remedy’ framework.Footnote 77 The UNGPs are formulated in three mutually enforcing pillars. Pillar I outlines the duty of states to establish binding rules to promote respect for human rights by non-state actors, including businesses, and identifies ways for states to discharge their duty more effectively.Footnote 78 Of particular note is that under Pillar I, the UNGPs address the state-business nexus, by requiring in Guiding Principle 4 that ‘States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State […] including, where appropriate, by requiring human rights due diligence’.Footnote 79 Guiding Principle 4 could apply to the Indonesian extractives and natural resources sector where the government or a state entity (possibly including the military) has a share, or is a partner, in the business enterprise.
Moreover, Guiding Principle 5 requires that ‘States should exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights’.Footnote 80 Here again, where the government of Indonesia has entered directly into an concession contract or licence with an MNC in the extractive or natural resources sector, it remains under a continuing obligation with respect to the protection of international human rights in its territory.
Pillar II spells out the implications of the corporate responsibility to respect human rights. Guiding Principle 11 requires business entities to avoid infringing on the human rights of others and to address any adverse human rights impacts with which they are involved.Footnote 81 This means not only those adverse human rights impacts that may occur through a company’s own business activities or entities within a business enterprise, such as subsidiaries, but also any adverse impacts that may be linked to a company’s broader business relationships.Footnote 82 Of significance is the introduction of this requirement for all business enterprises, irrespective of their size, the nature and context of its operations.Footnote 83 Thus, logging and palm oil plantation businesses in Indonesia, which are either owned or controlled directly by MNCs, or through local subsidiaries, are covered equally.
Similarly, such companies and/or their subsidiaries need to have in place a human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights, as set out in Guiding Principle 17. This requirement even extends to third-party suppliers in their supply chains.Footnote 84 Again, human rights due diligence will be significant in the upstream supply chain, i.e. from the plantation to the mill and the port, in Indonesian oil palm plantations or logging operations.
Pillar III affirms that states must ensure access to effective judicial remedy for human rights abuses and that business enterprises should establish or participate in effective grievance mechanisms for individuals and communities that may be adversely impacted.Footnote 85 In this context, the Office of the United Nations High Commissioner for Human Rights, at the request of the Human Rights Council, has produced a report on improving accountability and access to remedy for victims of business-related human rights abuses.Footnote 86
In order to disseminate and promote the implementation of the UNGPs, the Human Rights Council established the Working Group on the issue of human rights and transnational corporations and other business enterprises in June 2011.Footnote 87 The Working Group called on states to develop National Action Plans on Business and Human Rights (NAPs) to demonstrate their implementation of the UNGPs,Footnote 88 and provided guidance in December 2014 (updated in November 2016).Footnote 89
Encouragingly, Indonesia became the fifteenth state and the first Asian country to launch its NAP on 16 June 2017.Footnote 90 The Indonesian National Commission for Human Rights (Komnas HAM) began developing the NAP in September 2014 in response to the lack of focus on corporations in the National Plan of Action for the Promotion and Protection of Human Rights and increasing land conflicts and human rights abuses involving corporations.Footnote 91 It was completed following a multistakeholder effort between Komnas HAM, relevant government ministries (e.g. the Ministry for Industry), institutions [e.g. the Institute for Policy Research and Advocacy (ELSAM)], business groups and civil society [e.g. the Foundation for International Human Rights Reporting Standards (FIHRRST)].Footnote 92
Various actors believe that the government should develop coherent legislation to ensure that both the government and companies fulfil their responsibilities under the UNGPs. They hope that the NAP will provide the necessary impetus for further legislation at the presidential level to protect human rights from the negative impacts of business operations.Footnote 93 Rather than leaving responsibility for human rights with companies, and given the lack of operational impact of corporate efforts thus far, it is felt that the role of the state should be enhanced to support the implementation of the UNGPs and regulate corporate behaviour.Footnote 94 However, any readjustment of the relationship between the state, corporate actors and individual must address the role of the security sector if meaningful progress is to be made towards reducing human rights violations in the natural resources industry, including the agricultural commodities sector.
As recognized by the embassy representative for the Netherlands, successful implementation of the UNGPs not only depends on the necessary government legislation but a change in corporate culture so that companies recognize the Guiding Principles as a moral concern rather than legal issue.Footnote 95 Inevitably, however, market forces will help to motivate companies to take their human rights responsibilities more seriously.Footnote 96 Timber certification has improved the competitiveness of Indonesian wood.Footnote 97 There are increasing concerns for the palm oil market following European palm oil initiatives, including the non-binding European Parliament Resolution on Palm Oil and Deforestation of Rainforest adopted on 4 April 2017.Footnote 98
In contrast to the UNGPs, there is no evidence that private security companies operating in Indonesia have engaged with the relevant international standards contained in the International Code of Conduct for Private Security Providers (ICoC) of 2010. Although it is not binding on PMSCs, the Code does detail the human rights that PMSCs are expected to respect (including restrictions on the use of force and torture). Further, it requires PMSCs to exercise due diligence in vetting and training of employees as well as having grievance procedures and effective remedies to victims of abuse.
In September 2013, a governance and oversight mechanism was established as an Association under Swiss law: the International Code of Conduct Association (ICoCA) based in Geneva. The ICoCA Board of Directors, made up of representatives of states (US, UK Australia, Canada, Norway, Sweden, Switzerland), industry and civil society organizations, is responsible for developing procedures for certification, monitoring, reporting, assessing performance and addressing complaints. The Association is empowered to request a member company to take corrective action to remedy non-compliance with the Code within a specified time period. A non-compliant company may suffer suspension or termination of membership.Footnote 99 Of the 600 or so companies that signed up to the ICoC only 95 have joined the ICoCA, with none from Indonesia.Footnote 100 Only by being a member of the ICoCA will a PMSC be required to meet agreed international standards. At the Board meeting in March 2016 ‘the Certification Committee continued discussions regarding challenges faced by Members wishing to become certified to currently-recognized standards’. Challenges ‘included access to standards (particularly for PSCs operating in the “Global south” and non-English speaking regions) as well as the cost of certification’.Footnote 101 Despite these difficulties the Certification Process opened on 1 November 2016, recognising PMSCs with independent accredited certification to US standards (PSC 1) as well as international ones (ISO 28007, ISO 18788).Footnote 102 There are procedures for reporting, monitoring and assessing accredited PMSC performance, including provision for field based reviews.Footnote 103
The specific issue of business and security has been more squarely put before the UN’s Human Rights Council by a written statement submitted in 2016 by the Asian Legal Resource Centre (ARLC), an NGO with consultative status before ECOSOC, entitled ‘Indonesia: Lack of human rights policy in business sectors’.Footnote 104 The ARLC pointed to instances of ‘chaos and conflict between security forces and the local community […] as the community strives to reclaim the land being used by these companies and struggles for the right to a healthy environment’. It also emphasised that ‘the increasing number of agrarian conflicts in the plantation area is evidence of the expansion of large-scale plantations in Indonesia. It also noted that one of the biggest commodities in plantation areas is palm oil’; and that ‘the majority of human rights violations in the agrarian sector and natural resources were committed by the Police and Military. The pattern of violations is fabrication of charges, land confiscations, violence and torture, and shooting to death’.Footnote 105
Although this statement places the role of business at the heart of Indonesia’s human rights problems, and it recognizes the role of the state security apparatus in the expansion of the natural resources and mining sectors at the expense of the local populations, it does not identify the blurring of the line between the state and private security as being an issue. To be able to exert control over human rights abuses, it is important to identify the functions of the state and those of the private sector; to determine when the acts of private actors are attributable to the state; but also to recognize that the government still has positive obligations to regulate the private sector in order to prevent human rights abuses.