Fitting Human Rights into the ASEAN-China FTA: Indonesian Perspective

Another version of this article was first published in The Jakarta Post daily news paper on 12 January 2009, see in more detail here>>>.

Trade Liberalization

Entering the year 2010 is marked by the entry into force of a free trade area agreement between ASEAN and China or also known as the ASEAN-China FTA. Unfortunately, not many commentators or even government agency specifically analyze the possible impact of this FTA agreement to the fulfillment of rights-human rights in Indonesia. In fact, there are many aspects of human rights that can be affected by the enforcement of this FTA, some of which are the rights to health and a healthy environment, right to work and to earn a decent livelihood, the access to natural resources rights, and other social, economic, and cultural rights.

Because of space limitation, this article will not examine the impacts that can be caused by the FTA on all aspects of human rights which has been recognized under several legislations in Indonesia. The simple analysis addressed in this article on the linkages between the implementation of this FTA with the prospect of the fulfillment of human rights in Indonesia is expected to become inputs for the government and NGOs in formulating their policies. So that human rights fulfillment is not marginalized by trade liberalization reasons.

The ASEAN-China FTA was actually first agreed in 2001 in the ASEAN-China Summit which formulate a Framework on Economic Co-operation and to establish an ASEAN-China Free Trade Area. Under this framework, it was agreed to establish a free trade area within 10 years time. Furthermore, the agreement was then reinforced by the signing of Framework Agreement on Comprehensive Economic Co-Operation Between ASEAN and the People’s Republic of China in Phnom Penh, on November 4, 2002, by the head of state and government of all ASEAN countries and the People’s Republic of China.

ASEAN-China FTA is not the first trade liberalization agreement which entered by Indonesia. Indonesia’s participation in regional and international trade agreement began with the AFTA in 1992, followed by its accession as member of the WTO, and by other agreements such as the ASEAN-Japanese FTA, Korea-ASEAN FTA, as well as bilateral agreement with Japan in Indonesia-Japan Economic Partnership Agreement (IJ-EPA). These agreements could possibly be added by the EU-ASEAN FTA. The same possibility may also happen in the ASEAN-Australia-New Zealand FTA, both agreements are now still in the negotiation process.

Some commentators found that a number of trade agreements may potentially limits the fulfillment of human rights. IJ-EPA for example, got criticized because this agreement is considered to facilitate the entry of hazardous toxic waste to Indonesia (The Jakarta Post, 06/27/2008). Similarly, the ASEAN-Australia-New Zealand FTA is considered to be expanding the opportunity on the ownership of land by foreigners, this is due to national treatment provision, in which foreign companies should be treated the same as those obtained by domestic companies in terms of land ownership (bilaterals.org , 02/04/2009).

The fulfillment of Human Rights

What about the ASEAN-China FTA? Would there be any impact from the implementation of this FTA on the fulfillment of human rights in Indonesia? There have been many objections raised by the industry associations and business on the implementation of this FTA, mainly because they are not ready yet to compete. Some analysts believe China’s international trade will only benefit more in this FTA, this is based on the deficit trade balance against China which continues for the last few years. But that is more to economic reasons, below are some reasons to describe why the FTA would potentially affect the fulfillment of human rights in Indonesia.

First, among the commodities that have to be liberalized are agriculture and fisheries products. However, the majority of Indonesia’s populations are very much depending in these two sectors. The possible entry of agricultural and fisheries products from China in a substantially lower price would be a direct threat to the fulfillment of the rights of Indonesian farmers and fishermen to work and earn a decent livelihood. In fact, the effect of these cheaper agricultural and fisheries products from China has already hit our farmers and fishermen even before this FTA enter into force (Antara, 30/12/2009).

The same situation will possibly be occurred in the manufacturing sector. The entry of goods at a lower price from China would make our key manufacturing industries unable to compete and will have to close his business or at least reduce its production capacity. This situation will not only result in the higher rates of termination of employment – which is estimated to  reached the figure of 7.5 million workers – but the harder competition for jobs will obviously lower the bargaining position of labor and workers. This situation will in turn make it too difficult for the workers to obtain their basic rights, such as the rights to a proper wages and compensation on termination.

Second, of course we still remember when the Indonesian Department of Health issued a ban on the circulation of food products, beverages and cosmetics imported from China. This was because they proved to be contained with chemicals which harmful to human. Likewise, it was also found that some elements in toy products come from China are made from harmful chemicals. The lower cost of producing goods in China seems to have a direct relationship with the poor health safety of these products. These experiences should become an important lesson for the government.

With tariff reduced to zero percent, it is inevitable that the number of imported goods from China will be significantly higher. The government should then strengthen the health standards of a product. However, this measure alone is not enough, governments will also need to reinforce its control mechanisms, imposing effective sanctions for non-compliance and provide direct and appropriate compensation for the victim. Without these four measures in hand, it is sufficed to say that the government may have ignored the rights of its citizens on healthy living and healthy environment.

Third, unlike the upcoming EU-ASEAN FTA which in its negotiating directive clearly stating that the establishment of a free trade area between the European Union and ASEAN will fully respect the implementation of “… international environmental and social agreements and standards”, the same provision does not exist in the ASEAN-China FTA. The lacks of guarantee to respect environmental and social rights in this FTA may put the environment and society in a vulnerable position.

As we all may have been aware, environmental standards in China are relatively low. Industrialization in China led to a higher level of air and water pollution. It is argued that China will more likely to overtake the United States as the largest producer of carbon emissions in the world (New York Times, 26/08/2007). With the entering of industrial machinery and investors from China, government must ensure that the environmental law and corporate social responsibility obligations are strictly observed. We certainly do not want the ASEAN-China FTA opens the way for the destruction of the environment and violations of social and cultural rights of the people by foreign investors.

Does not fit: But must be worn

Like fitting a new dress, it appears that ASEAN-China FTA does not entirely fit with human rights. This is because the implementation of this FTA may potentially hinder the fulfillment of human rights in Indonesia. There will be a lot of homework for governments, including ensuring the availability of jobs, the fulfillment of labor rights, environmental protection and respect for social and cultural rights. But the Indonesian government seems unlikely to back out of this agreement. Although it will feel a bit cramped, the human rights dress must not be unworn.

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