Seeking Justice Overseas: The Caledonian Sky Incident

On March 4, 2017, a British-owned cruise ship the Caledonian Sky ran aground and caused damage to the coral reefs in Raja Ampat, West Papua. This incident devastating the total area of 13,532.6 square meters. The damages to the marine park’s ecosystem caused by this incident was estimated at around US$18.6 million.

Perhaps, the indigenous community of Raja Ampat would be the most impacted by this incident. In fact, the head of Yembuba village has expressed the sadness of its people, saying that the marine area is crucial to the livelihood of the community. The water has been protected by the customary law– known as the Sasi–from illegal fishing and other damaging activities.

The owner of the ship has acknowledged that it will consider a ‘fair and realistic settlement”. Based on a survey carried out by the government and the insurance company, both parties have reached an understanding on the total area of damaged reefs.

Despite the efforts by the government to hold the ship’s operator to compensate for the damages it caused, settlement of this incident might not be an easy task. There are a number of disadvantages on the government side that need to be considered seriously.

First, the Caledonian Sky was released to leave the Indonesian waters just after the incident took place. Second, the operator of the ship–the Nobel Caledonia–is a foreign company based in London. Third, the insurance company–which also a foreign company–may come up with its own calculation of compensation, lesser than the government’s expectation.

The worse scenario is that the government would need to bring this incident to a court for settlement. Considering the three issues above, perhaps the most appropriate place to settle the dispute would be the court where the company is based, or where the ship is registered.

Seeking justice overseas is not new for communities impacted by corporate activities in Indonesia. In December last year, a class action lawsuit was brought by 13.000 Indonesian fishermen and seaweed farmers to Australian court against PTTEP Australasia–the operator of Montara oil drilling facilities–for polluting the waters.

Likewise, a case was brought by Tom Beanal–a leader of Amungme tribe in Papua–against Freeport McMoran Inc. to the US court, alleging that the company operation contribute to the genocide of indigenous people. Another case was brought in US court by eleven villagers for allegation of complicity in human rights abuses by Exxon Mobil Corp. in Aceh.

There are a number of reasons why seeking justice overseas is more preferable than pursuing the company’s responsibility in the local court. First, the alleged company is based in a foreign countries, and most of its assets are located in its home country.

It would be difficult to persuade foreign company which has no assets or business interest in Indonesia to appear before the local court. Even if the court decide to examine the case in the absent of the alleged company, the execution of Indonesian court’s judgment in a foreign jurisdiction may be burdensome. These perhaps the main reasons why the victims of Montara oil spill brought their case to Australian court.

Second, litigating in foreign jurisdiction provide a more predictable results and justice for the victims of corporate abuse. This is because, the home countries of multinational companies have a relatively better rule of law conditions, and more advanced liability laws.

Indeed, Indonesian laws may be sufficient to adjudicate corporate misconduct. However, past experiences showed that it is not easy to hold company liable for environmental damages and the abuse of community rights. For instance, in the Lapindo mudflow case, the court found that the disaster was not caused by the company’s fault.

Although it is also true that the local communities have been successful in a number of cases, the execution of the court judgment remain problematic. This situation happens in the case of cement plant in Kendeng. The Central Java authority seems to disregard the Supreme Court judgment which revokes the environment permit.

Apart the above advantages, a number of challenges may be found when seeking justice abroad. The most common challenge is the unfamiliar law and procedures. However, it would not be a problem for the Indonesian government, as it may seek assistance from the lawyers and legal experts. Some reputable law firms in foreign jurisdiction might even offer a no win-no pay scheme.

Similarly, litigation process in a foreign court may take some period of time. But this situation is also common when litigating in Indonesian court. Rather than waiting for the company to offer a settlement, a litigation threat would force the company to seriously consider the government’s claims.

To end up, the government has failed to hold the operator of Montara platform liable for polluting Indonesian water. It was after 7 years since the pollution took place that the fishermen and seaweed farmers take the initiative to bring their case to foreign court.

Learning form this mistake, the government must have several plans in the Caledonian Sky incident case. The company is in a better position to delay the settlement process. It is time for the government to consider the option to file a claim against Nobel Caledonia in a foreign court.

Corporate Knowing and Showing: tell us what harm you might cause

This article was first appeared in The Jakarta Post on 6 June 2016, the article may be found here.

The basic tenet of creating an institution called corporation is to bring more benefit for the society at large. Corporations can generate economic wealth at a much larger scale than individual business. The government provide incentives for corporations, as a means to increase production, which at the end may help the government in distributing the wealth.

Unfortunately, on the other side of the coin, corporate business operations have also been accused as the main cause of environment degradation, triggering social conflicts, and human rights violations. Almost all company may be related to at least one of those issues. For instance, a global food chain company may be accused for fueling deforestation by using paper pack made from the Indonesian rain forest timber.

In the earlier day, the environment, consumers and human rights activist relied on the ‘naming and shaming’ campaign, in making the company to respond to their voices. Negative publicity and boycott on the company’s product are some examples.  This campaign assume that reputation is the most important element for company’s business. The naming and shaming campaign tries to create an incentive for corporation to stop its harmful activities.

Unfortunately, there are a number situations that could make this naming and shaming approach difficult to achieve its objectives. First, the complex structure of corporation. The layer of corporate groups and the web of subsidiaries across borders make it difficult to trace which company should be held responsible for the harm. Moreover, with its capital power, corporations can easily transfer its operation to other countries, leaving the harm unaddressed.

Second, corporations hide behind the national law and the local government protection. Many companies take the advantage on the absence of law, regulation uncertainty and weak legal enforcement in the country where they operates.  Third, to avoid being targeted to a negative publicity, company create its own voluntary standards which contains policy to respect social, environment and human rights issues. Whereas, most of these standards are used as a lip service, and many of them are lacking of public verification mechanism.

Since the birth of the United Nations Guideline on Business and Human Rights in 2011, there has been a fundamental change in the way corporations should behave towards social, environment and human rights issues. This guideline introduces a new approach which replace the naming and shaming campaign. It endorses a new rule of the game, that is the ‘knowing and showing’ approach.

Instead of blaming and punishing companies with bad publicity to stop their negative impact to society, the knowing and showing approach provide a chance for companies to take prevention steps  before the harm occurs.  Companies are encouraged to conduct assessment to know what harm they may cause to the environment, local communities, and employees. Likewise, companies are endorsed to communicate to the public, all measures that they have taken to minimise the negative impact arising out of their business operation. In this way, the company will be able to tell the real situation to the public, yet maintain its reputation.

How does this knowing and showing approach work? The UN guideline provides a practical instrument to implement this approach. This instrument is the human rights due diligence. The human rights due diligence starts with commitment by company to respect human rights, and followed by assessing what impact to human rights that the company may cause, in what way, and to what level of severance.

The result of this assessment must be known by every personnel at all level within the company, and the company must take appropriate measure to address every single identified harm, including to cooperate with government and non government institution relating with particular issue. The measure that has been taken must be evaluated, whether or not this measure has properly avoid the negative impact to occur or minimising the impact when it occurs. Finally, the company must prepare a regular report which contains all information about the above activities, and it must be accessible to the public.

Preparing human rights due diligence at the earlier phase of a project would be an ideal condition. However, this due diligence may also be conducted at any stage of a business activities, regardless of the sector and the size of the business. For instance, it is not too late for companies involved in the reclamation project in the Teluk Jakarta to conduct human rights due diligence. Likewise, it would be better for the company operating a goldmine project in Tumpang Pitu Banyuwangi to prepare due diligence, as the project has only started a few weeks ago.

However, we should bear in mind that human rights due diligence is not aiming at justifying the business project to continue. As mentioned above, it is a mechanism for the company to realise what harm they may cause, and a tool for all stakeholders to communicate and find a better solution to avoid human rights violations from occurring. When the human rights impact is so severe, there is no other option for the company, unless to halt the project. As we are all agree that human lives worth more than everything.

Complicity oleh Korporasi

Seorang petani di Tebo-Jambi ditemukan tewas di kawasan perkebunan sawit milik PT Wira Karya Sakti, yang merupakan anak perusahaan Asia Pulp and Paper (Kompas, 3/3/15). Ada dugaan kejadian ini terkait dengan konflik antara korporasi dengan masyarakat lokal. Bila dugaan ini benar, maka korporasi terkait seharusnya dapat dimintai pertanggungjawaban karena turut mengambil bagian (complicity) atas terjadinya pelanggaran hak asasi manusia.

Laporan Komnas HAM (2014) menemukan bahwa korporasi menempati posisi kedua tertinggi sebagai pihak yang diadukan atas pelanggaran HAM sepanjang tahun 2013, dengan 937 jumlah pengaduan. Konflik lahan di area perkebunan dan pertambangan menjadi permasalahan utama. Bila isu pelanggaran  HAM oleh korporasi dan complicity tidak mendapatkan perhatian serius–bahkan terus dibiarkan–bukan tidak mungkin korporasi akan menjadi entitas pelanggar HAM tertinggi dalam waktu dekat.

Jatuhnya korban nyawa yang terkait dengan kegiatan usaha korporasi bukan baru pertamakali terjadi di Indonesia. Tujuh penduduk lokal meninggal akibat konflik lahan perkebunan di Mesuji-Lampung. Seorang petani meninggal tertembak di pelabuhan Sape-Bima saat aksi penolakan operasi tambang. Di Timika-Papua, seorang pekerja tambang tewas ditembak saat demo menuntut kenaikan gaji.

Di level internasional, pelangaran HAM terkait kegiatan usaha korporasi telah ada sejak lama. Enam puluh tahun yang lalu petinggi korporasi di Jerman dinyatakan bersalah karena mensuplai produk gas beracun untuk digunakan di kam konsentrasi. Sampai saat inipun korporasi masih mengambil bagian pada kasus-kasus pelanggaran HAM di banyak negara.

Misalnya, korporasi pertambangan menggunakan angkatan bersenjata pemerintah negara di tempatnya beroperasi untuk mengusir dan mengintimidasi penduduk lokal. Ada juga korporasi yang mensuplai senjata dan logistik bagi kelompok bersenjata anti pemerintah,  untuk menjamin pasokan sumber daya alam dan mineral tertentu. Korporasi produsen alat dan pakaian olahraga menggunakan pemasok lokal yang mempekerjakan anak-anak.

International Commission of Jurist (2008) merumuskan korporasi dapat berada dalam katagori complicity bila memenuhi setidaknya satu saja dari tiga kondisi. Pertama, korporasi menjadi penyebab atau berkontribusi terhadap terjadinya pelanggaran HAM. Kontribusi ini meliputi beberapa bentuk perbuatan, yaitu: tindakan korporasi membuat pelanggaran terjadi (enables); tindakan korporasi membuat pelanggaran dan akibatnya menjadi lebih buruk (exacerbates); atau korporasi memfasilitasi sehingga mempermudah terjadinya pelanggaran (facilitates).

Kedua, korporasi mengetahui (knowledges), atau seharusnya mengetahui bahwa operasi usahanya dapat melanggar hak orang lain. Sehingga dengan pengetahuannya tersebut, korporasi semestinya dapat mengambil langkah agar pelanggaran dapat dihindari (forseability). Ketiga, kedekatan hubungan (proximity) antara korporasi dengan pelaku pelanggaran.

Jangkauan terbatas

Sayangnya instrumen hukum kita masih belum mampu menjerat pelanggaran hak asasi oleh korporasi dengan menggunakan kriteria complicity diatas. Kejadian penculikan, penganiayaan, dan pembunuhan petani lokal oleh sekuriti korporasi akan ditangani sebagaimana perbuatan kriminal pada umumnya. Sedangkan pelanggaran atas hak untuk hidup, bebas dari penyiksaan dan rasa takut akan dianggap seolah-olah tidak pernah terjadi.

Alih-alih menjerat korporasi untuk bertanggungjawab atas pelangaran hak asasi, membawa pelaku ke pengadilan pelanggaran HAM bukanlah perkara yang mudah. Benar bahwa Komnas HAM berwenang melakukan penyelidikan pro justitia dalam kasus pelanggaran berat–diantaranya adalah kejahatan terhadap kemanusiaan. Namun pelanggaran berat dalam katagori ini harus memenuhi dua unsur utama, yaitu meluas dan sitematik. Tanpa kehadiran elemen-elemen ini, Komnas HAM terbatas hanya dapat mengeluarkan rekomendasi.

Keterbatasan jangkauan ini menjadi salah satu penghambat utama dalam menjerat korporasi untuk bertanggungjawab atas pelanggaran hak asasi. Lemahnya kekuatan memaksa dari rekomendasi sering dipakai sebagai alasan untuk menghindar. Sebagai contoh, rekomendasi Komnas HAM tentang terjadinya 18 pelanggaran hak asasi di kasus lumpur Lapindo tidak mendapatkan perhatian serius dari pemerintah. Akibatnya, korporasi yang terkait dengan semburan lumpur seperti tidak terjamah oleh hukum.

Perlunya rencana aksi

Tingginya jumlah pengaduan pelanggaran oleh korporasi mengindikasikan adanya permasalahan serius dalam relasi bisnis dan hak asasi di Indonesia.

Isu penghormatan, perlindungan, dan pemenuhan hak sosial dan lingkungan masih dipisahkan dari upaya pemerintah menarik sebanyak mungkin modal korporasi. Ketergantungan akan modal menciptakan relasi tidak sehat antara pemerintah dengan korporasi.

Pemerintah akan cenderung menggunakan cara represif guna melindungi  kepentingan pemodal (Blanton & Blanton: 2007). Akibatnya, kegiatan usaha korporasi mendapatkan berbagai insentif dan kemudahan, sedangkan akses masyarakat lokal untuk mendapatkan haknya atas lahan dan mata pencaharian semakin dipersulit.

Mengurai permasalahan dalam relasi bisnis dan hak asasi manusia di Indonesia tidak bisa dilakukan dengan cara yang instan. Demikian pula penyelesaiannya tidak dapat sepenuhnya dibebankan kepada pemerintah semata. Diperlukan keterlibatan seluruh pemangku kepentingan dalam menyusun sebuah rencana aksi nasional (NAP). Setidaknya ada tiga manfaat yang dapat diambil dari adanya rencana aksi ini.

Pertama, memberikan klarifikasi  mengenai kewajiban negara dan tanggungjawab korporasi terhadap hak asasi. Kedua, menyediakan alat bagi manajemen resiko dan sistem peringatan dini bagi kegiatan usaha korporasi dengan resiko pelanggaran yang tinggi. Ketiga, membuka kesempatan bagi terjadinya kerjasama antara LSM, korporasi dan masyarakat korban dalam menyusun mekanisme pemulihan yang efektif. Keempat, memuat target capaian dan kriteria capaian yang jelas, serta adanya kerangka waktu bagi setiap tahapan dari capaian yang diharapkan.

Tentu saja penyusunan NAP bukan merupakan jaminan bagi menurunnya angka pelanggaran hak asasi oleh korporasi. NAP memerlukan keterlibatan seluruh pemangku kepentingan dalam implementasinya, karena itu kekuatannya bergantung pada proses dialog, pemahaman, dan kemauan untuk terus belajar serta memperbaiki kesalahan.

Hal yang paling mendesak saat ini adalah memastikan bahwa institusi pemerintahan dan pejabat-pejabat pemerintah bertindak selaras dengan kewajiban negara terhadap HAM.

Sehingga diharapkan pejabat yang menempati jabatan strategis di departemen yang berkaitan dengan kegiatan usaha korporasi memiliki komitmen yang sama dalam penghormatan terhadap hak masyarakat lokal, dan pelestarian lingkungan. Dengan itu semua, diharapkan korporasi dapat memiliki mekanisme internal untuk menghindar dari melakukan complicity.

Instead of Building Smelters in Indonesia, Why Not Renegotiate Royalties?

This article was first appeared in The Jakarta Globe on Tuesday, 04 March 2014. Click here>> for detail.

It has been confirmed that the government is not going to withdraw the regulation that imposes progressive tax on the export of unprocessed mineral ore. The government is confident that this regulation will effectively force mining corporations to build processing facilities in Indonesia by the end of 2016. The main objective of this regulation is to boost state income from the mining sector. To be exempted from this export levy, a number of mining companies have already committed to building smelters.

Weighing the benefits

There are pros and cons to this regulation. Those who support it argue that it is time to stop selling our natural resources for the benefit of private foreign companies. They say Indonesia should get a bigger share of the money made from the export of our mineral resources.

Those opposing the regulation believe that the imposition of high taxes on the export of ore would force mining companies to scale back production. Mining companies may then have to lay off significant numbers of employees, which may trigger social unrest.

The mineral saga is not going to be over soon. Mining concession holders are considering foreign arbitration. But the government does not feel threatened — neither by the arbitration threat, nor by the possible social unrest that may result from rising unemployment in the mining sector. Also, we shouldn’t forget that this is an election year, which means the mineral ore conflict could be used by political groups to obtain short-term advantages.

To a certain extent, the mining companies’ opposition to the high export levy is reasonable. Within the five years grace period provided for in Law No. 4 of 2009, the government has done very little to ensure that the relevant companies were taking the necessary steps in anticipation of the mineral ore export ban. However, the government’s goal of boosting state income from the export of minerals does deserve our full support. This country needs to gain more from the extraction of its natural resources.

Yet, despite the government’s good intention, it remains unclear exactly how much the state is expecting to gain from forcing companies to build smelting facilities in the country. Additionally, it is doubtful whether the government has taken into consideration the environmental damage the country may bring upon itself as a result of the regulation.

Environmental impact

Article 33 of the Constitution states that Indonesia’s natural resources “shall be used to the greatest benefit of the people.” This is a rather broad concept, but fortunately the Constitutional Court has provided four conditions to test whether or not the objectives of the Constitution are met, relating to (1) the actual benefit of natural resources for the public; (2) the degree to which the benefits are distributed equally; (3) the level of public participation in determining the use of natural resources; and (4) the degree of respect for traditional rights in extracting the resources.

It’s easy to argue that the imposition of a progressive export tax and the development of local processing facilities would bring benefits, because state income will increase. Therefore, the first constitutional condition is met. However, turning to the second condition, problems arise because we cannot easily say that the current regulation would necessarily result in equal distribution of benefits. Among other things, the environmental costs must be considered in this respect.

The development of smelters may cause environmental damage, lead to changes in ecosystems and negatively affect human health. These are costs that have to be included in the government’s calculation. A 2012 study on the impact of the smelting industry in China by Xiuwu Zhang and other scientists found that the industry contributed to pollution of water and soil and had an adverse impact on human health.

Already, a number of Chinese investors have been showing interest in building smelting plants here. Indonesia had better learn from China’s experience, to make sure similar environmental problems do not occur here.

The government may argue that the development of smelter plants, and processing procedures later on, will follow strict environmental and health standards. However, in most of cases, environmental damage from corporate activities happens because the government has no effective surveillance mechanism. The haze problem in Sumatra is just one example of how the government has been unable to prevent companies from using fire to clear land. With the development of a smelting industry in Indonesia, plenty of people could be exposed to pollution in the air, water and soil. It is in this way that the smelting industry may not bring equal benefit to all people.

Renegotiating royalty payments

If the main objective of the government is indeed to increase the state income from the mining sector, there may be another option worth considering — one that does not carry significant risks.

The government may simply negotiate an increase in royalty payments from mining companies. There is no better time to renegotiate such a royalty increase than today, when our bargaining position is at its highest. Total royalty payments may be set to an amount equal to the additional income the government expects to obtain through the development of a local smelting industry. Companies may even be given two options: build a smelting plant or increase your royalty payments.

In conjunction with new royalty deals, the government may force companies to allocate more funds to corporate social responsibility and community development programs. This may also be a good time for the government to endorse the implementation of the 2011 UN Guiding Principle on Business and Human Rights, which may help to reduce conflicts in mining areas.

Regardless of what is decided, mining companies must realize that Indonesia today is a different country than it was few decades ago, when most of the mining contracts were signed.

It is up to the government to regulate how the mining industry should bring the greatest benefit for the Indonesian people. But the impact of the current export ban and smelter plans on the environment and our health must not be ignored.

Iman Prihandono is a lecturer and researcher in business and human rights at the Faculty of Law of Universitas Airlangga in Surabaya. Contact him at iprihandono@fh.unair.ac.id.

See also related article below:

Lead Poisoning Sickens 600 Kids in China

Desa kosong seluruh warga diungsikan PT Smelting Gresik sebar gas beracun (Villagers were evacuated as Poisonous Gas Leaks from PT Smelting Gresik, 07 Juli 2013).

Tunduk Pada Korporasi Asing

Tulisan ini pertama kali dimuat pada kolom Opini Jawa Pos hari Rabu 29/01/2014. Klik Disini>>.

Larangan ekspor mineral mentah, dan jangka waktu lima tahun yang diberikan oleh UU No. 4/2009 tentang Minerba bagi perusahaan pertambangan mineral untuk membangun fasilitas pengolahan dan pemurnian mineral (smelter) seolah tidak dihiraukan. Lebih dari itu, kebijakan hilirisasi pertambangan mineral ini mendapatkan penolakan.

Berbagai alasan dikemukakan, diantaranya biaya investasi pembangunan smelter yang sangat besar, dan keharusan melakukan pengurangan tenaga kerja dalam jumlah besar akibat penurunan kapasitas produksi. Beberapa korporasi asing bahkan mempertimbangkan untuk menggunakan mekanisme arbitrase internasional bila pemerintah tetap memberlakukan larangan ekspor mineral mentah.

Alasan diatas nampaknya efektif dalam memaksa pemerintah mengoreksi ketentuan mengenai ekspor mineral melalui penerapan pajak ekspor progresif dan menunda kewajiban pembangunan smelter sampai dengan tahun 2017.

Mengalah

Meskipun pemerintah menolak disebut telah mengalah pada korporasi asing, beberapa keadaan mengindikasikan kemungkinan ini. Misalnya, konsesi pertambangan mineral skala besar melalui Kontrak Karya saat ini dipegang oleh beberapa korporasi asing. Dalam setahun, korporasi-korporasi ini rata-rata mampu mencatat laba bersih dalam angka ratusan juta dollar. Agak sulit diterima akal sehat bila korporasi-korporasi raksasa ini tidak dapat memenuhi kewajiban membangun smelter dalam waktu lima tahun, terlebih lagi dengan alasan besarnya investasi yang harus dikeluarkan.

Bila ditarik agak lebih jauh kebelakang, sebenarnya bukan sekali ini saja pemerintah mengoreksi Undang-undang untuk memfasilitasi kegiatan usaha korporasi asing. Pemerintah pernah mengeluarkan Perpu No. 1/2004 yang mengoreksi UU No. 41/1999 tentang Kehutanan. Perpu tersebut selanjutnya melahirkan Keppres No. 41/2004 yang memberikan jalan bagi 13 korporasi asing untuk dapat melanjutkan kegiatan pertambangan di kawasan hutan lindung.

Selain koreksi terhadap Undang-undang, pengaruh kepentingan korporasi asing juga patut diduga terlibat pada beberapa kejadian kejanggalan hukum di negeri ini.  Kita tentu masih ingat kasus hilangnya Ayat tembakau dalam draf Undang-undang Kesehatan yang telah disahkan DPR. Meskipun pada akhirnya Ayat tembakau berhasil ‘dikembalikan’, besar dugaan korporasi asing dalam industri rokok terlibat dalam upaya penghilangan ini.

Contoh lainnya adalah kasus dugaan tercemarnya susu formula dengan bakteri zakazakii. Sampai dengan saat ini, putusan Mahkamah Agung yang memerintahkan dibukanya informasi mengenai merek-merek susu formula yang diduga tercemar, telah diabaikan. Tidak salah bila publik beranggapan bahwa pengabaian ini seolah dilakukan untuk melindungi kepentingan korporasi asing produsen susu formula.

Kejadian-kejadian diatas menunjukkan masih lemahnya posisi tawar pemerintah terhadap korporasi asing. Pengaruh korporasi asing bahkan telah pula mempengaruhi pengambilan keputusan di lembaga legislatif, dan yang lebih mengkhawatirkan lagi mampu melemahkan wibawa Mahkamah Agung, salah satu lembaga yudisial tertinggi negeri ini.

Manfaat investasi asing

Kembali ke masalah koreksi terhadap ketentuan pelarangan ekspor mineral mentah dalam UU Minerba No. 4/2009, kejadian ini sangat disayangkan dan dapat dihindari seandainya pemerintah mempertimbangkan beberapa hal berikut.

Pertama, sejak ketentuan ini diberlakukan lima tahun yang lalu, tidak nampak langkah pengawasan dan evaluasi berkala dari pemerintah terhadap upaya kepatuhan oleh perusahaan pertambangan mineral. Keributan baru terjadi saat pelarangan ekspor mendekati tenggat waktu pemberlakuannya. Pemerintah terlambat menyadari bahwa upaya hilirisasi industri pertambangan ternyata hanya berjalan di tempat.

Kedua, dalam kurun waktu lima tahun, pemerintah terkesan abai dalam mengatur syarat kadar pemurnian mineral yang boleh diekspor. Saat pelarangan ekspor mendekati batas waktunya, pemerintah seolah baru sadar bahwa kadar pemurnian mineral untuk dapat diterima pasar ekspor berbeda-beda tergantung jenisnya. Kekosongan aturan ini dimanfaatkan oleh perusahaan tambang untuk memaksa pemerintah mengoreksi peraturan pelarangan ekspor mineral mentah.

Ketiga, pemerintah kurang mengantisipasi biaya sosial yang dapat ditimbulkan oleh kewajiban pengolahan dan pemurnian mineral. Khususnya berkaitan dengan adanya kemungkinan pemutusan hubungan kerja dalam jumlah signifikan pada industri pertambangan skala besar milik korporasi asing. Asumsinya, rasionalisasi tenaga kerja tidak diperlukan bila perusahaan tambang telah membangun smelter dalam kapasitas pengolahan yang minimal sama dengan kapasitas produksi tambangnya. Namun, lemahnya kalkulasi pemerintah dalam menghitung biaya sosial yang mungkin timbul selanjutnya dimanfaatkan oleh korporasi asing untuk mengoreksi pelarangan ekspor mineral mentah.

Akibat dari ketidakmampuan mengantisipasi ketiga poin diatas, kesempatan untuk mendapatkan keuntungan dari investasi asing dalam pemanfaatan sumber daya alam menjadi tertunda pula. Bjørn Letnes (2002) berpendapat bahwa manfaat investasi asing bergantung pada tingkat ketersediaan created assets di negara tujuan investasi. Dalam hal ini, created assets yang paling berpengaruh adalah human capital dan infrastructure.

Disinilah letak korelasinya, pelarangan ekspor mineral mentah dimaksudkan untuk menaikan nilai tambah mineral yang akan di ekspor. Diharapkan devisa negara akan meningkat secara signifikan dengan penjualan mineral jadi atau setengah jadi, dibandingkan dengan menjual mineral mentah.

Namun, pengolahan dan pemurnian mineral tentunya memerlukan infrastruktur. Inilah alasan mengapa Undang-undang mewajibkan perusahaan tambang untuk memiliki fasilitas pengolahan dan pemurnian mineral. Tanpa infrastuktur ini, keinginan untuk mendapatkan keuntungan maksimal dari investasi asing di industri pertambangan hampir mustahil.

Pelajaran penting

Polemik pelarangan ekspor mineral mentah memberikan pelajaran penting bagi pemerintah. Langkah pengawasan kepatuhan, penyediaan aturan kadar pemurnian , dan antisipasi biaya sosial harus segera diambil untuk memastikan kepatuhan penuh dalam tiga tahun kedepan.

Hal lain  yang harus diantisipasi adalah meningkatnya investasi asing dalam pembangunan fasilitas smelter (Jawa Pos, 28/1). Pemerintah harus memastikan bahwa pembangunan smelter tidak menimbulkan masalah sosial dan lingkungan baru. Tanpa ini, amanat konstitusi untuk memanfaatkan kekayaan alam bagi sebesar-besarnya kemakmuran rakyat akan sulit tercapai.

Pendididkan Hukum Masa Depan

Tulisan ini pertamakali dimuat pada kolom opini Koran Jawa Pos edisi Senin, 14 Oktober 2013.

Semenjak gelombang reformasi bergulir, telah banyak kemajuan dalam bidang hukum di Indonesia. Wajah hukum Indonesia berubah bila dibandingkan dengan masa 15 tahun silam. Amandemen terhadap Undang-undang Dasar 1945 misalnya, telah membawa dampak yang besar terhadap perkembangan jumlah instrumen hukum dan kelembagaan hukum.

Instrumen hukum dalam bentuk Undang-undang dan peraturan di bawahnya pada umumnya telah disusun untuk mewujudkan berjalannya kehidupan bernegara yang demokratis, pemerintahan pusat dan daerah yang transparan dan akuntabel, serta menjamin kesejahteraan umum. Dengan tujuan yang sama pula, lembaga-lembaga hukum baru seperti KPK, KY dan MK dibentuk.        

Sayangnya, wajah baru hukum kita seperti tidak memberikan banyak pengaruh pada perbaikan kinerja birokrasi dan penegakan keadilan pada umumnya. Seharusnya perbaikan hukum dapat menjadi katalis dalam membawa perbaikan pada tingkat ketaatan hukum di masyarakat. Namun realitas menunjukkan kecenderungan yang sebaliknya, contohnya kekerasan cenderung semakin meningkat.

Perbaikan hukum juga masih belum dapat menyelesaikan permasalahan kronis negeri ini, yaitu korupsi. Kehadiran KPK seperti tidak membuat pelaku korupsi jera. Lebih mengkhawatirkan lagi, personil lembaga penegak hukum, hakim dan anggota legislatif adalah yang termasuk paling sering menjadi terpidana korupsi.

Beberapa pihak berpendapat, tidak sedikit juga yang bernada menyalahkan, bahwa lembaga pendidikan tinggi hukum turut andil atas kondisi ini. Kampus dianggap kurang mampu menghasilkan praktisi hukum yang berintegritas dan memihak pada kepentingan publik. Fakultas Hukum lebih mengajarkan hukum sebagai komoditas transaksional antara pihak-pihak berkepentingan, baik di ranah publik maupun privat.

Meskipun cukup beralasan, namun pendapat diatas tidak juga benar sepenuhnya. Terjadi perubahan sosial, ekonomi dan politik yang signifikan pada masyarakat Indonesia. Hal ini menyebabkan tantangan bagi pendidikan tinggi hukum semakin kompleks. Perubahan ini juga melahirkan bidang-bidang hukum baru dan profesi-profesi hukum baru di luar profesi tradisional, seperti hakim, jaksa, atau anggota legislatif.

Sehingga, banyaknya contoh kurang baik yang ditemukan pada lembaga peradilan dan penegakan hukum tidak otomatis juga berarti memburuknya kualitas pendidikan tinggi hukum kita. Ada begitu banyak praktisi hukum lain yang berprestasi dan beintegritas tetapi sangat jarang diberitakan.   

Sebagai bagian dari peringatan 61 tahun pendidikan tinggi hukum di Surabaya, Fakultas Hukum Universitas Airlangga baru-baru ini menyelenggarakan sebuah konferensi internasional tentang arah pendidikan hukum masa depan. Dalam salah satu sesi di konferensi ini, dimana penulis menjadi fasilitatornya, salah satu pembicara, seorang ahli pendidikan hukum klinis dari AS berpendapat bahwa pendidikan tinggi hukum yang baik adalah yang adaptif, inovatif dan yang menanamkan nilai-nilai (value) tentang etika profesi.

Adaptif berarti mampu membaca kebutuhan dan perubahan yang terjadi di masyarakat. Inovatif berarti metode pembelajaran yang berbeda harus diterapkan pada kondisi yang berbeda, perkuliahan tidak harus selalu di dalam kelas, bahkan pengajarnya tidak harus selalu akademisi. Sedangkan, pemahaman tentang nilai-nilai etika profesi akan membantu mahasiswa memiliki kepekaan dalam memilah yang baik dan buruk, apapun profesi yang akan dipilihnya nanti.

Mungkin contoh yang paling relevan untuk menggambarkan aplikasi ketiga unsur pendidikan hukum masa depan diatas adalah ide tentang dimulainya pengajaran tentang Hukum Nuklir pada Fakultas Hukum di Indonesia. Mendengar kata nuklir saja tentunya akan segera mengundang resistensi publik, apalagi mengajarkannya. Banyak pihak mungkin beranggapan bahwa cabang ilmu hukum yang satu ini masih belum diperlukan di Indonesia, kita bukan negara pengguna nuklir.

Anggapan ini sebetulnya kurang tepat, memang betul saat ini Indonesia belum memiliki pembangkit listrik tenaga nuklir, namun bukan berarti kita belum bersentuhan dengan aspek nuklir.

Badan Tenaga Atom Nasional misalnya sudah berhasil menemukan varietas baru padi dan kedelai yang tahan hama dan berproduksi lebih baik. Hal ini dilakukan melalui rekayasa genetik dengan teknologi nuklir. Selain itu, letak geografis Indonesia menjadikan negara ini menjadi daerah perlintasan kapal pengangkut limbah nuklir. Perlintasan ini sangat berisiko menimbulkan bahaya bagi kesehatan manusia dan lingkungan.

Contoh diatas menyediakan alasan yang cukup bagi Fakultas Hukum untuk adaptif terhadap penggunaan, potensi pengembangan dan resiko aktifitas nuklir di Indonesia. Oleh karena itu, sudah saatnya Hukum Nuklir mendapatkan porsi pengajaran yang sama seperti cabang hukum internasional lainnya. Hukum Angkasa misalnya, sudah diajarkan sebagai mata ajar tersendiri meskipun Indonesia belum pernah mengirimkan pesawat ulang alik dan astronotnya ke luar angkasa.

Sampai saat ini belum ada satupun Fakultas Hukum yang mengajarkan Hukum Nuklir sebagai sebuah mata ajar yang mandiri. Juga, tidak banyak ahli hukum yang menguasai bidang ini. Beruntung, Fakultas Hukum Universitas Airlangga memiliki alumni yang sejak tahun 1984 sudah terlibat dalam perundingan perjanjian multilateral di bidang nuklir. Beliau adalah Bapak Triyono Wibowo, mantan Wakil Menlu, dan saat ini adalah Duta Besar/Perwakilan Tetap RI untuk PBB, WTO dan Organisasi lainnya di Jenewa, Swiss.

Sebagai contoh langkah inovatif, beberapa kali beliau memberikan kuliah mengenai Hukum Nuklir ditengah kesibukannya sebagai seorang diplomat senior. Sebagai bentuk penghargaan atas dedikasi beliau pada profesinya dan sumbangsihnya pada perkembangan ilmu, Universitas Airlangga menganugerahkan gelar Doktor Honoris Causa dalam bidang ilmu hukum.   

Tinggal sekarang hal yang paling krusial, adalah memastikan bahwa nilai-nilai etika ditanamkan kepada mahasiswa. Kita tentu tidak ingin Hukum Nuklir digunakan hanya untuk mengakomodasi kepentingan sekelompok orang. Adalah tugas lembaga pendidikan tinggi hukum untuk memastikan bahwa hukum seharusnya membawa kebaikan, bukannya kerusakan.  Kemanakah arah pendidikan hukum masa depan? Jawabnya ada di seberapa adaptif, inovatif dan peka pendidikan hukum kita. 

Suap oleh Korporasi Multinasional

Tulisan ini pertamakali dimuat di kolom opini Koran Jawa Pos edisi Kamis, 15 Agustus 2013. Klik disini>>.

Tertangkapnya Kepala SKK Migas Rudi Rubiandini oleh KPK atas dugaan menerima suap dari perusahaan migas asing sangat mengejutkan banyak pihak. Tidak hanya karena prestasi kerjanya yang baik selama masa 7 bulan menjabat sebagai Kepala SKK Migas. Tetapi Rudi juga memiliki rekam jejak yang bersih, baik saat menduduki jabatan Wamen ESDM maupun ketika masih aktif sebagai akademisi.

Misalnya, ketika kasus semburan lumpur Lapindo disidangkan, Rudi adalah saksi ahli akademisi yang berpendapat bahwa semburan lumpur disebabkan oleh kesalahan pada proses pengeboran. Keberaniannya untuk berbeda pendapat dengan ahli lainnya dalam kasus Lapindo, yang sarat dengan kepentingan politik, menunjukkan idealisme dan integritasnya yang kuat.

Namun kasus ini menarik tidak hanya karena faktor Rudi Rubiandini semata, tetapi juga karena melibatkan korporasi multinasional dalam upaya penyuapan terhadap pejabat negara. Kasus ini menjadi menarik karena selama ini kasus penyuapan yang ditangani KPK lebih banyak melibatkan perusahaan dalam negeri. Kasus impor daging dan kasus Hambalang adalah sedikit contoh upaya penyuapan kepada pejabat negara yang melibatkan korporasi lokal.

Memang baru-baru ini setidaknya ada dua kasus korupsi yang melibatkan korporasi multinasional, yaitu kasus bioremediasi Chevron and kasus frekuensi Indosat IM2. Namun kedua kasus tersebut tidak termasuk dalam kerangka penyuapan. Kedua kasus tersebut lebih berkaitan dengan tindakan koprorasi yang mengakibatkan kerugian pada keuangan negara.

Sehingga, bila benar upaya penyuapan terhadap Rudi dilakukan oleh korporasi multinasional Kernel Oil Pte. Ltd., yang berkedudukan di Singapura, maka kejadian ini dapat dikatakan sebagai sesuatu yang tidak lazim. Hal ini karena ada banyak alasan tidak menguntungkan bagi korporasi multinasional untuk menyuap pejabat publik secara langsung dan terang-terangan.

Berbeda dengan Indonesia, negara tempat domisili hukum korporasi multinasional pada umumnya adalah negara maju dengan penegakan hukum yang efektif, dimana yang bersalah akan dihukum sesuai dengan ketentuan yang berlaku tanpa kompromi. Bagi negara-negara maju, penyuapan terhadap pejabat publik di negara tujuan investasi adalah isu yang sangat serius.

Penyuapan terhadap pejabat publik di negara berkembang dapat mengakibatkan ketidakseimbangan alokasi pemanfaatan sumber daya, dan menimbulkan kompetisi tidak sehat diantara investor asing. Pada akhirnya penyuapan terhadap pejabat publik akan berakibat pada menurunnya kualitas hidup, mengancam demokrasi, melemahnya institusi publik dan menggerus supremasi hukum di negara tujuan investasi. Semua keadaan ini sangat tidak kondusif bagi korporasi multinasional untuk melakukan investasi.

Oleh karena itu negara-negara asal korporasi multinasional sudah menyiapkan instrumen hukum untuk mencegah penyuapan terhadap pejabat publik asing. Amerika Serikat misalnya memiliki Foreign Corrupt Practice Act (FCPA) yang melarang dan memidanakan korporasi di AS yang menyuap pejabat publik di negara lain untuk mendapatkan proyek. Aturan yang sama juga dapat ditemukan dalam Australian Criminal Code. Singapura, tempat domisili Kernel Oil Pte. Ltd., mengatur mengenai penyuapan yang dilakukan diluar negeri dalam the Prevention of Corruption Act.

Komisi Sekuritas dan Pasar Modal AS (US SEC) telah mendaftar beberapa korporasi asing yang terjerat pidana berdasarkan FCPA atas tindakan penyuapan di Indonesia. Diantaranya adalah Monsanto, Innospec dan Alianz SE.

Disinilah letak ketidaklaziman dalam kasus penyuapan terhadap Rudi Rubiandini. Dengan adanya jerat-jerat hukum di negara asalnya, semestinya akan kecil kemungkinan korporasi asing akan melakukan  penyuapan terhadap pejabat publik setingkat Kepala SKK Migas secara langsung dan terang-terangan. Seperti yang sudah disebutkan diatas, modus penyuapan langsung seperti itu paling sering dilakukan oleh korporasi lokal.

Pada umumnya korporasi multinasional tidak melakukan penyuapan secara terang-terangan kepada pejabat publik. Mereka melakukan pendekatan yang berbeda, yaitu agar terhindar dari jerat hukum. Hilman dan Hitt (1999) merumuskan setidaknya ada tiga jenis strategi yang dipakai oleh korporasi multinasional untuk mempengaruhi kebijakan pemerintah agar menguntungkan, atau setidaknya tidak menghambat kegiatan usaha mereka. Strategi ini adalah: (1) information strategy; (2) financial incentive strategy; dan (3) constituency-building strategy.

Dalam menggunakan information strategy, korporasi multinasional mempengaruhi pengambil kebijakan publik melalui penyediaan informasi spesifik tentang keuntungan dan kerugian dari suatu kebijakan tertentu. Korporasi multinasional umumnya adalah pelaku usaha yang sudah sangat berpengalaman dan mempunyai kemampuan dalam menjaring informasi pasar. Informasi inilah yang kemudian dibagikan kepada pemerintah, agar pemerintah dapat mengambil keputusan yang tepat.

Pada financial incentive strategy, perusahaan asing tidak memberikan keuntungan finansial secara langsung dalam bentuk uang. Biasanya, keuntungan finansial kepada pejabat publik diberikan dalam bentuk kepemilikan saham atas nama orang-orang terdekat dengan pejabat publik tersebut. Dapat juga dalam bentuk jabatan direksi atau komisaris pada anak perusahaan.

Selanjutnya pada constituency-building strategy, korporasi asing akan memobilisasi semua pihak yang memiliki kepentingan dengannya, seperti karyawan, pelanggan, pemasok dan distributor untuk memberikan dukungan suaranya dalam pemilihan umum kepada partai politik tertentu atau pembuat kebijakan tertentu.

Oleh karena itu menarik untuk diteliti lebih jauh mengapa korporasi multinasional seperti Kernel Oil Pte. Ltd., tidak menggunakan tiga strategi diatas, melainkan lebih memilih meniru cara-cara penyuapan terang-terangan seperti yang sering digunakan oleh korporasi lokal. Apakah virus suap-menyuap langsung dan tunai yang lazim dipakai perusahaan lokal sudah menular ke perusahaan asing.

Kemungkinan lainnya adalah ada kekuatan-kekuatan lokal yang telah mendorong Kernel Oil Pte. Ltd. untuk menggunakan cara penyuapan langsung ini.

Terlepas dari ada banyak kemungkinan lainnya, kasus ini menarik untuk terus diikuti jalan ceritanya. Bila benar Kernel Oil Pte. Ltd. menyuap, apakah KPK dapat memeriksa direksi Kernel yang kemungkinan berkewarganegaraan asing. Kasus ini akan menjadi test-case yang baik bagi KPK dalam menangani kasus korupsi yang berdimensi transnasional.

TNCs, Labour, Environment and Human Rights in Indonesia

This article was first published in The Jakarta Post on the 4th July 2013, here>>>.

The business operations of transnational corporations (TNCs) have long been labelled as one of the main contributor of human rights violations, environment degradation, social conflicts and deteriorating labour conditions. As TNCs can easily relocate their capital to different countries whenever their business interest is at risk, they tend to put little respect to non-business issues.

Though that situation is correct to some extent, TNCs on the other hand, has a huge potential to endorse better condition of human rights in country where their business operation is located. One of the main reasons for this argument is that with its financial power, TNCs are capable to play significant role in promoting better respect for human rights, sustaining environment, help to improve social live through the fulfillment of access to health and education services, and establishing proper labour conditions.

The most recent haze crisis is one of examples where the operations of TNCs have brought negative impacts to the environment and posing risk to the health of not just the local populations, but also to the people across the region. Likewise, not so long ago, the collapse of underground tunnel incident in one of the largest mining site in Papua had resulted to the lost of several lives. This incident shows that mining operation poses a high risk to workers’ live and to the environment.

So far, the government has taken action in both the haze and the underground tunnel case by conducting investigations. However, this action seems to be insufficient to prevent similar incidents to reoccur in the future. The government should begin to think of alternative measures to ensure that TNCs observe human rights, environment protection, health and safety, and respecting the social lives of local population in conducting their business operation.

To date, there are a number of non-binding instrument at international level. Likewise, many TNCs have publicly announced their own standard of conduct in relation to labour, environment, social and human rights issues. However, what makes violations of these issues by TNCs continue to occur? There are at least two answers for this question.

First, it is argued that TNCs are profit-maximization entities. Therefore, they will only consider non-business issues if this conduct would increase their profitability. Unfortunately, many TNCs think that respecting human rights, protecting labour and environment would only put additional cost to their production line. This is exactly what happened in the haze incident. Fire is the cheapest method in carrying out land clearance in the expansion of palm oil plantation.

Second, TNCs adopt a self-making human rights, labour and environment standard as part of their marketing strategy. They use this self-making standard merely as a lip service to show that they have put effort to implement the standard. In fact, many of these self-making standards are lack of regular examination mechanism by an independent auditor. Therefore, the implementation of these self-making standards cannot be clarified.

The international human rights regime put the government as the main duty bearer to ensure the protection, respect and fulfilment of human rights. It is the duty of government to ensure that TNCs, operating within its jurisdiction, do not perform any harm to the labour, environment, and human rights. In order to fulfill its duty, the Indonesian government need to implement an instrument on these issues for TNCs to observe. Among a wide range of standards for TNCs available at international level, the government should seriously consider to adopt the ‘OECD Guidelines on Multinational Enterprises’.

There are a number of advantages in adopting this standard. This guideline set a number of conducts to be carried out by TNCs in wide area of issues, including human rights, labour, and environment. Further, this guideline provides a mechanism for examination and dispute settlement by the National Contact Point for any allegation to the violation of rights by TNCs. In addition, it has been implemented since 1974, and has been lastly up-dated in 2011 to adjust with the recent development in the way TNCs conduct their business operation. Most importantly, this guideline is endorsed and implemented by all 34 governments of OECD member countries, the home countries of worlds’ largest TNCs.

Unfortunately, adopting and enforcing an international instrument, especially a non-binding instrument like the OECD Guideline is not an easy task. This effort may also invite strong resistance from the TNCs. However, there are a number of alternative ways which may be considered by the Indonesian government.

First, the adoption of OECD Guideline may be done through inserting the guideline into bilateral investment treaty or other international investment treaties which is signed by Indonesian government and the other foreign country governments, especially the OECD member countries. Inserting a non-binding instrument into a legally binding instrument such as treaty would strengthen the regulatory character of the non-binding instrument.

Second, the Indonesian government has recently been conducting a renegotiation of mining contract with a number of TNCs that holding mining concessions or permits. This would be a good momentum for the government to include the implementation of the guideline by TNCs on the negotiation table. The government should grab the opportunity to ensure the commitment of TNCs operating in mining sector to observe the guideline. A similar procedure may be followed to other sectors that pose high risk to labour, environment and human rights.

Third, this alternative might be the most contentious, nevertheless, worth it is considered. The Indonesian government may consider of becoming an adherence country to the ‘OECD Guidelines on Multinational Enterprises’. Adherence to the guideline shows that the government is not being discriminative to TNCs operating in Indonesia. This is because every Indonesian company operating overseas will also committing to observe the guideline. Thus, adherence to the guideline will create a ‘level playing field’ and minimise resistance from the TNCs operating in Indonesia to implement the guideline.

Milk contamination: Conflict between global corporations and public interest

This article was first published in The Jakarta Post on 9 March 2011, can be accessed through the link HERE

It is regrettable that the issue of infant formula milk contamination may only end up with a plan to conduct another investigative research. This plan clearly shows the government’s non-compliance to the Supreme Court’s verdict, which demanded three institutions publish a list of contaminated milk products distributed in 2003-2006.

To date, there have been no convincing reasons why the Health Ministry, the Food and Drug Supervisory Body (BPOM) and the Bogor Institute of Agriculture (IPB) refused to abide by the verdict. The ministry assumes no obligation to publish, as it was not the institution that conducted the research, while IPB argues that they have no legal basis to publish its research findings to the public.

If viewed more closely, this case involves the interests of global corporations, and the foremost global producers of formula milk. Undoubtedly, there is a fear that these corporations will have to face legal suits filed by consumers when the research findings are disseminated. This does not include the decrease in worldwide consumer’s confidence in several leading brands that would also lead to a decline in companies’ profit.

In short, the adverse impact that would occur and litigation costs that must be paid by these corporations will be very big indeed. At the same time, the government’s dependence on foreign direct investments has also been so high. This situation explains why the Health Ministry chose to ignore the ruling of the Supreme Court, and violated the public’s right to information.

The ability of global corporations in influencing the government’s public policies is not unusual. There are at least three different ways that are often carried out by global corporations in protecting their business interests in developing countries. And there have been many examples where the foreign corporation uses these means to secure their business activities in Indonesia.

First, foreign investment has the characteristics where capital can be transferred and factories can be relocated from one country to another. This situation requires host governments to maintain positive investment climate, because the opposite condition would lead to the relocation of capital to other countries.

It is common that when many foreign investors are threatening to relocate their operations to another country, the government will im-mediately take measures to amend regulations on labor, taxation and business permits. Unfortunately, in many cases these measures are taken without taking into consideration the social impacts that may follow.

Second, foreign investment activities are usually conducted in cooperation with politicians or people who have access to government. This cooperation is generally done through the mechanism of joint operation contracts or by allocating shares ownership for a national company that has a direct or indirect affiliation with political leaders or government officials.

This cooperation is required by global corporations to ensure that the parliament and government will not enact any law or regulation that could adversely impact their business interests.

For instance, there was a joint operation between an Australian mining company and a national company which has affiliations with the leader of a political party. These companies invested in a natural gas exploitation project in Sidoarjo, East Java. Apparently, this project has been stopped due to the mud flow. Perhaps, because of the political influence wielded by the national partners, that foreign company can safely withdraw from this project, regardless of the fact that social and economic impacts are still felt by the communities affected by the mud flow up until recently.

Third, when unfavorable situations occur, foreign corporations will usually request their government initiate a “G to G” settlement. Indeed, there is no guarantee that the host government would immediately change its policy, but the bargaining power owned by governments from developed countries may at least force governments in developing countries to delay or replace the policy out of concern for the one that is less harmful to the interests of foreign investment.

The use of a G to G settlement by the foreign investor in an attempt to rescue their business operations in Indonesia is not unprecedented. This can clearly be seen when the government of one developed country express its disappointment against the ruling of the Commercial Court on the bankruptcy of a subsidiary of a Canadian insurance company in 2002. Eventually, that ruling was annulled by the Supreme Court. Whether it is true or not, the public might have the opinion that foreign pressure had influences the final ruling in the case.

So what should be done by the Indonesian government in addressing the pressures of global corporate power? The main problem in this country is the lack of legal certainty. The three ways taken by global corporations in securing their investment activity as described above occurs precisely because they believe that the rule of law in Indonesia cannot provide certainty on the limits of rights and obligations of persons and legal entities.

In the milk contamination case for instance, it is unclear who has the obligation to announce the research findings which may affect public safety. This is not to mention the issue of the legal protection of the researchers, and the producers themselves.

Obviously, producers must also be given equal opportunities to explain and prove that their product is safe for consumption. Unfortunately, the government has not yet provided a clear and fair accountability mechanism in this issue.

The lack of legal certainty would make the government become more powerless in regulating global corporations. There have been many cases in which companies with global brands have been willing to pay compensation and recall their products from the market. Similarly, there was a case where a global corporation in the mining sector was willing to abide by the court’s decision to make restitutions following a leak of one of its pipelines. Can the same thing also happen in Indonesia?

There are many things that must be done, but among the most important issues is legal certainty. A legal certainty must guarantee that any act detrimental to the interests of the public will be made accountable through a transparent and fair mechanism.

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.