Addressing Human Rights and Sustainability

in Indonesia Mineral Mining Sector

Atep Abdurofiq

1,2

, Asep Saepudin Jahar

1,2

, Khamami Zada

1,2

, Kamal Fiqry

1,2

, Moh. Ali Wafa

1,2

Universitas Islam Negeri Syarif Hidayatullah,Jl. Ir. H. Djuanda, Jakarta, Indonesia

Faculty of Sharia and Law, Universitas Islam Negeri Syarif Hidayatullah

Keywords: Human rights, sustainability, Indonesia, mineral mining sector.

Abstract: The most important social occurrence resulted by the spread of capitalism, democracy, and liberal

economics has been state as true that human rights along with sustainable developments in the mining sector

especially defining coal and mining only. Library research is using in collecting the data. This study

measures the validity and reliability by using observation approach and documentation study toward various

documents and earlier academic research about businesses and human rights in Indonesia. The research

found the facts that the main key drivers for Multinational Corporations (MNCs) in Indonesia Mining

Sectors Address Human Rights and Sustainability Issues develop human rights concepts and reduces the

dangers of turmoil and character loss, and to stay away from necessary regulations. The process of

embedding human rights can be seen in MNCs well-being, safety, security, product preservation and

integrity procedures that well implemented at subsidiary level. On the other hand, the process of embedding

sustainable development can be seen in MNCs supports on developing countries with a lot of required

capitals, jobs, and environmentally amiable advances technologies. In attention to the strengthening of the

MNCs role in protecting Human Rights, the Government, particularly the ministry/institution, has oblige to

protect the interest of the community and has the role in providing the framework that enables bring about

responsible business. The MNCs has responsibilities to respect Human Rights by referring to elemental

norms contained in Human Rights Universal Declaration. The study was analyzed with the business and

human rights principles which were stated in Indonesia National Action Plan on Business and Human

Rights.

1 INTRODUCTION

The most important social occurrence resulted by the

spread of capitalism, democracy, and liberal

economics has been the recognition of human rights

along with sustainable development. Human rights

are ubiquitous and indissoluble—the realization

about human rights enables a broad range of social

personal possessions, containing independence,

equality, opportunity, and wealth. Sustainable

development is frequently representing the

development that fits the existing needs with

compromising the capabilities of forthcoming

generations to fit their needs.” In addition, it is

ordinarily conceded that this must consolidate

environmental, social and economic concerns.

Minerals are fundamental for human prosperity.

However, the minerals extraction is correlated with

both challenges and opportunities. Historical anxiety

around work environment and the competitiveness

of the mining sector has been complemented by a

growing amount of other issues. Contemporarily,

underlying goals are to encounter ways by which the

mining sectors could advocate human rights and

sustainable development (Hojem, 2014).

It has been acknowledged that politics is starting

point for mitigating the unfavorable impacts of

mining and for enhancing and improving its

beneficial economics, social and environmental

results. However, most current policy frameworks

and instruments in supervising the mining sectors

tend to show gradual efforts and often unsuccessful

to be realized in the national stage. It can be

understood that latest governance approaches and

instruments could not flourished in the context of

bringing a transition from the human-based model

widely prevalent in the developing countries to

green politics, whereby the extractive sector is an

972

Abduroﬁq, A., Jahar, A., Zada, K., Fiqry, K. and Wafa, M.

Addressing Human Rights and Sustainability in Indonesia Mineral Mining Sector.

DOI: 10.5220/0009921309720978

In Proceedings of the 1st International Conference on Recent Innovations (ICRI 2018), pages 972-978

ISBN: 978-989-758-458-9

isle with few linkages to the local economy (Acosta,

2013).

Mining sectors roles in sustainable development

are under close examination. Incited by

government’s criticism and non-governmental

organizations (NGOs), they perceived that

multinational mining companies’ irresponsibility

treatment of environment and the communities, the

Global Mining Industries Initiative is inspecting the

positive contribution of the mining and minerals

sector into the global transition toward sustainable

development’. Even though it is pointed out such

responsibilities for sustainable development in the

mining sectors stay at the bureaucracy (Denielson

and Lagos, 2001), the responsibilities of

multinational mining companies are increasing in

term of scope and focus.

The mining sector in this study is defined by coal

and metal mining only. This study aims to answer

and elaborate the questions as follows; (1). What are

key drivers that multinational corporations in

Indonesia mining sectors address human rights and

sustainability issues? (2). How does multinational

corporations in Indonesia mining sector address

human rights and sustainability issues? (3). How

does multinational corporations in Indonesia mining

sector and governments collaborate and innovate,

new paths for mutually beneficial action? The study

was analyzed with regarding the business and human

rights principles which are stated in Indonesia

National Action Plan on Business and Human

Rights. The data were collected through library

research. This study measures the validity and

reliability by using observation approach and

documentation study toward various documents and

previous academic research of business and human

rights in Indonesia.

2 BUSINESS AND HUMAN

RIGHTS IN INDONESIA

Multinational corporations (MNCs) in Indonesia

were not only playing an important role in

promoting and enhancing economic growth but also

influence all facets of the state’s daily life. MNCs is

creates jobs, produce goods and services, advancing

the welfare of laborer and the shareholders.

Nonetheless, on the other aspect the existence of

MNCs also has adverse effects on the society and

individuals. Business has some impacts on human

rights likes pollution and environmental

disturbances, the making of goods and supplies of

services that disadvantageous to the consumers,

dispossession, and rivalry over natural resources

potentials. Since the rising role of MNCs in the era

of economics globalization, MNCs are also has the

responsibility to respect human rights, it caused by

the existence of MNCs has a lot of potential to

violate the human rights principles.

Various violations of human rights in the

environmental field have occurred in almost all of

the social life. Such violations should be interpreted

as a threat to Indonesian human civilization. In turn,

it will accumulate and lead to violations of economic

rights, violations of social and cultural rights, civil

and political rights. The phenomenon of the right to

a good, healthy and balanced environment as human

rights, is associated with the reality of environmental

management in Indonesia has not yet materialized.

With regards to the issue of environmental damage,

the right to the environment in the perspective of

human rights is interesting to be observed and

studied, in order to describe the conception of

human rights and environmental rights, the

regulation of the right to the environment in the

Indonesian positive legal provisions, environmental

rights good and healthy is human rights, and its

implementation in environmental management

policies.

One of the manifestations of the political

commitment of the State law in the context of

business relations and human rights is the drafting of

a National Action Plan (NAP) on Business and

Human Rights in the context of preventing and

reducing the impact of corporate operations on

human rights (Geneva, 2015). Therefore, the NAP

on Business and Human Rights should accelerate the

actions to be taken, in order to ensure the protection

of and respect to human rights in the policies and

decisions of the State related to the relationship

between economic players and human rights. The

State officials must use the various options available

to them, including all public policies and market-

based policies available to them to make changes

(Statement on National Action Plans on Business

and Human Rights, 2016). The NAP on Business

and Human Rights should function to make sure that

corporations perform their responsibility to respect

human rights.

The NAP on Business and Human Rights should

at least be able to provide an illustration of the

following aspects: (1). Instrument for implementing

the UN Guiding Principles on Business and Human

Rights and to reflect the state duties under the

International Human Rights Law to protect human

rights from any detrimental impact caused by

Addressing Human Rights and Sustainability in Indonesia Mineral Mining Sector

973

corporation business activities. In addition, in order

to provide more access for effective recovery; (2).

Instrument for promoting human rights respect

through the process of due diligence (Statement on

National Action Plans on Business and Human

Rights, 2016). Based on the result of identification

by the Human Rights Commission of the main

issues in connection with business and human rights,

they include rights of the environment, health, water,

life, ownership of property and land, rights of the

traditional communities, labor rights, and right to

information (Waagstein, 2013). Also, the existing

policies are not completely able to ensure that the

corporate operations remain within the corridor of

respect to human rights. The NAP on Business and

Human Rights reinforces the role and responsibility

of the company to respect human rights so that the

efforts to respect human rights will be more

advantageous to the corporation in the long run.

3 MNC’S HUMAN RIGHT ISSUES

IN INDONESIA MINING

SECTOR

Local companies (state-owned and private) and

multinational initiated the mining sector in

Indonesia. The entry of foreign investment in

mineral mining was first based on the 1967 Direct

Foreign Investment Law. This law raises issues

regarding human rights violations and the demands

of the rights of indigenous peoples in Indonesia.

Although they are often blamed, Freeport, Rio Tinto,

Newmont, BHP, and INCO were answered by

several mining experts in Indonesia that these

companies operate well. Some NGOs focus on

major mining multinational companies and only say

little about extensive illegal gold mining that

involves the use of uncontrolled mercury to recover

gold is a serious health hazard. There are many

wealthy businessmen behind this activity. Hundreds

of illegal miners control gold deposits.

In the relations between the authorities in the

country where the investment is conducted with

investors as mentioned above, at the practical level

this situation is further aggravated by the

decentralization policy in the natural resources

sector which allows the region, through a policy and

regulation to give exploitation permits natural

resources excessively without considering aspects of

environmental protection. Paying attention to such

conditions, by positioning the existence of the

environment and natural resources as one of the

fundamental human rights, what needs to be done is

how to realize development in contact with the

environment and natural resources with a human

rights perspective.

Indonesia is carrying out an important case for

the involvement of the global mining industry with

human rights issues. This country is currently at the

intersection of history, with a large enough scope to

reform legislation and implementing agencies. In the

context of mining, Indonesia remains very potential,

with abundant prospects for gold, copper, bauxite,

tin, nickel and coal in addition to oil and natural gas.

Current economic conditions, as a country that is in

desperate need of foreign currency, make Indonesia

very vulnerable to lowering standards on social and

environmental issues.

4 MNC’S SUSTAINABLE

DEVELOPMENT ISSUES IN

INDONESIA MINING SECTOR

The mining business gives the greater part of the

material we depend on to manufacture instruments

and framework to get a lot of vitality. In the interim,

mining is a human movement that is all the more

exasperating to the earth and is related with colossal

social effects and imbalances. With the fatigue of

rich metal stores and the use of natural insurance

controls, numerous worldwide mining organizations

move to creating nations where directions are less

inflexible. The substantial mining ventures usage in

creating nations makes numerous circumstances of

incredible riches for minorities, in the interim most

the populace has not seen their social, monetary and

welfare status. Then again, the impacts of mining

frequently harm their condition (Jaskoski, 2014).

Creating nations are the host nations of mining

ventures that suit and modernize their laws to be

incorporated into aligned natural and general

wellbeing measures.

From MNC's perspective, a key part of effective

mining is getting, notwithstanding official and

legitimate mining grants, and in addition social

licenses from the neighborhood network, that is,

their assention and stickiness to mine in their region.

Corporate duty from worldwide mining

organizations has additionally been created to impart

riches from mining to nearby networks, and this has

been accomplished through interests in building

foundation for the area, for example, schools and

doctor's facilities, engaging neighbourhood networks

ICRI 2018 - International Conference Recent Innovation

974

and limiting effects. Thusly, the eventual fate of

mining relies upon great mining practices to monitor

the earth anyplace and furthermore to assume social

liability in the advancement of the zone and add to

enhancing the personal satisfaction of the network.

5 KEY DRIVERS

The main drivers for Multinational Corporations in

the Indonesian Mining Sector Address Human

Rights are the evolution and expansion of the

concept of human rights. MNCs can only operate in

the context of legislative arbitral decisions, because

they have no doctrinal wisdom to receive a perfect

endowment; they do not have humanitarian intuition

to accept the conception of human dignity; or

wisdom and insight to accept utilitarian optimism.

MNCs are more fun talking about rights that come

from relative strength than from some abstract

concepts. Arbitrary rights arise in a world where it

might make right. It is important to consider tensions

between developed and developing countries around

the concept that rights are Northern inventions

imposed in the South, and are a pretext for deciding

decisions in developing countries that are contrary to

the values of developing countries or structures.

MNC must operate in the reality it faces in the host

country. MNC must deal with the peculiarities in

which it operates in certain jurisdictions. Amazingly,

the multinational mining companies will perform the

operation with global consistency. However, in

many cases multinational mining companies will be

faced with the tensions between rights imposed by

their home countries and the absence or lack of

enforcement by their host countries.

Many of the problems being exposed by

multinational mining companies are mainly caused

by the failure of public trust in the decision-making

process of multinational mining companies. One

reason that the reputation of multinational mining

companies is negatively recognized by the public is

due to differences in the pattern of governance

during multinational mining companies. Some

appear to be entirely under the control of their top

management, while others are subject to direction by

their Directors Board; there are still others so

distributing decision making seems very difficult.

Multinational mining companies do not explain to

the public the relative roles and responsibilities of

the board independent members and company and

their operational management in relation to company

decisions. Several units of regional business appear

to have a high autonomy degree and are not fully

subject to decision-making processes at the senior

corporate level. Therefore, civil society elements

who willing to influence the mining companies’

decisions are often uncertain where and how to use

their bargaining power. NGOs that attempt to

influence company decisions on business operations

may find bargaining power at the corporate level

relatively fruitless.

In contemporary years, the articulation by

several multinational mining companies of global

principles related to sustainable development

sometimes including special commitments to human

rights has provided easy to understand decision-

making process and greater predictability of

consistency in global management decision-making

among many companies distributing operations.

This consistency is achieved when mining

companies have succeeded in making overall

company policies a part of the company's

organizational culture.

Then, the logical writing has distinguished

different reasons where global mining organizations

put assets in tending to manageability issues through

embracing approaches and standards, executing

changes and the board measures, unveiling data.

Determinants might be inward or outside, yet

frequently the limits are not clear. For instance,

global mining organizations might be focused on

social obligation since they trust this will give them

an upper hand. Walsh records a few manners by

which supportability procedures can give upper

hands, for example, lessening authoritative costs,

access to speculators supporting manageability and

more prominent chances to enroll and hold higher

quality representatives. Be that as it may, the

investigation of the connection among CSR and the

organization's budgetary execution, some of which

have concentrated on global mining organizations,

have created fluctuated results. Ostensibly, this

leaves more space for individual administrators' very

own convictions to decide the organization's system

(Walsh, 2014).

A few researchers have endeavored to discover

how a few variables impact the dedication of MNCs

in extractive ventures to supportable improvement.

Research discoveries demonstrate that media assume

an essential job before all else however reduce after

some time. Interestingly, certain MNC asset factors,

for example, global experience and friends estimate

are decidedly identified with more prominent

manageability from start to finish all through the

period. This negates comparative research on the

dispersion of new changes in worldwide mining

organizations, which he supposes monetary or

Addressing Human Rights and Sustainability in Indonesia Mineral Mining Sector

975

specialized clarifications are increasingly imperative

from the begin; as it were, that manageability

responsibilities will be driven by global

organizations that attempt to catch the advantages

that might be from "early adopters", which at that

point turn into the standard. A few specialists

contend that worldwide mining organizations may

not be persuaded of the advantages related with

maintainability duties, where institutional

clarifications, for example, general assessment

assume an increasingly critical job at an early stage.

All things considered, the logical writing on the

variables that impact mining organizations'

maintainability responsibilities isn't altogether

definitive (Bansal, 2005). Scholastics and approach

creators' viewpoints extend from CSR as a possibly

ground-breaking approach to defeat destitution to

accomplish manageable improvement, for pundits

who think of it as a part of advertising with the point

of decreasing the danger of notoriety stuns and

misfortunes, and to maintain a strategic distance

from the fundamental directions (Kemp, 2010). As

indicated by Bridge and McManus (2000) as

ecological based resistance has expanded both in

authoritative limit and voters, worldwide mining

organizations have looked to recapture moral

specialist by dispensing feasible advancement ideas

(Jenkins, 2004). In the meantime, the logical writing

perceives that global mining organizations vary in

their capacity to defeat supportability.

6 MNC’S IN INDONESIA MINING

SECTOR ADDRESS HUMAN

RIGHTS AND

SUSTAINABILITY ISSUES IN

REALITY

The process of implant human rights within a

multinational mining company can be seen in health

protection, safety, security, product stewardship and

integrity procedures are well implemented at MNCs

subsidiary level. On the other hand, there are areas

that deserve more attention in implementation both

in developing procedures as well as in practices at

MNCs subsidiary level. These include labor aspects

in core operations/contractors, relations with

societies and addressing the potential for connivance

in some human rights abuses of the host

government.

MNCs are very powerful and wealthy actors who

can contribute to increasing the level of Gross

Domestic Product, respecting human rights and

democratization, and suggest that multinational

companies can contribute to advancing human rights

because they bring "capital, technology,

management techniques and managers who are often

eager to introduce social empowerment and increase

in terms of their financial investment (Spar, 1999).

Among the optimistic opinions is also a scholars’

community, practitioners and policy makers who

believe that large multinational companies can

improve the living atmosphere of poor countries

through the voluntary codes of conduct application

and Corporate Social Responsibility (CSR) policies

(Falck and Heblich, 2007).

At the same time, there is a growing awareness

among MNC's top managers that respect for human

rights is a fundamental and important aspect of

valuable management practices (Brown and Woods,

2007). Adoption of a code of conduct that addresses

human rights issues in several ways. For example,

through greater investment in addressing community

needs those were not met. Nelson notes "although

MNC's social investment or philanthropic budget is

a small part of the resources collected through its

main business activities, this budget is not

substantial (Nelson, 2000). A study of 50

multinational mining companies found that social

investment or philanthropic figures for multinational

mining companies this is almost equivalent to the

United Nations Development Program's annual

operating budget, so philanthropic and social

investment initiatives allow companies to play an

important role in promoting various types of

political, civil and socio-economic rights, such as

equality, education and health rights and a safe and

healthy environment (Rivoli and Waddock, 2011).

On the other hand, the process of instilling

sustainable development in multinational mining

companies can be seen that they have provided

developing countries with much needed capital

inflows, job creation, and environmentally friendly

technology. Through the concept of free markets,

multinational corporations create wealth and

prosperity, which provides income streams for

improving welfare. If the essential of developing

countries is to reduce some conditions of poverty,

they need to privatize, deregulate, protect private

property, and establish legal rules, then

multinational companies will support capital

inflows.

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976

7 COLLABORATION AND

INNOVATION

Most of the imminent causes of human rights abuse

regarding to a MNCs operations atmosphere within

the immediate local area of a mining project. These

include the environmental and social impacts of the

mining operation, protest from societies land and

resources over loss, inadequate compensation or

relocation, and the actions of public or private

security forces in react to these protests. These

imminent causes are directly related to the mine

presence, and are thus properly the corporate

responsibility as well as the host country.

About the strengthening of the corporate role in

protecting Human Rights, the Government,

particularly the ministry/institution, has the

obligation to protect the interest of the community

and has the role in supplying the framework that

enables the implementation of responsible business.

In addition, it also needs to facilitate the

environment that enables the business to act

accountably and complies with the obligation to

protect the interest of the community from the

possibility of negative impacts caused by the

operation of a business entity. Further more, such

policy may encourage the qualified and responsible

investor to minimize the possible negative impact

risks from the investment, and ensure the broader

formation of values and sustainable development. As

such, the government can support the corporate role

to respect Human Rights through the licensing and

regulation instruments.

The corporation has responsibility to respect

Human Rights by referring to the basic norms

contained in the Human Rights Universal

Declaration. Such Declaration explicitly represents

that every member of the society is bound to obey

the substantive provision of Human Rights. The

meaning of such phrase is extended so that it covers

the entity that is not included in the individual or the

state, namely the corporate. As part of the

community member, the corporate is also

responsible to promotes and respect Human Rights

as regulated in the international Human Rights

instruments. Further on, the corporate, management,

and the people who are working are also required to

recognize the responsibility and respect the norms

that are contained in the United Nations agreements

and other international instruments. However, in

business, the first effective and responsible step in

managing the Human Rights problems is by

developing the adequate understanding that Human

Rights are relevant in business.

8 CONCLUSIONS

Multinational companies (MNCs) in Indonesia play

an important role in promoting economic growth and

as a result influence on all aspects of the country's

daily life. Indonesia is carrying out an important

case for the involvement of the global mining

industry with human rights issues. The main driver

for Multinational Corporations in Indonesia Mining

Sector Addresses Human Rights is the evolution and

expansion of the concept of human rights, failure in

public trust in multinational mining companies. On

the other hand, the scientific literature has identified

various reasons where multinational mining

companies invest resources in addressing

sustainability issues through adopting policies and

principles, implementing reforms and management

standards, disclosing information. The determinants

of adoption may be internal or external, but often the

boundaries are not clear. For example, multinational

mining companies may be committed to social

responsibility because they believe this will give

them a competitive advantage. The process of

applying human rights in multinational mining

companies can be seen in the procedures for

protecting health, safety, security, product

stewardship and integrity that are carried out well at

the MNC subsidiary level. At the same time, there is

increasing awareness among MNC's top managers

that respect for human rights is a fundamental and

important aspect of valuable management practices.

With regard to strengthening the role of corporations

in protecting human rights, the Government,

especially ministries or government bodies and

institutions, has an obligation to protect the interests

of the community and have a role in providing a

framework that enables responsible business

implementation. Corporations have a responsibility

to respect human rights by referring to the basic

values contained in the Universal Declaration of

Human Rights. The Declaration explicitly states that

every member of society or community is bound to

comply with the substantive provisions of human

rights.

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