Corporations in Indonesia play an important role in promoting economic growth and therefore have an influence on all aspects in the daily life of the community. Corporations create jobs, produce goods and services, and can improve the welfare of employees and the shareholders. However, on the other hand the existence of corporations also has a detrimental effect on the community in general as well as individuals. Some impacts of business on human rights are pollution and damage to the environment, the production of goods and provision of services that are disadvantageous to consumers, eviction, and conflict on natural resources. Since the role of corporations has greatly increased in this era of globalized economy, corporations are also responsible for respecting human rights as their existence has the potential to violate the basic human rights.
The UN Guiding Principles for Business and Human Rights have received full support from the UN Human Rights Council. The Human Rights Council established in 2011 is an innovative instrument of international law intended to place the corporation as a new actorthat will have the role of being responsible for promoting and respecting human rights. In line with these goals, the UN Guiding Principles also lay the foundation for convergence of standard rulings on the relation between business and human rights.
Furthermore, John Ruggie declares that the normatif contribution of the Guiding Principles does not lie in creating new international legal obligations, but in the efforts to elaborate the implications of the existing standard and practices of the country and business, to integrate the relations into one coherent and comprehensive document, and to identify the country’s efforts
to improve the protection of human rights in the context of business. In other words, the UN Guiding Principles aim to become internationally recognized standards on business and human rights for the country and companies.
Under the Guiding Principles, a country is obliged to protect human rights from violations by a third party, including corporations. The UN Guiding Principles on Business and Human Rights require that a country must take certain steps through policies, legislation, regulations, and effective judicial system. On the other hand, a corporation also has the responsibility to prevent
or become involved in the impacts that are detrimental to human rights and try to prevent or handle the harmful impact on human rights that are directly related to their activities, products, services, or business relations.
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