The State and Corporate Responsibility against Pollution of Pertamina Oil Leakage: Remedies of Impacted Victims Must Be Prompt, Adequate, Effective and Responsive

Press Release

Institute for Policy Research and Advocacy (ELSAM)

The State and Corporate Responsibility against Pollution of Pertamina Oil Leakage: Remedies of Impacted Victims Must Be Prompt, Adequate, Effective and Responsive

The oil spill caused by leakage of offshore platform YYA-1 area of ​​Pertamina Hulu Energy Off-shore in North West Java has been polluting the north coast of Karawang. The incident has been going on for 3 (three) weeks since the first time occurred on July 12. As a result, it has given detrimental impact to fishermen as they are unable to explore the sea, thus preventing them to exercise the right to work. In addition, this oil pollution also causes losses to salt and shrimp farmers. Moreover, residents, especially children, suffer from health problems from smelling the oil waste (Kompas, Wednesday 7 August 2019). The oil leakage caused by exploitation activities of Pertamina raises the legal liability to provide a remedy for all affected victims based on the principle of prompt, adequate and effective.

Remedy for victims affected by pollution must also be gender-responsive, it needs to consider the role of women that endure additional burden from the incident. Environmental degradation will have a distinct impact on a person depending on several main factors including gender. However, because women outnumbered men in the number of population living in poverty, the bad effect of this environmental degradation will disproportionally affect women compared to men. In general, household burdens are increasing, because women face threats to security including food, water, energy, economy, and health. Often women become the main users of water in household consumption and maintain family food security. Women in many cases also take a leading role in educating children and ensuring the health of children and families, including sanitation can be fulfilled. Furthermore, environmental degradation also has the potential to impair the development of a child, thus prevent the protection and fulfillment of rights under the best interest of the child, and ultimately render the women bear the burden.

The international law system constructs the problem of marine pollution based on two legal regimes, which is the international environmental law and international law of the sea. The two regimes developed the concept of establishing a mechanism for legal liability and compensation. The 1982 Law of the Sea is the only international treaty that provides a comprehensive framework for the protection of the marine environment by broadly defining pollution as the release of substances or energy into the marine environment that is likely to have a negative impact.

In the perspective of international environmental law, every pollution caused by offshore oil exploration raises the legal liability to provide remedy based on the polluter pays principle. The 1992 United Nations Conference on Environment and Development (UN Conference on Environment and Development) confirmed this principle for the first time and has received international support as an environmental policy. The polluter pays principle obliges the party that is causing the pollution to pay the detrimental impacts caused by the pollution, in this case, the victims and community should not be bear any burden to pay (Yoshifumi Tanaka, 2015). Under that principle, pollutants must pay certain costs: prevent pollution or reduce pollution to meet applicable standards and laws; prevent, control, reduce and mitigate environmental damage caused by pollution; repair the damage caused to the environment, such as cleaning pollution and restoring a damaged environment; and carry out repairs, including compensation and remedy, for injuries that cannot be repaired.

By requiring pollutants to be responsible for external costs arising from pollution, the principle burdening these costs to polluters, hence the polluter must internalize and perceive these costs as costs in business operation. Internalization will be completed when pollutants have paid all costs arising from the pollution incident. The principle plays an important role in preventing pollution and providing a remedy (Douglas Fisher, 2016). This legal liability is strengthened through the precautionary principles as stated in Principle 15 of the Rio 1992 Declaration on Environment and Development (Rio Declaration on Environment and Development). In particular, protection of the marine environment from offshore oil and gas activities is not treated based on a sectorial perspective, but rather is part of the application of an ecosystem approach (Nengye Liu, 2015). Based on this principle, Pertamina must be legally responsible for “paying” all victims of oil pollution contaminating the north coast of Karawang.

In the context of this legal liability, the government is also held liable because Pertamina is a State-Owned Enterprise (SOEs). The implementation of economic activities through SOEs confront public duties and private obligations. In other words, the legal duties of the state combined with the responsibilities of the private organizations. This duality perspective can also be seen in the UN Guiding Principles on Business and Human Rights. SOEs is a state instrument and need to actualize the state responsibility to protect human rights. At the same time, SOE functions as a commercial business and is therefore subject to the regulation of corporate responsibility to respect human rights.

Specifically, the 4th UN Guiding Principles state that:

“States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies such as export credit agencies and official investment insurance or guarantee agencies, including, where appropriate, by requiring human rights due diligence”.

The commentary of the 4th principle states that business enterprises are controlled by the State or their actions can be attributed to the State, a violation of human rights by business companies can render in violations of the country’s international legal obligations. Besides, the closer relation a business enterprise is to the State, or the more dependent the business on legal authority or taxpayer support, the stronger the rationale for State policy to ensure that the company respects human rights. This principle should be interpreted that SOEs must do more to respect human rights than private companies. In other words, SOEs must lead by example in respecting human rights as according to the Article 1 Number 1 of Law Number 19 of 2003 concerning State-Owned Enterprises, SOEs defines as a business entity whose entire or most of its capital is owned by the state through direct participation from the separated state assets. The law also states that the main purpose of SOEs is to benefit by providing goods and services to customers and to improve economic growth and national prosperity.

The Guiding Principles govern non-discriminatory treatment, with special attention to the rights and needs of, and challenges faced by, individuals from groups or populations who may be at risk of becoming vulnerable or marginalized, and put attention to the different risks that faced by women and men. In the context of remedy, the mechanism must also be accessible and contingent with the intended interest groups and provide assistance to those who encounter special obstacles in accessing remedy.

Based on the above explanation, the Institute for Policy Research and Advocacy (ELSAM) urges the Government of Indonesia, to:

  1. The President of the Republic of Indonesia through the Ministry of SOEs must amend Law Number 19 of 2003 concerning State-Owned Enterprises in order to integrate international human rights standards, specifically the UN Guiding Principles on Business and Human Rights to encourage SOEs compliance through commitment to human rights policies, due diligence on human rights, effective and responsive recovery mechanisms.
  2. Pertamina must take necessary steps to restore the rights of victims based on the principle of prompt, adequate, effective and responsive to groups of women affected by oil pollution considering the facts that they suffer an additional burden from the environmental degradation.
  3. The President of the Republic of Indonesia instructs Pertamina to restore a degraded environmental condition in accordance with the polluting pays principle and the principle of intergenerational justice.

Jakarta, August 12, 2019

Institute for Policy Research and Advocacy (ELSAM)

Wahyu Wagiman, SH., MH.

Executive Director

For further information, please contact Andi Muttaqien (Deputy Director of Advocacy) telephone: 08121996984; Adzkar Ahsinin (Senior Researcher) telephone: 085694103959, Muhammad Busyrol Fuad (Legal Advocacy Staff) telephone: 085655004863