Human Rights Due Diligence (“HRDD”) is becoming an increasingly important aspect of corporate compliance in Indonesia. Broadly, HRDD refers to a process through which businesses identify, assess, prevent, mitigate, monitor, and address actual or potential adverse human rights impacts arising from their operations and business relationships.

Indonesia’s existing framework on Business and Human Rights (“BHR”) was established through Presidential Regulation No. 60 of 2023 on the National Strategy on Business and Human Rights (“Perpres 60/2023”). While the Government has stated that the National Strategy period ended in September 2025, Perpres 60/2023 remains recorded as in force in the official regulatory database. The Government is now developing a new Presidential Regulation on the Implementation of Compliance Assessment for Business Actors in Business and Human Rights (“Draft Perpres”) as a further regulatory framework for BHR compliance.

As of September 2026, the Draft Perpres remains under development and harmonisation. In August 2026, the Ministry of Human Rights confirmed that the Government was accelerating the finalisation of the Draft Perpres, with the aim of completing and promulgating it in 2026. The Government has also indicated that broader socialisation is expected in 2027, followed by mandatory and binding implementation in 2028, initially targeting large-scale companies with more than 2,000 employees. Businesses below that threshold are expected to remain subject to guidance and self-assessment through the PRISMA platform during this period. These timelines and requirements, however, remain subject to the final form of the regulation.

The proposed framework places greater emphasis on the systematic identification and management of human rights risks. Rather than relying solely on general corporate policies, businesses are expected to assess how their operations and business relationships may create or contribute to potential adverse human rights impacts.

The Government has already developed PRISMA (Penilaian Risiko Bisnis dan Hak Asasi Manusia) as a digital self-assessment platform for businesses. PRISMA is designed to help companies identify potential human rights risks, establish follow-up measures, monitor their implementation, and communicate the results. Its assessment covers areas including employment, working conditions, discrimination, freedom of association, privacy, environmental impacts, supply chains, grievance mechanisms, and impacts on local and indigenous communities.

For businesses with extensive supply chains, this may require human rights considerations to be incorporated into existing supplier and contractor due diligence. Depending on the nature of the relationship and the relevant risks, companies may also consider incorporating appropriate human rights representations, compliance obligations, reporting requirements, audit rights, and remediation provisions into their commercial agreements.

HRDD should not necessarily operate as a standalone policy. Its implementation may require businesses to integrate human rights considerations into their existing compliance and risk management frameworks. This may include reviewing employment and workplace policies, assessing human rights risks in business relationships, strengthening contractual protections, and establishing appropriate grievance and remediation mechanisms.

Documentation will also become increasingly important. Companies should be able to demonstrate how relevant human rights risks were identified and assessed, what measures were implemented to address those risks, and how the effectiveness of those measures was monitored. A general commitment to respecting human rights may therefore be less effective where it is not supported by an identifiable internal process and appropriate documentation.

Although the Draft Perpres has not yet been finalised, businesses can begin reviewing their existing practices in preparation for the proposed framework. Early assessment may help identify gaps in internal policies, supplier due diligence, contractual arrangements, grievance mechanisms, and compliance documentation before any mandatory requirements take effect.

This is particularly relevant for businesses with significant workforces, extensive supply chains, or substantial interactions with local communities. The broader regulatory direction is also consistent with international developments in responsible business conduct, including the increasing use of human rights and other due diligence frameworks for businesses and supply chains. The OECD has identified Indonesia among the countries considering due diligence legislation as part of broader developments in responsible business conduct.

Accordingly, while businesses should not treat the Draft Perpres as a final set of binding obligations at this stage, its development provides an indication of the Government’s direction of travel. Reviewing existing policies, contractual arrangements, grievance mechanisms, and documentation processes now may allow businesses to identify and address potential gaps in a more orderly manner.

Schinder Law Firm advises Indonesian and international businesses on corporate compliance, employment, commercial contracts, regulatory matters, and emerging Business and Human Rights requirements. We assist businesses in reviewing and developing policies, contractual arrangements, due diligence processes, and compliance frameworks in line with applicable Indonesian law and evolving regulatory requirements. For further consultation, please contact info@schinderlawfirm.com.

Author:
Dewi Susanti