Pigai Prepares Banking Access Block Sanctions for Companies Violating Human Rights
Human Rights Minister Natalius Pigai has said the government is preparing a regulation on human rights and business that could serve as the basis for imposing sanctions on companies proven to have committed human rights violations, including restrictions on access to banking finance.
Pigai made the statement while inaugurating the Human Rights Study Centre at the Mimika College of Law (STIH Mimika) in Timika, Mimika Regency, Central Papua, on Tuesday (18/8).
He said the regulation, in the form of a Presidential Regulation, is still undergoing harmonisation at the Ministry of Law.
“Not only can a company be shut down, but a recommendation from the Ministry of Human Rights could also result in a company that is suspected or indicated to have committed human rights violations being unable to obtain credit. It would be immediately banned from banking,” Pigai said.
He explained that the regulation is directed at strengthening corporate responsibility to respect human rights in conducting business activities, including preventing companies from becoming involved in actions that could potentially lead to human rights violations in their operational areas.
According to Pigai, companies proven to have supported or financed parties committing human rights violations may be subject to measures in accordance with provisions to be set out in the regulation.
“Once the President signs it, regardless of the company, I as minister will make the decision whether it is closed, sanctioned in the banking sector, or given a warning,” he said.
Pigai said strengthening the regulatory framework on human rights and business is also necessary to improve certainty regarding corporate responsibility in conducting business activities while supporting the fulfilment of human rights standards in international economic cooperation.
He added that the government is still completing the drafting and harmonisation process of the regulation before it can be enacted.