Indonesia’s 2026 Regulatory Update on Business and Human Rights
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Updated: 1 day ago
The Business and Human Rights (BHR) Compliance Assessment, known in Indonesia as Penilaian Kepatuhan Pelaku Usaha terhadap Bisnis dan Hak Asasi Manusia (BHAM), is a tool created by the Indonesian Government to help monitor, evaluate, and encourage private companies to respect human rights. The Ministry of Law and Human Rights runs this program.
Primary Objectives of the BHR Assessment
Risk Mitigation
Helps companies find possible human rights violations in their supply chains and daily operations.
Transparency
Shows how well companies put human rights principles into practice.
Global Competitiveness
Ensures companies adhere to international standards, such as the United Nations Guiding Principles on Business and Human Rights (UNGPs), which are now important for global trade and EU rules.
Protection of Workers and Communities
Protects the rights of workers and indigenous peoples, and supports environmental sustainability along with business goals.
While BHR compliance may appear administrative, it offers significant benefits:
The 12 PRISMA Assessment Components
The 12 PRISMA Indicators (Programme for Business and Human Rights Risk Assessment) are the Ministry's main tool for assessing how well companies respect human rights. These indicators ensure companies pursue profit while also minimising negative impacts on people and the environment.
Human Rights Policy: The company must have a policy committing to respect human rights, supported by thorough due diligence and communicated to all employees and relevant stakeholders.
Labour: Respect for fundamental workers’ rights, including the prohibition of forced labour and child labour, and the assurance of freedom of association.
Working Conditions: Provision of a safe and healthy workplace, reasonable working hours, and fair wages in accordance with international standards or national regulations.
Trade Unions: Respect for workers’ rights to form or join trade unions and to engage in collective bargaining without discrimination.
Privacy: Protection of employees’ and customers’ personal data from misuse.
Non-Discrimination: Elimination of all forms of discrimination in employment (recruitment, promotion, remuneration) based on race, gender, religion, or disability.
Environment: Corporate responsibility for operational impacts, including pollution prevention and the protection of ecosystems.
Land and Indigenous Peoples: Respect for land rights and traditional practices, including the principle of free, prior and informed consent (FPIC) in land use.
Corporate Social Responsibility (CSR): CSR should be implemented as a corporate responsibility rather than merely charitable activities, and integrated into core operations to support human rights.
Grievance Mechanism: Provision of safe, confidential, and effective grievance channels for workers or affected communities.
Supply Chain: The company must conduct due diligence on suppliers to ensure human rights standards are applied throughout the production process.
Business Impact of Human Rights Compliance: Adherence to human rights enhances corporate reputation, prevents legal risks, improves performance outcomes, and facilitates licensing processes.
The implementation of BHR compliance is grounded in Presidential Regulation (Perpres) No. 60 of 2023 on the National Strategy for Business and Human Rights (Stranas BHAM). This regulation mandates that ministries, agencies, and regional governments ensure that companies within their jurisdictions apply human rights principles in their operations.
2026 Update: Transition Towards Mandatory Compliance
In 2026, Indonesia’s BHR Compliance Assessment moved from voluntary to the first phase of mandatory legal enforcement.
New Presidential Regulation in Finalisation (Target: 2026)
President Prabowo Subianto has approved the drafting of a new Presidential Regulation concerning Business and Human Rights Compliance Assessment. The draft is now being finalised with input from ministries, agencies, and civil society groups, with completion targeted for the end of 2026 to create a stronger legal foundation than before, so Indonesia has a consistent national compliance standard recognised internationally and aligned with OECD standards.
Compliance Roadmap (2026–2028)
The government has planned a step-by-step transition:
Conclusion
This assessment serves as human rights due diligence. Companies will be judged not just on their policies, but also on the real steps they take to prevent and reduce harm to people and communities. Indonesia’s 2026 regulatory update marks a clear move from voluntary commitment to enforceable accountability in business and human rights.
Reference :
Muis, A., Prasetyo, T., & Yudha, A. (2024). LEGAL REVIEW OF THE READINESS OF BUSINESS IMPLEMENTATION BASED ON HUMAN RIGHTS IN THE MAKASSAR INDUSTRIAL AREA. https://doi.org/10.33059/jhsk.v19i1.9741
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