Aceh – Indonesia, Minister of Human Rights Natalius Pigai revealed that companies proven to have committed human rights violations could face sanctions, including restricted access to bank credit.
Speaking at the opening of the Bali-Timor Leste Business Forum in the Sanur Kura-Kura Special Economic Zone (SEZ), Denpasar, on Friday, October 2, 2026, Pigai stated that the government is preparing a human rights compliance assessment mechanism for businesses. Initially, this reporting can be done voluntarily before becoming mandatory in 2026.
“After verification, we will assess it. The reports can be voluntary or mandatory. However, I will make it mandatory in 2026; it cannot be done right now,” Pigai said.
According to Pigai, the Ministry of Human Rights will not merely receive reports from companies in the future, but will also conduct direct inspections to ensure compliance with human rights standards.
He explained that there are several stages of action that can be imposed on companies found committing violations, ranging from official warnings to restrictions on access to financing.
“If they fail to comply, there are three steps. We will issue a warning, and we will ban them from the banking sector so they cannot secure loans,” he said.
Pigai mentioned that the mechanism restricting banking access is linked to the financial services sector’s oversight system. He stated that non-compliant companies could face serious consequences regarding their ability to secure funding.
“They won’t be able to receive international financial support because they will be locked out and shut down by system,” he said.
In addition to restricted financing access, Pigai noted that human rights violations by businesses could ultimately lead to the revocation of operating licenses and company closure in accordance with applicable legal mechanisms.
“If a company truly violates human rights, its license will be revoked, and the company will be closed,” he asserted.
Pigai also reminded business owners to respect workers’ rights and preserve the environment. According to him, companies are required not only to chase profits, but also to ensure workers receive their rightful dues and that the local ecosystem is maintained.
“Business communities must free themselves from bad practices. Do not oppress employees, pay fair wages, preserve the environment, and maintain the ecosystem,” he urged.
He emphasized that these standards apply not only in Indonesia, but are also part of evolving international standards regarding business and human rights.
Pigai added that implementing human rights standards in business must also account for green and blue economy principles as part of sustainable economic development.
According to him, corporate compliance with human rights, worker protection, and environmental conservation will become increasingly vital as businesses become more interconnected with global business and financial systems.***