Responsibilities of Multinational Corporations in Their Business in Global Supply Chains in Indonesia: A Case Study Approach

Business Law Program, Law Department, Faculty of Humanities, Bina Nusantara University, Jakarta, Indonesia 11480

The garment industry plays a major role in the economy in Indonesia. Many investments are made by multinational corporations (MNCs) in pursuing their activities in the global supply chain sector that may result in human rights violations. One of the cases of human rights violations is unpaid labor wages by Uniqlo due to the closure of Jaba Garmindo Factory, one of Uniqlo’s suppliers. This study is intended to determine the responsibilities of MNCs in violating human rights directly or indirectly in running their business. It also describes how the company’s code of conduct will affect the respect of human rights. Using normative legal research performs this study. This research found that Uniqlo breaches the UN Guiding Principles on Business and Human Rights and Code of Conduct of Uniqlo. Uniqlo also does not meet the report of an international standard. In conclusion, Uniqlo obliges to pay the labor wages of Jaba Garmindo Factory as the responsibility of MNCs also for indirect human rights violation related to a business relationship. Government should impose regulations that would force businesses to comply with the UN Principles on Business and Human Rights and Code of Conduct of MNCs.

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