TuK INDONESIA Urges Stronger Human Rights Protection in Sustainable Finance Rule Revision

PRESS RELEASE

Jakarta, 22 May 2026 — Transformation for Justice INDONESIA (TuK INDONESIA) has submitted recommendations on the draft revision of Financial Services Authority Regulation No. 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Service Institutions, Issuers, and Public Companies (POJK 51/2017) to the Financial Services Authority (OJK) on Thursday (21/5).

In its submission, TuK INDONESIA stated that the revision of POJK 51/2017 represents a critical opportunity to strengthen sustainable finance governance in Indonesia amid growing climate risks, social conflicts, human rights violations, and increasing greenwashing practices within the financial sector.

However, TuK INDONESIA criticized the revision process for lacking transparency and meaningful public participation, particularly due to the limited involvement of civil society organizations and communities directly affected by corporate operations and financial sector investments.

“This revision process must not become merely an administrative exercise conducted behind closed doors. Sustainable finance regulations should emerge from an open and inclusive process involving communities that have directly experienced the impacts of problematic financing, ranging from land conflicts and environmental destruction to human rights violations,” said Erma Nuzulia Syifa.

TuK INDONESIA noted that after nearly a decade of POJK 51/2017 implementation, sustainable finance practices in Indonesia remain largely focused on administrative compliance and reporting obligations. Meanwhile, financing linked to deforestation, land conflicts, community criminalization, environmental pollution, and violations of Indigenous Peoples’ rights continues to occur.

For this reason, TuK INDONESIA believes the revision of POJK 51/2017 should become a momentum to strengthen accountability mechanisms for financial institutions, including through stricter and more participatory oversight systems.

“Corporate sustainability reports often appear convincing on paper, while realities on the ground tell a very different story. The greatest risk stemming from weak oversight is greenwashing, where sustainability claims become nothing more than a branding tool without meaningful changes to social and environmental impacts. Moreover, there is still no dedicated public grievance mechanism for ESG implementation in practice,” Erma added.

In addition to highlighting the lack of public participation, TuK INDONESIA also criticized the absence of explicit human rights principles and frameworks within the revised regulation. This is despite the fact that global standards increasingly recognize human rights as a core indicator in sustainable business and investment governance.

According to TuK INDONESIA, the exclusion of human rights indicators from the regulation creates a significant oversight gap regarding the impacts of financial sector investments on communities.

“Today, human rights are no longer treated as an optional issue in global business practices. International regulations are increasingly positioning human rights as a mandatory indicator within supply chains and financing systems. If Indonesia falls behind, the credibility of its sustainable finance implementation will also be questioned,” she said.

In its recommendations to OJK, TuK INDONESIA urged the regulator to:

• ensure meaningful participation of civil society organizations and affected communities in the verification and oversight of Sustainability Reports;
• establish a transparent, accessible, and accountable public grievance mechanism;
• strengthen oversight to prevent greenwashing and superficial compliance;
• explicitly integrate human rights principles and frameworks as binding sustainability indicators;
• ensure sustainable finance implementation prioritizes the protection of communities and the environment, not merely market interests.

TuK INDONESIA emphasized that the financial sector plays a strategic role in shaping Indonesia’s development trajectory. Therefore, financial institutions must also be held accountable for the social, environmental, and human rights impacts generated through their financing activities.

“Money flowing from financial institutions always creates real impacts in people’s lives. Sustainable finance should not stop at green terminology and annual reports, but must genuinely ensure that no communities are sacrificed for business profits,” Erma concluded.

Media Contact:
TuK INDONESIA
Annisa ([email protected]/087884446640)

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