Those principles have long guided voluntary commitments but are now moving toward binding regulation in Indonesia. Since late 2025, the government has been drafting regulations to make HRDD mandatory. The shift matters: corporate operations can indeed create serious problems for people living in or around their operational areas. Regulation alone, however, cannot ease the everyday pressures that drive exploitation in the countryside. Rural socioeconomic conditions are shaped by unequal positions and overlapping interests among local actors. These dynamics complicate the common narrative that frames human-rights risks as simply corporations versus communities. Legal standards create an essential baseline of accountability, yet they mostly govern ‘big’ actors—corporations, state agencies and supply-chain nodes within formal oversight.
Social complexity on the ground
Behind those big actors lies a dense web of everyday undercurrents shaping millions of rural livelihoods. Local elites—often monopolizing their role as landlords, traders, middlemen, or informal credit providers—operate in the gaps between the law and daily life. These actors are rarely scrutinized, yet their interactions can be similar to corporate malfeasance: perpetual indebtedness, land loss and exploitative labor arrangements. The burden falls disproportionately on the young, women and the elderly—many of whom are poor farmers cultivating less than half a hectare or are landless workers. Supply chain governance, therefore, must extend beyond compliance checklists and engage with social realities on the ground.
That complexity is largely absent from how production is categorized. The Central Agency of Statistics (BPS), for example, has a “Smallholder Estate Crops” category—administratively useful but one that masks important differences within rural production systems. Not all “smallholders” are equal: some control sizeable landholdings, can hire several wage workers while becoming rich, as others tend tiny plots with little capital and must sell their labor to survive. The label “small” is thus relational: it compares individual plots to corporate plantations, not to one another.
As villagers increasingly cultivate cash crops, livelihoods are becoming more deeply integrated into the market’s circuits, including within the so-called Indigenous communities. Land is gradually shifting from a social and cultural resource into a marketable commodity, while labor is increasingly becoming a vehicle for others to profit from. This is enabling some local elites to consolidate economic power by concentrating land, suppressing wages and accumulating capital, often at the expense of poor farmers and landless workers.
My field engagement with Indigenous communities in the Manggarai highlands of East Nusa Tenggara in 2025 offers a brief glimpse of how such dynamics can unfold.
Debt, land dispossession and precarious work
In the Manggarai highlands, far from large corporate plantations, candlenut production provides incomes but also entrenches inequality. Rural elites, acting as middlemen and rich farmer, offer pre-harvest purchases at predetermined low prices and extend loans for daily necessities, exploiting the crop’s once-a-year harvest cycle. Debts are repaid with the next season’s yield, leaving many poor farmers little chance to seek better buyers. When prices rise, middlemen capture the margin and sometimes use the proceeds to acquire land from indebted farmers—reinforcing a cycle of dispossession and perpetual indebtedness. Variants of this pattern—advance credit, limited selling options and eventual land transfer—recur across other “Smallholder Estate Crops” such as cocoa, tobacco, rubber, and others.
Although agriculture remains an important source of rural employment in Manggarai, the lure of urban wages encourages many poor farmers and landless workers to migrate. Migration, however, offers no guarantee of stability. Consider landless rural youth with limited education: they are seldom absorbed into secure employment. Even many university graduates I met are confronting a labor market that is not expanding sufficiently in formal, labor-intensive sectors. Many eventually return to their villages only to face the same structural constraints they once tried to escape, and are compelled to accept long working hours, low wages and minimal formal social protection simply to survive.
Reframing the issue beyond corporate compliance
These recurring patterns point to a deeper structural issue. No HRDD framework, however well drafted, can address these realities if it focuses only on corporate or formal-sector conduct. Legal compliance alone cannot dismantle entrenched rural inequalities that continue to expose poor farmers and landless workers to human-rights risks. Regulation must therefore be paired with policies that transform the underlying rural socioeconomic conditions.
What does that mean in practice? The government must pair regulatory enforcement with deeper agrarian reforms: stronger land-access policies, targeted cash assistance, labor protections that reach informal workplaces, investments in labor-intensive sectors and better educational infrastructure for rural youth. Without tackling these structural constraints, vulnerable groups such as poor farmers and landless workers will remain trapped in cycles of dependency and exploitation, no matter how robust the regulations look on paper.
Transforming those conditions is also a political task. Meaningful reform rarely emerges without organized pressure from below. Stronger and progressive political organizations, legal-aid networks and cooperative initiatives are therefore essential to articulate and defend the interests of poor farmers and landless workers. Without such collective organization, rural grievances remain fragmented, and the structural conditions that sustain dependency and exploitation are likely to persist.
/* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0in; line-height:116%; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman",serif; mso-ascii-font-family:"Times New Roman"; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:"Times New Roman"; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi; m