The United Nations (UN) Human Rights Council’s adoption of the Guiding Principles on Business and Human Rights (UNGPs) in 2011 set a clear global expectation that businesses have a responsibility to respect human rights. These principles have underpinned the growth of national regulations aiming to ensure human rights due diligence on the part of businesses. In particular, February 2017 has seen a number of key developments reflecting a clear shift toward increased demand for government action and corporate accountability in relation to the human rights impacts of business activities.
For example:
- February 7: The Dutch Parliament adopts a child labor due diligence law. If approved by the Senate, it will require companies to investigate whether child labor occurs in their supply chain and, if it does, to develop a plan of action to combat it.
- February 17: The Government of Australia announces an inquiry into whether laws in Australia could be strengthened to combat modern slavery at home and in the supply chains of Australian businesses, much like the Modern Slavery Act in the UK.
- February 21: The French Parliament adopts a long-awaited law establishing a human rights and environmental due diligence requirement for French companies with at least 5,000 employees. These companies are now required to publish annual public vigilance plans detailing the measures they have taken to identify and prevent human rights and environmental risks in their supply chains. Belgium and Spain have reportedly already expressed interest in enacting a similar law.
These regulatory approaches range from imposing a due diligence requirement as a matter of regulatory compliance, to providing incentives and benefits in return for demonstrating due diligence, to encouraging due diligence through transparency and disclosure mechanisms. Regardless of the approach, human rights due diligence lies at the heart of each of these regulatory provisions.
Due Diligence Starts in the Supply Chain
The responsibility of businesses to conduct human rights due diligence does not end at the legal boundary of the individual company, but also includes their direct and indirect business relationships, including those with suppliers.
Guidance documents are stacking up to help companies meet rising expectations on human rights due diligence. For example, the OECD released its Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector on February 8, 2017, providing a guide to supply chain due diligence in the garment and footwear industries. Resources like these offer companies the tools necessary to comply with relevant regulations in their industry or region.
NAPs in the News
In recent months, we’ve also seen a surge in the number of National Action Plans (NAPs) developed by countries to implement the UNGPs in their own contexts and foster increased business respect for human rights. The rise of NAPs further signals the concerted efforts by governments to take action on the topic of business and human rights. In the case of Germany, for instance, the country’s NAP has set a target of 50 percent of companies with 500 or more employees conducting voluntary human rights due diligence by 2020. If this target is not met, the Government has signaled it may introduce mandatory due diligence.
These regulations, guidance tools and NAPs reflect firm government expectations that businesses must undertake human rights due diligence as a matter of priority. In short, the corporate sector is feeling the heat to ensure their products and services are not linked to human rights abuses.
Ensuring Your Business Rises to the Challenge
Your business can thrive in this new reality by broadening its existing due diligence actions to include human rights. Developing and implementing a slavery and human trafficking due diligence program is an excellent starting point for businesses under pressure from human rights regulations in the U.S. and UK.
Although due diligence is a well-known business tool in the context of helping companies manage risk and reduce liability, human rights due diligence is not as well understood and requires a different approach and set of tools. Beginning with an anti-human trafficking due diligence program puts your company on firm footing to then broaden its due diligence actions to address other human rights issues.
To learn more about supply chain human rights risks such as human trafficking, download our free eBook ‘Anti-Human Trafficking and Your Supply Chain’. For more information on how your company can meet its human rights due diligence obligations, contact our subject matter and regulatory experts at info@assentcompliance.com.