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UN Working Group’s report on human rights due diligence makes essential reading for business

Posted: 21/11/2018

The unanimous endorsement by the Human Rights Council of the Guiding principles on business and human rights: implementing the United Nations ‘protect, respect and remedy’ framework was groundbreaking. It created a globally recognised structure for the respective duties and responsibilities of governments and business enterprises. The Guiding principles have since become a common reference point for all business and human rights stakeholders.

While recalling that businesses have an independent responsibility to respect human rights and in order to do so they are required to exercise human rights due diligence, the recent UN Working Group’s report on human rights due diligence has highlighted a number of good practices that deserve more consideration. These include:

Stakeholder engagement - which involves engaging, in good faith, with critical voices, such as trade union representatives, that raise concerns about potential and actual human rights problems. Consulting directly with affected workers provides the best way to identify and understand what actions are needed to remedy such concerns.

Transparency and meaningful reporting - perceived legal risks have played a significant role in creating reluctance to disclose information about human rights risks and mitigation efforts. However, good practices are emerging, spurred by benchmarking initiatives, investor pressure, legal developments and a wider trend towards transparency in corporate responsibility. This accords with the key findings of advisory firm Ergon Associates from its most recent analysis of UK modern slavery statements. Its report found that only 54% of companies analysed in April 2017 produced an updated statement, of which a significant minority (42%) made no changes or only minimal changes, which is particularly disappointing when one considers the context. For leading companies, Ergon reports that the UK Modern Slavery Act’s transparency requirement has underlined and strengthened existing programmes and activities.

Going beyond tier one of a supply chain - managing the risks to and impacts on human rights in supply chains is complex. One approach for going beyond tier one involves ‘cascading’ requirements down to the suppliers of suppliers, which may be most effective when incentives are applied, with constructive engagement and support for good practices such as risk assessments, audits, training and capacity-building, and the establishment of grievance mechanisms.

Building and exercising leverage - it can be very effective to be clear about the possibility of termination of relationships upfront when entering into new business relationships if adverse impacts on human rights are identified and left unaddressed. As with other business decisions, exercising human rights due diligence on potential termination is another critical aspect of emerging good practice.

The UN Working Group’s report confirms that these types of practices should be backed up by appropriate policies. It identifies that the critical change required is for businesses to integrate into their operations a ‘human rights lens’ that considers both the potential and actual adverse impacts on people, with the goal of preventing and addressing these impacts. This conclusion is reinforced by the fact that emerging legislation in other countries serves to keep the subject higher up corporate agendas.

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