Editor’s
note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of
European and International Human Rights Law at Leiden University in the
Netherlands. Prior to commencing the LLM, she worked as a business and human
rights solicitor in Australia where she specialised in promoting business
respect for human rights through engagement with policy, law and practice.
The UNGPs second pillar, the corporate
respect for human rights, is built around the concept of human rights due
diligence (HRDD). Since 2011, following the resounding endorsement of the UNGPs
by the Human Rights Council, it has become clear that HRDD constitutes a
complex ecology of diverse practices tailored to the specific context of a
particular business. The UNGPs are not legally binding and there is no
institutional mechanism in place to control how they are to be translated into
practice by the companies that purport to endorse them. Nonetheless, numerous
companies and regulatory schemes have embraced the idea of HRDD (such as the
OECD Guidelines, the French law on the devoir
de vigilance, the UK and Australian modern slavery laws and the Dutch
Agreement on Sustainable Garment and Textile).
The operationalisation of HRDD has been
shaped over the past 8.5 years by a variety of actors, including international
organisations, consultancies and audit firms, as well as non-governmental
organisations. These actors have conducted research and developed various
methodologies, instruments and tools to define what HRDD is and what it entails
in order to assist or influence businesses in its operationalisation. The
interpretation of the requirements imposed by HRDD process outlined in the
UNGPs is open to a variety of potentially contradictory interpretations. This
pluralism is well illustrated by the diversity of actors involved in an ongoing
struggle to define its scope and implications.
This second blog of a series of articles
dedicated to HRDD looks at it through the lens of the most influential players shaping
HRDD in practice by examining their various perspectives and contributions to
the concept. Case studies will then be undertaken to look at how HRDD has materialised
in practice in specific companies. To wrap up the series, a final piece will
reflect on the effectiveness of the turn to HRDD to strengthen respect for
human rights by businesses.
The
UN’s Authoritative Contributions to the Meaning of HRDD
The OHCHR’s Interpretive Guide to the HRDD
Acknowledging that the immediate challenge
of the UNGPs is effective implementation, the Office of the High Commissioner
of Human Rights (OHCHR) released The
Corporate Responsibility to Respect Human Rights: An Interpretive Guide (OHCHR
Guide). It seeks to provide additional background explanation to the corporate
responsibility to respect human rights in order to support a full understanding
of their meaning and intent. It is thereby clear that the OHCHR recognises that
the UNGPs require clarification in order to be properly implemented by
business. While the OHCHR Guide states that it does not intend to change or add
to the UNGPs, or to provide operational guidance on implementing the respect
for human rights by business in practice, it does in fact contribute to the
practical operation and reach of HRDD. It attempts to narrow down the meaning
of open-ended aspects of the UNGPs and provide context and explanations of
concepts and ideas referred to in the UNGPs that require further clarification.
The OHCHR Guide takes the approach of
answering a series of questions that are likely to be asked by a range of
stakeholders, including business, on a principle-by-principle basis. It
provides guidance on the concept of HRDD in and of itself, as well as on each
step of the HRDD process. Therefore, it seeks to answer the questions of how,
when, what with respect to HRDD and the process it entails, which is missing in
the UNGPs themselves, in an attempt to guide business in implementing corporate
respect for human rights. Notably, the OHCHR Guide defines HRDD in the context
of the UNGPs as ‘an ongoing management process that a reasonable and prudent
enterprise needs to undertake, in the light of its circumstances (including
sector, operating context, size and similar factors) to meet its responsibility
to respect human rights’. Prior to this, the meaning of the concept had never
been clearly set out. Importantly, it discusses why HRDD actually matters,
namely, to assist businesses to identify the human rights risks specific to
their business at a point in time and the actions they need to take to prevent
and mitigate them.
The work of the UN Working Group on the
issue of human rights and transnational corporations and other business
enterprises
The UN Working Group on the issue of human
rights and transnational corporations and other business enterprises (Working
Group) has contributed to the practice of HRDD by examining the challenges and
success stories of businesses in order to ‘contribute to faster progress’ in
the realisation of HRDD. The Working Group was established shortly after the
UNGPs were endorsed. It has a broad mandate,
which includes promoting the effective and comprehensive dissemination and implementation of the UNGPs;
identifying, exchanging and promoting good practices and lessons learned on the
implementation of the UNGPs; and providing support for efforts to promote capacity-building and the use of
the UNGPs.
Last year in its report
to the General Assembly on the ‘emerging practice and innovations of corporate
human rights due diligence across sectors’, the Working Group acknowledged that
there are gaps and challenges in current business HRDD practice. In doing so,
the Working Group has entered into the interpretative fray and clearly aimed at
influencing the scope and depth of HRDD. For example, the Working Group argues
that businesses don’t properly understand HRDD in many cases resulting in
issues such as the misconstruction of risk and human rights impact assessments
becoming a tick box exercise. Further, it identifies that there is generally
weak performance with respect to the ‘taking action’ and ‘tracking performance’
aspects of HRDD, and considers that businesses are failing to make the
requisite link between HRDD and the remediation of actual human rights impacts.
While the Working Group has not provided a
tool per se to assist business to implement HRDD, it usefully compiled a set of
cross-cutting aspects of good practice demonstrated by business that can be
applied by all businesses regardless of their specific context. Through setting
out what it deems to be ‘good practice’ with respect to HRDD, the Working Group
has attempted to shape expectations of business under HRDD. As a result,
businesses can learn from the actions taken by other businesses that are
regarded as successfully implementing aspects of the HRDD concept and its
process.
The Working Group emphasises the importance
of stakeholder engagement with critical voices, those directly affected by
human rights impacts and NGOs during all stages of HRDD and providing greater
transparency and meaningful reporting. The Working Group also highlights the
importance of extending HRDD beyond tier one suppliers to all suppliers in a
business’ value chain and building and exercising leverage by conveying that
the business will prevent and address human rights impacts across business
relationships wherever they arise. Further, the Working Group encourages
businesses to address systemic human rights issues by building collective
leverage to address the root causes of those issues.
The
OECD’s Contribution
The OECD is a powerful norm-entrepreneur in
the struggle to define HRDD. It has played a very productive role in it,
creating a number of guidance documents regarding various aspects of the concept.
The OECD has incorporated HRDD into the OECD Guidelines for
Multinational Enterprises, one of its greatest contributions has been to
devise sectoral solutions to issues that arise when businesses conduct HRDD in
particular industries.
The 2011 revision of the OECD Guidelines
resulted in ‘risk-based due diligence’ being incorporated as a key tool for
identifying, preventing and mitigating actual and potential adverse impacts in
the areas covered by the Guidelines. The provisions of the OECD Guidelines that
address HRDD align with the process set out in the UNGPs. It is significant
that HRDD has been included in the OECD Guidelines, as all governments adhering
to them are required to establish a National Contact Point, which is, inter alia,
a grievance mechanism that resolves matters relating to the non-observance of
the OECD Guidelines. As such, it is likely that a sort of non-binding
‘jurisprudence’ will emerge from the workings of National Contact Points on
what HRDD entails from the perspective of the OECD and the related expectations
on businesses.
Last year the OECD released Due
Diligence Guidance for Responsible Business Conduct (OECD Guidance). The OECD
Guidance provides practical support
to enterprises on the implementation of the OECD Guidelines. The Guidance
provides a practical tool for business (rather than theoretical one) focusing
on the concrete actions for business to take to align with international HRDD
standards (including the UNGPs and OECD Guidelines) and operationalise HRDD.
Illustrative examples are provided on how each of the steps in the HRDD process
can be approached and carried out.
The OECD has also published a number of
other due diligence guidance documents targeting HRDD in the context of
particular sectors and operational contexts. Some examples include the OECD Due Diligence Guidance for Responsible
Supply Chains in the Garment and Footwear Sector, the OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and the OECD Due Diligence Guidance for Meaningful
Stakeholder Engagement in the Extractive Sector. The purpose of these materials is to
provide businesses with the tools to implement the due diligence
recommendations in the Guidelines in their particular sector, having regard to
the sector-specific complexities and challenges that may arise during that
process. Therefore, the OECD acknowledges that HRDD is not a straightforward
process and different intricacies can arise in implementing the concept based
on the industry in which a particular business operates, requiring the process to
be tailored to each business.
The role of other actors in the struggle to
define HRDD
Shift
and Ruggie’s Legacy
Shift, a global
consultancy organisation, was created by those who worked closely with Ruggie
during his mandate as Special Representative on the
issue of human rights and transnational corporations and other business
enterprises to establish the UNGPs. The founders of Shift recognised that into
order to put the UNGPs into practice, governments, businesses, investors and
NGOs needed to take action and a new paradigm needed to be created so that
business could be done upon the three pillars of the UNGPs. Shift places a great focus on
assisting companies on putting the UNGPs into practice by assisting them to
report on their business and human rights practices. It has zeroed in on
reporting the UNGPs because it believes that it can be ‘a very powerful driver
of improved management’.
Shift
together with Mazars, an audit, accounting and consulting group, created the UN Guiding Principles Reporting Framework (Reporting Framework) as a tool to
assist businesses to report on human rights issues so that they can align themselves
with the UNGP’s responsibility to respect human rights. The Reporting Framework
seeks fill the gap between principle and practice through providing a:
global and widely accepted process for companies to
demonstrate whether their policies and processes are indeed aligned with the UN
Guiding Principles and therefore capable of meeting their responsibility to
respect human rights.
The
implementation guidance aspect of the Reporting Framework provides a series of
questions for companies to self-evaluate their actions in order to ‘know and
show’ that it is meeting its responsibility to respect
human rights in practice. It provides guidance on how to respond
to the questions with relevant and meaningful information. The disclosures of
147 companies under Reporting Framework have been recorded in a database since it was published in 2015,
including the likes of Rio Tinto, Unilever, Google and Apple. However, the tool
has not necessarily been used by businesses in consecutive years. For example,
Rio Tinto has not used the tool since 2016 and Unilever since 2015. Consistency
in use of any tool is critical to being able to track a company’s performance
in implementing the UNGPs over time. Using the recorded information, Shift has
identified various trends and insights on business disclosure.
Shift has
also partnered with the Global Compact Network Netherlands and Oxfam to release
a guidance tool for companies named ‘Doing business with respect for
human rights’
(Guide). The Guide is intended to equip businesses with practical advice and
real-life examples that assist with translating the principles set out in the
UNGPs into concrete action. With respect each of the core elements of the
UNGPs, a series of guidance points are provided so these concepts can be put
into practice, along with examples so that companies can learn from practice.
Common pitfalls generally experienced by companies are also outlined to assist
businesses from falling into these ‘traps’. Interestingly, the Guide was the
result of workshops held in Indonesia, Mexico, South
Africa and Turkey which brought together civil society stakeholders and
businesses for ‘frank sharing of perspectives, challenges and ways forward on
ensuring greater business respect for human rights’. As a result, the Guide
draws upon these different perspectives and draws on learnings from various
practical experiences.
Shift has
also provided practical strategies for business in
conducting HRDD in high risk circumstances (Shift Guidance). In doing so, it
has recognised that certain businesses will face high risks as a result of factors
in the broader operational context (e.g. corruption), business relationships,
business activities and the presence of vulnerable groups. The Shift Guidance provides
a tool to identify a business’ highest risks (i.e. considering the relative
weight of risk factors, the presence of meta indicators and the capacity of the
business’ management systems), setting out a series of questions for businesses
to ask themselves. It also emphasises the importance of engaging both internal
and external stakeholders.
Multistakeholder
Organisations and HRDD: The Ethical Trading Initiative
The Ethical
Trading Initiative (ETI), an alliance of companies,
trade unions and NGOs, has also made its own contribution
to the concept of HRDD. ETI focuses on promoting respect for workers’ rights
globally. ETI has developed its own HRDD Framework (ETI Framework) to help companies
meet the corporate responsibility to protect in the labour rights context by
preventing and managing labour rights risks that arise in supply chains. The
ETI Framework aligns with the ETI’s Base Code, which is a set of
internationally recognised labour standards derived from the ILO Conventions
and includes, for example, ensuring living wages are paid and working hours are
not excessive. It also focuses on workers with the greatest risk of human
rights abuses such as children, women and migrant workers.
The focus of
the ETI Framework on workers’ rights is clearly evidenced through the stated action
items that companies should take in order to satisfy each step. For example,
with respect to assessing actual and potential human rights risks, businesses should
identify risks to workers by sector, nature of work,
type of worker, employment relationships and labour market dynamics and assess
workers’ ability to access rights to freedom of association and collective
bargaining. While it is
clear that the ETI Framework is based on the HRDD process articulated in the
UNGPs, it also draws from the OECD due diligence tools and the Reporting
Framework discussed above. Accordingly, it is aimed at complementing these frameworks,
rather than replacing them.
ETI Norway
has also released ‘A Guide to Human Rights Due
Diligence in Global Supply Chains’ (ETI Guide) to assist companies to
operationalise HRDD in order to improve working conditions in supply chains.
While the ETI Guide is intended to strengthen the role of Norwegian companies
in achieving sustainable business practice, it can be applied to companies
outside of Norway. The HRDD process outlined in the ETI Guide focuses on how to
prevent, mitigate and remedy negative impacts on people working in supply
chains, and the local communities in which they live and work, through adopting
a risk-based approach. It acknowledges that HRDD needs to account for all
players throughout all stages of a supply chain. Success factors for each of
these steps are provided to guide businesses on what satisfaction of each step
looks like, along with illustrative case studies of Norwegian companies that
have successfully carried out HRDD.
Conclusion
HRDD is complex and its practice is being
shaped by actors through the development of a variety of overlapping but
multifarious administrative tools, reports, guidance documents and guidelines.
What is clear is that there are a multiplicity of players weighing in on what exactly
HRDD is, what it entails and how it should be implemented and practiced by
business. Each of these players has different legitimacies and interests that have
influenced their contribution to HRDD – for example the ETI’s contribution to
HRDD is mainly focused on workers rights in the labour context.
It is clear that the UNGPs marked the end
of the beginning to stopping corporate abuse of human rights. With respect to
HRDD, the definition of its practical scope is still subject to ongoing
interpretative struggle, with the resulting consequence being that there is a
degree of uncertainty as to how businesses should operationalise HRDD.
Accordingly, its meaning and impact can be properly understood only in the context of its concrete
use, requiring specific case studies of business practice to be examined. The
next blogs in this series will carefully examine the practices of businesses
that have implemented HRDD in order to understand what HRDD actually does in
practice.