Al Jazeera writes: Rights groups have called on car manufacturers to do more to address abuses in their aluminium supply chains, including the destruction of farmland, damage to water sources and excessive greenhouse gas emissions that affect communities in Africa, Asia and South America.
Shifts in geopolitical power and the rise of authoritarianism are disrupting the dynamics for making progress on human rights globally.
At the same time, the relevance of the global human rights framework is being called into question by some of our most acute social challenges – rapidly evolving technology, deepening inequality and the climate crisis.
Chatham House’s Human Rights Pathways project is exploring how alliances, strategies and institutions are adapting, and will need to evolve, to strengthen human rights protection in this increasingly contested and complex global environment.
At this panel event speakers reflect on some of the key themes that will influence the future of human rights, including the long-term impacts of the pandemic, the place of human rights diplomacy in the new geopolitics, the relevance of human rights to social movements, and the potential of human rights law to galvanise efforts on urgent challenges such as the climate crisis.
Ghida Anani, Founder and Director, ABAAD Resource Center for Gender Equality
Agnès Callamard, Secretary-General, Amnesty International
Michael O’Flaherty, Director, EU Agency for Fundamental Rights
César Rodríguez-Garavito, Director, Center for Human Rights and Global Justice, New York University School of Law
Chair: Renata Dwan, Deputy Director, Chatham House
The United Nations formally recognized a decade ago that businesses have a responsibility to respect human rights. It was a groundbreaking development. 10 years later, it’s clear that it was only a first step: we need laws that enforce companies’ duty to protect workers and communities from abuse and hold them accountable if they don’t.
Young people have always been drivers of social and economic reform, and today’s global youth population is more numerous and interconnected than ever before. While they have been at the forefront of civic rights movements in recent years, young people are largely excluded from discussions around human rights norms and how to monitor their protection and defence.
• Business is increasingly keen to be seen to be doing due diligence on ESG.
• The ‘affected stakeholder’ concept is a key way of identifying those most impacted by corporate actions.
• This year’s Global Future Council on Human Rights aims to give insight on corporate actions regarding the living wage and human rights defenders.
In this age of emerging ESG priorities for business, one essential question is how those with the legal and financial responsibility for running a company (i.e. the board members) engage directly with those upon whom their company’s actions have the greatest impact (i.e. the affected stakeholders)? Anyone who has read one of the many fables about elephants and mice will know that it is in the elephant’s own self-interest not to ignore its impacts upon the most vulnerable.
There is a growing expectation that this be the case in business, but very few concrete examples of how it might be done in practice. Company boards like to be seen as responding to #MeToo, Black Lives Matter or LGBTI issues once they have become societal expectations. But what can be done proactively to ensure that boards are truly engaging with the people directly or indirectly impacted by their business?
All too often it is those marginalized due to gender, ethnicity, sexual orientation, age, disability, religion, socio-economic class or other factors that are under-represented in the power structures of business – yet these very groups are the ones most vulnerable to the decisions taken there. Remedying this is more than a box-ticking exercise or just the appearance of individuals in the boardroom: it is about ensuring that the knowledge of human rights risks is adequately understood, and that the board has the experience, skills and independence to act upon this.
Recent corporate lapses, such as the destruction of a 46,000 year-old sacred Aboriginal site in Australia or the tailings dam failures in Brazil, show the importance of fully implementing such knowledge. A recent report on 103 companies complying with France’s mandatory due diligence law informs us that such reports were only reviewed at executive committee or board level in 20% of cases. Human rights due diligence must be a strategic issue for any company and an issue of board oversight; we are hoping that this will be reflected in forthcoming legislative proposals from the European Union as well as in national laws. We also note the proposals for mandatory board-level diversity disclosures in the US.
But company directors around the world who feel they must lead on ESG issues should not be waiting to be pushed. There is leadership advantage now in asking one question: “How does my board engage with the very people that are most vulnerable to our mistakes, but also most likely to benefit from us performing better on these issues?”
One of the main critiques of stakeholder capitalism is identifying who precisely is a stakeholder of a company and who is not. The term “stakeholder” is often so broadly defined that it could almost include anybody. However, framing the concept around “affected stakeholders”, particularly those most vulnerable to a company’s actions and inactions, provides a clearer lens. This is the approach set out in the UN Guiding Principles on Business and Human Rights, which understands affected stakeholders to be those most impacted by a company’s operations, most often workers, community members or consumers, sometimes human rights defenders. Some organizations represent these parties (such as trade unions, representative NGOs or community-based organizations), but they are not in themselves affected stakeholders. Hopefully this guiding principle will be chosen by the European Union and others in terms of mandatory due diligence requirements with board-level oversight.
This year the World Economic Forum’s Global Future Council on Human Rights, which we co-chair, is focused precisely on the question of how to identify and engage with those most affected. We have agreed to take two very different human rights issues – living wage in the supply chain and the protection of human rights defenders – and bring affected stakeholders into a direct dialogue with company directors from different business sectors.
These two encounters will be very different. On the living wage, we will be joined by directors whose companies have recently made supply chain commitments, or are considering the possibility, to hear from workers, not necessarily in their own supply chain, about why those in power must make this a central concern in how companies maintain business relations. It might be a difficult conversation, but it won’t be an abstract one. The same in relation to human rights defenders, often seen as the canary in the coalmine for the health of a company’s operating environment: Are stakeholders free to express their concerns and are businesses and government officials ready to listen and be held accountable for their actions?
We hope that these two encounters will generate some firm insights for both the board directors and the affected stakeholders. But the main aim is for all those involved to share their experiences in a report we will publish in September this year for board directors anywhere in the world to read. We hope this will show how boards can engage directly with affected stakeholders and the kinds of insights that can flow from this. We hope also to inform regulators how best they might shape board requirements in law. This must be more than compliance assessments, auditing or due diligence reports; it needs to be an active component of how boards are structured and how they conduct their business.
To mark the 10th anniversary of the UN Guiding Principles on Business and Human Rights (UN Guiding Principles) on June 16, 2021, Secretary of State Tony Blinken announced that the United States would update its National Action Plan (NAP) on Responsible Business Conduct.
NAPs are a tool, encouraged by the UN Human Rights Council, that support the implementation of the UN Guiding Principles and demonstrate a state’s commitment to protecting human rights as they relate to business activities; more than two dozen countries have produced a NAP in the decade since the UN Guiding Principles were adopted. The original U.S. NAP was published in December 2016.
Q1: What happened with the last U.S. NAP, and why is the United States updating it?
A2: The Obama administration announced its intent to develop a NAP in September 2014. The National Security Council (NSC) led an interagency process to agree on its text and commitments that involved at least 16 U.S. departments and agencies, from the Departments of State, Commerce, and Treasury, to the U.S. Agency for International Development, the office of the U.S. Trade Representative, and the Environmental Protection Agency. The final NAP was released in December 2016, just weeks before the end of the administration.
Under the Trump administration, some components of the NAP, such as the commitment by Customs and Border Protection to enforce the prohibition on entry of goods made with forced labor, continued to be implemented. Momentum around the monitoring and implementation of the NAP as a whole, however, was not a policy priority for the NSC.
Launching a new NAP process at the beginning of an administration provides an opportunity for the administration to lay out a comprehensive vision for how it expects to engage with companies and regulate business impacts on human rights—from ending forced labor in supply chains to preventing the use of technology to surveil and attack human rights activists. At its best, a NAP can be a vehicle for new government commitments to leverage its influence to prevent and remedy abuses and a signal to business that it takes these issues seriously. In Germany, for example, the government committed through its NAP process to consider adopting legislation mandating that large German companies undertake human rights due diligence if an assessment found that fewer than 50 percent of such companies were doing so. When two successive surveys found that fewer than a quarter of companies were carrying out adequate due diligence, the German government moved forward with mandatory legislation that was adopted by its parliament on June 11, 2021.
Many countries’ NAPs have been criticized for setting a low bar—calling only for voluntary efforts by business and promising no new concrete action by government. The first U.S. NAP received mixed reviews in this regard. Commitments to leverage U.S. government procurement power by prohibiting agencies from contracting with companies that do not exercise human rights due diligence and the tightening of rules to prevent goods made with forced labor from entering the United States were welcomed by activists and business. But many organizations felt the majority of the NAP simply referenced existing U.S. government activities rather than break new ground or present a vision for the future; they also criticized the NAP development process for not being sufficiently transparent. The Biden administration has a chance to address these shortcomings in a new process.
Q2: What can we expect from this NAP process?
A2: This week’s announcement left open at least four big questions about the updated NAP:
What is the starting point? The first NAP process was criticized for not starting with a comprehensive national baseline assessment of existing governance gaps related to business and human rights in the United States. Given the scale of impact of U.S. business around the world, it is not surprising that the government was reluctant to attempt a comprehensive review—one that could itself take years. Nevertheless, the uneven implementation of the current NAP over the last five years raises the question of if, and how, the government will take stock of its current commitments before adopting new ones.
What will the scope be? The first U.S. NAP explicitly focused on the conduct of U.S. businesses overseas; the human rights impacts of companies operating in the United States were considered outside the scope of the exercise. The fact that this is described as an “update” rather than a “second” NAP, and that the Department of State will lead the process rather than the NSC, suggests the same will be true now. Nevertheless, given President Biden’s “foreign policy for the middle class” and his prominent efforts to promote domestic labor rights and end the use of private prisons, among other domestic human rights-related initiatives, there may be more pressure on the administration to broaden the scope. This opens the door to participation by far more U.S. government departments and agencies and would certainly require strong engagement by the NSC and the Domestic Policy Council to wrangle potentially reluctant participants. A domestically focused NAP, however, would be a powerful example for other governments considering human rights-related regulations for business and demonstrate the U.S. government’s seriousness on this issue.
How will external stakeholders be involved? During the first NAP process, the administration did some outreach to civil society organizations, primarily in the United States. It held four in-person roundtables in California, New York, Oklahoma, and Washington, D.C., and created an email address for outside groups to submit their recommendations. Outreach to stakeholders overseas, however, was limited—particularly to individuals and communities directly affected by the practices of U.S. companies. There was also no opportunity for outside stakeholders to comment on a draft of the NAP—no doubt due to time constraints—rather, the administration published its finalized NAP without soliciting outside comments or providing feedback on the recommendations it had received. Launching this process at the beginning of the administration rather than close to the end, and the widespread use of videoconferencing, should facilitate a much broader consultation process this time around.
Will it include or call for mandatory business action? Many NAPs, including the U.S. NAP, have been criticized for focusing on encouraging voluntary steps by companies, even while many governments have moved toward mandating company action on human rights. In 2017, France passed the Duty of Vigilance law requiring large companies to assess their human rights risks and prevent abuses in their operations and supply chains; a failure to do so opens the company to civil liability. As noted above, Germany is in the process of adopting broadly similar legislation, while the European Commission has pledged to adopt mandatory due diligence rules across the European Union in 2021. There will no doubt be pressure on the administration to commit to binding rules on companies as part of their broad approach to managing business impacts on human rights in the NAP process.
Q3: What else is the U.S. government doing on this issue?
A3: While the NAP announcement was the biggest headline from the Department of State’s UN Guiding Principles anniversary statement, it included other important references. Most notably, the statement called on technology companies in particular to “establish guardrails” against misuse of their products, building on the department’s 2020 guidance on the export of surveillance technology—a topic that will continue to be a focus of both the administration and civil society. It also emphasized the role that private investors and multilateral development banks play in influencing company behavior—two groups that have faced relatively little scrutiny up to now but are expected to play an increasingly important role in defining the boundaries of responsible business conduct. Looking forward, in the run-up to the administration’s Summit for Democracy, where the impact of business activities on civic freedoms and human rights generally will be scrutinized, these and other issues make sense to be at the forefront of the administration’s human rights efforts.
Marti Flacks is a senior fellow and director of the Human Rights Initiative at the Center for Strategic and International Studies in Washington, D.C.
“It is regrettable that politics is trying to achieve a good goal with a badly made law,” said BDI CEO Joachim Lang, who expects companies will now incur “incalculable risks”, pointing to the “disproportionately high” sanctions as a major problem. EPA-EFE/Maja Hitij / POOL [Maja Hitij]
The German Bundestag has adopted a law that will force companies to respect human rights in their supply chains, despite opposition from some political parties and industry. EURACTIV Germany reports.
“We cannot build our prosperity permanently on the exploitation of people, so this law is an important step,” Labour Minister Hubertus Heil said as the Due Diligence in Supply Chains Law – whose aim is to stop human rights abuses by suppliers of German companies – was adopted on Friday (11 June).
Development Minister Gerd Müller referred to it as an “important step towards enforcing standards in global supply chains” while SPD MP Bärbel Kofler called it a “paradigm shift.”
Companies will have to analyse human rights risks throughout their supply chain, take preventive and corrective measures, and set up complaints mechanisms and report on their activities at regular intervals, the new law states.
According to the text, companies will also be obliged to comply with environmental due diligence standards, especially with regards to the avoidance of harmful chemicals in global production processes.
However, the new law will only apply to large companies.
“We have been careful to find a balanced solution for business. The Due Diligence Act will not impose an immediate additional burden on our small and medium-sized enterprises,” the government’s representative for SMEs, Thomas Bareiß, told EURACTIV Germany.
”The law only applies to larger companies and branches of foreign companies with 3,000 or more employees, or later with 1,000 or more employees. It is not possible to pass on the due diligence obligations to small and medium-sized enterprises,” Bareiß added.
Failure to comply with the legal obligations can result in severe penalties.
Companies will have to implement the law’s requirements with regard to their direct suppliers, though indirect suppliers will also be covered if the German companies become aware of their human rights violations.
However, the law was fiercely criticised by the opposition, especially by the far-right AfD and economically liberal FDP. “This is a law that only the competition is happy about,” said AfD parliamentarian René Springer.
According to FDP lawmaker Karl Julius Cronenberg, the law would hold the business community too “responsible”. “The milestone is becoming a millstone,” Cronenberg quipped, referring to high bureaucratic requirements businesses will have to deal with.
An increase in bureaucracy is also a concern for companies, a representative survey by the Leibniz Institute for Economic Research (ifo) showed.
“Particularly in industry, 43% of the participating companies say they expect negative effects from an increase in bureaucracy or documentation, followed by wholesale trade,” Lisandra Flach of the ifo Centre summarised.
The Federation of German Industries (BDI) also criticised the law.
“It is regrettable that politics is trying to achieve a good goal with a badly made law,” said BDI CEO Joachim Lang, who pointed to the “disproportionately high” sanctions as a major problem.
Partial success for civil society
In contrast, the Left and the Greens criticised the law for not going far enough.
Eva Maria Schreier of the Left parliamentary group complained the bill is now only “a pale shadow of what it originally was and what it could have been.”
The exclusion of civil liability, removed from the draft last-minute, is a big sticking point for the Greens and the Left.
Civil society had mixed reactions.
The law had been “weakened in numerous places under pressure from business lobbyists,” said Johanna Kusch, coordinator of the civil society alliance “Initiative Supply Chain Act”.
Oxfam’s business and human rights expert, Franziska Humbert, called it a “success” for human rights but also a “minimal solution, a supply chain law light”.
Cornelia Heydenreich, head of the corporate responsibility team at Germanwatch, said the law was “still weak in crucial places,” but overall, it represented a “paradigm shift for Germany”.
The European Commission hopes to present in autumn legislation addressing human rights issues in supply chains, similar to the new German law.
“Today we are passing the toughest supply chain law in the world” and this could also be the basis for a European supply chain law, stressed SPD MEP Bernd Rützel. CDU MEP Hermann Gröhe also saw the law as “a good blueprint for the EU”.
However, some EU lawmakers expressed caution about the German initiative.
“A supply chain law only makes sense at the European level,” said Renew Europe MEP Svenja Hahn. She warned that unilateral national moves could lead to “a different framework for German companies on the EU’s single market.”
“The German government should rather have supported the joint European effort, which would apply to all companies operating on the single market and should make it easier for them to safeguard human rights along their supply chains,” Hahn told EURACTIV.
The United States government’s decision to “reengage” with the Geneva-based United Nations Human Rights Council is a big step toward the multilateral support for human rights that President Joe Biden promised in his major foreign policy speech.