Companies have a responsibility to respect human rights, and human rights due diligence (HRDD) is now widely recognized as an efficient way to put this principle into practice.
Human Rights Due Diligence
HRDD is generally understood as a means by which companies can identify, prevent, mitigate and account for the negative human rights impacts of their activities or those linked to their business relationships. These business relationships often involve subsidiaries, subcontractors, suppliers and a variety of economic transactions.
Passing laws requiring European companies to implement due diligence would have multiple benefits, including improving companies’ risks assessment and management, helping state authorities meet their duty to protect human rights, and improving access to justice for victims of corporate abuse, in and outside Europe.
State of play / EU activity
The United Nations Guiding Principles on Business and Human Rights (UNGPs) enshrined HRDD as the operational principle to put the companies’ responsibility to respect human rights into practice. The concept of due diligence is also a well-known risk management tool for business enterprises and financial institutions. In fact, due diligence was recognized as a set of useful practical steps to address companies’ human rights and environmental impacts and promote responsible business behaviour, long before the adoption of the UNGPs. HRDD has also been included in international standards such as the OECD Guidelines, the Global Compact, the Global Reporting Initiative, etc.
Although HRDD as such is not currently a legal obligation for companies, due diligence or some of its elements (reporting, impacts assessment, etc.) are already incorporated into national and international legal frameworks. Governments make use of due diligence when asking companies to comply with already established legal principles in areas analogous or directly relevant to human rights, such as labour rights, environmental and consumer protection, or the fight against corruption.
Some States go one step further by directly embedding human rights due diligence into law. One example is the French devoir du vigilance bill (the due of vigilance bill), recently adopted by the French National Assembly. The law will oblige companies to design and put in place a “vigilance plan” to prevent the negative human rights impacts of their activities, both at home and abroad. Another example of this trend towards corporate due diligence regulation in Europe is the Transparency in Supply Chains Clause from the 2015 UK Modern Slavery Act. The provision requires business domiciled or making business in UK to report on the measures they take to prevent slavery or human trafficking from taking place in their supply chains.
EU law also contains different legislative tools embedding elements of due diligence in the aforementioned areas (labour, environment, consumer and anti-corruption). It has taken important steps towards the development of corporate human rights due diligence, for instance with the adoption of the EU Timber Regulation (creating due diligence obligations for timber importers) and the Non-Financial Reporting Directive (setting companies’ disclosure obligations on human rights risks and measures).
Unfortunately, the EU and its Member States are yet to establish an obligation for European companies to prevent or respond for adverse human rights impacts of their operations outside the EU. Some on-going processes like the negotiations to adopt a Conflict Minerals Regulation represent important opportunities to listen to civil society calls for increased corporate accountability, and to make business enterprises meet international human rights law standards.
The current developments inside and outside the EU (US Dodd-Frank act, for instance) create a unique momentum for EU institutions to honour their human rights commitments.
Corporate responsibility to respect human rights
State duty to protect human rights
- Corporate accountability
- Responsible supply chains
- Duty of care
- Risk management
- UN Guiding Principle on Business and Human Rights