The UN Guiding Principles on Business and Human Rights (UNGPs), Guiding Principle 17, states that:
“In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.”
The four elements of a due diligence process (Assessing actual and potential human rights impacts (Guiding Principle 18), Integrating and acting upon the findings (Guiding Principle 19), Tracking responses (Guiding Principle 20), Communicating how impacts are addressed (Guiding Principle 21)) are explored in depth in the UNGPs and the associated Commentary.
As well as measures which businesses should take, Guiding Principle 3, provides that states should “(p)rovide effective guidance to business enterprises on how to respect human rights throughout their operations”, with the Commentary noting that such advice should be provided on human rights due diligence and “should indicate expected outcomes and help share best practices”.
The Gender Guidance to the UNGPs, developed by the UN Working Group on Business and Human Rights, makes a number of recommendations surrounding gender sensitive human rights due diligence. Some of the more significant statements include the recommendation that “States should integrate a gender perspective in mandatory human rights due diligence laws, including those concerning modern slavery and transparency in supply chains” as commentary to Principle 1; the suggested action that “State should require all State-owned or State-controlled business enterprises to follow the gender framework and guidance in conducting human rights due diligence and in collecting sex-disaggregated data” as commentary to Principle 4; and the guidance that “business enterprises should explicitly integrate a gender perspective in carrying out all steps of human rights due diligence as per the Guiding Principles,” as guidance to Principle 17. In the same document, the Working Group recommends that States apply the gender framework and guidance in developing or revising all initiatives and measures, including national action plans on business and human rights, aimed at implementing the Guiding Principles.+ Read more
DIHR’s paper on responsible business conduct as a cornerstone of the 2030 Agenda examines the value of human rights due diligence in this context. It is important to highlight that given the inter-relationship between many SDGs, business strategies that aim to contribute to the realisation of only certain SDGs are not a substitute for human rights due diligence. Without a clear understanding of how a company’s operations may affect human rights, there is a risk of failing to adequately address the overarching aim of the 2030 Agenda to “realise human rights of all”. However, by using due diligence as a tool that addresses the root causes for human rights violations, a business can maximize its contribution to the SDGs and support an environment in which human rights are protected.
12) Responsible Consumption and Production
The Committee on Economic, Social and Cultural Rights in General Comment No. 24 on State Obligations under ICESCR in the Context of Business Activities assert that:
“The obligation to protect entails a positive duty to adopt a legal framework requiring business entities to exercise human rights due diligence in order to identify, prevent and mitigate the risks of violations of Covenant rights, to avoid such rights being abused, as well as to account for the negative impacts caused or contributed to by their decisions and operations and those of entities they control on the enjoyment of Covenant rights. States should adopt measures such as imposing due diligence requirements to prevent abuses of Covenant rights in a business entity’s supply chain and by subcontractors, suppliers, franchisees, or other business partners.”
General Comment No. 24 further states that in discharging their extraterritorial obligation to protect:
“States Parties should also require corporations to deploy their best efforts to ensure that entities whose conduct these corporations may influence, such as subsidiaries (including all business entities in which they have invested, whether registered under the State party’s laws or under the laws of another State) or business partners (including suppliers, franchisees or sub-contractors) respect Covenant rights. Corporations domiciled in the territory and/or jurisdiction of States Parties should be required to act with due diligence to identify, prevent and address abuses to Covenant rights by such subsidiaries and business partners, wherever they may be located. The Committee underlines that although the imposition of such due diligence obligations does have impacts on situations located outside these States’ national territories since potential violations of Covenant rights in global supply chains or in multinational groups of companies should be prevented or addressed, this does not imply the exercise of extraterritorial jurisdiction by the States concerned. Appropriate monitoring and accountability procedures must be put in place to ensure effective prevention and enforcement. Such procedures may include imposing a duty on companies to report on their policies and procedures to ensure respect for human rights and providing effective means of accountability and redress for abuses to Covenant rights.”
The due diligence guidance for responsible businesses conduct on how to conduct due diligence in accordance with the OECD Guidelines for Multinational Enterprises, and specific guidance in relation to sourcing of minerals from conflict affected and high-risk areas, the garment and footwear sector, and the financial sector. To assist businesses in their human rights due diligence processes, the UN Guiding Principles Reporting Framework, provides guidance to business on how to report on measures they have taken to respect human rights. The Corporate Human Rights Benchmark assesses large listed multinationals on their policies as well as on how they conduct human rights due diligence.
The report “Human Rights Due Diligence: The Role of States”, commissioned by ICAR, ECCJ and CNCA provides a good overview of the extent to which the legal systems of states already make use of due diligence to ensure that businesses respect established standards, as well as a description of a range of regulatory options States might use to take the next steps in ensuring businesses respect human rights,
State efforts to encourage due diligence stems from guidance to businesses to legal requirements. For example, the CSR Compass developed by the Danish Government, intends to help companies comply with international standards in the supply chain.
Some national legislatures have introduced their own forms of due diligence laws, including:
- The 2017 French law on the duty of vigilance imposes due diligence obligations on large French companies (with at least 5,000 employees) to prevent human rights abuses in their operations and throughout their supply chains. To track its effectiveness, the Duty of Vigilance Radar, was created by NGOs to identify companies covered by the law and analyse their vigilance measures.
- Other legislation encouraging due diligence includes the UK Modern Slavery Act 2015 which requires that businesses (with a turnover above £36m) prepare a slavery and human trafficking statement for each financial year.
- In 2018, the Australian Modern Slavery Act established a national reporting requirement on large businesses in the Australian market with annual revenue of at least 100 million Australian dollars. Relevant businesses need to report on risks of modern slavery in their operations and supply chains as well as to provide actions to address those risks.
- In May 2019, the Netherlands adopted the Child Labour Due Diligence Law which will enter into force in 2022 and will require companies to submit a statement to regulatory authorities declaring that they have carried out due diligence related to child labour in their full supply chains.
- In June 2019, the Government in Finland published a plan to adopt mandatory Human Rights Due Diligence (mHRDD) legislation at the national level. In the initial stages of the plan, the government will conduct a study to assess the mHRDD proposal. The study will be conducted with employers’ associations, entrepreneurs associations and employees organizations, taking into consideration the position of SMEs. Read the Government’s programme (in Finnish) here.
- In Switzerland, the counterproposal to the Swiss Responsible Business Initiative is anticipated to enter into force in 2022. Among other measures, the legislation will impose compulsory due diligence for supply chains on Swiss companies that provide services or products with suspected links to child labor. The SRBI will apply to companies with at least 500 employees and a balance sheet sum exceeding
CHF 20 million, or a turnover of CHF 40 million.
- In June 2021, the Norwegian Parliament adopted the Transparency Act. It will enter into force in July 2022, requiring U.S-based multinationals with operations in Norway to conduct human rights due diligence and publish an annual human rights statement. The companies concerned will at least have sales revenues of NOK 70 million, a balance sheet sum of NOK 35 million and at least 50 full-time employees.
- Similarly, the German Parliament passed the Act on Corporate Due Diligence in Supply Chains in 2021. Taking effect in 2023, it will initially cover companies with 3,000 or more employees, and from 2024 onwards companies with 1,000 or more employees.
In February 2022, the European Commission published a proposal for a the Corporate Sustainability Due Diligence Directive (CSDD). If adopted, the CSDD Directive would require companies in scope to identify and address their negative human rights and environmental impacts in line with key international frameworks including the UNGPs, OECD Guidelines and associated due diligence guidance. Companies would be required to conduct due diligence on their own operations, their subsidiaries and any entity with whom they have an “established business relationship”. The CSDD Directive would apply to large EU and non-EU companies and medium sized companies which operate in the following “high impact” sectors: textile, agricultural and extractive (DIHR).
In addition to actions taken to introduce mandatory due diligence obligations at the EU level through the CSDD, the European Commission has introduced a number of other initiatives which have the objective of encouraging responsible business conduct and respect for human rights by business, as well as contributions to sustainable development:
- The Sustainable Finance Disclosure Regulation (SFDR) was adopted in 2019 and became operative in March 2021. It aims to strengthen the disclosures of
the financial services sector that pertains to investments promoted as having sustainability as its objective or as having environmental, social or governance (ESG) characteristics. (DIHR).
- In July 2020, the Taxonomy Regulation entered into force, which provides a classification system of environmentally sustainable activities for investors by reference to six environmental objectives. For economic activities to be considered environmentally sustainable they need to contribute substantially to one or more of the six objectives, do no significant harm to the remaining objectives; and satisfy minimum safeguards including around human rights and governance matters (DIHR). The European Commission is currently discussing the potential for a Social Taxonomy document which would cover social impacts and set human rights standards when assessing economic activities.
- In April 2021 the European Commission published a proposal for a Corporate Sustainability Reporting Directive (CSRD), which would replace the existing Non-Financial Reporting Directive (NFRD) adopted in 2014. The proposal extends the scope of the Directive to include large companies and listed SMEs and will introduce a new set of EU sustainability reporting standards that all reporting companies will be required to use (DIHR). In March 2022, the CSRD proposal moved to the final stage of the legislative process.
- In November 2021, a proposal for a Deforestation Regulation was published, which would establish “mandatory due diligence rules for companies which want to place soy, beef, palm oil, wood, cocoa and coffee commodities, as well as derived products including leather, oil cakes and chocolate on the EU market” (DIHR).
- Following the State of the Union Address in September 2021, Ursula Von der Leyen announced that the European Commission will propose a legislative initiative aiming at prohibiting products that have been made using forced labor on the European Union market. This initiative will cover both domestic and imported products and combine a ban with an enforcement framework. A call for evidence has been issued by the European Commission between May and June 2022 to collect inputs on stakeholders’ views on the need for action and the envisaged initiative. The DIHR was able to provide their feedback, highlighting the utmost need to “ensure that any measure places the needs of rightsholders at the center and is coherent with other parallel regulatory developments.”
What National Action Plans say on Human rights due diligence
Action point 1
Develop a toolkit for companies and organizations on human rights
This point presents the action of developing, in collaboration with experts and its main human rights stakeholders and organizations, a toolbox that will help companies prevent human rights violations and promote the respect for human rights through their activities. This “Toolbox” will be composed of different elements including concrete tools for applying the principle of human rights due diligence.
Action point 15
Incorporate the principle of “due diligence” into the management of the company, also in the terms of human rights
This is the main action point on human rights due diligence. Concretely, the action will consist of contacting those responsible for the two Belgian corporate governance codes in order to examine the possibility of integrating international developments, in particular with regard to human rights, which will entail the attempt to minimize the administrative burden on public authorities or enterprises, but without impairing the application and implementation of ambitious criteria and controls. The integration of the ‘due diligence’ obligation for companies covered by the EU Directive 2014/95/EU concerning human rights in the instruments of corporate governance will allow for the creation of new business opportunities, as well as clarify the expectation of the plublic authority vis-à-vis compabies, in particular companies that do not yet have a comprehensive social responsibility policy, with an emphasis on prevention rather than punishment.
Action point 20
Promote state enterprises that are socially responsible
This point touches upon human rights due diligence. The action’s objective is to create a learning network for public enterprises, which strives to bring together knowledge, to pool expertise and exchange experiences in order to realize CSR commitments and ambitions. Particular attention will be paid to how public enterprises can integrate and promote respect for human rights within their organization through tools such as reporting and/or “due diligence”.
Action point 22
Encourage responsible supply chain management with a sector-wide approach
The NAP mentions human rights due diligence in reference to severel OECD guidelines such as:
- The “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”
- The “OECD-FAO Guidance for Responsible Agricultural Supply Chains”
- The “OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector ”
Pillar 1: The State Duty to Protect Human Rights
Strand 1: Training in the Field of Business and Human Rights
Action Point 1.5 (pages 31-32)
The Ministry of Social Development will: …
- Through the Division of Public-Private Cooperation, include the focus on business, human rights and sustainable development in training activities about Public Incentives to Benefit Social Development by means of: …
- Workshop-seminars about Public Incentives to Benefit Social Development for Business Enterprises and public-private cooperation in accordance with the Guiding Principles and the 2030 Agenda, thus strengthening the State-Business nexus and promoting due diligence in human rights. …
Action Point 1.6 (pages 32-33)
The Ministry for the Environment will: …
- In coordination with the Environmental Assessment Service, expand the training carried out in technical-environmental matters to representatives of the civil society and indigenous peoples to facilitate their involvement and the exercise of their rights during the process of citizen’s involvement.
Strand 2: Dialogue
Action point 2.4 (page 45)
The Ministry of Energy, through the Division of Participation and Dialogue, will promote the creation of formal and steady opportunities for dialogue between businesses and communities in localities where they expect to install energy projects. Aimed at a smooth management of these opportunities, the “Guide for Participation Standards in the Development of Energy Projects” will be available to promote the existence, from the public sector, of mechanisms allowing to decrease the asymmetries existing between the parties, such a registry of advisors and facilitators to be used by communities; a symmetry fund allowing to finance the advisors and facilitators; complaints mechanisms allowing to forward complaints to the authorities that the parties may have regarding compliance with
agreements; dispute resolution mechanisms allowing to resolve through alternative methods any disagreements that may arise in the dialogue process. Efficiency criteria set out in Guiding Principle No. 31 will be included in the design of the complaint mechanism.
Additionally, the Ministry will promote the development of “local governance mechanisms” in the localities where energy projects are installed. They will be composed of representatives from the community, business enterprises, local authorities and other actors that the parties may consider relevant, with the purpose of carrying out dialogue processes aimed at decision making connected with local development initiatives that may be developed from the presence of an energy project within the territory.
Strand 3: Inclusion and Non-Discrimination
Action Point 3.7 (page 39)
The Ministry of Energy will promote the respect of human rights of indigenous peoples in the development of energy projects. It will do this through the implementation of the Indigenous Chapter the 2050 Energy Policy, developing consultation and participation processes pursuant to ILO Covenant 169, and drafting a guide for indigenous participation in the development of energy projects.
Strand 4: Transparency and Participation
Action Point 4.1 (page 39)
The Ministry of Energy will:
- Encourage, within the framework of the Local Development Policy, the participation of communities in the different stages of the life-cycle of energy projects so that their interests may become known and be taken into consideration, as well as contributing to the general development of the localities receiving them. Diverse mechanisms will be promoted to facilitate participation (detailed in theme 2) and transparency in the processes carried out. Considering the above, an online Transparency Platform will be developed for communities to have access to the dialogue processes that are taking or have taken place, the agreements reached and compliance, among other things.
Strand 5: Public Procurement
Action Point 5.1 (page 42)
The Chilean System of Public Purchases, (Chilecompra), has the mission to facilitate the contracting of goods and services by the State through a public market web platform, in the different purchase procedures. Chilecompra will:
- Incorporate an “Integrity Agreement” clause, where the supplier bounds himself/herself to respect human rights in accordance with the Guiding Principles. Through the integrity agreement, suppliers commit, inter alia, to act with transparency, probity and truthfulness regarding the information and details submitted in the tender papers. This clause will be included in all terms and conditions of the Framework Agreement, and use thereof will be encouraged in the terms and conditions of public tenders. For the correct understanding of this clause, Chilecompra will train suppliers in its contents, including the issues of business and human rights.
Strand 8: Legislation, Policies and Incentives
Action Point 8.1 (page 49)
The Ministry of Economy will support the legal provision committed in the Agenda for Productivity, Innovation and Growth seeking to create a legal framework for social business enterprises, by encouraging the incorporation of business and human rights criteria.
Strand 9: State Business Enterprises
Action Point 9.1 (page 49)
The National Copper Corporation (CODELCO) will carry out a due diligence pilot project about human rights in one of its operations, in accordance with the commitments set out in the Corporate Sustainability Policy passed in December 2016.
Action Point 9.2 (pages 49-50)
The National Oil Company (ENAP), with the support of independent experts, will prepare a baseline to identify eventual impacts on human rights and the promotion and respect actions the company is currently performing. This has the purpose to identify gaps and manage the relevant plans for human rights remediation and mitigations. Priority subjects included in the study will be: life, health, environment, water, communities and workers. This initiative is based on the new Sustainability Policy passed by the Board of Directors in December 2016. It is composed of four strands: consideration of stakeholders, environment, integrated management and human rights.
Action Point 9.3 (page 50)
The Ministry of Economy, Development and Tourism will support the incorporation of the Guiding Principles in the business enterprises forming part of the System of Public Business Enterprises (SEP)
To strengthen coordination between the Ministries forming part of the Inter-Ministerial Working Group, amplify the impact of this Action Plan, and make known its progress, the Group will carry out the following actions: …
2. Encourage the adoption of policies, statements or codes of conduct by business enterprises and urge the implementation of mechanisms of due diligence.
Pillar 2: The Corporate Responsibility to Respect Human Rights
What does the Government expect from business enterprises? (page 65)
- That they comply with and respect the existing legislation.
- That they know and get acquainted with the international instruments on social responsibility, such as the UN Guiding Principles on Business and Human Rights, OECD Guidelines, and ILO Tripartite Declaration.
- That they apply due diligence in the field of human rights with the purpose of identifying the potential risks of impacts on human rights by their operations.
- That they create operational-level grievance mechanisms allowing them to identify potential impacts and establish remedial actions in case these occur.
Strand 2: Promotion of Corporate Due Diligence in the Field of Human Rights
Action Point 2.2 (page 71): The Ministry of Economy, Development and Tourism will: …
- Create working groups in conjunction with the Under-Secretariat of Fisheries and Aquaculture and the Under-Secretariat of Tourism, which will have the duty to analyse and create mechanisms to monitor these sectors regarding their respect for human rights. It will encourage and work with SEP for the adoption of an audit system in the field of human rights.
Indeed, for a company, observing Responsible Business Conduct standards and implementing due diligence in its response to the Covid-19 crisis will help ensure that its business decisions avoid and address potential adverse impacts on people and the planet, including in its supply chain. Those companies that take proactive steps to address Covid-19 risks in a way that mitigates adverse impacts on workers and supply chains are more likely to generate greater long-term value and resilience.
… the specific objectives that will develop the general objective mentioned above are the following:
- Encourage the adoption and appropriation of corporate due diligence processes to strengthen respect for human rights and eventual remediation of adverse impacts.
VIII. FUNDAMENTAL PILLARS
i. Fundamental Pillar 1: The State’s obligation to protect human rights
Strand 9 [Eje nº 9]: The state as economic actor
- The Ministry of Finance and Public Credit will adopt commitments to respect human rights and good reporting practices (GRI methodology) to monitor company performance.
ii. Fundamental Pillar 2: The duty of business to respect human rights
Strand 2 [Eje nº 2]: Promoting corporate human rights due diligence
- The business associations will provide training opportunities aimed at promoting due diligence in the development of business activities. This will be done through the dissemination of the OECD Guidelines described in chapter IV “International Standards”.
- The Presidential Advisory Office for Human Rights and International Affairs, together with business associations, will be responsible for promoting responsible supply chain management in the area of human rights, with an emphasis on small and medium-sized enterprises.
- The Presidential Advisory Office for Human Rights and International Affairs will disseminate methodologies, tools and recommendations to inform corporate human rights due diligence processes.
- The Procurement Agency [Colombia Compra Eficiente] will disseminate the due diligence framework established by the entity in the Guide for Socially Responsible Public Procurement within state entities.
UN Guiding Principles on Business and Human Rights [page 5]
“…The second pillar, declaring the corporate responsibility to respect human rights, is aimed at businesses, who are responsible for not breaching human rights actively, not being directly involved in human rights infringements, and acting with due diligence to lay bare any such violations. …”
Disqualification of a member of a body [page 13]
“Current state of play:
- The disqualification of members of governing bodies from holding such office was introduced into Czech law in 2014 by the Business Corporations Act. This makes it possible to punish those who have bankrupted their company or have repeatedly and seriously breached the tenet of due diligence. They may be disqualified for up to 3 years.”
Supply chains and conflict minerals [page 21]
“Current state of play: …
- The Czech Republic was involved in the consultation and approval of OECD recommendations on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector. The Ministry of Industry and Trade IS now considering how they can best be implemented in the Czech Republic.
- Establish one or more competent bodies responsible for the application, in the Czech Republic, of Regulation (EU) 2017/821 of the European Parliament and of the Council laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas, and notify that body (those bodies) to the European Commission.
Coordinator: Ministry of Trade and Industry
Deadline: 9 December 2017”
State aid, guarantees and subsidies [page 25]
“In June 2012, the OECD Council adopted the Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence, which expands and reinforces the original provisions on the environmental and social aspects of officially supported exports.”
Pillar II baselines: Human rights as a moral and ethical obligation [page 29]
“The introduction of efficient mechanisms to safeguard respect for human rights is not only moral and ethical, but also purely pragmatic: damages for human rights abuse can be sought in judicial proceedings. Modern legal systems allow high levels of damages to be awarded, and any such judgment could generate very bad publicity among customers, partners and the general public. Reasonable control mechanisms and thorough due diligence in keeping with best practice make it possible to work around – or at least curb – such risks even if damage has already been caused.”
Pillar II, Scope and content of the obligation to respect human rights [page 32]
“How should respect be shown? Recommended measures will differ depending on the size of a business, the market on which it is active, the sector, and a host of other factors. The UN Working Group on Business and Human Rights makes the following recommendations in particular: …
- Introduce and apply the internal control mechanism of “human rights due diligence”.
Due diligence [page 35-36]
“The Government of the Czech Republic recommends that businesses consider introducing an internal due diligence mechanism to spot and eliminate human rights risks, or incorporate human rights risks – as another evaluation criterion – into their existing due diligence mechanisms.
The term “due diligence” is broadly known in the business community and denotes in-depth reviews into businesses and or the transactions they are preparing. The UN Working Group on Business and Human Rights defines human rights due diligence as a process to identify and evaluate human rights risks, a series of steps to understand how a company’s activities can affect human rights. It must also include appropriate responses to the findings. A fundamental difference between financial risk and human rights risk is that, while financial audits and financial due diligence explore the ramifications for the business itself, human rights due diligence examines the effects on third parties – the holders of human rights (customers and people living in the vicinity of a business or who are affected by its operations).
The search for and eradication of human rights risks should form part of all major commercial operations, not just because any violations of human rights that are exposed could lead to hefty financial losses (compensation, loss of customers, a tarnished reputation), but mainly because – unlike economic loss – human rights loss cannot be fixed so easily.
An effective due diligence mechanism should meet the following criteria:
- Consider the internal risks (stemming from the business’s own operations) and external risks (particularly in relation to business partners and other entities with which the business works).
- Identify existing risks (with a view to eliminating them) and potential risks (with a view to preventing any loss or damage).
- Adapt the mechanism to the size of the business, the nature of its operations and specific local factors.
- Implement the mechanism in the internal management system.
- Regularly update the mechanism to reflect evolving conditions.
- Leverage the experience and knowledge of independent experts who operate externally or maintain a high degree of personal independence.
- Engage employees, as they should have the opportunity to draw attention to risks and provide assistance in the removal thereof.
- Engage the public directly concerned, stakeholders in the community and vulnerable groups in the formation of the mechanism.
Public engagement can take many forms. First of all, this may entail consultations with those affected by businesses’ operations (holders of human rights) because these people are best placed to highlight the problems looming over them. Likewise, employees should be involved as they need to know how to deal with the knowledge they accrue in their work. Finally, public engagement may comprise external expert opinions, opposing views, etc.
Most companies have already introduced control mechanisms that can be tweaked so that they also apply to human rights risks. These tend to be compliance mechanisms, used by businesses to keep track of requirements imposed by legislation, regulators, investors and capital markets (the conditions for participating on the stock exchange etc.). Businesses should view the obligation to respect human rights as a legal compliance matter. Even if the duty to comply with human rights in the course of business operations may not derive directly from a particular country’s legal system, businesses should act as though this were the case and attribute the weight of the law to moral and ethical rules in their internal decision-making. This will enable them to incorporate human rights protection into existing mechanisms used to run checks on legal obligations. As a result, businesses will comply with their duty to respect human rights and take due care at minimum extra cost, thereby making big savings.
Human rights auditing should extend beyond the actual business to some extent and touch on the activities of external entities, such as those in the supply chains. Businesses could have a hand in violations of human rights through their own negligence, including via their subsidiaries and suppliers. Such conduct, despite not being wilful or intentional, does not relieve a business of liability as it could be viewed – by the courts and the public – as a form of negligence or failure to engage in appropriate supervision.
Although it is impossible for a business to carry out due diligence at an external entity to the same extent as internal due diligence, those areas that are most at risk should be identified, someone should be singled out as liable for infringements of rights and, where possible and feasible, specific steps to eliminate these risks should be demanded. If external risks identified, businesses should exercise any influence they have to stave off those risks, for example by sharing good practices and their own experience. Businesses lacking such influence should leverage their links with other entities (customers, suppliers, business associations, trade unions and bodies of public administration). If they have no way of influencing such conduct, they should weigh up the option of terminating cooperation.
Businesses who decide to publish the results of due diligence should:
- Choose a form that the general public can readily understand. Besides conventional reports, they might consider personal meetings, online discussions and public hearings.
- Choose a scope and frequency that enables them to pass on all necessary information without overwhelming the reader.
- Publish not only the risks that have been identified, but also the steps to tackle them.
- Withhold information that could encroach on the privacy or other legitimate interests of employees and other persons, and refrain from disclosing business secrets.”
Voluntary non-financial reporting [page 38]
“What should be included in a report? Human rights standards, as opposed to financial reporting, which is governed by sophisticated and internationally reputed respected standards, are still inchoate. Even so, the following information should not be left out of a report:
- Whether a human rights commitment has been made, how it has been devised, whose rights it affects, how it is communicated, and whether and how responsibility for compliance is addressed within the business.
- A specification of key issues, i.e. areas viewed by the company as operationally risky, or in which it is most involved. Information about how such issues have been identified and, if the company has operations in multiple countries, information as to which countries are affected.
- Information on how these risks are addressed and what measures have been taken.
Significant events that have occurred in the past year.”
2. The state duty to protect human rights
2.2 Recommendations from the Council for CSR on the state duty to protect [page 10-11]
“In November 2011, the Danish Council for CSR started working on recommendations to the Government on how the UNGPs on the state duty to protect could be implemented. The council finished its work in January 2012 where the recommendations were handed over to the Government.
Among other initiatives, the Council for CSR recommended that the Danish Government:
- Expands the existing Danish corporate non-financial reporting requirement to include mandatory reporting on human rights;
- Encourages responsible public procurement by requiring government contractors to perform due diligence on human rights in relation to the products or services covered by the contract, including regularly supervising the contractual requirements;
- Requires state-owned companies and governments agencies which distribute significant government funds to incorporate due diligence in their business activities; …”
2.3 Actions taken
Danish Government’s expectations to companies [page 11]
“… at Danish embassies in emerging markets, the Trade Council in co-operation with the Danish Business Authority holds workshops in responsible supply chain management, especially focusing on small and mediumsized companies and their local business partners (GP 3c). The courses are held on an annual basis. They include practical guidance on how to demonstrate due diligence in business operations in regard to adverse impacts on human rights.”
Protection of human rights through state regulation and policy [page 12]
“Companies involved in Danida Business Partnerships – an instrument that facilitates and provides economic support to develop commercial partnerships between Danish companies and partners from developing countries – are now required to integrate CSR strategically in their business operations and to demonstrate due diligence, including human rights, in order to mitigate adverse impact.”
Companies that receive substantial support and services from State agencies [page 13]
“The Environmental & Social Due Diligence Policy of the Danish Export Credit Agency (EKF) states that EKF is committed to implementing the UN Guiding Principles on Businesses and Human Rights (GP 4).”
Providing effective guidance on how to respect human rights [page 13-14]
“…To ensure that companies have the right tools and the necessary guidance to handle the new due diligence requirements, the Government has updated the existing web tool, the CSR Compass and the Global Compact Self-Assessment Tool in accordance with the due diligence requirements of the UNGPs. The revised Compass includes a guide for small and medium-sized companies on how to exercise due diligence (GP 17) and also gives guidance on ways to solve company conflicts by actively engaging in a dialogue with the company’s stakeholders (GP 29). The revised Global Compact SelfAssessment Tool works as a self-Assessment guide to a CSR due diligence going through a questionnaire covering aspects of human rights, worker’s rights, environment and anti-corruption and including a template for a followup action plan.”
3. The corporate responsibility to respect human rights
Introduction [page 17]
“While, the Danish Government has an important role in promoting the UNGPs by clarifying and communicating expectations towards companies, the Government acknowledges that in the short term it can be a significant challenge for companies to implement due diligence in their business operations – especially if the company has a complex supply chain or if the company is an SME. Thus, the Government supports the implementation of the corporate responsibility to respect by carrying out initiatives which are aimed at supporting and assisting companies with this effort.”
3.1 UNGPs on the corporate responsibility to respect human rights [page 17]
“In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances, including: …
b) A human rights due-diligence process to identify, prevent, mitigate and account for how they address their adverse impacts on human rights; …”
4. Access to remedy
4.3 Actions taken
Access to non-judicial remedy [page 20-21]
In the second national action plan for CSR from March 2012, the Danish Government announced the establishment of a Mediation and Complaints-Handling Institution for Responsible Business Conduct. …
The institution will base its assessments on the OECD Guidelines for Multinational Enterprises, which incorporate the UN Guiding Principles on Business and Human
Rights, including in particular the due diligence concept as described in the UN Guiding Principles, when looking at a complaint. …
So far the promotional activities have included among other:
- Development of guidance on due diligence in the supply chain and company-based conflict resolution;”
Appendix 1, GP 2
Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 24]
“In 2004 the Ministry for Business and Growth in collaboration with the Confederation of Danish Industry developed the CSR Compass. The CSR Compass is an online tool which Danish companies can use when requiring customers and suppliers to respect human rights and perform due diligence.”
Appendix 1, GP 2 continued
Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 25]
“Together with other OECD members, Denmark has worked and will continue to work to ensure that project-related social and human rights impacts are included in the OECD Common Approaches, including that relevant elements from the UNGP and Human Rights become part of the way export credit agencies undertake their due diligence”
Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 25]
“Denmark has contributed actively to the discussions in OECD on how to embrace Human Rights in the ”Recommendation of the Council on the Common Approaches for Officially supported Export Credits and Environmental and Social Due Diligence (Common Approaches)”. Together with other OECD members, Denmark has worked to ensure that project-related social and human rights impacts are included in the OECD Common Approaches, and also that relevant elements from the UNGPs and Human Rights become part of the way export credit agencies demonstrate due diligence. Furthermore, the revised Common Approaches now ensure policy coherence with the OECD Multinational Guidelines.”
Appendix 1, GP 3c
Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 27]
- “…The Trade Council under the Ministry of Foreign Affairs advises Danish companies and their local partners on how they should handle their social responsibility in a number of export markets. The advisory services include human rights due diligence.
- The Trade Council in co-operation with the Danish Business Authority holds workshops in Responsible Supply Chain management, especially focusing on small and medium-sized enterprises and their local business partners (GP 3c). The courses are held on an annual basis. They will include practical guidance on how to demonstrate due diligence in business operations in regard to adverse impacts on human rights. To further assist the Danish companies in emerging markets, the embassies are also conducting free CSR reviews of local business partners. The reviews include a due diligence component. …
- Companies involved under Danida Business Partnerships are required and guided to undertake a CSR due diligence covering human rights, workers’ rights, environment and anti-corruption and to follow-up with an action plan in order to mitigate adverse impacts of business activities on employees and society at large.
- The ministry of Foreign Affairs is also working on competence development courses within UNGPs and CSR for embassy staff, including e-bites, guidance on how to perform CSR due diligence and workshops for Danish companies operating abroad and local companies in new growth markets. …”
Appendix 1, GP 4
State Duty to Protect [page 28]
“States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies such as export credit agencies and official investment insurance or guarantee agencies, including, where appropriate, by requiring human rights due diligence.”
Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 28]
- “EKF’s Environmental & Social Due Diligence Policy states that EKF is committed to implementing the UN Guiding Principles on Businesses and Human Rights.
- When conducting due diligence IFU uses the Global Compact SelfAssessment tool, which contains a robust assessment of human rights conditions.”
Government covering note on the UN Guiding Principles on Business and Human Rights National Action Plan
“A report on legislation pertaining to national and international business and human rights is to be drafted based on the principles stated in the UN Guiding Principles. The objective is to examine whether legislation corresponds with the aims of the UN principles and determine the necessity of initiatives taken to otherwise improve corporate operating practices, particularly where due diligence, corporate reporting obligations and remedies for victims of human rights violations are concerned. It is also to propose concrete recommendations for change, wherever necessary.”
“With regard to the due diligence, the working group rightly emphasises in its report the need to identify best practices and the concept of more functional international specifications. At the same time, it is vital that the discussions be continued also at the national level. The aim of the round table discussions presented in the report should be to not only increase dialogue, but also to establish as broad a national understanding as possible on what due diligence means and how it can be properly implemented in various sectors and business areas. Stakeholders from different fields are invited to the round table discussions, whose final outcomes are addressed by the Committee on Corporate Social Responsibility.”
Introduction [page 11]
“…companies have the responsibility to respect human rights, regardless of the states’ obligation. Companies should therefore carry out due diligence …”
1 The state obligation to protect human rights
1.2 Activities in international organizations [page 14]
“In international human rights bodies, Finland has emphasised development related to due diligence.”
1.3 Activities in the EU [page 16]
“On 18 April 2013, the European Commission made a proposal to amend the accounting directive for the disclosure of so-called non-financial information of certain large companies.
The proposal shall be applied to companies of significant public interest with more than 500 employees on average on the account closing date. According to the proposal, such companies should include in their annual report a declaration stating material data related to the environment, social affairs, employees, human rights, and the prevention of corruption and bribery. The declaration should contain a short description of the business model, a description of the policies related to the areas mentioned above as well as the due diligence related to them, the results obtained in the policies, the main risks and risk management that apply as related to the areas mentioned above, and the non-financial performance indicators significant for company business. Instead of a declaration attached to the annual report, companies may also publish separate reports on certain conditions.”
3 Expectations towards companies and support services
3.1 Clarification of due diligence [page 24-26]
“The OECD Guidelines for Multinational Enterprises12 were updated in 2011. In the same connection, the UN Guiding Principles on Business and Human Rights were included in the Guidelines along with due diligence. In the OECD Guidelines, due diligence is seen as an examination process with which companies identify and prevent the actual and potential adverse impacts of their activities in their decision making and risk management. This means that due diligence is not a single action. Instead, it is an ongoing process where the human rights impacts of business activities are assessed with appropriate and sufficient care.
Due diligence also includes the mitigation of adverse impacts and communication on how companies deal with these adverse impacts. Potential effects are dealt with by preventing or mitigating them, whereas actual impacts will be dealt with by remedying them.
By following due diligence, an attempt is made to prevent the adverse impacts which a company will either cause itself, to which it will considerably contribute towards, or which are directly related to the company’s activities, products or services through a business relationship.
The contribution refers to a situation where that contributing impact is substantial. This means activities resulting in indirect adverse impacts caused, promoted or encouraged by another party. This does not cover minor or insignificant contributions. If a company contributes to a detrimental effect on human rights, it should take the necessary measures and use its influence to prevent or alleviate the adverse impact.
In the Guidelines, business relationships cover relations with business partners, supply chain operators and other operators independent of the state and governmental operators that are directly related to the company’s business activities, products or services. If the company has a lot of suppliers, it should identify the areas where the risk of adverse impacts is highest and contribute to the prevention of these risks.”
WHAT IS SUFFICIENT?
“At the consultation events organised by the working group, it was suggested that a new statutory obligation on due diligence should be established for companies when implementing the UN principles on a national level13. Transforming the due diligence described above into a legally binding obligation is difficult to envisage. The problem with statutory due diligence for respecting human rights is the difficulty of defining the obligation included therein. On a national level, respecting human rights is defined in appropriate legislation, and careful actions may be important for assessing company responsibilities. Extending national legislation to international activities is even more challenging. The special questions related to the regulation of international business activities have been described above in Section 1.1.
According to the international guidelines, the sufficiency of following due diligence and the possibilities of making a difference are always weighed on a case-by-case basis. The issues mentioned above (such as the size of the company, branch of activity, operating conditions, ownership and business structure) are taken into consideration. The seriousness of the adverse impacts caused is important as well. Since both the UN principles and the OECD Guidelines emphasise prevention, a retrospective assessment on sufficiency will cause challenges of its own for preparatory actions.
The discussion on the content of due diligence and the ways it is applied also continues in international organisations.
Though there is no binding regulation on due diligence, it is a central concept in managing human rights risks related to international business activities. For these reasons, more discussion and information is required on the types of risks and possibilities related to each branch of activity, on the types of risk management needed, and on the expectations for observing due diligence in various branches of activities.
As a follow-up measure, the working group proposes that
- companies, non-governmental organisations and other key stakeholders are invited to a roundtable discussion by branch of activity. For example, the discussion could begin with the forest industry, the consumer goods trade and the textile industry. With the discussions, an attempt shall be made to create a dialogue amongst various stakeholders and to establish the essential risks for each branch of activity as well as sufficient risk management and due diligence.
- In co-operation with the business sector, the collective industrial organisations and non-governmental organisations, sharing of due diligence best practices is promoted in order for companies to apply them.
Principal responsible parties: Ministry for Foreign Affairs and Ministry of Employment and the Economy, schedule by the end of 2015.”
I- The State’s Obligation to Protect Human Rights
The International Framework
3. The Organisation for Economic Co-Operation and Development (OECD) [page 14]
… Lastly, France finances actions supporting the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas …
4. The International Organisation for Standardization (ISO) [page 15]
France actively contributed to work completed by ISO which resulted in the adoption of the ISO 26000 standard on social responsibility for businesses and organizations. This standard seeks to promote a common understanding of social responsibility, but cannot be used for certification. The ISO 26000 standard deals with seven core subjects, one of which is human rights …
… The standard also defines the concept of due diligence, describing it as a “comprehensive, proactive process to identify the actual and potential negative social, environmental and economic impacts of an organization’s decisions and activities over the entire life cycle of a project or organizational activity, with the aim of avoiding and mitigating negative impacts”…
Actions Underway [page 16]
- France actively contributes to OECD activities in the field of responsible business conduct, particularly its work on due diligence (in the textile and finance sectors) and reinforcing the OECD Guidelines to mark their 40th anniversary (from June 2016 onwards).
The European Framework
6. The Council of Europe [page 17]
… the Recommendation CM/Rec(2016)3 on human rights and business was adopted by the Committee of Ministers of the Council of Europe on 2 March 2016. Currently this recommendation includes the following provisions:
Article 20: Member States should apply such measures as may be necessary to encourage or, where appropriate, require that:
- business enterprises domiciled within their jurisdiction apply human rights due diligence throughout their operations;
- business enterprises conducting substantial activities within their jurisdiction carry out human rights due diligence in respect of such activities; including project-specific human rights impact assessments, as appropriate to the size of the business enterprise and the nature and context of the operation.”
7. The European Union (EU) [pages 17-18]
… Following the proposal for a European regulation on the traceability of minerals from conflict zones, France supported an ambitious draft regulation on responsible supply chains for minerals in conflict zones and high-risk areas. The regulation on due diligence for conflict minerals was approved at a plenary session of the European Parliament in March 2017, following the political understanding announced by the Council in June 2016. France will work to ensure that it is correctly implemented and quickly evaluated so it can be reinforced if necessary.
France could play a key role in the adoption of a common European framework on due diligence. The French National Assembly launched a parliamentary “green card” initiative to this effect.
- France is promoting the notion of due diligence at the European level to encourage the creation of a common framework based on the legislative framework adopted in France.
The National Framework
10. The Reinforcement of Legislation [page 23]
Recent public policies have led France to adopt new legislative measures supporting CSR.
- An act on a duty of vigilance for parent companies and outsourcing companies was promulgated on 27 March 2017. Under this act, companies that employ more than 5,000 employees in France, or more than 10,000 employees in France and abroad, must draft and implement due diligence plans. Plans must set out reasonable measures to identify risks and prevent serious abuse of human rights, fundamental freedoms, health, personal safety and the environment, arising as a result of the operations of the company, of companies under its direct or indirect control, or of subcontractors and suppliers with which it has well-established commercial relationships.
Actions Underway [page 27]
- France is implementing the act on the corporate duty of vigilance.
13. The Role of Public Agencies [page 26]
The NAP recalls the CNCDH’s 2013 recommendation regarding France’s export credit agency COFACE, namely the establishment of human rights due diligence procedures including exhaustive human rights impact assessments, better transparency and information, and better civil society and affected stakeholders participation. It also recalls the CSR Platform’s recommendation for the development agency AFD and the export credit agency COFACE to reinforce their due diligence procedures and to establish grievance mechanisms.
- COFACE is continuing efforts to make information on reasonable due diligence in the social and environmental fields (which include human rights) visible and accessible on its website.
Actions to be Implemented
- Make AFD funding for businesses conditional on implementing or undertaking to implement non-financial reporting and a CSR due diligence plan for projects, or on the enforcement of host country or international standards.
15. Economic Sectors and Human Rights
Not only must the authorities promote and raise awareness of CSR standards, they must also require extra vigilance with respect to high-risk economic sectors, geographic areas and products.
Actions for all Economic Sectors
- Reinforce due diligence, particularly in sectors and countries at risk of human rights abuses.
- Encourage French businesses to develop and implement due diligence plans on the basis of their size.
The Textile and Garment Sector
… the OECD set up a working group to develop a guide for the enforcement of the guidelines in the textile sector, at France’s insistence. This working group brings together international organizations such as ILO, the private sector, civil society, NCPs and States. The guide will include reinforced due diligence measures to be implemented in this specific sector. The OECD has also planned to set up a platform for shared dialogue and good practices …
- France is helping to finalize the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.
The Extractive Sector
Extractive industries are often considered opaque and at high risk of environmental and human rights abuses. As such, they are subject to heightened due diligence measures and initiatives seeking to address sector-specific risks.
France’s actions in this field focus on multilateral and European initiatives reinforcing the legal and regulatory framework for businesses working in the extractive sector, especially in regions with fragile governance systems.
- France helps monitor and finance the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and HighRisk Areas. This document is an international reference in the field of good practices for businesses seeking to identify and manage non-financial risks in their mineral supply chains (funding for armed groups and terrorism, human rights abuses, child labour, corruption, etc.).
- France also helped draft and adopt the OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector. This guide contains recommendations to help businesses in the sector identify and manage the adverse impacts of their operations on communities affected by mining projects.
- France raises awareness among French businesses of their due diligence obligations with respect to mineral supply chains as set out in relevant regulatory initiatives (the OECD Due Diligence Guidance, the EU Conflict Minerals Regulation and national law on due diligence).
The Financial Sector
In a statement dated 27 May 2013, the OECD’s Norwegian NCP specified that like other enterprises, investors are expected to comply with due diligence requirements recommended by the OECD Guidelines for Multinational Enterprises regarding the respect and protection of human rights including in relation to minority shareholdings. The OECD also set up a multi-stakeholder Working Party on Responsible Business Conduct in finance, and developed recommendations to support the implementation of the Guidelines in this sector. France monitored this work closely. Recommendations on responsible business conduct for investors have been established.
- France promotes, at the national and European levels, investment policies that incorporate due diligence and highlight the principles and practices of institutional investors.
II- Businesses’ Responsibility to Respect Human Rights
Introduction [page 37]
In March 2015, the National CSR Platform agreed on the following points with respect to due diligence:
Parent companies and outsourcing companies should undertake due diligence (which some considered should be voluntary and reasonable, and which others considered should be compulsory) with respect to subsidiaries and subcontractors in order to improve human rights and environmental risk prevention.
This due diligence could include the following measures:
- Defining the scope of the fundamental rights concerned. The Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and the Charter of Fundamental Rights of the European Union could serve as a basis for this definition.
- Setting a size threshold over which companies and groups would be obliged to implement due diligence processes.
- Defining the operational content of reasonable due diligence processes for companies in due diligence plans. These plans would distinguish between subsidiaries and subcontractors given the different due diligence processes applicable to each of these cases. The goal of these plans would be to identify and prevent human rights and environmental risks resulting from business operations. The French NCP’s work on the textile and garment sector could be a useful reference. Parent companies and outsourcing companies would have to disclose the due diligence processes they implement, in compliance with the European directive on non-financial reporting.
III- Access to Remedy
Introduction [page 46]
In its 2013 opinion, the CNCDH made the following recommendations:
- Drawing inspiration from the duty to protect and remedy in the environmental sphere, the CNCDH recommends that a duty of vigilance on the part of the parent company with regards to its subsidiaries be legally imposed with the aim of preventing any violations of human rights that might occur over the course of its activities.
2. Non-Judicial Mechanisms – At the International Level
2.1 The OECD National Contact Point (NCP) [page 54]
The French NCP is very active in promoting responsible business conduct and the OECD Guidelines for Multinational Enterprises. Following the Rana Plaza tragedy, the NCP stepped up its activities, especially in the field of due diligence for supply chain risks, human rights and workers’ rights …
The Positions Adopted by the Different Groups of the National CSR Platform
Proposals by the civil society and trade union groups [page 61]
- Civil (and possibly criminal) liability and a duty of vigilance should be introduced for French parent companies and outsourcing companies that commit human rights violations in France or abroad over the course of their activities or those of their subsidiaries or subcontractors. Under this regime, the burden of proof would be on companies, enabling victims to trace the abuse to the highest level of the chain of responsibility.
There is no explicit mention of human rights due diligence in the Business and Human Rights Chapter of the Georgian Human Rights NAP.
The German NAP includes a chapter on due diligence and reference is made to due diligence throughout the NAP.
III. Federal Government expectations regarding corporate due diligence in respecting human rights [page 7-12]
“With regard to corporate respect for human rights, the Federal Government expects all enterprises to introduce the process of corporate due diligence described below in a manner commensurate with their size, the sector in which they operate, and their position in supply and value chains. This applies especially when they operate in countries where the rule of law is not enforced or is only partly enforced. Such expectations are without prejudice to the fundamental duty of a state to guarantee the protection of human rights within its territory.
Scope and practical structuring of due diligence in the field of human rights
“The responsibility to exercise due diligence applies in principle to all enterprises, regardless of their size, the sector in which they operate, or their operational context within a supply or value chain with an international dimension. The nature and exercise of due diligence for any given enterprise should be commensurate with these factors; it should be possible for the enterprise to incorporate its due diligence obligations into its existing processes in an appropriate manner without the creation of undue bureaucratic burdens.
Enterprises should prevent and mitigate any adverse impact of their business activity on human rights. When due diligence in the realm of human rights is defined and exercised, consideration should be given to the beneficial effects of corporate activity and to the diverse perspectives of the company’s own employees, the relevant stakeholders and others who may be affected. Within large enterprises, these include the staff of the human resources, purchasing, compliance and sales divisions. From outside the enterprise, suppliers, customers and trade unions but also bodies from civil society, business organisations and governments should be involved. Particular attention should be given to the rights of their respective employees and to those of local populations who may be affected.
Depending on the size of the enterprise, the nature of its products or services, the potential risk of particularly adverse impacts on human rights and the operating context, the measures to be taken are likely to vary in scope. It may be appropriate to conduct certain elements of the process in combination with other enterprises within an association or industry, subject to compliance with antitrust legislation. Small and medium-sized enterprises in particular should make use of the advisory and support services to be offered by the Federal Government and business associations under the National Action Plan. The expertise of organisations within civil society and trade unions should also be brought to bear.
The elements of human rights due diligence described in binding form in the following paragraphs are not to be understood as a rigid sequence. On the contrary, findings relating to one element should be used continually for the revision and development of the other elements so that learning processes can take place. There must be scope for the incorporation of present and future legal requirements for the exercise of human rights due diligence.”
Core elements of due diligence in the field of human rights
- “a human rights policy statement
- procedures for the identification of actual or potential adverse impact on human rights
- measures to ward off potentially adverse impacts and review of the effectiveness of these measures
- a grievance mechanism”
“With the aid of a policy statement, enterprises should state publicly that they are meeting their responsibility to respect human rights. This statement should be adopted by the senior management of the enterprise and be communicated both internally and externally. It should be used, on the one hand, to address human rights issues of particular relevance to the enterprise and/or the sector in which it operates, citing the international reference instruments in the field of human rights and, on the other hand, to describe the procedure used by the enterprise to exercise human rights due diligence. In particular, this includes the clear assignment of responsibilities within the enterprise, underpinned by the necessary training of staff employed in the relevant divisions. The statement should be continually revised and developed.”
Procedure for the identification of actual and potential adverse impacts on human rights
“Central to the exercise of due diligence is the establishment of a procedure that serves to identify, to prevent or to mitigate potentially adverse effects of corporate activity on human rights. It is not – or not only – a matter of considering risks to the company’s own business activity but is primarily about risks to the human rights of those who may be affected by corporate activity, such as employees of the enterprise itself or of other companies in the supply chain, local populations and customers.
The consideration of potentially adverse impacts on human rights is a continuous task that accompanies work processes and, in particular, is performed with a sectoral focus. It should take place when new divisions, products or projects are launched as well as in the context of existing business activities. When potential risks are examined, a distinction must be made between the following types of impact:
- those generated directly by the enterprise itself,
- those to which the enterprise contributes, for example through direct contractual relations with suppliers, and
- those connected indirectly with the enterprise through its business relations, its business activity or its products or services even though no direct contractual relationship exists, for example in situations involving numerous intermediary dealers. Granting loans, issuing credit lines and providing other financial services to other banks, insurers or other financial service providers do not in themselves constitute a relationship in the above sense if those transactions cannot be unambiguously attributed to a particular business activity in the real economy.
This systematic approach to identifying key impact factors and risks is nothing new and is already part of established management systems and processes, as may be seen, for instance, in Annex I to Regulation (EC) No 1221/2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), which deals with the internal environmental review to be conducted by participating organisations.
The size of an enterprise, the sector to which it belongs and the nature of its business activity directly influence the risk that its operations will have an impact on human rights. The required depth and breadth of the risk assessment depends on these factors. An initial risk analysis on the part of an enterprise should be conducted for each division or each product category and possibly for each location too. The starting point may be a simple overview of the company’s main activities and of the value chains and business relations these activities entail. On the basis of this overview and with due regard to the international human rights standards enshrined in instruments such as the Universal Declaration of Human Rights, the International Covenants on Human Rights, the ILO Core Labour Standards and the OECD Guidelines for Multinational Enterprises, potential risk areas can be identified. Contextual circumstances such as the political framework and the presence of vulnerable groups of people (indigenous populations, for instance) should be factored into the analysis. The choice of method and the assessment of risks can be made on the basis of the analysts’ own research, interviews in-house, in subsidiary enterprises and/or with business partners and input from external specialists.
With the aid of this analysis, enterprises should determine whether an in-depth review is needed. This is most likely to be the case if the risk of an adverse impact on the human rights of particular groups is particularly high and fuller information is required before any action can be taken. For this reason, the recognised problem areas should be ranked in order of priority.
The risk of a particularly adverse impact arises, for example, in cases where a large number of people may be affected or the potential impact would have serious, unforeseeable, or irreversible consequences. The in-depth review should at least include local dialogue with actually or potentially affected parties and recourse to both internal and external expertise in the field of human rights.”
Measures and effectiveness tracking
“On the basis of the results of the analysis, measures should be identified and incorporated into business activity. Such measures may, for example, comprise specialised training of particular employees in-house or with suppliers, adaptation of particular management processes, changes in the supply chain and participation in sectoral initiatives. So that potential or actual impacts can be properly addressed, enterprises should define clearly where competence lies for particular issues and establish the corresponding review mechanisms. Depending on the type of impact, an enterprise itself can initiate remedial measures. If the enterprise does not possess sufficient leverage to implement successful measures, it should cooperate with other players to increase its influence. Withdrawal from an area of business activity or from a location should only ever be a last resort in such situations. The enterprise should focus first and foremost on developing remedial measures. To this end, objectives should be formulated and be communicated internally and externally as the relevant measure dictates. With the aid of effectiveness tracking, the enterprise should regularly review the efficacy of the measures it has taken and, to this end, engage in dialogue with affected stakeholders.”
“Enterprises should keep information at their disposal and communicate it, where appropriate, to external recipients in order to demonstrate that they are aware of the actual and potential impact of their corporate activity on human rights and are taking appropriate steps to address the situation. The form in which this information is communicated should be tailored to its recipients. Enterprises whose business activity poses a particularly high risk of adverse impacts should issue regular public reports on that subject. Such reporting may be done in the framework of the company’s existing reporting format or take the form of separate reports focused on human rights. At the same time, such reporting obligations should not impose disproportionate administrative burdens on the reporting companies or on the SMEs in their supply chains.”
“For the early identification of (actual or potential) adverse impacts, enterprises should either establish their own grievance procedures or play an active part in external procedures. Such procedures may, for example, be established by sectoral associations. The mechanism should be structured to match the target group. Accordingly, the target group should be consulted when the procedure is being devised. When new mechanisms are established as well as when existing mechanisms are used, care should be taken to ensure that they provide a fair, balanced and predictable procedure which is accessible to all those who might be affected (for instance by eliminating linguistic or technical barriers). As an extra measure, consideration should be given to the creation of offices with which complaints can be lodged anonymously.
The procedure should provide for maximum transparency for all stakeholders and should comply with international human rights standards. Existing complaints offices within an enterprise or its environment should be screened for compliance with the criteria defined above.
The grievance mechanism of each enterprise and its whole process of corporate due diligence should be subjected to regular practice-based reviews to assess their effectiveness.”
- The Federal Government expects all enterprises to introduce the processes described above in a manner commensurate with their size, the sector in which they operate and their position in supply and value chains. Their compliance will be reviewed annually from 2018. In the absence of adequate compliance, the Federal Government will consider further action, which may culminate in legislative measures and in a widening of the circle of enterprises to be reviewed (see chapter VI below).
- The National Corporate Social Responsibility (CSR) Forum of the Federal Government, comprising representatives of the political and business communities, trade unions, civil society and academic professions will draw up an intersectoral “CSR consensus” paper on corporate responsibility in value and supply chains and present it to the Federal Government as a recommendation. One element of that paper, among other things, is to reinforce the expectation of a responsible management of due diligence in the realm of human rights as described in the present chapter. Further information is made publicly accessible online at csr-in-deutschland.de. The possibility to join the “CSR consensus” is open to all enterprises that operate in Germany. The list of companies that have joined will be updated continuously and made publicly available at www.csr-in-deutschland.de.
- The aim is that at least 50% of all enterprises based in Germany with more than 500 employees will have incorporated the elements of human rights due diligence described in this chapter into their corporate processes by 2020. Enterprises which have not adopted particular procedures and measures should be able to explain why they have not done so (the ‘comply or explain’ mechanism). If fewer than 50% of the enterprises defined above have incorporated the elements of human rights due diligence described in chapter III into their corporate processes by 2020 and the target is thus missed, the Federal Government will consider further action, which may culminate in legislative measures. In this context, the Federal Government will also examine, in consultation with the National Regulatory Control Council, the necessity of the corporate compliance costs arising from this plan and will consider a widening of the number of enterprises to be reviewed, in order to potentially include enterprises with fewer employees in future assessments and subsequent additional [sic]”
1. Key areas for action [page 13]
In relation to the three pillars of the UN Guiding Principles, the following are the primary areas for action: …
- effective exercise of corporate due diligence with regard to human rights …”
1.1 Basic rules of economic policy
Measures [page 20]
- “ The instruments of development policy relating to cooperation with business will be reviewed for compliance with the requirements of the UN Guiding Principles. In particular, the contractual clauses of the develoPPP.de programme are to be fleshed out to include the due diligence requirements with regard to human rights. …
- The requirements set out in the UN Guiding Principles and in the National Action Plan, in particular in its chapter III, on due diligence with regard to human rights, also apply to the organisations that implement development policy, including bodies that provide financing for development. They also serve as a basis for further assessment and monitoring and, where appropriate, further development of the grievance procedures that state implementing organisations, including financing bodies, have already established. …”
Measures [page 22]
“The Federal Government will examine whether and to what extent binding minimum requirements for the corporate exercise of human rights due diligence can be enshrined in procurement law in a future revision. It will draw up a phased plan indicating how this aim can be achieved.”
1.2 State support
Measures [page 23]
“The Federal Government will examine to what extent the sustainability assessment for which the Subsidy Policy Guidelines provide is consistent with the requirements set out in the UN Guiding Principles and how enterprises receiving significant subsidies can be subjected to a future obligation to apply the elements of due diligence described in chapter III above.”
Export credits, investment guarantees and other instruments for the promotion of external trade
Measures [page 25]
- “Better information and greater transparency will serve to draw corporate attention, as early as during the initiation stage of projects, to the great importance attached to human rights due diligence and to the OECD Guidelines. In particular, the Federal Government will extend its support for the affected enterprises in the form of information material.
- In addition, it is planned to introduce human rights due diligence reports into the assessment procedures of the insurance instruments for foreign trade in cases where there is a high probability of serious implications for human rights. …
- The detailed procedure for assessing applications for the provision of export credit guarantees, guarantees for direct investments abroad and untied loan guarantees will be further reinforced as regards respect for human rights; this will entail measuring the procedure against the specific requirements set out in the NAP. To this aim, human rights will be treated as a separate point in future project assessments. The aim is to ensure that enterprises which avail themselves of foreign trade promotion instruments exercise due diligence. In particular, this includes participation in grievance proceedings initiated against them before the German National Contact Point for the OECD Guidelines for Multinational Enterprises.”
2.1 Ensuring the protection of human rights in supply and value chains [page 28-30]
“Throughout the world, the expectations of consumers, civil society and trade unions in terms of product quality and transparency of production are rising. Their attention is increasingly focused on factors such as environmental protection and social and employment standards along manufacturers’ supply chains. In many cases these supply chains are not transparent, and it is difficult to assess the situation with regard to individual enterprises within the chain. This increases the risk of adverse impacts on human rights and on social, labour and environmental standards in host countries. These countries often lack an adequate legislative basis or state supervision and enforcement of compliance with existing laws.
The Federal Government nevertheless expects enterprises to discharge their responsibility to exercise due diligence as regards human rights and therefore to create and apply appropriate management instruments that minimise the risk of involvement in the generation of any adverse impact (see chapter III above).”
The current situation
In the framework of the German presidency of the G7 in 2015, the Federal Government was a driving force behind the successful proposal to include a chapter on responsible supply chains in the Leaders’ Declaration. In that chapter, the private sector is being urged to exercise due diligence with regard to human rights. Together with the Heads of State or Government of the other G7 nations, the Federal Chancellor declared the Government’s support for the promotion of sustainability standards in global supply chains, including decent working conditions. To this end, the G7 are to:
- support efforts to set up substantive national action plans for the implementation of the UN Guiding Principles,
- increase transparency within supply chains,
- promote instruments for the identification and prevention of risks,
- strengthen grievance mechanisms,
- encourage best practices
- and, in particular, assist small and medium-sized enterprises in developing a common understanding of due diligence and responsible supply-chain management.
The Partnership for Sustainable Textiles, which was initiated by the Federal Ministry for Economic Cooperation and Development, has established an obligation to comply with sustainability standards and to guarantee corporate due diligence in the textile and clothing sector. All members of the Partnership are required to pursue its social and environmental objectives. They submit to a review process, which is conducted by an independent third party and is designed to bring about continuous improvement. Individual schedules of measures (road maps) are compiled annually by all members; the first of these is to be produced by the end of January 2017. A robust sanctions regime and regular reporting on the implementation of the road maps will ensure credibility and transparency. The Textile Partnership creates a reference framework and an independent review system of international scope.”
- “The Federal Government will publish a study identifying high-risk sectors and regions of particular relevance to the supply and value chains of German business. On the basis of this study, with the Federal Government in a moderating role, sector-specific guides to the exercise of human rights due diligence and examples of best practice will be drawn up in cooperation with the relevant business associations and with the aid of dedicated multi-stakeholder forums. …
- By means of the Partnership for Sustainable Textiles, the Federal Government supports a multi-stakeholder initiative combining voluntary and compulsory elements. The Textile Partnership is designed to comply with the UN Guiding Principles. The aim is to have 75% of the German textile and clothing market signed up to the Textile Partnership by 2018. The Partnership should serve as a model for the definition of due diligence requirements in other industries.
- The “Round Table on Human Rights in Tourism”, a model initiative for the development of a specific sectoral understanding of due diligence with regard to human rights, will receive increased financial support from the Federal Government.”
2.2 Transparency and communication regarding corporate impacts on human rights [page 30]
“Transparency requirements for corporate activity are an elementary component of due diligence with regard to human rights. These requirements are not limited to formal sustainability reporting but also entail willingness to engage in open dialogue with consumers, customers and actual or potential stakeholders and to share information on request.
2.3 Business activity in conflict zones [page 32-33]
The current situation
“An important contribution to these efforts is being made by the deliberations, which Germany is backing, on what are known as ‘conflict minerals’, an intense discussion being conducted within both the OECD and EU frameworks. In 2011, the OECD published a guide to corporate responsibility along supply chains in which minerals from conflict zones are traded and handled. The guide, entitled OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, has also been available in German since 2015. The primary aim of the Guidance is to curb the funding of armed conflicts from the proceeds of trade in raw materials; in addition, compliance with its recommendations would help to prevent serious human rights violations, especially child labour.
The European Commission has presented a proposal for a regulation setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas. Based on the aforementioned OECD guide, the Commission’s draft regulation would establish a voluntary undertaking to observe due diligence rules within supply chains when importing the minerals referred to above so as to ensure that proceeds from their sale are not used to fund armed struggles in conflict zones or other high-risk areas. The European Parliament, on the other hand, expressed itself in favour of a binding instrument for downstream operators, that is to say along the whole value chain. A basic compromise has now been reached between the European Parliament, the Council and the European Commission on a binding instrument focused on the upstream area, i.e. the supply chain. Further details will now have to be negotiated in the context of the trialogue conducted by the EU institutions.”
“The Federal Government is pursuing the aim of preventing the use of proceeds from the sale of tin, tantalum and tungsten, of their respective ores and of gold to fund armed struggles in conflict zones and other high-risk areas. It is committed to the establishment of binding due diligence rules, which should be proportionate and should not entail unnecessary red tape, particularly for small and medium-sized enterprises.”
3. Available means of practical implementation support
Measures [page 35-36]
“III. Opportunities for training and dialogue
- The range of advisory and training services offered by the German Global Compact Network will be expanded and supplemented by services such as a graduated range of webinars and other formats relating to specific elements of human rights due diligence just like practical questions and answers. …
- Creating a global level playing field
- In multilateral forums such as the G20, the EU and ASEM and in close cooperation with international organisations such as the ILO, the OECD and the UN, the Federal Government will press for the creation of a global level playing field with regard to terms of competition. To this end, the G7 leaders decision on sustainable supply chains will be further fleshed out with a view to arriving at a common global understanding of due diligence and of sustainable supply chain management.”
4.2 National Contact Point for the OECD Guidelines [page 39]
“Among other things, the NCP is responsible for complaints of insufficient respect for human rights and of insufficient consideration for human rights in the exercise of companies’ due diligence as defined in the OECD Guidelines.”
V. Ensuring policy coherence [page 40]
“The Federal Government will continue to press in global as well as other forums for a common understanding of due diligence.”
VI. Monitoring [page 41]
“The National Action Plan marks the starting point of a process that will be continuously updated and developed. The process will be shaped by the implementation of the measures for which this Plan provides as well as by a comprehensive procedure for monitoring the implementation of these measures by all players.
To this end, the Federal Government is planning, subject to budgetary approval, the immediate execution of the following steps: …
- The interministerial committee will verify the implementation and coherence of the adopted measures and drive forward the development of the NAP implementation process. The main areas of activity to come under its scrutiny will be the measures relating to the state duty to protect (public procurement, promotion of external trade, etc.) and the fleshing-out of due diligence obligations (chapter III above), including the planned definition of sectoral specifications and the corresponding support services. …
- Progress in the corporate implementation of the elements of human rights due diligence described in chapter III above will be reviewed by means of an annual survey conforming to current scientific standards, beginning in 2018. The survey will be conducted on the basis of a representative sample to establish the number of enterprises that have introduced the elements of due diligence listed in chapter III above and will also include qualitative interviewing on the substantive depth of these measures and the challenges encountered during their implementation in enterprises. The yardstick for this review will be the objectives formulated in chapter III.
- On this basis, the review will establish whether at least 50% of all German-based enterprises with more than 500 employees have incorporated the elements of human rights due diligence described in chapter III into their business processes by 2020. The review will also include a ‘comply or explain’ mechanism, whereby enterprises that are not implementing particular procedures and measures can explain why this has not been happening. An updated status report will be produced in preparation for a revision of the 2016 – 2020 National Action Plan.”
Section 2: Current legislative and Regulatory Framework
Supply Chain [page 15]
“The Government supports the proposal by the European Commission for an EU Council Regulation which provides for the establishment of an EU-wide system for supply chain due diligence of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas. The main objective of this proposal is to help reduce the financing of armed groups and security forces through mineral proceeds in conflict-affected and high-risk areas by supporting and further promoting responsible sourcing practices of EU companies. Of course, supply chain diligence is not limited to the extractive industries and areas of conflict.
Irish expertise has also been commissioned by multi-national corporations and technical cooperation programmes to undertake third party audits in the context of supply chain due diligence on factory standards. The design and implementation of a long-term building inspection and enforcement regime for all buildings in Bangladesh has, for example, been greatly assisted by Irish engineering expertise. Where possible, including through our Overseas Development Assistance, the Government will look to support such initiatives.”
Section 3: Actions
II: Initial priorities for the Business and Human Rights Implementation Group [page 18]
“i. develop a practical toolkit on business and human rights for public and private entities within 12 months to assist them in their human rights due diligence
iii. Encourage and support awareness of effective human rights due diligence by State owned or controlled companies.
iv. Encourage and support effective human rights due diligence in the context of State support to business and NGOs.
vii. Promote awareness of relevant multi-stakeholder and multilateral initiatives such as the UN global Compact, the Principles for Responsible investment and the Children’s Rights and Business Principles among state owned or controlled companies.
ix. Encourage companies and NGOs funded by the State to carry out human rights due diligence as appropriate to their size, the nature and context of operations and the severity of the risk of adverse human rights impacts.
xi. Encourage and facilitate the sharing of best practice on human rights due diligence, including effective supply chain audits”
Annex 1 – List of additional and ongoing actions to be carried out across Government commits
EU and Multilateral Efforts [page 20]
“6. Support the implementation of the Regulation establishing an EU-wide system for supply chain due diligence of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas.”
C. National Priorities
…With the aim of analysing specific matters related to the Italian context, the NAP mainly focuses on six priorities representing the business and human rights areas that NAP intends to address….
- PROMOTING HUMAN RIGHTS DUE DILIGENCE PROCESSES, AIMED AT IDENTIFY, PREVENT AND MITIGATE THE POTENTIAL RISKS, WITH PARTICULAR FOCUS ON SMEs;…
III. Government’s Expectations Towards Business
… According to the ‘Responsibility to Respect’, in order to prevent and avoid negative human rights impacts enterprises have to conduct processes aimed at preventing the risk of causing (or contributing to adverse human rights impact and at adopting specific measures able to mitigate eventual harmful consequences. Companies are thus expected to:… ii) set up and implement due diligence processes to identify, assess and prevent any potential human rights risks, which could be incurred in across their operations and activities (or business partners or suppliers)…
RESPONSIBLE BUSINESS CONDUCT AND OECD DUE DILIGENCE PRACTICES
With reference to the promotion of responsible business conduct, the Italian OECD NCP is committed to implement the OECD Guidelines for Multinational Enterprises by promoting them through an in-depth dialogue with businesses, trade unions, non-governmental organizations, representatives of civil society. Since the 2011 review of the OECD Guidelines, the NCP developed tools to make international standards operational especially for SMEs such as the “Due Diligence Guidance for SMEs” and activities for awareness raising and pilot projects involving large companies and SMEs with the aim of spurring a proactive responsible supply chain management through training, information and assistance …
- Promote common understanding of due diligence among companies and strongly encourage companies to engage in human rights policy and due diligence processes involving the entire supply chain …
- Participate to initiatives in the context of the OECD, EU and other international fora on sustainable supply chains, human rights and due diligence.
- Within the framework of the monitoring mechanism set in the Plan (see par. V) give special attention to due diligence of business enterprises owned or controlled by the State
- Further promote the knowledge of the OECD due diligence guidance ‘Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones’ and ‘Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas’, encouraging and supporting SMEs to follow as well this guidance tools.
Italy’s Updated NAP
III. ITALY’S EXPECTATIONS TOWARDS BUSINESS
In 2017 EU passed the new Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas. The Regulation meets the EU countries commitments to breaking the link between armed conflicts, crimes and illegal exploitation of minerals which often implies serious human rights abuses. EU companies in the supply chain are required to adopt due diligence to ensure they import these minerals and metals from responsible and conflict-free sources only. The new Regulation will take effect on 1 January 2021.
- Introduction of specific courses on due diligence and children rights to be included in the training programmes for officials of public administration.
Chapter 2. Action Plan
2. Areas of the NAP
(3) Measures of the Government Promoting Corporate Responsibility to Respect Human Rights
A. Measures Related to Domestic and Global Supply Chains and Promotion of Human Rights Due Diligence Based on the UNGPs
(Existing framework/Measures taken）
Japan’s Stewardship Code and Corporate Governance Code refer to grasping the status of investee companies and corporate information disclosure to promote sustainability initiatives, including elements of ESG issues. In addition, the Stewardship Code, which was revised again in March 2020 also includes reference to consideration on sustainability when holding dialogue between institutional investors and investee companies. Furthermore, the Guidance for Collaborative Value Creation was published as a guideline for dialogue and disclosure on voluntary and proactive initiatives of companies on non-financial information, including ESG factors.
Under the Women’s Participation Act, businesses that regularly employ 301 or more workers are obligated to: (1) understand the status of women’s participation and advancement in business enterprises and analyze issues; (2) establish, notify, disseminate, and publish an action plan incorporating quantitative goals and initiatives based on the understanding of the status and analysis of issues; and (3) publish information on the company concerning women’s participation and advancement in the workplace. These initiatives were enhanced with the partial revision of the Women’s Participation Act in May 2019.
With respect to the environment, corporate initiatives are being promoted with the establishment of the Environmental Reporting Guidelines. In August 2020, the “Introductory Guide on Environmental Due Diligence along the Value Chains: Referencing the OECD Guidance” was issued as a manual, including points to note in conducting environmental due diligence in relation to risk management and value chain management stated in the Environmental Reporting Guidelines. The Guidelines state that human rights are integral to address some measures regarding environmental issues, and explains that environmental due diligence is required as part of responsible business conduct and integrated with human rights.
In terms of awareness-raising activities and support, studies and research have been conducted by relevant institutions, including the Institute of Developing Economies of the Japan External Trade Organization (IDE-JETRO) and the Business Policy Forum, Japan. The results have been issued for the benefit of business enterprises.
For Japanese business enterprises engaging in overseas businesses, contact points for Japanese business enterprises (Japanese business support officers) have been established at Japanese embassies and consulates to enhance support for Japanese business enterprises’ overseas expansion.
Among international organizations, ILO provides information to both company managers and workers on how to better align business operations with international labour standards and build good industrial relations through the ILO Helpdesk for Business on International Labour Standards.
In addition to the above, international initiatives, including the Extractive Industries Transparency Initiative and measures against Illegal, Unreported and Unregulated fishing are being implemented, and Japan makes an active contribution to such initiatives.
(Future measures planned)
(a) Publicize the NAP and raise awareness of human rights due diligence among Japanese business enterprises in cooperation with industry groups and other relevant bodies
- Promote responsible business conduct by publicizing the NAP among corporations and raising awareness of human rights due diligence, including in supply chains, among industry groups and other relevant bodies. [All Ministries]
(b) Continue to raise awareness on the OECD Guidelines for Multinational Enterprises
- Continue to raise awareness on the OECD Guidelines for Multinational Enterprises in cooperation with relevant organizations to promote responsible business conduct. [Ministry of Foreign Affairs, Ministry of Health, Labour and Welfare, Ministry of Economy, Trade and Industry]
(c） Raise awareness on the ILO Declaration and ILO MNE Declaration
- Continue to raise awareness on the ILO Declaration and the ILO MNE Declaration on the websites of relevant ministries and agencies in cooperation with relevant organizations. [Ministry of Health, Labour and Welfare]
(d）Publicize the NAP and raise awareness of human rights due diligence to Japanese business enterprises operating overseas via Japanese embassies, consulates, and overseas offices of government-related entities
- Publicize the NAP and raise awareness of human rights due diligence with possible cooperation with local agencies and organizations by Japanese embassies and consulates. In so doing, sufficient attention is to be paid to the issue of protection of human rights of workers in supply chains, including the socially vulnerable such as women and children. [Ministry of Foreign Affairs, Ministry of Finance, Ministry of Economy, Trade and Industry]
(e） Raise awareness on the Guidance for Collaborative Value Creation
Continue to boost efforts to raise awareness of the Guidance for Collaborative Value Creation, which is useful for holding dialogue and disclosure relating to non-financial information, including ESG factors for investors and corporate managers and directors. The Guidance can be used as a guide for voluntary and proactive initiatives of companies. [Ministry of Economy, Trade and Industry]
( f ）Steadily implement the Act on the Promotion of Women’s Participation and Advancement in the Workplace
- The revised Act was adopted and enacted at the ordinary parliamentary session in 2019 (effective from June 1, 2020). The expansion of the Act’s scope (to be effective from April 1, 2022) included: expansion of the obligation to develop action plans and to have information disclosure for business enterprises employing 101 or more employees, and the obligation to reinforce information disclosure applied to business enterprises employing 301 or more employees. Going forward, disseminate information on the contents of the revision, and provide support for SMEs to develop action plans for smooth implementation of the revised Act. [Ministry of Health, Labour and Welfare]
(g）Promote information disclosure by business enterprises in accordance with the Environmental Reporting Guidelines
- Promote understanding of environmental due diligence and information disclosure by publicizing the Introductory Guide on Environmental Due Diligence issued in August 2020. [Ministry of the Environment]
(h）Support initiatives by international organizations overseas
- Continue to provide support for efforts, including voluntary contributions to the ILO, such as promoting decent work of workers at the lower tiers of global supply chains and disseminating good practices discovered through those activities. [Ministry of Health, Labour and Welfare, line Ministries]
C. Support for Small and Medium Enterprises (SMEs) regarding Business and Human Rights
(Future measures planned)
(b) Conduct seminars targeting SMEs in cooperation with economic organizations and civil society
- Continue to implement human rights education and awareness-raising seminars for business enterprises targeting SMEs as part of the project called the Support for Human Resources Development in SMEs and enhance understanding for human rights due diligence. [Ministry of Economy, Trade and Industry]
Chapter 3. Government’s Expectations towards Business Enterprises
(2)The Government expects Japanese enterprises, regardless of their size and sector of industry, to respect internationally recognized human rights and the principles concerning the fundamental rights set out in the ILO Declaration; introduce the process of human rights due diligence based on the UNGPs and other related international standards; and engage in dialogue with stakeholders, including those that are part of supply chains. Furthermore, the Government expects Japanese business enterprises resolve issues through effective grievance mechanisms.
Chapter 4. Framework for Implementation and Review of the NAP
4. The Inter-Ministerial Committee will, particularly during the first year, discuss the following points. For this, the Inter-Ministerial Committee will promptly commence its work after the launch of the NAP.
- Consider methods for effective and sustainable follow-up (including the discussion on appropriate evaluation indicators).
- Consider what information is sought by business enterprises in corporation with industry groups and other organizations to ensure that the implementation of the NAP contributes to the introduction of human rights due diligence by business enterprises, as indicated in Chapter 3 under “Government’s Expectations towards Business Enterprises.” Examples of such information could include successful and problematic cases and necessary steps to take going forward. The aforementioned “implementation of the NAP” particularly refers to publication of and awareness-raising for the NAP, and provision of information on the NAP for business enterprises, as mentioned in Chapter 2.2. Areas of the NAP (3) Measures of the Government Promoting Corporate Responsibility to Respect Human Rights.
- Consider providing opportunities for business enterprises to air their views in cooperation with industry groups and other organizations, to monitor to what extent human rights due diligence has been promoted as a result of the formulation and implementation of the NAP.
|CHAPTER TWO: SITUATIONAL ANALYSIS AND THEMATIC AREAS OF FOCUS
2.2 Kenya’s Experience with Business and Human Rights [Pages 6-7]
To develop a sustainable and equitable extractive sector, these challenges must be addressed especially since they have a far reaching impact on human rights. There is need to embed international human rights standards early into the exploration and drilling contracts, impact assessments, due diligence mechanisms and business reporting. This National Action Plan clarifies the Government’s expectation from concerned businesses in this regard.
CHAPTER THREE: POLICY ACTIONS
Policy Actions [Page 21]
The Government will:
i. Introduce a requirement for conducting Human Rights due diligence including the particular impacts on gender before approval of licences/permits to businesses; […]
3.2. Pillar 2: Corporate Responsibility to Respect Human Rights [Page 18]
Human rights due diligence is the primary tool that ensures that businesses identify the human rights risks of their activities, take measures to avoid or mitigate them, and where the harm has already occurred, ensure that the victims have access to an effective remedy. This responsibility extends beyond their activities to their business relationships including suppliers and contractors.
There is no mandatory requirement for human rights due diligence. Businesses, including state-owned enterprises, have not embraced the practice of engaging those whose rights are most likely to be impacted by their operations. […]
Policy Actions [Page 19]
c) Human rights due diligence: Require businesses to identify their human rights impacts including through conducting comprehensive and credible human rights impact assessments before they commence their operations and continuously review the assessment to ensure that they prevent, address and redress human rights violations. Such impact assessment should involve meaningful consultation with potentially affected groups and other relevant stakeholders and include particular gendered impacts.
CHAPTER FOUR: IMPLEMENTATION AND MONITORING
4.1. SUMMARY OF POLICY ACTIONS [Annex]
ANNEX 2: LEGISLATION PROPOSED FOR ENACTMENT OR AMENDMENT
The Lithuanian NAP makes no reference to human rights due diligence.
Part II: Specific objectives of the National Action Plan 2020-2022
1. The state duty to protect human rights
1.2. Implement pilot projects on due diligence in companies with majority state ownership
As a follow-up to NAP 1, it is important that the State continues to set a good example, including by implementing pilot projects on due diligence in majority-owned enterprises. Indeed, under the UN Guiding Principles, States should “take stronger measures to protect companies owned or controlled by them, … including, where appropriate, by requiring the exercise of human rights due diligence”.
The experiences of these pilot projects can be shared by appropriate means.
|Objectively verifiable indicators||– Benchmark: NAP 1 and National Baseline Assessment (NBA) [Etude de base]
– Contacts made by the political level
– Follow-up by the administrative level
– Reactions from the business community
|Verification sources||× Letters, e-mails and minutes of meetings
× Discussions and decisions at internal governance level
× Annual reports
× Signings of the National Pact [Pacte National]
|Expected results||× Presentation of the National Pact to the companies
× Increase in:
§ Formal commitments to apply the UNGPs
§ Due diligence processes in place
§ Remedies in place
§ Centralisation of documentary resources for economic actors
× Serve as good practice for other companies, including those in which the state has a minority stake
|Implementation timeline||× 1st phase: first semester 2020
× 2nd phase: duration of NAP 2
|Means of implementation||× Means of the ministries concerned
× Internal resources of the companies concerned
× Under the direction of: MAEE (Ministry of Foreign and European Affairs)
1.6. Study on the possibility of legislating a duty of care
Following the government’s commitment in the coalition agreement to “study the possibility of legislating on a duty of care for companies domiciled in Luxembourg”, the conclusions of the baseline study, the positions expressed by various actors within the working group on the need to introduce a binding duty of care for companies domiciled in Luxembourg, and recent legislative developments in other EU Member States, the possibility of the legislative option at national level is being studied, among others, at the level of the Working Group on Business and Human Rights [GT « Entreprises et droits de l’Homme »].
|Objectively verifiable indicators||× Benchmark: NAP 1, National Baseline Assessment (NBA) [Etude de base], CCDH’s (Commission consultative des Droits de l’Homme) Position Paper, position paper of l’Initiative pour un devoir de vigilance, position of the UEL (Union des Entrepises Luxembourgeoises)
× A number of meetings for discussing the issue
|Verification sources||× Study on the possibility of legislating a duty of care
× Work of the Working Group on Business and Human Rights [GT « Entreprises et droits de l’Homme »]
× Eventually, the work of an inter-ministerial sub-group
|Expected results||× Definition of the scope and content of the study
× Analysis of legislative initiatives abroad, at the European and at the UN level
× Assessment of the pros and cons and opportunities and limitations of a legislative approach
× Analysis of the existing legislation
× Analysis of the possible impact of legislation on the respect of human rights in the economic activities of companies
× Level playing field for companies
|Means of implementation||× MAEE (Ministry of Foreign and European Affairs) / Ministry of Justice
× CCDH (Commission consultative des Droits de l’Homme)
× l’Initiative pour un devoir de vigilance (Inititative for the duty of care)
× Working Group on Business and Human Rights [GT « Entreprises et droits de l’Homme »]
× External experts
1.7. Follow up on the commitment to introduce a duty of care at a European level
Following the Government’s commitment in the coalition agreement that “Luxembourg will support European initiatives to strengthen the social and environmental responsibility of transnational companies in the management of their supply chains and will commit itself at European level to binding and effective legislation”, the conclusions of the baseline study, the positions expressed by different actors within the working group on the need to introduce a binding duty of care for companies, recent legislative developments in other EU Member States and initiatives at the level of the European Parliament, a follow-up of the initiatives taken by Luxembourg in favour of European legislation on duty of care will be carried out in the framework of the National Action Plan.
To this end, regular reports will be made by the Ministry to the working group on the initiatives taken in favour of a duty of care at European level and on the progress of the work.
|Objectively verifiable indicators||× Benchmark: Coalition agreement|
|Verification sources||× Report from the MAEE (Ministry of Foreign and European Affairs)
× Follow-up in the Working Group on Business and Human Rights [GT « Entreprises et droits de l’Homme »]
|Expected results||Regular information of the working group members, sharing of published official documents and proposal of the working group to the Ministry|
|Implementation timeline||Duration of NAP 2|
|Means of implementation||× MAEE (Ministry of Foreign and European Affairs)|
1.9. Introduce human rights due diligence as advocated by the Guiding Principles into public-private partnership arrangements
The public-private partnership mechanisms in place, particularly at the level of development cooperation, provide opportunities to promote the implementation of the UN Guiding Principles on Business and Human Rights.
|Objectively verifiable indicators||× Benchmark: NAP 1
× National Baseline Assessment (NBA) [Etude de base]
× Evaluation from the “Business Partnership Facility”
|Verification sources||× Letters, e-mails and minutes of meetings
× Discussions and decisions at internal governance level
× Annual reports
× Signings of the National Pact [Pacte National]
|Expected results||Increase in:
× formal commitments to apply the UNGPs
× due diligence processes in place
|Implementation timeline||Duration of NAP 2|
|Means of implementation||× Working Group on Business and Human Rights [GT « Entreprises et droits de l’Homme »]
× Competent ministries
× Directorate for Cooperation and Humanitarian Action
1.14. Create human rights due diligence training
At the conference organised in June 2019 by the Ministry of Foreign and European Affairs and the University of Luxembourg, with the participation of high-level international experts, it was emphasised that awareness and concern for the UN Guiding Principles on Business and Human Rights must start with the training of future economic decision makers. Efforts to raise awareness and provide training in secondary and university education on the subject of “business and human rights” promise to increase knowledge of the importance of the subject.
|Objectively verifiable indicators||× Content of university courses in law and economics|
|Verification sources||× University of Luxembourg, Faculty of Law, Economics and Finance
|Expected results||× Modules on the UN Guiding Principles and due diligence are integrated into existing training (e.g. in the context of a Master in Management)
× Coherence of training content
|Implementation timeline||Duration of NAP 2|
|Means of implementation||× University of Luxembourg
× MAEE (Ministry of Foreign and European Affairs), MENJE (Ministry of Justice)
× House of Training
× Employers’ chamber [Chambre des salariés]
2. The corporate responsibility to respect human rights
2.2. Finalisation and implementation of the National Business and Human Rights Pact
The National Business and Human Rights Pact is one of the concrete flagship actions of NAP 1. A sub-working group has put a lot of effort into the implementation of the National Pact.
Further effort is needed to finalise the process of assessing the annual reports that participating companies are required to submit on the implementation of the Guidelines in their organisations and throughout their economic value chains.
|Objectively verifiable indicators||× Benchmark: NAP 1, National Baseline Assessment (NBA) [Etude de base]
× Text of the National Pact on Business and Human Rights
× Review of the effectiveness of the instrument in 2022
|Verification sources||× MAEE (Ministry of Foreign and European Affairs)
× UEL [Union des Entreprises Luxembourgeoises] / INDR [Institut National pour le Développement durat et la Responsabilité sociale des entreprises]
× Initiative for the duty of care [Initiative pour un devoir de vigilance]
|Expected results||× Critical mass of companies subscribing to the National Pact
× Annual reports on the implementation of the Guidelines submitted to the Business and Human Rights Working Group
× Evaluation of annual reports
× Recommendations to companies
|Implementation timeline||– 1st phase:
▪ Operational website
▪ Communication campaign
– 2nd phase: (as soon as possible) signing of the National Pact
– 3rd phase: 2020, training and implementation of due diligence processes in companies
– 4th phase: (March 2021) submission of first annual reports
– 5th phase: (between March and July 2021) evaluation of the first annual reports
|Means of implementation||– MAEE (Ministry of Foreign and European Affairs)
– Ministry of Economy
– UEL [Union des Entreprises Luxembourgeoises] / INDR [Institut National pour le Développement durat et la Responsabilité sociale des entreprises]
– Business and Human Rights Working Group
– External Consultant
The 2020-22 NAP states the second edition of the National Action Plan complements the first NAP. Additional information about the first NAP can be found here.
Content from non-BHR specific chapters in the Human Rights NAP:
Strategic priority 2.3. Respond to gross human rights violations, within a focalised intervention level, in order to prevent their reoccurrence
2.3.6. Encourage businesses to implement a prevention and reporting culture concerning human trafficking practices, particularly regarding people providing touristic, transport and communication services.
3.1 An active role for the government [page 14]
“As the government pointed out in its policy letter ‘CSR Pays Off’ and as is discussed under point 3 below on due diligence, the challenge in the next few years will be timely identification of risks in Dutch companies’ supply chains. The government wants to work on structural solutions within international chains, not incident management.”
3.3 Clarifying due diligence [page 21-28]
“A point raised during the consultations was that the government should clarify the UN Guiding Principles, using language companies understand. Companies feel that the government has failed to say what it expects of them in terms of due diligence.
Due diligence is a core concept of the UN Guiding Principles, as set out by Professor Ruggie. It may be defined as follows:
- Identifying and assessing human rights impacts: taking proactive, ongoing steps to understand how existing and proposed activities may cause or contribute to human rights impacts.
- Taking action and tracking effectiveness of response.
- Externally communicating how the business has addressed adverse impacts: it is possible that these impacts are not the direct result of a business’s own operations, but are caused elsewhere within the supply chain.
- Due diligence is not a one-off activity but an ongoing process.
In the 2011 update of the OECD Guidelines, the recommendation to apply due diligence was extended to the CSR domain. In all its communications with and conditions for the business community, the government uses the OECD Guidelines as its framework of reference for ICSR [International Corporate Social Responsibility]. Companies must take account of the potential social impact of their activities. Due diligence is thus the most important new element in the CSR policies of companies operating internationally and/or within international supply chains. Corporate responsibility for applying due diligence is part of good business practice. But what the most effective due diligence process entails depends on the size of the company, the nature of its trade relations and the sectors and countries in which it operates.
Raising companies’ awareness
“The aim of the information strategy described in the policy letter ‘CSR Pays Off ’ is to raise companies’ awareness of the need for due diligence. As an earlier study showed, SMEs operating internationally mainly need practical information. There are various aids for companies wishing to apply due diligence, and new ones are currently being developed, by the Social and Economic Council (SER), for instance. The government also has a role to play in making information and aids accessible. The knowledge centre CSR Netherlands plays an important role, while NL Agency and the embassies are major sources of information for companies operating at international level.
The government supports the SER with a grant for workshops to help companies shape the human rights component of their CSR policies, and to assist them in charting and prioritising the risks they face. These workshops are organised by SHIFT, a non-profit organisation set up with Professor Ruggie’s support to help companies and government authorities put the UN Guiding Principles into practice. The SER has also been given a grant to investigate whether the ISO 31000 risk management standard is applicable to CSR due diligence.
It is essential for companies to have access to all available information on due diligence. The European Commission has published human rights guidance for three business sectors: ICT companies, oil and gas companies and employment and recruitment agencies. These guides advise companies on how they can implement their responsibility to respect human rights in their everyday operations. At each step, the guides give a short account of what the UN Guiding Principles expect of them, and present a whole range of strategies and examples to help them put the principles into practice. The European Commission has also published a guide for SMEs and has developed a number of case studies. As mentioned above, the OECD has published a guide on responsible supply chains for conflict minerals and is working on a guide for responsible investment in agriculture supply chains. In 2010 Global Compact Netherlands published the results of a pilot study of application of the Ruggie Framework in ten Dutch companies. A follow-up publication is currently being discussed with Global Compact Netherlands.”
CSR Risk Check
“Using a grant from the Minister for Foreign Trade and Development Cooperation, CSR Netherlands has developed the CSR Risk Check for companies wishing to apply due diligence. Based on the sector and country in which a company is operating, this internet tool provides an indication of possible social impacts. CSR Netherlands works with the agency responsible for carrying out Sector Risk Analyses to harmonise the information on which the two instruments are based. This information will be used in the course of 2014 to compile sectoral world maps on which colour coding will be used to indicate whether a certain theme (e.g. child labour, discrimination of women) plays a role in a given country or region.”
Sector Risk Analysis
An issue raised during the consultations was that the government should help companies to take a proactive approach in identifying risks to human rights.
As announced in the CSR policy letter, Sector Risk Analysis has been introduced to identify the sectors that present the greatest risk of adverse social impacts and where priority should be given to strengthening company policy in relation to them. This forms part of the Dutch government’s due diligence towards the business community. In this way, it is helping the business community to fulfil its responsibility to apply due diligence on CSR. Both the business community and civil society organisations will be closely involved in the analysis. The government will enter into dialogue with the sectors identified in the analysis to explore how the situation can be improved. Human rights issues may also be raised. The government will report to the House of Representatives on progress with the project in early 2014.
Where specific issues relating to human rights and the Dutch business community play a role, the government will enter into dialogue with the companies concerned.
The government has reached agreement with a number of sectors on the subject of due diligence. Agreements with, for example, the textile sector and energy companies are now in preparation. The government is willing to remove obstacles identified by the companies concerned. It will support them in upscaling initiatives to international level – e.g. through the Better Coal Initiative dialogue – and will work for a level playing field for Dutch companies. The contents of these voluntary CSR agreements will depend on the nature of the problem, the degree to which the sector is organised and whether companies commit to achieving certain results or making certain efforts. The Minister for Foreign Trade and Development Cooperation and the Minister of Economic Affairs have requested the SER to advise them on effective CSR agreements with the business community. The SER is expected to issue its recommendations in early 2014. The sectors with which the government plans to enter into voluntary agreements will be announced in mid-2014.
Due diligence by government
“A point raised in the consultations was that the government should also apply due diligence to its own activities, for example in providing support for companies in the form of grants or other types of finance for activities abroad, export credit insurance and trade missions. In all these cases, the government requires the companies concerned to apply due diligence.
For some time now the government has applied ICSR [International Corporate Social Responsibility] frameworks for risk assessment (due diligence) to all applications for support. These frameworks differ, depending on the goals and the nature of the instrument in question. For example, the ICSR framework for trade missions differs from the frameworks for project grants or export credit insurance. Assessment is based on the risk profile of the project or instrument, so that high-risk projects are subject to more thorough assessment than projects with fewer risks.
Companies should always take responsibility for their activities and the ICSR assessment frameworks provide guidance in this respect. Participation in a voluntary CSR agreement will of course help companies wanting support from the government to fulfil the requirements set out in the frameworks.”
ICSR in relation to export credit insurance
“Under CSR policy on export credit insurance, both the government and companies are required to take responsibility for CSR. Companies using export credit insurance sign a declaration that they will seek to abide by the OECD Guidelines. The export credit agency Atradius DSB is responsible for carrying out a due diligence risk analysis of applications for insurance. The companies concerned are responsible for supplying the necessary information. If they are unable to do so, insurance will not be provided for the export transaction.
International agreements on the due diligence procedure for export credit insurance are set out in the OECD’s common approaches for export credit agencies. The common approaches apply to all OECD member states and, in terms of assessment of environmental and social impact, safeguard a level playing field between the member states’ export credit agencies. In the context of the common approaches, the OECD member states represented in the Export Credit Group have agreed that projects with potential adverse environmental and social impacts will always be screened for compliance with the IFC Performance Standards. The OECD Export Credit Group, in which all member states with export credit facilities are represented, is working on a strategy for assessing project-related human rights. The Netherlands plays an active part in this group, which is responsible for improving risk assessment.”
4. Action points
Clarifying due diligence [page 41]
- “The government will enter into dialogue with educational institutions providing courses in management-related studies on including business ethics and/or CSR in their curriculums.
- The government supports the SER with a grant for workshops to help companies shape the human rights component of their CSR policies, and to assist them in identifying and prioritising the risks they face. The SER has also been given a grant to investigate whether the ISO 31000 risk management standard is applicable to CSR due diligence.
- The government has entered into talks with Global Compact Netherlands on a follow-up to its publication ‘How to do Business with Respect for Human Rights’ (2010). • The Ministry of Foreign Affairs will shortly provide an interministerial training course for civil servants whose work calls for knowledge of the UN Guiding Principles, and a refresher or other course for implementing organisations on the significance of the OECD Guidelines for companies.
- In 2014 an independent committee will investigate whether the obligations of Dutch companies in relation to CSR are adequately regulated in Dutch law, and in accordance with the UN Guiding Principles. The committee will take into account the relevant case law, the situation in neighbouring countries and the business climate.”
3. The Corporate responsibility to respect human rights
Due diligence [page 33]:
In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed. Human rights due diligence:
(a) Should cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships;
(b) Will vary in complexity with the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations;
(c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.
Norwegian NAP refers to HRDD also in following sections:
The Government’s expectations of business enterprise [page 9]:
Business enterprises have an independent responsibility under the UN Guiding Principles to respect human rights by developing a public strategy or policy, exercising due diligence and helping to ensure a consultation and remediation process for individuals and communities affected by their activities. (…) In brief, the Government expects business enterprises to: (…) exercise due diligence and assess the human rights-related risks in the context of their operations. This applies particularly to enterprises that operate in demanding markets.
Due Diligence by GIEK, Export Credit Norway and Innovation Norway [page 24]:
GIEK and Export Credit Norway often provide financing for the same projects, and have established formal cooperation on CSR. The cooperation includes human rights due diligence based on the expectations of export credit institutions set by the UN Guiding Principles, and is an integrated part of GIEK’s and Export Credit Norway’s loan and guarantee activities. All projects for which financing is being considered are submitted to an internal risk classification, even projects where this is not required by the OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence. On the basis of the risk classification and considerations relating to opportunities for exerting influence, appropriate measures are taken to avoid, reduce and/or remedy potentially negative outcomes. In markets where there is a high risk that human rights will not be safeguarded in connection with business operations, it may be logical for example to require business enterprises to have adequate systems and strategies for risk assessment and follow-up. Innovation Norway practises environmental and social due diligence when dealing with all financing applications from business enterprises. The information on the company and the project for which support has been requested is assessed on the basis of a red flag checklist and a checklist based on the 10 principles of the UN Global Compact and adapted to Innovation Norway’s mandate and target groups.
The red flags are: risk of corruption, the nature of the company’s activities in low-cost countries, ethical dilemmas and environmental pressure from commercial activities. CSR scores reflect the level of CSR-related risk connected with the project or whether CSR may be a reason for giving the case priority. One of the conditions laid down in the contract with the client is that the enterprise must have high ethical standards and avoid contributing to corruption, human rights violations, poor working conditions or adverse impacts on local communities or the environment.
The Corporate responsibility to respect human rights with regards to conflict areas [page 32]: Political unrest and conflict entail a particularly high risk of human rights abuses. Companies that operate in such areas should therefore exercise particular due diligence if they are to avoid becoming involved in such abuses.
CHAPTER 3: National Action Plan Priority Areas and Proposed Actions
3.2. NAP Priority Areas
3.2.1. Financial Transparency, Corruption and Human Rights Standards in Public Procurement Contracts
- Federal (page 18)
‘10. Review and update the Public Procurement Regulatory Authority Rules to incorporate human rights due diligence as a key criterion in the bidding and evaluation process, and give preference to businesses that demonstrate actions taken to meet their human rights obligations.
Performance indicator(s): (i) Updated rules incorporating human rights due diligence
UN Guiding Principle(s): 1, 2, 3, 4, 5, 6, 8, 9
Relevant SDG(s): Goal 8 – Decent Work and Economic Growth; Goal 9 – Industry, Innovation, and Infrastructure; Goal 16 – Peace, Justice and Strong Institutions’
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 10 designating the Ministry of Law and Justice, the Ministry of Human Rights, the Public Procurement Regulatory Authority as Leading Entities, and designating the Provincial Law Departments; Provincial Human Rights Departments; Ministry of Commerce; Provincial Commerce Departments; Ministry of Industries and Production; Provincial Industries & Production Departments; Federal Cabinet; Provincial Governments; NGOs & INGOs with relevant expertise on public procurement; legal experts as Additional Entities (page 46).
3.2.3. Human Rights Due Diligence (pages 24-25)
‘As established during the NBA and consultative process, the concept of human rights due diligence in Pakistan currently lacks a legislative framework. An anticipated challenge in the implementation of human rights due diligence is uncertainty and reluctance amongst businesses regarding the regulatory requirements and potential costs of abiding by human rights due diligence standards. The responsibility to respect human rights applies to all businesses irrespective of their size. However, effective human rights due diligence frameworks account for the differences between the sectors, operating contexts, and circumstances of different kinds of business enterprises, and the potential severity and scope of their human rights impacts. Consequently, the scale and complexity of human rights due diligence actions undertaken by different enterprises may vary.
Human rights due diligence is an increasingly prominent area of discussion around the globe, not as a tick-box compliance exercise, but as a vital means to obtaining better human rights outcomes. It is anticipated that export markets will be negatively affected in countries which fall behind in addressing human rights violations across their supply chains. A pragmatic mix of human rights due diligence mechanisms, including the adoption of voluntary and common standards by businesses, as well as the development of a legislative and regulatory framework, will support the strengthening of a sustainable and resilient Pakistani economy. The progress of mandatory human rights due diligence legislation around the globe, especially in important trading partners, will be closely followed by the Government of Pakistan. Pakistan benefits from trade schemes such as GSP+, and the continuous and improved protection of human rights in business activity will only serve to further strengthen Pakistan’s international trading relationships.
Consistent Federal and Provincial coordination will be required to effectively conduct oversight and monitoring of compliance with human rights due diligence expectations. Progress in this regard will require strong communication and cooperation between relevant Ministries, Provincial Departments, and regulatory bodies for the establishment and oversight of human rights due diligence standards and guidelines, followed by the gradual development of a legislative framework.’
- Federal (pages 25-26)
‘31. Develop policy, including a proposed regulatory model, on the requirement of human rights due diligence for the approval of large-scale projects where the business activity poses a significant risk to the rights of a community at large, and incorporate into relevant existing Rules and Guidelines.
Performance indicator(s): (i) Policy development; (ii) Incorporation into relevant existing Rules and Guidelines
UN Guiding Principle(s): 1, 2, 3, 4, 5, 6, 8, 17, 23
Relevant SDG(s): Goal 8 – Decent Work and Economic Growth; Goal 10 – Reduced Inequalities; Goal 12 – Responsible Consumption and Production; Goal 16 – Peace, Justice and Strong Institutions’
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 31 designating the Ministry of Commerce, the Ministry of Human Rights, the Ministry of Industries and Production, the Provincial Industries and Production Departments as Leading Entities, and designating the Provincial Commerce Departments, the Provincial Human Rights Departments, the Board of Investments, the Pakistan Environmental Protection Agency, the Ministry of Energy, the Provincial Women Development Departments as Additional Entities (page 35).
‘32. Conduct feasibility study of human rights certification and provision of market incentives for businesses which demonstrate respect for human rights across their operations, including conducting human rights due diligence and publicising their efforts. Performance indicator(s): (i) Feasibility study report UN Guiding Principle(s): 1, 2, 3, 8 Relevant SDG(s): Goal 8 – Decent Work and Economic Growth; Goal 10 – Reduced Inequalities; Goal 12 – Responsible Consumption and Production; Goal 16 – Peace, Justice and Strong Institutions 33. Conduct feasibility study on the future enactment of mandatory human rights due diligence legislation in Pakistan, studying the legislative, regulatory, and economic framework in this regard.
Performance indicator(s): (i) Feasibility study report
UN Guiding Principle(s): 1, 2, 3, 8
Relevant SDG(s): Goal 5 – Gender Equality; Goal 8 – Decent Work and Economic Growth; Goal 10 – Reduced Inequalities; Goal 12 – Responsible Consumption and Production; Goal 16 – Peace, Justice and Strong Institutions’
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 32 designating the Ministry of Commerce and the Ministry of Industries and Production as Leading Entities (page 55).
‘33. Conduct feasibility study on the future enactment of mandatory human rights due diligence legislation in Pakistan, studying the legislative, regulatory, and economic framework in this regard.
Performance indicator(s): (i) Feasibility study report
UN Guiding Principle(s): 1, 2, 3, 8
Relevant SDG(s): Goal 5 – Gender Equality; Goal 8 – Decent Work and Economic Growth; Goal 10 – Reduced Inequalities; Goal 12 – Responsible Consumption and Production; Goal 16 – Peace, Justice and Strong Institutions’
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 33 designating the Ministry of Commerce and the Ministry of Industries and Production as Leading Entities (page 56).
‘34. Conduct a study on the potential impact of the future enactment of mandatory human rights due diligence legislation by major trading partners, such as the European Union, on Pakistan’s competitiveness in export markets, inflows of foreign direct investment, Pakistan’s role in global supply chains, and schemes such as GSP+.
Performance indicator(s): (i) Assessment report
UN Guiding Principle(s): 1, 2, 3, 8, 9
Relevant SDG(s): Goal 8 – Decent Work and Economic Growth; Goal 12 – Responsible Consumption and Production; Goal 17 – Partnerships for the Goals’
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 34 designating the Ministry of Commerce as Leading Entity (page 56).
- Federal and Provincial (page 27)
‘35. Develop and launch a Human Rights Due Diligence Partnership Project with the private sector, for the purpose of establishing a framework and standards for human rights due diligence reporting.
Performance indicator(s): (i) Launch of Partnership Project
UN Guiding Principle(s): 2, 3, 11, 12, 15, 17, 23
Relevant SDG(s): Goal 5 – Gender Equality; Goal 8 – Decent Work and Economic Growth; Goal 10 – Reduced Inequalities; Goal 12 – Responsible Consumption and Production; Goal 16 – Peace, Justice and Strong Institutions’
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 35 designating the Federal & Provincial Governments, the Ministry of Human Rights, the Provincial Human Rights Departments as Leading Entities, and designating the Ministry of Climate Change; Ministry of Commerce and Textile; Provincial Commerce Departments; Ministry of Communications; Provincial Communications Departments; Ministry of Energy; Provincial Energy Departments; Ministry of Finance, Revenue and Economic Affairs; Ministry of Industries & Production; Ministry of Law & Justice; Provincial Law Departments; Ministry of Inter-Provincial Coordination, Pakistan Environmental Protection Agency; Ministry of Health; Provincial Health Departments; Federal and Provincial Ombudspersons as Additional Entities (page 57).
‘36. Establish voluntary and common standards for conducting and reporting human rights due diligence in business activity, applicable to both the direct operations and across the value chains of public and private enterprises.
Performance indicator(s): (i) Development and dissemination of voluntary standards in line with international best practices
UN Guiding Principle(s): 1, 2, 3, 11, 12, 15, 17, 23
This information is also covered under Appendix 1: Implementation Plan, Proposed Action 36 designating the Provincial Governments and the Ministry of Human Rights as Leading Entities, and designating the Ministry of Law and Justice; Ministry of Industries and Production; Ministry of Commerce; Provincial Human Rights Departments; Provincial Law Departments; Provincial Commerce Departments; Provincial Industries and Commerce as Additional Entities (page 58).
CHAPTER 4: State Expectations of Business Enterprises (pages 38-39)
‘[…]2. Ensure the elimination of child labour, forced or bonded labour, and all forms of modern slavery from their business operations and supply chains. This may be expedited through the utilisation of effective and thorough human rights due diligence […]
6. Establish adequate human rights due diligence mechanisms to identify, prevent, and remedy human rights impacts. Human rights due diligence should consider both internal risks that stem directly from business operations as well as external risks, which relate to all other entities that the business work with across their operations or are linked with through their value chains. Human rights due diligence should be carried out before commercial operations and business activities, proportionate to the size and scope of the enterprise and the scale and complexity of its potential human rights impacts, and on a continuous basis to ensure that integrated findings from impact assessments shape future business decisions. Businesses should also ensure that the risks identified through due diligence and corrective actions taken are adequately reported and communicated to stakeholders, preferably in the form of an annual human rights due diligence report.’
It is also noteworthy that Peru has taken significant steps to implement due diligence standards. In this regard, in 2018 it adhered to the OECD Council Recommendation on Due Diligence Guidance for a RBC, which adds to previous accessions to the Council Recommendations on Due Diligence Guidance for the mining sector in 2011 and the textile and footwear sector in 2017.
In particular, the Due Diligence Guidance for a Responsible Business Conduct, published in 2018, in addition to having been agreed by governments, trade unions, companies, and civil society, seeks to promote a consensus on due diligence and also to help companies implement the due diligence recommendations contained in the Guiding Principles. – page 8
CHAPTER I: PROCESS OF ELABORATING THE FIRST NATIONAL ACTION PLAN ON BUSINESS AND HUMAN RIGHTS
Under the OECD Guidelines, the Peruvian NCP is tasked with promoting the Guidelines and related Due Diligence Guidance and handling cases related to potential non-compliance with the Guidelines by a multinational enterprise, through a non-judicial process of mediation and conciliation between the company and the affected parties referred to as “specific instances” (OECD, 2020b, p. 22). – page 12
CHAPTER II: THE BUSINESS AND HUMAN RIGHTS SITUATION IN PERU
Confiep has developed recommendations on the implementation of risk-based due diligence that targets these differentiated processes according to the size and activities of the company. These recommendations refer to the Due Diligence Guidance for a RBC (OECD, 2018) and follow the OECD framework for due diligence, although they are still challenged to include measures regarding remediation mechanisms (cf. OECD, 2020b, p. 23). – page 32
Private sector initiatives have also aimed at shifting towards risk-based approaches to RBC. In this context, mention should be made of the United Nations Global Compact in Peru, whose technical secretariat is provided by Confiep.16 Likewise, bilateral Chambers of Commerce -such as the Spanish Chamber of Commerce and the Nordic Chamber of Commerce- have provided specific support to promote the adoption of RBC practices by Peruvian companies through promotional events on due diligence (OECD, 2020b, p. 23). – page 33
CHAPTER III: DIAGNOSIS AND BASELINE: ACTION AREAS
3.1. General conclusions of the diagnosis and baseline
The State has established frameworks that protect human rights and that directly and indirectly encourage the adoption of business and human rights standards and RBC. However, the effective application of these provisions still presents important challenges that transcend the regulatory sphere, such as that advances in the regulation are implemented in an increasingly uniform manner and all business sectors so that due diligence is progressively and sustainably a practice exercised by the majority of companies. A survey applied by the OECD in the present process to identify the progress of the business sector in the implementation of due diligence mechanisms shows that several companies have developed a human rights policy, but that there is still a long way to go in the implementation in practice of due diligence processes in the universe of companies surveyed. – page 39
In general, both the State and the business sector have shown a firm commitment to incorporate into their activities the postulates of the Guiding Principles and other instruments promoted by the RBC through due diligence. However, these advances, mainly in the regulatory sphere, have yet to be clearly reflected in practice, which is associated with cross-cutting problems of various kinds. – page 40
3.2. Conclusions of the specific issues
(…) there is still a need for training on corporate due diligence, both in business activities and supply chains. Likewise, there is an acceptable level of knowledge on the Guiding Principles, but this needs to be reinforced for the remediation pillar.
Due diligence mechanisms
The findings of the diagnostics show across the board that an important aspect that needs to be incorporated in companies is the adoption of due diligence measures. The OECD (2021) survey22 reports that 43% of respondents require all first-tier suppliers and business partners to meet RBC expectations as part of a contract or agreement. 42% claim to always adopt an enhanced due diligence process when risks are identified in the supply chain and 25% conduct risk assessments beyond Tier 1 in the supply chain or on their products, raw materials, or services.
In this sense, the survey identifies significant progress in the installation of a culture of business and human rights, RBC, and due diligence actions within companies, but at the same time, just over 50% do not apply due diligence processes to risks in the supply chain. This shows the need for a strategic articulation between the State, civil society, and the business sector so that an increasing number of companies incorporate these measures into their activities, as well as strengthen their practical application. In this regard, 57% mentioned the need to receive training on due diligence tools, so that training and advisory services are needed in this area to enable their practical implementation at the operational level. – page 42
There are important practices from the business sector such as the implementation of the Working Committee for the Promotion of Women’s Empowerment in the Business Sector, as well as other initiatives in empowerment for leadership and business, promotion of incursion in traditionally male tasks, rankings, and seals that recognize companies that implement gender equality practices. One of the main demands from civil society is the establishment of a care system, which represents one of the main barriers to women’s equal access to work and other spaces. It is also important to mention that it is necessary to implement due diligence measures. – page 45
Indigenous peoples and prior consultation
(…) With respect to other matters related to indigenous or native peoples, business associations have made progress with respect to corporate due diligence on human rights, with a clear intercultural approach, such as mechanisms for complaints and social claims in accordance with the Guiding Principles, which provide for reporting on the rules of due diligence and respect for human rights to external stakeholders and disseminate it among their contractors. However, public policy does not provide sufficient information on compliance. – page 49
Mining is one of the most important economic activities in the country and, in recent years, due diligence mechanisms have been widely adopted for the formal mining sector. Progress has been made in the negotiation of land transactions due to the dialogue mechanisms and, therefore, it is essential to strengthening them considering the land-use planning policy. In addition, the prevention and management of the environmental impacts of mining activity require improvements, such as better quality information on socio-environmental baselines and strengthening the administrative and legal capacity of the competent environmental oversight entities. Progress has also been made in social conflict prevention mechanisms, although the creation and implementation of a national prevention system is still pending.
The distrust of certain sectors towards mining activity merits a public policy that considers actions to monitor the progress of the business sector in the implementation of due diligence mechanisms, as well as transparency, training and multi-stakeholder dialogue, and greater dissemination of progress. On the other hand, Peruvian legislation has made progress in dealing with environmental mining liabilities; however, problems persist in rehabilitating environmental liabilities generated by informal and illegal activity. Complaints of heavy metal contamination deserve timely attention, a good example being the work of the Temporary Multisectoral Commission on the matter. – page 50
Table 8: NAP strategic guidelines and objectives, and alignment with the axes of the Peru Vision 2050
Strategic guideline No. 2: Design of public protection policies to prevent human rights violations in the business environment. Objective No. 1: Promote regulatory actions to prevent human rights violations in the corporate sphere
Action: Evaluate, taking into account the progress achieved through the NAP in strengthening public policy on GP-RBC, a regulatory proposal on due diligence in the business sector.
Background: In order to progressively strengthen the public policy on Business and Human Rights, based on the incorporation of the RP and other international standards in national public policies, it is convenient to evaluate the relevance of a specific regulation of legal rank that regulates corporate due diligence, the same that has been adopted in other European and Latin American countries. This evaluation should take into account the progress made in the incorporation of standards through the NAP.
Indicator: Assessment report on a regulatory proposal on due diligence in the corporate sector (Action Indicator). – page 77
Objective No. 2: Technical assistance to companies for the observance of human rights in their business activities
Action: Create and implement, within the General Directorate of Human Rights, a program to provide technical assistance to the business sector, both private and public, in the implementation of due diligence mechanisms for GP- RBC.
Background: In order to promote the implementation of due diligence mechanisms for the GP- RBC and other international standards, MINJUSDH will create and implement a technical assistance program for the business sector, both private and public sector, large, medium, small and micro enterprises, according to international standards, the current national and international regulatory framework and good practices in Peru and other countries that can be replicated in the Peruvian context, taking into account, if necessary, the context of the health emergency due to Covid-19.
Indicator: A program created and implemented, and annual progress report (Action Indicator). – page 105
Action: Produce, in coordination with the business sector, organized civil society, the competent state sector, indigenous peoples, and trade unions, specific guides for the business sector for the implementation of due diligence mechanisms.
Background: With the purpose of implementing the principles of the GP-RBC, and adapted to specific business sectors, the MINJUSDH will produce specific guides for special protection groups and issues prioritized in the diagnosis and baseline and others to be prioritized, in order to implement due diligence mechanisms.
Indicator: Follow-up reports on the implementation of the guides (Action Indicator). – page 107
Action: Produce, in coordination with the business sector, organized civil society and the competent state sector, a guide aimed at the micro and small business sector to promote their formalization and, progressively, a culture of due diligence.
Background: The guide will specifically address the principles of GP-RBC in order to promote the formalization of micro and small enterprises and progressively implement a culture of due diligence, taking into account their peculiarities. The guide will be developed with the business sector and civil society, and its implementation and follow-up will be promoted.
Indicator: Due diligence guide for micro and small companies prepared, presented, and implemented. Follow-up reports on the implementation of the guide (Action Indicator). – page 107
Action: Incorporate due diligence mechanisms to guarantee a human rights approach in the activities of the business sector, specifically in consumer relations and advertising.
Background: The activities carried out by the business sector, specifically, consumer relations and advertising must take into account the human rights approach, with special emphasis on groups in need of special protection.
Indicator: Guidelines for suppliers, incorporating recommendations related to due diligence in respecting equality and non- discrimination in consumption and/or advertising (Action Indicator). – page 109
Action: Formulate and implement a guideline for the implementation of due diligence management mechanisms for the RBC, aimed at public companies.
Background: In order to guarantee the implementation of the GP-RBC approach in SOEs, and specifically, of operational due diligence mechanisms, it is necessary that FONAFE, in accordance with its steering role, and with the support of MINJUSDH and other competent bodies, formulate and disseminate guidelines for the incorporation of the aforementioned approach and due diligence mechanisms in SOEs.
Indicator: Policy formulation by portfolios (Action Indicator). – page 114
Action: Formulate and implement a follow- up, monitoring, and evaluation mechanism for the implementation of due diligence mechanisms in public companies.
Background: In order to strengthen the implementation of due diligence mechanisms in SOEs, FONAFE Corporation should also implement a follow-up, monitoring, and evaluation mechanism for the implementation of due diligence mechanisms in order to strengthen its oversight of SOEs.
Indicator: Mechanism for follow-up, monitoring, and evaluation of the implementation of due diligence mechanisms in public companies (Action Indicator). – page 115
Action: Adopt due diligence measures to avoid actual and potential risks of violations to the safety and health of workers.
Background: Adopt due diligence measures to ensure the prevention of situations of violation of the safety and health of workers in business activities that include risk map, index of hazards and risks), documents (internal regulations, records), or institutions (OSH committee) in the company.
Indicator: Number of members of the Occupational Health and Safety Committee in the companies (Action Indicator). – page 116
Action: Provide information and raise awareness on collective labor rights due diligence throughout the supply chain.
Background: There is a need to provide information and raise awareness on the adoption of due diligence measures for the respect of collective labor rights throughout the supply chain. This information should include small and medium-sized enterprises, as well as the context of the Covid-19 pandemic.
Indicator: Information booklet on due diligence measures for respecting collective labor rights throughout the supply chain (Action Indicator). – page 117
Action: Provide technical advice on the implementation of due diligence mechanisms within the framework of GP-RBC, with a focus on occupational safety and health.
Background: In order to promote the implementation of GP-RBC due diligence mechanisms, the MINJUSDH will provide technical assistance to the business sector according to international standards, the national and international regulatory framework in force, and good practices in Peru and other countries that can be replicated in the Peruvian context on issues of due diligence in occupational safety and health.
Indicator: Number of orientations provided (Action Indicator). – page 118
Objective 2: Establish mechanisms for companies to report on their human rights due diligence processes.
Action: To progressively create and implement a mechanism for follow- up, monitoring, and voluntary reporting of the corporate due diligence mechanisms implemented by trade unions and companies in the formal sector, with the participation of the business sector, civil society organizations, indigenous peoples, trade unions, and the competent state sector.
Background: In order to follow up and monitor the implementation of due diligence mechanisms by the business sector, MINJUSDH will progressively create and implement a state mechanism to receive voluntary reports from the business sector reflecting progress in this task.
Indicator: Follow-up and monitoring mechanism for the business sector due diligence mechanisms (Action Indicator). – page 124
Objective 3: Create and strengthen mechanisms at the operational level by companies to redress human rights violations in the corporate sphere.
Action: Create and implement a follow-up and monitoring mechanism for corporate due diligence related to reparations, which are implemented by trade unions and companies in the formal sector, with the participation of the business sector, civil society organizations, indigenous peoples, Andean and Amazonian peoples, trade unions and the relevant state sector.
Background: Businesses should diligently manage complaints and/or claims received from people with disabilities and senior citizens who consider themselves affected by the adverse impacts of business activities, ensuring due process of their complaints and implementing sanctions and redress mechanisms, as appropriate. This action, with emphasis on reparation mechanisms, is implemented within the framework of Action 87.
Indicator: Follow-up and monitoring mechanism for the business sector due diligence mechanisms. – page 125
Action: Produce, in coordination with the business sector, organized civil society, the competent state sector, indigenous or native peoples, Andean and Amazonian peoples, and trade unions, specific guidelines for the business sector for the implementation of due diligence mechanisms that provide comprehensive reparation.
Background: In order to reflect the principles of PR-CER, and adapted to specific business sectors, MINJUSDH will produce specific guides for the groups of species and issues prioritized in the diagnosis and baseline and others to be prioritized, in order to implement due diligence mechanisms.
Indicator: Preparation and public presentation of the guides. – page 125
2017-2020 NATIONAL ACTION PLAN
2. Responsible business conduct (CSR/RBC) and human rights [page 6]
In Chapter IV [of the OECD Guidelines for Multinational Enterprises], Human Rights, it is stated that enterprises should respect human rights; avoid causing or contributing to adverse human rights impacts and address such impacts when they occur; seek ways to prevent or mitigate adverse human rights impacts that are directly linked to their business operations, products, or services through business relationships; have a policy commitment to respect human rights; carry out human rights due diligence; and co-operate through legitimate processes in the remediation of adverse human rights impacts.
Pillar II: Corporate responsibility to respect human rights
6. UN Guiding Principles in the operations of the Export Credit Insurance Corporation [page 32]
The issue of respecting human rights in the operations of export credit agencies was raised both in the work on the 2012 Recommendation (modification of the 2007 33 document) and during several years of its revision, culminating in the adoption of the current version by the OECD Council on 6 April 2016. The current version of the Recommendation, officially published on 3 April 2016 (TAD/ECG (2016) 3) takes greater account of the requirements for respecting human rights in a procedure known as due diligence in the social and environmental aspects, e.g., in the classification of export undertakings and risk assessment.
2021-2024 NATIONAL ACTION PLAN
|2. Ministry of Development Funds and Regional Policy
Responsible business – promoting due diligence standards
The plans of the Working Group for Relations with Individuals Performing Work include, among others, the following activities:
monitoring international trends concerning proposed regulatory solutions for increasing the responsibility of enterprises in the area of respecting human rights, supporting the process of possible implementation of regulatory solutions in this field into the Polish legislation, creating due diligence procedures by enterprises,
The issue of due diligence in the field of human rights will also be of particular interest to the Advisory Board for Sustainable Development and Corporate Social Responsibility in view of the legislative changes planned at the EU level as regards due diligence in the area of human rights and environmental issues, as well as in the field of non-financial reporting covering, among others, issues concerning the respect for human rights. Monitoring the directions of legislative changes in non-financial data reporting planned at the EU level, as well as work in areas related to non-financial reporting, constitutes one of the tasks of the Working Group on the Development of Non-financial Reporting established on 31 March 2021. – page 10/11
5. Ministry of Finance
Implementation of the Good Practice Catalogue on due diligence for European Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas
On 1 January 2021, new obligations took effect as regards supply chain due diligence for EU importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas. These obligations were established by Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017. – page 23/24
Appendix 2 (information of the Ministry of Foreign Affairs)
GOOD PRACTICE CATALOGUE FOR FOREIGN MISSIONS IN THE FIELD OF BUSINESS AND HUMAN RIGHTS2
– comply with the United Nations ‘UN Guiding Principles on Business and Human Rights’ and the principle of ‘due diligence’3 and to continuously raise awareness of the need to apply them in practice among both employees and partners of the mission; – page 46
The state’s expectations of business enterprises
With this Action Plan, the Government commits to encouraging the development and promotion of human rights due diligence in business and puts forward the recommendation and the expectation that economic operators will set up a mechanism for human rights due diligence. (pg. 7-8)
Principle 2 – States sets expectation for respecting human rights
[T]he Government of the Republic of Slovenia expects economic operators to set up a human rights due diligence mechanism to facilitate the identification, prevention and mitigation of adverse human rights impacts, as well as to report on their mitigation measures. Human rights due diligence includes assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed. Enterprises provide human rights due diligence reports as part of their financial or sustainability reports. The Government of the Republic of Slovenia will strive for the development and implementation of human rights due diligence in business and will maintain dialogue with stakeholders concerning the implementation of human rights due diligence in practice. This Action Plan provides further information on human rights due diligence in the annex ‘Guidelines on the implementation of human rights due diligence in business’. (pg. 11)
Principle 3d – Human Rights Due Diligence
With this Action Plan, the Slovenian Government recommends that business enterprises based in Slovenia practice human rights due diligence throughout the business process to guarantee human rights in business in accordance with the UN Guiding Principles. It also recommends they include due diligence reports in their annual reports or in sustainability reports. The Guidelines on Corporate Human Rights Due Diligence are included as an annex to the Action Plan to help draft due diligence reports. (pg. 22)
The Slovenian Government will strive to develop and foster human rights due diligence in business operations, and promote its recommendations for business enterprises, with a focus on those owned or co-owned by the state. When monitoring the implementation of the Action Plan, the Slovenian Government will continue the dialogue with the business sector, trade unions, NGOs and other partners on the implementation of human rights due diligence in practice, including the designing of mechanisms and tools for this purpose. To support the implementation of human rights due diligence, the Government will examine the possibilities of carrying out projects aimed at informing enterprises of the content and methodology of due diligence plans, including by providing counselling for its drafting. (pg. 23-24)
Principle 31 – Operational-level mechanisms
Slovenia will continue its efforts to establish cooperation with non-governmental organisations, businesses, trade unions and academia, to encourage enterprises to strive for continuous development and to apply the relevant appeal mechanisms to address the alleged or potential violations of human rights in business processes, also through human rights due diligence. (pg. 42)
Implementation of the National Action Plan
The review of the fulfilment of commitments with further proposals is conducted in multi-stakeholder form. Furthermore, the Ministry promotes, and steers activities aimed at developing mechanisms and tools for conducting human rights due diligence. (pg. 43)
Annex I – Human Rights Due Diligence
The UN Guiding Principles on Business and Human Rights define human rights due diligence as a process carried out by business enterprises to identify, prevent and mitigate adverse impacts on human rights, as well as to report on methods to reduce such impacts. Human rights due diligence is a permanent internal process and must be carried out by a responsible company to an extent appropriate to its size, sector, nature and geographical area to ensure respect for human rights. In addition, it is recommended that an enterprise also carry out human rights due diligence with its contractual partners and uses its influence to contribute to the acceptance of, and respect for, human rights. Human rights due diligence falls into the context of other careful assessments within the framework of the enterprise’s risk management. (pg. 44)
Annex I – Human Rights Due Diligence in Practice
The implementation of human rights due diligence can be summarised in five steps, which include adopting the commitment to respect human rights throughout business operations, setting up a structure for due diligence in all internal and external relations, a priority analysis, due diligence implementation through mechanisms for detecting, and responding to, violations and monitoring of, and reporting on, due diligence and respect for human rights. (pg. 45)
South Korea’s NAP makes no reference to human rights due diligence.
Guiding Principle 2
The State expects from Spanish companies, in Spain and abroad, a behavior consistent with its responsibility to respect human rights, which implies that they must act with due diligence, depending on their size and circumstances, to avoid the violation of the rights of third parties and to deal with the adverse impacts of their activity. In this regard, in addition to recalling the obligation incumbent upon the State to protect human rights, which includes abuses that may result from business activity, also the need to preserve the reputation of the State and to promote the Brand Spain should be noted.
“The Government will establish networks among Spanish companies or that the ones that operate in Spain for the promotion of: measures, procedures or internal systems that can effectively contribute to the prevention and/or mitigation of the negative consequences of business activities on human rights; as well as for the dissemination of good practices aimed to avoid these consequences, or to influence their avoidance, reduction or remedy. The establishment of procedures for internal assessment and determination of action will be promoted in a manner that avoids other negative consequences on human rights.”
“The Monitoring Commission will design and submit to the Government the adoption of an incentive system that includes both large companies and Small and Medium Enterprises (SMEs) that carry out policies in the field of human rights. These incentives may be economic, commercial, visibility and image, or other nature, to encourage companies to have policies and reliably certify that they have implemented adequate procedures at a global level according to their size and circumstances, namely:
- A public commitment to assume its responsibility to respect human rights in accordance with the provisions of the Principle no. 16;
- A process of due diligence aligned with the sectorial guides regarding the OECD (due diligence guidance), and based on the dialogue with stakeholders that allows identification, prevention, mitigation, and accountability of how they address the impact of their own activities and those that are directly related to their business relationships in accordance with the provisions of Principles no. 17 to no. 21;
- Some processes that allow to remedy all the negative consequences on human rights that have caused or contributed to provoke according to what is established in Principles no. 22, no.29, no. 30, no. 31.”
Guiding Principle 3
“The Government will train the personnel of the State Foreign Service, in accordance with Law 2/2014, of March 25, of the Action and of State the Foreign Service, as well as to the agencies in charge of the internationalization of business abroad about the responsibility of companies to respect human rights and due diligence and redress procedures, and will incorporate the Guiding Principles into the Annual Plans for External Action and the Brand Spain. Likewise, through its Diplomatic Missions, Permanent Representations and respective Sectorial Offices, especially the Economic and Commercial Offices, as well as through the Consular Offices, Technical Cooperation Offices and Training Centers of Spanish Cooperation AECID abroad, will disseminate tools and guidelines according to the characteristics of each country.”
“In order to increase transparency, and the confidence of consumers and investors on Spanish companies, the Government will compile the reports that companies write voluntarily, in accordance with the Spanish Strategy for Corporate Social Responsibility, and the Article 39 of the Sustainable Economy Law. It will be encouraged that these take into account the impact of their activities on human rights, including the value chain, introducing a specific chapter for that purpose. Likewise, and in relation to the reports and reports mentioned in the article 35 2 a) of the Sustainable Economy Law, which binds state business corporations, and public business entities attached to the General State Administration, it will be promoted the inclusion of a section on human rights. In addition, the transposition of Directive 2014/95/EU on disclosure of non-financial information and information about diversity by certain large companies and certain groups will be carried out.”
Guiding Principle 4
… Spain supports the OECD Council Recommendation on common approaches for export credits which benefit from official support and social and environmental due diligence.
Guiding Principle 7
“The Government will promote the application of the OECD Due Diligence Guide for Supply Chains Responsible for Minerals in Conflict or High Risk Areas.”
Guiding Principle 25
“Within one year from the approval of this Plan, the Monitoring Commission will prepare a report on the legal mechanisms through which the civil liability of companies that cause damage or harm to human rights, including damage or harm caused through the lack of action on due diligence for the prevention of their own behavior, or that of their employees or agents, or that of the companies belonging to the same business group.”
2 The corporate responsibility to respect human rights [page 14]
“In keeping with the UN Guiding Principles, businesses’ human rights efforts are expected to include the following main points: …
- Establish an integrated and ongoing process in the company to identify, prevent and manage human rights risks and opportunities, as appropriate to the size, nature and context of the operations, i.e. due diligence”
Annex: Measures taken [page 22-24]
The State as actor
- “Sweden is carrying out awareness-raising activities on this issue and supports the OECD’s work on how companies are to identify risks in the supply chain and avoid trade in conflict minerals (OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas).”
Action by government agencies
- “Over and above the projects and sectors covered by the OECD’s ‘Common Approaches’ recommendations, the EKN has requirements and processes in place for conducting due diligence with respect to the environment and human rights in all other business transactions. The EKN also produces country risk analyses for many countries (www.ekn.se). The due diligence and any more in-depth review proceed from the potential seriousness of the impact of a business transaction and depends on the size of the transaction. …
- The Swedish International Development Cooperation Agency (Sida) has developed forms of cooperation with the private sector with a view to mobilising additional resources for development. CSR is a precondition for cooperation. Based on the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and the principles of the UN Global Compact, a due diligence tool has been developed for assessing and facilitating dialogue with potential partners on business and human rights. …”
Annex: Measures planned [page 28-29]
How can the State support the business sector?
- “The Government Offices is considering conducting special due diligence in sectors facing distinct challenges.”
The State as owner
- “The Government will work to increase knowledge about the UN Guiding Principles on Business and Human Rights in state-owned companies and will ensure that these companies, where appropriate, conduct human rights due diligence in order to assess and address any significant risk to human rights.”
- “The Government’s clear expectation is that companies operating in Sweden or abroad comply with the UN Guiding Principles for Business and Human Rights and other relevant guidelines in this area, and review their due diligence and redress mechanisms. Companies operating in markets where human rights challenges are particularly serious should place special emphasis on work in the area.”
2 National Action Plan on Business and Human Rights 2020-23
2.1 Pillar 1: state duty to protect
2.1.2 Operational principles: legislative and information policy measures
Swiss legislation does not require companies to carry out human rights due diligence. In response to the popular initiative ‘Responsible Business – Protecting Human Rights and the Environment’, the Federal Council proposed submitting it to the people (referendum), without a counter-proposal. It advised voters to reject the initiative, explaining that it prefers a coordinated approach at the international level and the use of existing instruments, specifically the national action plans on the subjects covered by the popular initiative
2.1.3 The State-business nexus
Guiding Principle 10
Measure 9: Human rights due diligence by federal government-associated businesses
The Federal Council defines its strategic goals for federal government-associated businesses every four years and expects these companies to pursue a sustainable corporate strategy to the best of their business ability. As regards the protection of human rights, a number of these businesses already exercise due diligence and document these efforts in their reporting.
To advance the implementation of UN Guiding Principles by federal government-associated businesses, interdepartmental coordination must be stepped up. Failure by these entities to meet international standards on human rights due diligence could pose a reputational risk to the federal government. The Federal Council therefore intends to assist federal government-associated businesses in playing a lead role by raising awareness of human rights due diligence and promoting the exchange of best practices, particularly with regard to risk management, monitoring and public reporting. This optional measure is geared primarily towards federal government-associated businesses which work with suppliers and business partners abroad.
The federal government may also run optional training sessions on UN Guiding Principles and human rights due diligence for the members of boards of directors and senior management of federal government-associated businesses.
|Assist federal government-associated businesses in taking a lead role and encourage them to put in place human rights due diligence procedures.||examples of human rights due diligence exercised by federal government-associated businesses.
At least one training session held for federal government-associated businesses.
|FDF [Federal Department of Finance],
DETEC [Federal Department of the Environment, Transport, Energy and Communications],
EAER [Federal Department of Economic Affairs, Education and Research].
Measure 10: Human rights due diligence by business enterprises covered by Swiss Export Risk Insurance (SERV) and supported by Switzerland Global Enterprise (S-GE)
The OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence is constantly being updated and developed. Switzerland contributes to this process. The guidelines are intended, among other things, to provide greater protection against business-related human rights abuses, and they are widely recognised as constituting an international standard by export credit agencies and export risk insurance providers.
The SERV Ordinance (as amended) expressly requires insurance applicants to disclose human rights-related information. Unlike many other export credit agencies, SERV does not grant export credits, i.e. engage in direct lending, but solely provides insurance and guarantees, i.e. pure cover. SERV does not provide cover or accept liability in respect of claims relating to projects that do not meet international human rights standards because of the insured party’s activities.
Switzerland Global Enterprise (S-GE) works on behalf of the federal government and the Swiss cantons to promote exports and attract companies to Switzerland. It helps companies exploit new international markets, thus promoting Switzerland’s as a business location. S-GE has a Code of Conduct which is intended to ensure that its staff are not implicated in human rights abuses by Swiss companies. If S-GE determines that a company has committed a human rights abuse, it will decline the mandate in question.
|A rights-aware approach in all export promotion activities.||Human rights due diligence by SERV (source: report to Federal Council on the achievement of strategic objectives). Verification of compliance with Code of Conduct (source: S-GE monitoring report submitted to the EAER).||EAER [Federal Department of Economic Affairs, Education and Research]|
Measure 11: Human rights due diligence by public-private development partnerships
As laid down in the Code of Conduct for Contractual Partners of the FDFA [Federal Department of Foreign Affairs], respect for human rights and gender equality are two of the values which should be promoted in the interests of Switzerland. All individuals, companies or other entities that work with the FDFA are required to contribute to the promotion of these values and to act in accordance with them, and with the legal order. The Code of Conduct outlines the attitude and behaviour that the FDFA expects from its contractual partners (suppliers of goods and services, consultants, contractors, organisations responsible for implementing projects and/or recipients of contributions, etc.) in Switzerland as well as abroad. The Code of Conduct is binding and forms an integral part of all agreements between the FDFA and its partners.
The Swiss Agency for Development and Cooperation (SDC) Risk Assessment for Partnerships with the Private Sector takes into account the impact that these partnerships could have on human and employment rights, government structures and the environment. Consequently, the federal government will not work with partners which have repeatedly been involved in human rights abuses or cannot provide cogent evidence that they have substantially reduced their exposure to human rights risks.
The federal government is currently working with other donors on a risk management model for public-private development projects. The outcome of this process, which takes place within the framework of the Private Sector Engagement Working Group of the Donor Committee for Enterprise Development (DCED), could necessitate amendments to the SDC Risk Assessment for Partnerships with the Private Sector.
|Prevent human rights risks in public-private development partnerships.||A tangible example that the SDC Risk Assessment guidelines have been implemented, including a human rights risk assessment, prior to entering into a new public-private development partnership.||FDFA [Federal Department of Foreign Affairs],
EAER [Federal Department of Economic Affairs, Education and Research].
2.1.4 Business respect for human rights in conflict-affected areas
Guiding Principle 7
Given the heightened risk of human rights abuses in conflict-affected areas, States should help ensure that business enterprises operating in those contexts are not involved in such abuses or lead State entities to commit human rights violations. The federal government expects companies operating in conflict-affected and high-risk areas to conduct due diligence in a way that takes local circumstances into account. This requires the adoption of a conflict-sensitive approach based on human rights and observance of the ‘do no harm’ principle (consideration of problems intrinsic to fragile contexts).
Measure 13: Guidelines on human rights due diligence in conflict-affected and high-risk areas
Guidelines on human rights due diligence in conflict-affected and high-risk areas have been drawn up at international level and adopted by various OECD members. The Federal Council works at international level to advance the development, promotion and implementation of global standards. Switzerland also supports the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.33 It is also a member of the multi-stakeholder group that manages the implementation, dissemination and continued development of these guidelines. The OECD Due Diligence Guidance is aimed primarily at companies involved in the extraction and trading of commodities in conflict-affected and high-risk areas, but it also applies to manufacturers of products containing minerals which operate in the downstream value chain and are required to exercise due diligence.
In addition, the federal government supports a project led by the UN Working Group on Business and Human Rights that aims to clarify the practical steps that companies, investors and States should take to prevent and combat business-related human rights abuses in conflict, post-conflict and fragile contexts The EU adopted Regulation 2017/821 of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas. The relevant provisions will take effect on 1 January 2021. In accordance with the Federal Council decision of 14 August 2019, the FDJP is mandated to examine the introduction of a mandatory due diligence in the area of “minerals from conflict areas”. In the meantime, on 18 December 2019, the Council of States adopted a regulation on this issue as part of the preparation of an indirect counter-proposal to the popular initiative for responsible businesses. The National Council has not yet commented on this. The Federal Council is of the opinion that it should await the end of the parliamentary debates.
|Develop, promote and implement specific guidelines in respect of high-risk, conflict-affected areas.
Explore possible measures that are consistent with international rules, including a bill to be submitted for consultation.
|Example of the federal government’s contribution to organisations developing these guidelines.
Explore possible measures that are consistent with international rules, including a bill to be submitted for consultation.
|FDFA [Federal Department of Foreign Affairs],
EAER [Federal Department of Economic Affairs, Education and Research],
FDJP [Federal Department of Justice and Police].
2.1.5 Policy coherence
Guiding Principle 10
Measure 19: Promotion of respect for human rights and labour standards within financial institutions
Investments by the Swiss Investment Fund for Emerging Markets (SIFEM) are subject to full due diligence with regard to its environmental, social (including working conditions) and governance (ESG) responsibilities. The relevant human rights standards are applied in all ESG risk assessments. This means that the risks of human rights abuses are always taken into account in the investment decision-making process. SIFEM partners (fund managers) are required to submit an annual or half-yearly report detailing their ESG activities and any major ESG accidents and incidents. This information makes it possible to improve the monitoring of human rights issues from the initial situation assessment and right through the investment cycle.
2.2 Pillar 2: the corporate responsibility to respect human rights
2.2.1 Foundational principles
Guiding Principles 11 to 15
Business activities generate investment, jobs and economic growth, but they can sometimes have undesirable side-effects too. The Federal Council expects companies to exercise human rights due diligence.
Under the UN Guiding Principles, respecting human rights is a general standard of conduct that all business enterprises are expected to meet wherever they operate. It exists independently of States’ abilities and/or willingness to fulfil their human rights obligations. The responsibility of business enterprises to respect human rights refers to internationally recognised human rights
2.2.2 Operational principles: human rights due diligence
Guiding Principles 16 to 21
Pillar 2 of the UN Guiding Principles focuses on human rights due diligence. This process should include (1) identifying risks and possible and actual impacts, (2) taking measures to mitigate risks, (3) verifying effectiveness of these measures, and (4) reporting on the action taken and the risks identified. This is the most important mechanism for preventing human rights abuses. Business enterprises must seek ways to prevent or mitigate adverse human rights impacts which are directly linked to their business operations, products or services, even if they have not contributed to these impacts.
Measure 23: Evaluation of implementation of the UN Guiding Principles by business enterprises
The federal government aims to review the progress made by companies in implementing the UN Guiding Principles and, in particular, in respect of human rights due diligence. This external evaluation will be carried out in tandem with the review of the implementation of the OECD Due Diligence Guidance provided for in Measure 16 of the 2020–23 CSR Action Plan. These evaluations, which will also consider action taken by umbrella organisations and trade associations, should generate a clearer picture of the challenges posed by the implementation of the UN Guiding Principles.
|Review progress on the implementation of the UN Guiding Principles among business enterprises based and/or operating in Switzerland.||Publication of external evaluation findings on the implementation of the UN Guiding Principles by business enterprises.||FDFA [Federal Department of Foreign Affairs],
EAER [Federal Department of Economic Affairs, Education and Research].
Measure 24: Support for industry initiatives
Umbrella organisations and industry associations contribute to the development of industry initiatives. As well as playing a major role in raising awareness and furthering the implementation of human rights due diligence among business enterprises, initiatives led by umbrella organisations and industry associations can provide practical responses to the specific challenges faced by particular sectors. Companies operating in the same sector tend to encounter similar problems but do not have the financial resources or expertise to tackle them single-handedly. Participation in industry initiatives can help companies, especially SMEs, to widen their sphere of influence.
Measure 29: Public-private partnerships to promote respect for human rights in the value chain
The federal government supports a project to promote human rights due diligence with a view to preventing the exploitation of Syrian refugees and migrant workers in neighbouring countries (Turkey, Lebanon, Jordan). The aim is to strengthen the contribution that business enterprises make to providing decent work opportunities and combatting exploitation in the textile, agricultural and construction sectors in these countries.
Measure 30: Guides and tools to implement the UN Guiding Principles
Most business enterprises use certification and private labels (e.g. UTZ, Fairtrade, and amfori/BSCI) as a means of ensuring compliance with social and environmental standards along the entire value chain. The federal government intends to help businesses identify which certifications meet the human rights due diligence standards under the UN Guiding Principles.
In response to Recommendation 11 of the Background Report on Commodities, the Swiss government worked with a multi-stakeholder group (cantons, civil society and the private sector) to draw up a best practice guide for the commodity sector. ‘The Commodity Sector – Guidance on Implementing the UN Guiding Principles on Business and Human Rights’, which was published in November 2018, provides companies working in this sector with practical advice on exercising due diligence along their value chains. Measures, including awareness-raising events and practical workshops, will be put in place to disseminate and promote its application.
The OECD has also produced a series of guidelines for companies that contain practical recommendations on the adoption of due diligence along their value chains. In May 2018, it published guidance for companies of all sizes that are exposed to risks in their value chains, irrespective of the sector within which they operate. Other guidelines are aimed at specific sectors such as the agricultural, financial and textile sectors.
Many international guides and tools are already available. The federal government will explore the possibility of translating some of these into the national languages to enable them to be adapted and implemented in Switzerland. The complex nature of these guides means that some companies, especially SMEs, may find it difficult to put them into practice. Easy-to-use online interactive tools could provide a starting point for SMEs. The Swiss government will develop instruments that enable SMEs to carry out risk assessments and identify measures. They also could provide the basis for an assessment of the action needed to improve human rights due diligence.
IV. The corporate responsibility to respect human rights
B. Actions taken
- Respect for employee interests and the views of stakeholders (page 12)
‘Thanks in part to the joint advocacy of the Taiwan government and various other interested parties, more and more businesses — in order to fulfill their social responsibilities and honor their human rights commitments — have taken it upon themselves to establish human rights due diligence procedures, identify and assess related human rights issues, and set up an internal complaint mechanism that functions smoothly and ensures confidentiality.’
3. The core content of the National Action Plan on Business and Human Rights
3.1 Action plan on labour
3.1.3 Action Plan (2019–2022)
Pillar 1: State duties in protecting (Protect)
|Responsible agencies||Time-frame (2019–2022)||Indicators (wide frame)||Compliance with National Strategy/ SDGs/UNGPs|
|15.||Operations set for business sector||Regulate, supervise and require the large business sector and companies listed in the stock market that use migrant labour as their primary production resource, prepare a Human Rights Due Diligence report as a measure in deterring labour exploitation. The said report must be disclosed to the public in order to create awareness and be easy to review. This is important for transparency and traceability in accordance with good corporate governance.||– Ministry of Industry
– The Office of the Securities and Exchange Commission
|2019–2022||Letter circulated to the companies listed in the Stock Exchange of Thailand for disseminating the report on Human Rights Due Diligence||– National Strategy for National Competitiveness Enhancement
– SDG 8 and 12
– UNGPs Articles 1, 3, 4, 5, 7, 17, 18
– and 19
3.2 Action plan for community, land, natural resources and the environment
3.2.1 Overview of the situation
The Department of Industrial Works has specified the location of factories to be away from public places or communities and defined the specification of the type and size of the factory that requires having environmental personnel at the factory to determine the amount of pollution (water pollution, air pollution, soil pollution and sound/noise pollution) that can be released into the environment. They will also assign a specialist to be responsible for the safe storage of hazardous materials under the responsibility of the Department of Industrial Works in accordance with the Hazardous Materials Act B.E. 2535 (1992) including regulation criteria to eliminate waste or unused waste and the supervision of chemicals and hazardous waste as well. The steps in determining the authorization to establish or expand the factory that needs to prepare the Environmental Impact Assessment Report (EIA) must go through the process of the public hearing as required by the Ministry of Industry for safety. There are safety measures from the risk assessment of the factories that must prepare a risk analysis report for the potential dangers in operating a factory. Criteria are set for hazard identification for risk assessment and the preparation of risk management plans and safety measures for the working environment including boilers, industrial gas, chemicals, radioactive materials, electrical systems in the factories, fires and cold storage.
3.4 Action Plan on Cross Border Investment and Multinational Enterprises
3.4.3 Action Plan (2019–2022)
Pillar 1: State duties in protecting (Protect)
|Responsible agencies||Time-frame (2019–2022)||Indicators (wide frame)||Compliance with National Strategy/ SDGs/UNGPs|
|3.||Promotion of Investment||Require studies and assessments of the risk and impact on human rights (human rights due diligence) before undertaking large-scale projects or projects related to public services, including in the case of joint investment between the government and private sectors to prepare conducting projects relating to infrastructure and public services that are a duty of the state, including in the case that the government has assigned the private sector to do the project instead||– Office of the Economic and Social Development Council
– Ministry of Natural Resources and Environment (Bureau of Policy and Environmental Plan)
– Ministry of Transport
– Ministry of Finance (Office of the State Enterprise Policy Office)
– Ministry of Energy
– Ministry of Industry (Office of Economic Cooperation and Neighbouring Countries (Public Organization))
|2019–2022||A study to assess the risk and human rights impact (human rights due diligence) before the implementation of large-scale projects||– National Strategy for National Competitiveness Enhancement
– National Strategy for Human Capital Development and Strengthening
– National Strategy for Public Sector Rebalancing and Development
– SDG 8 and 16
– UNGPs Articles 1, 3, 4, 5, 7, 8, 9, 10, 17, 18 and 19
CHAPTER FOUR: STRATEGIES AND INTERVENTIONS
OBJECTIVE 4: To promote social inclusion and rights of the vulnerable and marginalized individuals and groups in business operations.
4.4.2 Engagement of business operators on human rights
Require human rights due diligence by businesses through comprehensive human rights impact assessments involving meaningful consultation with potentially affected groups, including consideration of gendered impacts of operations and covering value and supply chains.
- Promote responsible sourcing practices and certification.
- Mobilize and build capacity of selected business operators as human rights in business change agents.
- Ensure the establishment and strengthening of gender and equity-responsive internal grievance redress mechanisms in business operations.
- Ensure business actors adopt and implement human rights policies.
- Encourage business operators to register as members of the UN Global Compact.
The UK 2013 NAP provides in Government expectations of business that [page 13]:
“The UNGPs guide the approach UK companies should take to respect human rights wherever they operate. The key principles of this approach are to:
- adopt appropriate due diligence policies to identify, prevent and mitigate human rights risks, and commit to monitoring and evaluating implementation”
The UK 2013 NAP states in Further actions planned that [page 15]:
(ii) encourage trade associations/sector groupings of companies to develop guidance relevant to their members’ sector of activity on developing human rights policies and processes, including due diligence. There is generic guidance online about doing this e.g. at the Business & Human Rights Resource Centre. Some sector-specific guidance also exists, for example the International Council on Mining and Metals has produced a guide for mining companies on human rights due diligence. The European Commission has created guidance on the information communications technology (ICT), oil and gas and employment and recruitment sectors; http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/human-rights/index”
The UK 2016 Updated NAP‘s Introduction states [page 3]:
“The G7 Leaders’ Declaration (7-8 June 2015) contained the following commitments:
- To enhance supply chain transparency and accountability, we encourage enterprises active or headquartered in our countries to implement due diligence procedures regarding their supply chains
The UK 2016 Updated NAP‘s Introduction further states [page 3]:
“Companies understand the business case for respecting human rights and the benefits this brings. They understand that positive action, supported by due diligence, transparency and reporting can:
- help to protect and enhance a company’s reputation and brand value;
- safeguard and expand their customer base;
- help them attract and retain good staff;
- build and maintain sustainable and effective relationships with employees and external stakeholders;
- reduce risks to operational continuity resulting from conflict inside the company itself or with the local community or other parties;
- reduce the risk of litigation for human rights abuses;
- attract institutional investors, including pension funds, who are increasingly taking ethical , including human rights, factors into account in their investment decisions;
- help companies become partners/investors of choice for other businesses or governments concerned about human rights risks;
- support company ethics and values.”
The UK 2016 Updated NAP states in Actions taken that [page 8]:
“We will continue to promote implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas.”
The UK 2016 Updated NAP states in the case study on Support for Land Tenure and Other Property Rights that [page 13]:
“Jointly with US, Germany, France, the AU Land Policy Initiative and FAO, the UK has developed a land investment due diligence framework based on the VGGT [Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (Land Guidelines, VGGT)] and other international standards, to guide private sector investments under the New Alliance for Food Security and Nutrition.”
The UK 2016 Updated NAP in Government expectations of business that [page 14]:
“The UNGPs guide the approach UK companies should take to respect human rights wherever they operate. The key principles of this approach are to:
- adopt appropriate due diligence policies to identify, prevent and mitigate human rights risks, and commit to monitoring and evaluating implementation;”
The UK 2016 Updated NAP makes a reference to human rights due diligence in a NCP case study concerning World Wildlife Fund & SOCO International Plc [page 23]:
“As part of the statement, SOCO (…) also stated that “when we undertake human rights due diligence, the processes we adopt will be in full compliance with international norms and standards and industry best practice, including appropriate levels of community consultation and engagement on the basis of publicly available documents.”
The National Action Plan
Leading By Example [page 7]
“The U.S. government will continue to encourage and model good practices by leveraging its purchasing power, which totals more than $450 billion for goods and services each year, including nearly $25 billion on services performed overseas. Through this influence, the U.S. government aims to accelerate the pace at which RBC practices are developed, adopted, and sustained globally by improving awareness of best practices related to human rights among the tens of thousands of companies with which it does business each year, and encouraging contractors to exercise due diligence and take steps where existing practices can be strengthened.”
Outcome 1.4: Conducting Due Diligence in U.S. Development Funding and Trade Finance
New Actions [page 12]
“Enhancing Overseas Private Investment Corporation (OPIC) and Export-Import Bank of the United States (EXIM) Standards: OPIC and EXIM will enhance existing procedures and standards that require companies receiving their support to implement RBC principles. OPIC is reviewing its Environmental and Social Policy Statement, while EXIM has developed an improved mechanism for interested parties to provide comments, complaints, or suggestions on the environmental and social consequences of its pending and currently approved transactions, including reviewing ways to improve the new portal for online submission.” – Implementing Department or Agency: OPIC, EXIM
“Social Safeguards for U.S. Development Assistance: USAID will develop a social safeguards screening questionnaire that Missions may use as an assessment tool when designing new projects (including public-private partnerships) to ensure due diligence on social and human rights issues. USAID will also establish a resource library of tools and human resources that can be deployed for various social analyses; conduct a gap analysis to identify topics not addressed by current guidance; convene stakeholder consultations regarding recommendations for future guidance or policies; and pilot the social safeguards assessment tool with interested USAID missions. These actions will be in line with international best practice, existing G-7 commitments, and safeguard policies already in place by U.S. agencies.” – Implementing Department or Agency: USAID
“Land Tenure in Development Assistance Activities: The U.S. government reaffirms its support for the consistent implementation of the Voluntary Guidelines on the Responsible Governance of Tenure (VGGT), which provides a global framework for improved land and resources governance. The U.S. government will commit to adhering to and aligning its relevant overseas development assistance activities to the VGGT.” – Implementing Department or Agency: USAID
Facilitating RBC By Companies [page 17]
“The U.S. government encourages businesses to treat tools like the OECD Guidelines and the UN Guiding Principles as a floor rather than a ceiling for implementing responsible business practices, and to recognize that implementing RBC should be a continuing process. The U.S. government is supportive of company efforts to voluntarily report on human rights impacts, anti-trafficking measures, transparency and anti-corruption efforts, and other related aspects of their global operations, including the opportunities and challenges they face. Given the heightened risk of serious human rights impacts in conflict-affected areas, the U.S. government particularly encourages corporate due diligence and reporting under such circumstances.
The U.S. government generates and vets relevant information that can be used to conduct appropriate due diligence and risk assessment. While the concept of due diligence is increasingly well understood and accepted among businesses, the tools and resources available to effectively conduct detailed and appropriate risk and impact assessments can be sparse, particularly in many of the complex environments where this type of data is most needed.
To help address those gaps, the U.S. government deploys significant resources to produce and disseminate a variety of reports that help describe the state of human rights, labor rights, commercial, and investment conditions across the world, and produces international company profiles to provide U.S. companies with information to help them vet potential business partners. In certain instances, the government also funds third-party reports that contain information useful to those seeking to promote and implement RBC. As part of the ongoing effort to facilitate RBC, the U.S. government will continue to enhance these resources, making them increasingly user-friendly and easier to find for the purposes of corporate human rights due diligence and social impact assessment.”
Outcome 3.1: U.S. Government Reports
Ongoing Commitments and Initiatives [page 18]
“DOL Child Labor and Forced Labor Reports: DOL publishes and updates three reports on international child labor and forced labor (the Findings on the Worst Forms of Child Labor, the List of Goods Produced by Child Labor or Forced Labor, and the List of Products Produced by Forced or Indentured Child Labor) that serve as valuable resources for government action, civil society advocacy, and private sector due diligence on these issues. Since 2015, DOL releases these three reports through a new mobile application, Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World, which streamlines this wealth of information and makes it available on mobile devices. DOL regularly engages with companies and industry groups on how they can use these tools to strengthen their social compliance programs.” – Implementing Department or Agency: DOL
“Dodd-Frank Section 1502: … Section 1502 requires certain companies to submit annually a description of the measures taken to exercise due diligence on the source and chain of custody of the four “conflict minerals.”…” – Implementing Department or Agency: State, USAID, SEC, Commerce, USGS
Annex II: Key Domestic Executive Orders and Regulatory Efforts [page 26-29]
“Money Laundering and Bank Integrity: … Effective AML programs include, among other things, the ability to detect and report suspicious activity, including corruption, and to conduct due diligence and enhanced measures when banks, broker-dealers, or other institutions deal with senior foreign political figures …”
“Transparency: … Treasury recently announced a final rule to increase transparency in the financial system. The final Customer Due Diligence rule, which was first noticed in 2014 and was subject to a public comment process, will require that financial institutions—including banks and other entities—collect and verify the personal information of the real people (also known as beneficial owners) who own, control, and profit from companies when those companies open accounts. …”