Supply chains

The “supply chain and value chain concepts are related but distinct concepts”, although they are often used interchangeably in business and human rights discourse. As the Danish Institute for Human Rights (DIHR) notes:

“A company’s ‘supply chain’ encompasses the resources, activities, and business relationships that feed into a product or service. It traditionally covers ‘upstream’ inputs, such as the extraction of raw materials for manufacturing, energy used to power project sites, suppliers who build product components, and service providers who offer guidance or technical support. The supply chain includes physical assets as well as labour within all tiers of suppliers who contribute to a product or service.

A company’s ‘value chain’ extends beyond its supply chain to include the delivery, consumption, and end use of a product or service. The value chain covers the full lifecycle—including marketing and sales, logistics and distribution, responsible use of products, and end-of-life disposal, as well as business relationships with entities that use the company’s products or services.”

The UN Human Rights Office of the High Commissioner’s (OHCHR) Frequently Asked Questions about the Guiding Principles on Business and Human Rights notes that:

“A business enterprise’s value chain encompasses the activities that convert input into output by adding value. It includes entities with which it has a direct or indirect business relationship and which either (a) supply products or services that contribute to the enterprise’s own products or services, or (b) receive products or services from the enterprise.”

Ungps

The UN Guiding Principles on Business and Human Rights (UNGPs), Guiding Principle 13(b), states that businesses should “[s]eek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.” The Commentary to the Guiding Principle 13 highlights that “business enterprises may be involved with adverse human rights impacts either through their own activities, or as a result of their business relationships with other parties”, where business relationships are understood to include also relationships with “entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services”. Therefore, companies’ responsibility to respect human rights under the UNGPs encompasses adverse impacts across their entire value chain.

The Gender Guidance to the UNGPs furthers this in their guidance to the Guiding Principle 13, which advises that business enterprises should “take adequate measures to prevent or mitigate adverse impacts on women’s human rights that are directly linked to their operations, products or services by their business relationships.” The Gender Guidance also notes that “[w]omen are overrepresented … in supply chains of numerous industries, where they are more vulnerable to exploitation and abuse.”

Businesses increasingly source various goods and services from complex global supply chains spread in multiple countries, involving many business partners. The International Labour Organization (ILO) estimates that more than 450 million people work in supply chain-related jobs. As Human Rights Watch reports, while supply chains offer job opportunities and economic growth, adverse human rights impacts can occur at every stage of the supply chain, from sourcing raw materials to production lines in factories.

Adverse business and human rights impacts extend beyond a business’s own operations or its supply chain and can also occur after a product or service has left the company. This phase is commonly known as the “downstream” part of the value chain. For example, the working conditions of workers in warehousing and transportation industries, responsible use of products by end users or marketing practices that pose risks to human rights fall in the scope of the “downstream” part of the value chain. (DIHR, Due Diligence in the Downstream Value Chains). For instance, Business for Social Responsibility (BSR) highlights the human rights risks in the transport and logistics sector, which include, e.g. human trafficking, forced labour and poor working conditions (See the Issue page on Forced Labour & Modern Slavery for more information).

The corporate responsibility to respect under the UNGPs requires businesses to conduct human rights due diligence to identify, address and mitigate the adverse human rights impacts with which they may be involved through their business relationships. As it is highlighted in the Commentary to the Guiding Principle 19, for adverse human rights impacts that businesses are directly linked to through their business relationships:

“If the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise it. And if it lacks leverage there may be ways for the enterprise to increase it. Leverage may be increased by, for example, offering capacity-building or other incentives to the related entity, or collaborating with other actors.”

To engage with suppliers or business partners and to undertake human rights due diligence, it is necessary for businesses to know who their suppliers and business partners are through a supply chain mapping or value chain mapping exercise.

States play an important role in that they can influence companies’ conduct with regards to the supply chain by undertaking a mix of soft and regulatory measures. Some examples of regulation already in place include regulations requiring businesses to report publicly on measures to reduce human trafficking or forced labour in their supply chains or to conduct human rights and environmental due diligence in their supply or value chains (See the Issue page on Mandatory Human Rights Due Diligence for more information).

The California Transparency in Supply Chains Act of 2010 requires businesses with worldwide annual revenues of US$ 100 million or more that conduct business in California to disclose information on their websites from January 2012 onwards about efforts to eradicate slavery and human trafficking from their supply chains.
The UK Modern Slavery Act 2015 requires businesses (regulations have set this as businesses with a global turnover of more than £36 million) to produce and publish an annual statement on their activities to address forced labour and human trafficking in both their own operations and their supply chains. Section 54 of the Act focuses on ‘Transparency in Supply Chains’ and applies to commercial organisations that carry on a business, or part of a business, in the UK, without there being a need for the company to be headquartered in the UK.
The 2017 French corporate duty of vigilance law establishes a legally binding obligation for parent companies to identify and prevent adverse human rights and environmental impacts resulting from their own activities, from activities of companies they control, as well as from activities of their subcontractors and suppliers, with whom they have an established commercial relationship.
The Australia Modern Slavery Act 2018 requires entities based or operating in Australia, which have an annual consolidated revenue of more than AU$ 100 million, to report annually on the risks of modern slavery in their operations and supply chains and actions to address those risks.
The German Act on Corporate Due Diligence Obligations in Supply Chain 2021 establishes due diligence obligations for companies with 1,000 or more employees (from 2024 and onwards) to identify and prevent human rights and environmental risks in their own operations and in their direct suppliers whom they have a contractual relationship, and also in their indirect suppliers where they have actual indications suggesting that a violation of a human rights or environmental-related obligations are possible at indirect suppliers.
In 2022, Canada adopted an Act on Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff, imposes an obligation on certain government institutions and private-sector entities to report on the measures taken to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains.
The European Commission published a proposal on the EU Corporate Sustainability Due Diligence Directive in 2022. The final text agreed by the Committee of Permanent Representatives of the Governments of Member States to the European Union (COREPER) in March 2024 and adopted by the European Parliament in April 2024 establishes due diligence obligations with respect to companies’ own operations, the operations of their subsidiaries, and the operations carried out by their business partners in companies’ ‘chains of activities’. The term ‘chain of activities’ is defined as activities of a company’s upstream business partners related to the production of goods or the provision of services by the company, including the design, extraction, sourcing, manufacture, transport, storage and supply of raw materials, products or parts of the products and development of the product or the service, and activities of a company’s downstream business partners related to the distribution, transport and storage of the product.

In 2022, the OHCHR highlighted that neglecting the downstream part of the value chain in regulatory measures can result in significant human rights impacts, and excluding the impacts on the downstream value chain from the scope of these measures does not align with the UNGPs. More examples of States’ regulatory measures to address human rights and environmental risks in global supply chains can be found on the Issue page on Mandatory Human Rights Due Diligence and the BHR-Law Platform.

A number of tools have been created to assist businesses in identifying and assessing potential risks in their supply chains. These include benchmarking tools such as the Corporate Human Rights Benchmark and Know the Chain, as well as multi-stakeholder certification and collaboration initiatives. These initiatives include such as the Fair Labor Association, the Global Social Compliance Programme, the Ethical Trading Initiative, the Fair Trade Standards and Certification system, the Ethical Tea Partnership (ETP), the Rainforest Alliance, and the Forest Stewardship Council. While these initiatives are among the tools to measure companies’ respect for human rights in their value chains, a substantial body of research cautions against over-reliance on audit and certification methods, indicating their significant limitations and shortcomings (such as audit deception, limited engagement with rightsholders or lack of transparency in audit processes and results). Other worker-centred measures have also been developed to address specific risks in supply chains, including the Accord on Fire and Building Safety in Bangladesh, which creates a legally binding agreement between global brands, retailers, and trade unions to address human rights risks in supply chains. (See Worker Driven Social Responsibility Network for other examples)

A common method to ensure that suppliers are aware of human rights responsibilities is to require them to agree to a Code of Conduct, often attached to a contract. In situations where suppliers have been involved in human rights abuses, then a contractor should work with the supplier to address the situation by exerting or increasing its leverage, which can include ensuring the human rights abuse has ended, ensuring it does not occur again, and providing a remedy to victims. Terminating the relationship with the supplier may be considered if the supplier does not engage in remedial measures, but should not be the first reaction to an adverse impact. In 2023, the OHCHR provided guidance for businesses regarding remaining in and exiting from challenging contexts on human rights grounds, while some actors, such as the Fair Wear Foundation or Partnership for Sustainable Textile, provided responsible exit strategy guidelines for businesses.

In 2020, Oxfam published From Risk To Resilience: A good practice guide for food retailers addressing human rights in their supply chains. The publication provides good practice examples of advancing human rights in food supply chains. It also underlines gaps and recommends retailers to implement a more effective approach, including conducting human rights due diligence and engaging with Environmental, Social and Governance (ESG) issues.

In 2021, the ILO estimated that around 190 million women work in global supply chains, often concentrated in countries where labour laws and international human rights norms are poorly implemented. Women workers face a range of gender-related risks, such as occupational segregation, precarious employment, insufficient access to maternity rights and childcare, extended working hours and mandatory overtime, unsafe working conditions, limited opportunities for education and skills development, as well as exposure to violence and harassment (See the Issue page on Garment, Textile and Footwear Section for more information). Businesses should adopt a gender lens while conducting human rights and environmental due diligence in their supply chains. For example, guidance by the Organisation for Economic Co-operation and Development (OECD) and the UN Food and Agriculture Organization on integrating a gender perspective into supply chain due diligence provides illustrative examples and recommendations of how companies along agricultural supply chains can integrate a gender perspective into their due diligence actions.

Supply chains are a key consideration in the UNGPs and the OECD Guidelines that need to be considered by companies if human rights are to be respected. Similarly, increased accountability in supply chains can be crucial for the successful implementation of the Sustainable Development Goals (SDGs). For example, businesses can contribute to tackling underlying causes of child and forced labour in all forms (SDG 8.7) by taking efforts to eradicate extreme poverty (SDG 1.1) and ensuring decent work and fair living wages to workers and their families (SDG 8.5). Such actions, that may be enhanced by building partnerships with governments and non-governmental organisations in countries where a business operates, can also help ensure that children gain access to education (SDG 4.1). In short, ensuring respect for human rights across the supply chain can impact on many and multiple aspects of the SDGs at one and the same time (See the Issue page on the 2030 Agenda for Sustainable Development for more information).

References

The UN Guiding Principles on Business and Human Rights.
UN OHCHR, FAQ about the Guiding Principles on Business and Human Rights, (2014).
BSR, “Supply Chains and the OECD Guidelines for Multinational Enterprises” BSR Discussion Paper on Responsible Supply Chain Management, (2010).
Working Group on Business and Human Rights, Gender Dimensions of the Guiding Principles on Business and Human Rights.
ILO, ILO welcomes G7 steps to foster fair production in global supply chains, (2015).
Human Rights Watch, Human Rights in Supply Chains.
DIHR, Due Diligence in the Downstream Value Chains: Case Studies of Current Company Practice, (2023).
BSR, 10 Human Rights Priorities for the Transport and Logistics Sector.
BSR, Supply Chain Visibility: Traceability, Transparency, and Mapping Explained, (2019).
Shift, How Value Chain Mapping is Helping Companies Respect Human Rights, (2019).
The UK Modern Slavery Act 2015.
The California Transparency in Supply Chains Act of 2010 (SB657).
Repórter Brasil, Brazil’s ‘dirty list’ names and shames companies involved in slave labour, (2013).
Respect International, The National Pact to Eradicate Slave Labour.
The French corporate duty of vigilance law
The German Act on Corporate Due Diligence Obligations in Supply Chain

The UN Office of the High Commissioner, Mandating Downstream Human Rights Due Diligence, (2022).
BHR-Law Platform.
Clean Clothes Campaign, Fig Leaf for Fashion. How social auditing protects brands and fails workers, 2019.
Accord on Fire and Building Safety in Bangladesh.
Worker Driven Social Responsibility Network.
SOMO, Should I Stay or Should I Go?, (2016).
OHCHR, Business and Human Rights in Challenging Contexts: Considerations for Remaining and Exiting, (2023).
Fair Wear Foundation, Responsible Exit Strategy Guidelines, (2018).
Partnership for Sustainable Textiles, New Guideline: Responsible Exit, (2021).
Oxfam, From Risk to Resilience: A good practice guide for food retailers addressing human rights in their supply chains, (2020).
ILO, Gender equality in global supply chains, (2021).
OECD and UN FAO, Integrating a gender perspective into supply chain due diligence.

Additional Resources:

OECD, Practical actions for companies to identify and address the worst forms of child labour in mineral supply chains, (2017).
UN Global Compact, Community Engagement and Investment to Advance Human Rights in Supply Chains, (2012).

UN Global Compact, Supporting Worker Empowerment – Including Support for Workers’ Assertion of their Human Rights – in the Supply Chain, (2012).

SER, Dutch Banking Sector Agreement on international responsible business conduct regarding human rights, (2016).
Finland, A Shared Vision for Respecting the UN Guiding Principles on Business and Human Rights in Grocery Trade Supply Chains, (2015)
Verité, Compliance is Not Enough: Best Practices in Responding to The California Transparency in Supply Chains Act, (2011).
Oxfam,From Risk To Resilience: A good practice guide for food retailers addressing human rights in their supply chains, (2020).
Institute for Human Rights and Business –Supply Chain section
Sean Ansett,Raise the Curtain: Human Rights in Retail Supply Chains, (2013).
Global Social Compliance Programme, Consumer Goods Forum,GSCP Reference Tool on Supply Chain Social Performance Management Systems, (2013).
Ruggie,Making Economic Globalization Work for All: Achieving Socially Sustainable Supply Chains, (2017).
Bier, D. Doorenbos and Ch. Saris,Bill adopted by Dutch Parliament introducing a duty of care to prevent child labour, Lexology, (2017).
Human Rights Watch,Work Faster or Get Out, Labor Rights Abuses in Cambodia’s Garment Industry, (2015).
Forbes,Amnesty International Slams Colgate, Nestlé and Unilever For Palm Oil Supply Chain Abuses, (2016).
Verité,A Verité Assessment of Recruitment Practices and Migrant Labor Conditions in Nestlé’s Thai Shrimp Supply Chain An Examination of Forced Labor and other Human Rights Risks Endemic to the Thai Seafood Sector, (2016).
UK Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill.

What National Action Plans say on Supply chains

Belgium (2017 - open)

Action point 1

Develop a toolkit for companies and organizations on human rights

Elaborer une boîte à outils destinée aux entreprises et organisationsconcernant les droits del’Homme

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 the management of supply chains.

Action point 13

Strengthen and monitor the respect for human rights in public procurement

Renforcer et contrôler le respect des droits de l’Homme dans les marchés publics

This is the main action point on public procurement, but also engages with the issue of supply chain management. The federal government explains that “since certain sectors are more sensitive than others to possible human rights violations, especially when certain parts of the supply chain are in “at risk” countries, it is not enough to include clauses if they are not (or cannot) be controlled subsequently. Moreover, companies wishing to enter into public procurement contracts are not always familiar with supply chains and can rarely guarantee what is happening throughout their supply chains.” The Working Group on Sustainable Public Procurement analyzed various case studies on monitoring compliance with ILO clauses and human rights in supply chains in order to test, through pilot projects, whether such an initiative is feasible in Belgium. Implementation and follow-up of this initiative will be carried out in cooperation with the relevant federal, regional and local administrations.

In 2016, the 2016-2020 Plan on Flemish Public Procurement was approved, a plan that emphasizes innovation, sustainability, reduction of human rights violations in supply chains, professionalization and access of SMEs

Action point 14

Evaluate the Belgian label to promote socially responsible production

Evaluer le label belge visant à promouvoir la production socialement responsible

This point includes issues of supply chain management. It presents “the Belgian label” that was a product label created in 2002 and promulgated by law to promote socially responsible production. Companies able to demonstrate that core labor standards were respected throughout their supply chain for their products and services can apply the “Belgian social label” to these products and services.

Action point 15

Incorporate the principle of “due diligence” into the management of the company, also in the terms of human rights

Intégrer le principe de « diligence raisonnable » au sein des organismes de gestion de l’entreprise, également en matière de droits de l’Homme

Supply chains are briefly mentions in relation to the publication of human rights reports: “companies are encouraged to make public their policy on corporate ethics, social affairs, human rights, including, where applicable, in their supply chains, the human rights risks identified, their action plans to prevent any negative impacts and to remedy if necessary, and the measured impact of these action plans.”

Action point 19

Promote best practice of SMEs that adopt responsible supply chain management, especially through the « CSR Compass » tool

Promouvoir les bonnes pratiques des PME qui adoptent une gestion de la chaine d’approvisionnement responsable, notamment grâce à l’outil « CSR Compass »

The NAP presents “one of the most relevant instruments developed by the European Commission on supply chain management” being the responsible supply chain management portal, CSR Compass. Actions from the government of Wallonia will include the promoting vis-à-vis companies the ready-made instruments, also covering the CRS compass. Concretely, this will involve setting up workshops for exchanges between companies of the same sector and the creation of a practical guide for SMEs wishing to improve the ethics in their supply chain.

Action point 22

Encourage responsible supply chain management with a sector-wide approach

Encourager la gestion responsable des chaînes d’approvisionnement avec une approche sectorielle

The NAP explains that different initiatives have been taken in the past to contribute to the respect for human rights in supply chains. The “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from ConflictAffected and High-Risk Areas” was the first example of a collaborative, multi-stakeholder initiative supported by the OECD for responsible management of mineral supply chains located in conflict areas. The NAP states that the NCP had organized a round table in 2014 with the objective of collecting reactions and questions to the “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”. One of the aimed actions will be for the NCP to continue its work of informing and spreading knowledge to Belgian companies on the sustainable management of the supply chains through a sectoral approach.

Pillar 1: The State Duty to Protect Human Rights

Strand 6: Strengthening Coherence between Public Policies

6.3. The Ministry of Foreign Affairs will: …

Disseminate the importance of respecting human rights in global value chains (GVCs), encouraging the introduction of this matter in discussions held and worked carried out by the GVC Intergovernmental Group, as well as in presentations to the business community and other agents.

Pillar 2: The Corporate Responsibility to Respect Human Rights

Strand 2: Promotion of corporate due diligence in the field of human rights

2.2. The Ministry of Economy, Development and Tourism will:

Hold a working group at least once each semester with the Division of Social Economy and Associativity and the Division of Smaller Business Enterprises with the purpose of identifying the impact of human rights in the management of businesses such as cooperatives and SMEs, and of incorporating the vision of human rights and business enterprises within this type of economic associations. Based on the activities of thee working groups, sector guides will be developed to evaluate compliance with human rights issues, with special emphasis on the management of supply chains.
… Agree, with business enterprises represented in the Social Responsibility Council for Sustainable Development, upon the development of memorandums of understanding, guides, handbooks and guidelines containing best practices, so that they can become an integral part of business and human rights standards in the following subject matters: labour practices, impact on communities, corporate practices and supply chain management.

Contributions by Other Actors

5. Fundación ACCIÓN Empresa will:

Prepare a study about main challenges existing in this field, starting by the corporate role, to comply with the Guiding Principles, with the purpose of contributing strategies to resolve issues through good corporate practices in this field.
Create a Corporate Committee for Responsible Supply, aimed at identifying the best corporate practices in place to minimise the infringement of rights in their value chain. It includes 4-6 annual sessions.

V. Proposal of a Roadmap for an Upcoming Action Plan

9. Incorporation of matters related with the risks of human rights violations in supply chains and inclusion of LGBTI people.

VIII. FUNDAMENTAL PILLARS

(…)

ii. Fundamental Pillar 2: The duty of business to respect human rights

Strand 1[Eje nº 1]: Provide companies with the tools to fulfil their responsibility to respect human rights

(…)

The ICBF [Instituto Colombiano de Bienestar Familiar] will promote plans, programmes, strategies and projects coordinated with the State, to eradicate child labour in economic sectors identified as critical, in which children and adolescents participate in the production value chain.
ProColombia (in charge of promoting Colombian exports, international tourism and foreign investment in Colombia) will take advantage of spaces or programmes that contribute to the promotion of exports to raise awareness of good sustainable development practices that include human rights commitments by companies as a factor of competitiveness in global value chains.

Strand 2[Eje nº 2]: Promoting corporate human rights due diligence

(…)

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.

National Action Plan – production and objectives [page 6-7]

“… this Action Plan’s commitments … make it easier for businesses to keep clear of such situations in their supply chains and among their business partners.”

Most serious infringements of working conditions [page 16]

“There may be numerous labour-law violations in supply chains, via temporary employment agencies, or at entities that act as recruiters but do not hold a permit to do so.”

Supply chains and conflict minerals [page 20-21]

“Current state of play:

Numerous voluntary certification schemes run by states and international organisations on the one hand and the private sector on the other attempt to map out the origin of raw materials and supply chains. …
Under the new European rules on non-financial reporting, companies will also publish information on their supply chains.
The Czech Republic was involved in the consultation and approval of the OECD-FAO Guidance for Responsible Agricultural Supply Chains. The Ministry of Industry and Trade and the Ministry of Agriculture will arrange for this Guidance to be published and publicised at their seminars and workshops.
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.

Tasks:

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
In the public sector’s procurement of high-risk products and raw materials, consider giving preference to suppliers participating in recognised certification schemes.
Coordinators: All ministries
Deadline: Running”

Public procurement [page 23]

“In their public procurement, contracting authorities should know how to reflect and evaluate environmental and social requirements and the protection of human rights correctly in relation both to the supplier and, as far as practicable, the supplier’s subcontractors.”

State enterprises and companies in which the state has a shareholding [page 26-27]

“… [State enterprises and companies in which the state has a shareholding] should ensure a high level of prevention in order to avoid becoming involved in violations of human rights indirectly (e.g. in supply chains). …

Tasks:

Recommend that state enterprises and companies in which the state has a shareholding insert clauses in new contracts that allow for the contractual relationship to be terminated if the counterparty or supply chain is found to seriously violate human rights or universally recognised ethical and moral standards.
Coordinators: All ministries concerned
Deadline: Running”

Pillar II, Scope and content of the obligation to respect human rights [page 30-34]

“For businesses, there are three dimensions to respect for human rights: …

Do not contribute to violations of human rights: A business does not commit violations itself, but acts in a way that facilitates or smooths the way for violations. This may encompass: …
- Pressure on suppliers to circumvent safety and labour-law standards.
Do not be associated with violations of human rights: This applies to other parties’ activities about which a business knows, on which it has a bearing, and/or which are closely related to its own business, and may encompass: …
- The use of suppliers or subcontractors who exploit child labour or otherwise violate human rights in their activities …

Where does respect come into play? Unlike a state, which is duty-bound to protect human rights everywhere in its jurisdiction, a business’s liability depends on where it exercises genuine influence and what sort of control it wields over a situation:

The supply chain and business partners: Businesses should have a vested interest in ensuring that the components, raw materials and external services they use are not associated with violations of human rights (e.g. “sullied” by child labour). Although this is beyond the direct control of businesses, they could negotiate the corresponding contractual clauses and, in extreme cases, switch suppliers. Their toolkit here includes the tender conditions employed, human rights clauses in contracts (the possibility of terminating a contract if wayward conduct is detected and the possibility of running checks), the requirement of internationally recognised certification, etc. …

What should a commitment encompass?

Relations with partners: Although an internal document cannot dictate how business partners are to conduct themselves, it can influence them indirectly. In this respect, businesses should specify – as part of their commitment – what standard of care they expect from their partners and suppliers and, status permitting, they should implement that standard in the form of tender conditions of contractual clauses or by other means. …

A commitment is not merely an internal document. It is a statement by a business that it is aware of and serious about its human rights responsibility. Besides being posted on the corporate website, the commitment should also be incorporated into communications with suppliers, investors, business partners and other groupings. These communications should encompass the following information:

How did the commitment come about?
What target groups (right-holders) does it concern?
How will it be disseminated among those it concerns?
- Among those who are to implement it (employees, suppliers)?
- Among the right-holders who are to protect it?”

Due diligence [page 36]

“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.”

2. The state duty to protect human rights

2.3 Actions taken

Danish Government’s Expectations to Companies section [page 11]

“In addition, 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 medium-sized 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.”

Providing effective guidance on how to respect human rights

Since 2005, the Danish Government has worked directly with promoting CSR among Danish companies. The efforts have focused on providing companies with tools and guidance to implement CSR policies in a manner which is both strategic and manageable (GP 3c).

Examples of relevant tools include:

The CSR Compass – which is a free online tool that helps companies implement responsible supply chain management. http://www.csrcompass.com/“

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.”

3.2 Recommendations from the Council for CSR on the corporate responsibility to respect [page 17]

“Since its creation in 2008, the Danish Council for CSR followed the work of the SR SG John Ruggie closely. In 2009, the Government asked the Council to produce a set of guidelines for responsible supply chain management to help companies meet international social and environmental requirements and expectations in their supply chain.

In June 2010, the Council published a set of guidelines for responsible supply chain management based on the Protect, Respect, Remedy Framework. The Council also made sure that the guidelines were aligned with recognised international principles like the UN Global Compact, ISO 26000 etc. The guidelines were meant as a supplement to the Protect, Respect, Remedy-Framework, intended to provide greater clarity about responsible supply chain management by offering a practical, easy-to-read guide and online tool.”

Appendix 1, GP 2

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 24]

“…In 2010, the Government asked the Council for CSR to develop guidelines for Responsible Supply Chain Management based on the UN Protect, Respect and Remedy framework”.

Appendix 1, GP 2 continued

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 25]

“The Danish Ethical Trading Initiative is an example of a soft law initiative. It is the first Danish multi-stakeholder initiative for Ethical Trading and Responsible Supply Chain Management. The initiative is co-financed by Danida.”

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 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 a n 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. (…) In 2013, a number of Danish organisations have been granted support by Danida for initiatives focusing on the promotion of ethical trading initiatives and supply chain management, CSR and Fair Trade …

In 2013, a number of Danish organisations have been granted support by Danida for initiatives focusing on the promotion of ethical trading initiatives and supply chain management, CSR and Fair Trade.”

Appendix 1, GP 8

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 31]

“The Government has updated the CSR Compass which is an online tool that helps companies exercise due diligence in the supply chain. The guide has been updated in accordance with the UNGPs and the OECD Guidelines for Multinational Enterprises. This online tool will also be promoted to governmental departments, agencies and other State-based institutions.”

Introduction [page 11]

““Companies should also critically assess the activities of their contractual partners – for instance, in supply chains – and to react to the shortcomings detected.””

1 The state obligation to protect human rights

1.3 Activities in the EU [page 17]

RAW MATERIALS

“The Commission proposal has taken into consideration both the OECD Guidance for mineral purchasing in conflict zones as well as the OECD and UN guidelines more generally related to responsible supply chain management. The proposal is currently being discussed on the national level. Finland actively participates in the discussion of the proposal in the Council working group. …

As a follow-up measure, the working group proposes that

Finland actively participate in the discussion of the proposal for a regulation on conflict minerals and in the discussion for the development of practices for responsible supply chains in the raw material sectors.
Principal responsible party: Ministry for Foreign Affairs, continuous activities.”

3 Expectations towards companies and support services

3.1 Clarification of due diligence [page 25]

“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.”

I- The State’s Obligation to Protect Human Rights

The International Framework

3. The Organisation for Economic Co-Operation and Development (OECD) [page 14]

The French National Contact Point (NCP) for the OECD Guidelines is a mediation body that aims to resolve conflicts while promoting and applying these guidelines. …

… Its actions to promote the OECD Guidelines include: …, contributing to work completed by the G7 on global supply chains in 2015, …

… 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. …

Actions Underway [page 16]

France seeks to ensure that the issues of … supply chains are addressed by the G20, particularly by working with Germany, whose presidency runs from 2016 to 2017. It also seeks to build on the G7’s commitments to the UN Guiding Principles in 2015, as well as commitments made during the International Labour Conference in June 2016, one of the three themes of which was “decent work in global supply chains”.

The European Framework

7. The European Union (EU) [page 18]

… Following the proposal for a European regulation on the traceability of minerals from conflict zones,6 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. …

The National Framework

13. The Role of Public Agencies [page 27]

…, the National CSR Platform, in its report on the implications of corporate responsibility on businesses’ supply chains (November 2014), recommended that the due diligence measures used by the AFD and COFACE be reinforced, and that these agencies be encouraged to set up mechanisms to deal with complaints from financial beneficiaries in the event of fundamental rights abuses.

15. Economic Sectors and Human Rights

The Agriculture and Food Sector [page 32]

The strategic importance of national food security and economic opportunities in the agricultural sector have led a number of countries and businesses to invest (and support investment) in agrifood production. Given this large-scale investment, which often involves large-scale land purchases, the international community has sought to implement guidelines and directives to regulate these projects. Two major initiatives have been launched:

The Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (also known as the VGGT), adopted by the Committee on World Food Security (CFS) in May 2012;
The Principles for Responsible Investment in Agriculture and Food Systems (also known as the RAI), adopted by the CFS in October 2014, which are partly based on the UN Guiding Principles on Business and Human Rights.

France supports and is politically, technically and financially committed to adopting and implementing these texts. Working with actors involved in French cooperation efforts, it developed the Guide to Ex-Ante Analysis of Agricultural Investment Projects that Affect Land and Property Rights to facilitate the enforcement of these principles. France also actively participated in the drafting of the OECD-FAO Guidance for Responsible Agricultural Supply Chains.

Actions Underway

Partner States are encouraged to apply the Voluntary Guidelines on the Responsible Governance of Tenure of Land (VGGT) and the Principles for Responsible Investment in Agriculture and Food Systems (RAI).
Recommendations in the Guide to Ex-Ante Analysis of Agricultural Investment Projects that Affect Land and Property Rights are being integrated into the AFD’s due diligence procedures in the land, social and environmental fields.

Actions to be Implemented [page 33]

Ensure the VGGT and RAI are respected by French economic actors abroad. Training on the implementation of these principles and directives will be offered to government employees (in embassies and economic services) and agencies.

The Textile and Garment Sector [page 33]

… The NCP report, produced following hearings with all parties involved, was submitted to the Minister and published online on 2 December 2013. It addresses all actors, and establishes a full range of measures which, once implemented, will enable businesses to oversee supply chains in this sector. The recommendations were shared widely, particularly with the OECD, ILO and EU, and were followed by similar reports published by the Italian and Belgian NCPs.

Following the publication of these recommendations, 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.

As for the EU, it has set up a multi-stakeholder platform for the textile sector.

The G7 included the issue of supply chains in the Leaders’ Declaration issued under the German Presidency following the Elmau Summit in June 2015. This was followed by a roadmap, which was adopted by the French Ministries of Social Affairs and Development in October 2015. While the scope of these initiatives extends beyond the textile sector, approved measures will initially apply to this industry. This is the case for the “Vision Zero Fund”, which will be created to reinforce workplace safety and reduce workplace accidents in producer countries.

Meanwhile, the NCP is continuing to implement and build on its recommendations, particularly in order to harmonize auditing baselines and mutualize supplier audits.

Actions Underway

France is continuing to raise awareness of the NCP report issued on 2 December 2013, and monitor the implementation of its recommendations in the French textile, garment and distribution sectors.
France is helping to finalize the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.
France is determining whether to support the “Vision Zero Fund” following the G7’s Leaders’ Declaration at Elmau.

II- Businesses’ Responsibility to Respect Human Rights

Introduction [page 37]

… companies must continue efforts to develop tools and good practices in the human rights field, at all levels of the production chain. …

Actions to be Implemented

Monitor the implementation of legislation requiring some companies to disclose due diligence plans addressing subsidiary and subcontractor risks at each level of the supply chain, and, if necessary, take measures to enforce this legislation.
Promote social dialogue and employee expression as tools to reinforce respect for human rights at all levels of the supply chain.

…

III- Access to Remedy

2. Non-Judicial Mechanisms – At the International Level

2.1 The OECD National Contact Point (NCP)

… 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. …

I. Introduction [page 3]

“The “Made in Germany” label stands for high quality and reliability. At the same time, the increasing involvement of German enterprises in global supply and value chains presents both opportunities and challenges. New markets and production facilities are established, which creates employment and prosperity. At the same time, however, companies operating in global supply and value chains are exposed to risks arising from a lack of transparency and the frequently inadequate respect for human rights and for labour, social, and environmental standards. This applies especially to production in developing and newly industrialised countries but also within Germany.”

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.”

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.”

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. …

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. …”

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”

Reporting

“…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.”

Measures

“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. …”

1.2 Public procurement [page 21]

“By placing greater emphasis on sustainability in their procurement transactions, public authorities not only perform their function as role models but can also wield significant leverage in increasing the supply of sustainable products.”

2. Challenges in corporate practice [page 27]

“Enterprises can impact beneficially as well as adversely on the exercise of human rights within their own production processes and in their supply and value chains, both through their own business activity and through their business relationships.”

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 protectionand 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 fact is that every enterprise, through its business activity, has an influence on the living and working conditions of its employees, on its customers and suppliers, on the environment and on the wider economic context. The OECD Guidelines for Multinational Enterprises, to which Germany is committed, call on enterprises, within the context of their own activities at home and abroad, including those of their subsidiaries, to respect human rights and to do everything they can to avoid causing or contributing to adverse human rights impacts. This also offers German enterprises the opportunity to positively shape the operating environment in host countries by joining efforts and so to improve the conditions for stable business activity and for the creation of new markets.”

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.

Host countries are assisted by means of capacity-building measures in introducing and upholding environmental and social standards. The Federal Government has long been supporting multi-stakeholder initiatives that have been launched in various sectors for the purpose of devising strategies and monitoring procedures.

These include, for example, the Sustainable Cocoa Forum, founded jointly by the Federal Ministry of Food and Agriculture, the Federal Ministry for Economic Cooperation and Development, the business community and civil society. In the Forum, the Federal Government, together with representatives of civil society, the confectionery industry and the food trade and in cooperation with partner countries, presses for improved production conditions and living standards in cocoa-growing areas and for sustainable cocoa farming.
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.
With support from the Federal Government-funded German Global Compact Network, the “Round Table on Human Rights in Tourism” was launched in 2012. Its aim is to specify the precise requirements of the UN Guiding Principles on Business and Human Rights for the tourism industry and to develop, in a multi-stakeholder format, solutions to human rights challenges that are specific to tourism.”

Measures

“The Federal Government will support the systematic inclusion of sustainability chapters in free-trade agreements, which will prescribe, among other things, compliance with the ILO Core Labour Standards.
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.
The Federal Government will continue to promote the Vision Zero Fund, which was initiated on the basis of a G7 decision. The Fund is to be administered by the International Labour Organization and will serve to prevent and reduce work-related deaths and serious work-related accidents in global supply chains.
Through its development cooperation programme, Germany supports the application of sustainability standards in host countries, for example through the regional project entitled “Social and labour standards in the textile and garment sector in Asia”, which covers three countries – Bangladesh, Cambodia and Pakistan.
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 31]

The current situation

“Through their purchasing decisions, consumers influence the supply of sustainably produced and delivered goods and services. Instruments such as the information platform www.siegelklarheit.de (sustainability standards comparison tool), initiated by the Federal Government, create transparency and help consumers to adopt sustainable purchasing habits.”

Measures

“The Federal Government is considering the introduction of a certification mark into German law. The relevant EU legislation already provides for the introduction of a European certification mark and gives Member States the option of introducing a national certification mark in addition. Such a mark could be used, for example, to certify compliance with certain human rights standards in supply and value chains. …”

2.3 Business activity in conflict zones [page 32]

“…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 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.”

3. Available means of practical implementation support

Measures [page 36]

“III. Opportunities for training and dialogue

In cooperation with business networks, ‘practice days’ for SMEs are offered nationwide. These sessions provide support, information and exchanges with other enterprises on responsible supply chain management and high-quality sustainability reporting. …

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.”

4.1 Access to justice and the courts for injured parties

Support for remedy mechanisms in third countries [page 37]

“With regard to potential human rights violations within supply chains, great importance attaches to reinforcement of the rule of law and democracy in the relevant third countries, because that will create conditions for the introduction of effective redress mechanisms in those countries.”

V. Ensuring policy coherence [page 40]

“Implementing the UN Guiding Principles on Business and Human Rights will mean pooling the efforts of all stakeholders, creating incentives to improve the human rights situation throughout supply chains and in target countries for investments and preventing serious violations of human rights in the context of business operations. …”

Foreword [page 5]

“The impact of business activity on the enjoyment of human rights is increasingly recognised. For employees and customers this can be direct and immediate, but other persons may be affected indirectly, for example by supply chain decisions.”

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]

“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

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.”

II. Premises

a) Introduction

“In more recent times, BHR issues have experienced new criticalities, especially with respect to the accessibility and use of remedial mechanisms. These criticalities are related to companies’ and stations’ responsibilities along the global supply chain and the space without physical boundaries proper of digital technologies.

(…)

A particular attention to BHR issues has been introduced in the Action Plan on Human Rights and Democracy 2020-2024, in the perspective of a wider process for the elaboration of a comprehensive EU framework dedicated to the implementation of the UNGPs. In the aforementioned document, the institutions commit themselves to conducting a dialogue with businesses in order to increase the level of protection and promotion of human rights, with the aim of combating corruption and introducing good practices in the area of corporate social responsibility, Due Diligence, accountability and access to remedy, and to fostering contacts and exchanges between businesses and civil society also in the area of women’s empowerment, sustainable development and decent work. This is in addition to strengthening their commitment at the multilateral level and in the development of new tools and materials to advance understanding on these issues. In this approach, the role of the institutions is crucial in terms of comparison and horizontal collaboration both internally (at the central level and in the European Delegations) and externally (with development banks and international financial institutions) and in the dialogue with Member States. The institutions consider a targeted business action to ensure the protection of human rights in the labour market, along the supply chain, and in the context of relevant challenges posed by digital technologies.” (p. 9)

c) National Priorities

“2. The promotion of fundamental rights through business activities both offline and online along the supply chain, at local, national, regional and global level.” (p. 11)

IV. Italian ongoing activities and future commitments

a) Foundational principles

“Italy renews its commitment for an open and constructive dialogue with businesses of all sizes who operate at different levels and in multiple sectoral areas. So far they could ensure respect for human rights in their structures, in planning and implementation of their development and economic growth strategies along the whole supply chain, as enshrined in the main binding and non-binding international legal instruments.

Irregular work and the agricultural sector

“In relation to the agricultural sector along a wider perspective, the Ministry of Agriculture, Food and Forestry Policies , through the provision of incentives in the agro-food sector, promotes interventions for a better distribution of value along the supply chain with the aim̀ of guaranteeing producers adequate remuneration. The Ministry intends to support and develop potential̀ of rural areas throughout Italy, also through the implementation of the National Rural Development Programme, co-financed by the European Agricultural Fund for Rural Development (EAFRD). This programme is implemented at the regional level through Rural Development Plans (RDP).” (p. 20)

Gender dimension

“Italy has domestically transposed Directive (EU) 2014/95 on non-financial reporting through Legislative Decree No. 254/2016 and, in this context, an important inspection and verification activity by CONSOB of non-financial reporting is being conducted. Its ultimate aim is to verify adequate and transparent information along the supply chain, and also on processes of Due Diligence and management of the risk of violation of human and labour rights along the supply chain.” (p. 34)

Environment

“In the context of the European Action Plan for the Circular Economy, the Government, through dialogue with local authorities and constant consultation of public and private operators and trade associations – intends to develop technical and administrative tools to ensure the support and development of coherent supply chains according to an approach of economic circularity.” (p. 35)

“The implementation of Green Public Procurement has also the purpose to develop circular supply chains, through the adoption of Minimum Environmental Criteria (CAM) for an increasing number of production sectors. CAM are currently in place for 18 categories of supplies and procurements.” (p. 38)

Children’s and adolescents’ rights

“The Italian Government supports public and private sector initiatives to promote attention, inclusion and protection of children’s and adolescents’ rights in business practices with the aim of integrating them into all aspects of the value chain” (p. 40)

Responsible Conduct and Due Diligence in the framework of the United Nations, OECD and European Union

“At the European level, the adoption of Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 establishing supply chain Due Diligence obligations for Union importers of tin, tantalum and tungsten, minerals and gold, originating in conflict or high-risk areas, has recently led EU Member States to take action to adapt their legal and regulatory systems to introduce this new obligation for Union importers.

More recently, the debate on Due Diligence has been deepened with a view to its broader mandatory scope: the EU Commission, in its 2018 Action Plan on Sustainable Financial Growth, drew the attention of all stakeholders to the need to develop strategic tools that incorporate Due Diligence along the supply chain. Following the European Parliament Resolution of 29 May 2018, dedicated to sustainable finance for the progressive definition of a mandatory Due Diligence framework, in January 2020 the EU Commission published a specific study on regulatory production process and aimed at compiling a comprehensive measure on mandatory Due Diligence. Finally, in its Resolution of 10 March 2021, the European Parliament addressed to the Commission recommendations concerning Due Diligence and Corporate Responsibility for a future directive, which would contribute to preventing and mitigating potential or actual negative impacts of business action on human rights, the environment and good governance.” (p. 43)

The nexus State – Business

“To this end Italy renews its commitment to ensure that companies controlled or participated in by the State, companies that are supported or have access to governmental benefits, companies that contract or conclude trade transactions with the State, carry out their production activities in compliance with international and European standards, both binding and non-binding, and of related national legislative measures to implement these standards for a full and concrete protection of human rights along the whole supply chain.” (p. 48)

Internationalization of companies

“Italy has performed best practices through awareness campaigns and training activities in line with the OECD Guidelines on Due Diligence, as well as the relevant EU regulations. In addition, again with reference to responsible trade in minerals, Regulation (EU) 2017/821 of the European Parliament and of the Council was adopted in 2017. This established supply chain Due Diligence obligations for Union importers of tin, tantalum and tungsten their ores, and gold, originating in conflict or high-risk zones. It has been transposed into Italian law through Legislative Decree No. 13 of 2 February 2021, which establishes Due Diligence obligations in the supply chain for Union importers of tin, tantalum and tungsten, their ores, and gold, originating in conflict or high-risk areas.” (p. 52)

ANNEX 1 – Accountability Grid and Assessment Tools for the Implementation of the NAP

“32. Participate in relevant OECD, European Union and other international initiatives on sustainable supply chains, human rights and Due Diligence.” (p. 66)

“35. continuing the promotion and protection of human rights, with a proactive role of the Inter-ministerial Committee for Human Rights, in correlation with the priority lines introduced in the framework of the PNRR and the SNSVS, including – among others – issues such as anticorruption, non-financial information disclosure , supply chain, environmental issues, decent work and non-discrimination in favour of competing companies in public calls for tender and within contracts stipulated with companies for the purchase of goods and services, with particular regard to (i) Italian companies operating abroad; (ii) Italian companies using foreign suppliers; (iii) foreign companies” (p. 66)

“36. promote the use of distributed ledger technologies, such as blockchain, to facilitate the traceability of products and services along global supply chains, including at sectoral level and in coordination with International Organizations.” (p. 67)

“38. Further promote awareness of the OECD Guides on Due Diligence for Companies Operating in Weak Governance Zones (the “Risk Awareness Tool for Multinational Companies in Weak Governance Zones” and the “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”).” (p. 67)

“50. Contribute, through exchange with governments and social partners, to good practices and common strategies to support the application of Due Diligence mechanisms in the debate on “Decent Work in the Global Supply Chain” promoted by ILO” (p, 68)

Introduction

The Republic of Slovenia adopted this Action Plan to enhance activities aimed at ensuring respect for human rights in business operations along the entire value chain. (pg. 4)

Annex I: Human Rights Due Diligence in Practice

An enterprise should identify the relevant facts through the entire value chain – not only within its business process but also on the outside, i.e. in relation to its contractual partners. A priority list of the potentially most critical human rights should be made, and a practical connection between them and business operations along the entire value chain should be established. (pg. 46)

D. Tasks for the Third NAP

Institutionalization of Human Rights Management

1. Secure corporate responsibility on human rights [page 4]

…

(2) To the extent possible, corporations should pay attention to prevent human rights violations happening at supply chain such as business partners or supplying companies.

…

II. Antecedents and Context

… In addition, there has been much debate about the role of the company in the field of EU development cooperation. Among other things, we should mention the Council Conclusions on sustainable clothing value chains, approved in May 2017. …

Guiding Principle 2

Measure 7

“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.”

Guiding Principle 3

Measure 4

“The Regulations will be implemented and the Directives will be transposed, and the adaptation of the Spanish legal system to the Recommendations and the Opinions made by the EU regarding the Guiding Principles will be studied. This, will be done taking into account the reports published by the European Commission on the legal framework for human rights and the environment applicable to European companies operating outside the EU (2010), and on responsible management of the supply chain (2011) and other relevant reports.”

Measure 10

“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 7

Measure 4

“The Government will promote the application of the OECD Due Diligence Guide for Supply Chains Responsible for Minerals in Conflict or High Risk Areas.”

2 The corporate responsibility to respect human rights [page 13]

“The conditions for companies’ efforts to respect human rights vary depending on their size …

In keeping with the UN Guiding Principles, businesses’ human rights efforts are expected to include the following main points: …

Procedure:

Identify and monitor the risks throughout the value chain (employees, business partners, suppliers, distribution and customer channels) and assess where responsibility for risks lies and how the company can have a positive impact”

Annex: Measures taken [page 22]

The State as actor

“The conduct of companies in relation to armed conflicts is highly relevant to respect for human rights. Sweden has proposed sharper formulations in the draft regulation on responsible trade in minerals from conflict areas that is currently being discussed in the EU. In other words, we consider it should be mandatory for importers from particularly problematic countries to obtain certification. 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).”

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)

Objectively verifiable indicators	× Benchmark: NAP 1, National Baseline Assessment (NBA) [Etude de base] × Economy Barometer [Baromètre de l’economie] × Training courses provided by House of Training, IMS – Fairtrade and ASTM, Finance & Human Rights asbl × A number of companies subscribing to the National Business and Human Rights Pact
Verification sources	× UEL [Union des Entreprises Luxembourgeoises] / INDR [Institut National pour le Développement durat et la Responsabilité sociale des entreprises] × House of Training × Training courses IMS – Fairtrade and ASTM × Employers’ chamber [Chambre des salariés] × Human Rights Working Group [GT « Entreprises et droits de l’Homme »]
Expected results	× Better understanding of the Guiding Principles and human rights issues in business
Implementation timeline	Duration of NAP 2
Means of implementation	× UEL [Union des Entreprises Luxembourgeoises] / INDR [Institut National pour le Développement durat et la Responsabilité sociale des entreprises] × House of Training, IMS – Fairtrade and ASTM, Finance & Human Rights asbl × Employers’ chamber [Chambre des salariés] × Specialised NGOs (notably UNICEF and Droits des enfants et principes commerciaux) × Consultants

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 ▪ Prospecting ▪ Launch – 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 – 5^thphase: (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] – Companies – IMS – Business and Human Rights Working Group – External Consultant

ACTION POINTS PILLAR 1	Aim	Responsible party	Timeline
Sustainable trade with and investment in developing countries
Strengthen collaboration between ministries by establishing an interministerial working group to conduct a permanent dialogue on sustainable trade and investments, focusing on specific high-risk value chains with a strong Dutch footprint.	Enhance learning capacity regarding policy coherence on sustainable trade and investments and on business and human rights	All ministries involved, with BZ taking the initiative.	From 2022
Research, monitor and evaluate the impact on developing/producing countries of national, European and international sets of rules and standards aimed at improving the sustainability of trade and investments, where possible under the auspices of the EU and supported by local stakeholder consultations	Enhance learning capacity regarding policy coherence on sustainable trade and investments and on business and human rights.	BZ	On introduction of new proposals and during implementation