While the definitions of supply chain and value chain somewhat differ the terms are often used interchangeably in business and human rights discourse. The UN OHCHR FAQ 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.”
The UN Guiding Principles on Business and Human Rights, Guiding Principle 13(b), notes 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 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”.
It should be noted that companies need to understand the risks of adverse human rights impacts throughout their supply chain, not limiting it to their first tier suppliers.+ Read more
To engage with suppliers and to undertake human rights due diligence, it is necessary for a business to know who their suppliers are through a supply chain mapping exercise. Some supply chains can be immense; Unilever has highlighted that their “value chain includes approximately 76,000 suppliers around the world, with sales in more than 190 countries … We employ 172,000 people in our operations but many millions play a role in our value chain.”
A number of tools and certification and collaboration initiatives have been created to assist businesses in identifying and assessing potential risks in their supply chains such as e.g. the Fair Labor Association, the Global Social Compliance Programme, the Ethical Trading Initiative, Fair Trade Standards and Certification system, the Ethical Tea Partnership (ETP), CSR Compass, Know the Chain, Rainforest Alliance, and The Forest Stewardship Council. Certain measures have also been developed to address specific risks in supply chains, including the Accord on Fire and Building Safety in Bangladesh
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 which can include ensuring the human rights abuse has ended, ensuring it does not occur again, and providing remedy to victims. Terminating the relationship with the supplier may be considered if the supplier does not engage with remedial measures, but should not be the first reaction to an adverse impact.
States also play an important role in that they can influence companies conduct with regards to 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. 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 California Transparency in Supply Chains Act of 2010 (SB657) requires businesses with worldwide annual revenues of USD 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. Furthermore, Brazil has developed a Dirty List of businesses using forced labour in their supply chains.
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.
Supply chains relate to the following Sustainable Development Goals
- Shift, From Audit to Innovation: Advancing Human Rights in Global Supply Chains, August
- Shift, Respecting Human Rights Through Global Supply Chains, August 2012
- OECD (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264252479-en
- The OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector
- OECD‑FAO Guidance for Responsible Agricultural Supply Chains
- OECD, Practical actions for companies to identify and address the worst forms of child labour in mineral supply chains
- UN Global Compact, “Sustainable Supply Chains: Resources & Practices”
- UN Global Compact, Good Practice Notes on Human Rights:
– „Community Engagement and Investment to Advance Human Rights in Supply Chains”
– „Supporting Worker Empowerment – Including Support for Workers’ Assertion of their Human Rights – in the Supply Chain”
- CSR Compass, http://www.csrcompass.com/
- Know the Chain, https://www.knowthechain.org/benchmarks
- The California Transparency in Supply Chains Act of 2010 (SB657),
- Netherlands, International Responsible Business Conduct (IRBC) Agreement for responsible gold value chain signed: Know, Show and Improve, http://www.internationalrbc.org/gold/news/2017/6/start-verantwoord-goud?sc_lang=en
- Dutch Banking Sector Agreement on international responsible business conduct regarding human rights, 28.10.2016
- Finland, A Shared Vision for Respecting the UN Guiding Principles on Business and Human Rights in Grocery Trade Supply Chains, 20 August, 2015
- Verité, Compliance is Not Enough: Best Practices in Responding to The California Transparency in Supply Chains Act, 2011
- Interfaith Center on Corporate Responsibility (ICCR), Christian Brothers Investments Services (CBIS), and Calvert Investments, Effective Supply Chain Accountability: Investor Guidance on Implementation of The California Transparency in Supply Chains Act and Beyond , November 2011
- Institute for Human Rights and Business – Supply Chain section
- Sean Ansett, Raise the Curtain: Human Rights in Retail Supply Chains, September 2013
- Global Social Compliance Programme, Consumer Goods Forum, GSCP Reference Tool on Supply Chain Social Performance Management Systems, January 2013
- J. Ruggie, Making Economic Globalization Work for All: Achieving Socially Sustainable Supply Chains, February 2017
- The Conflict-Free Sourcing Initiative
- The Economist Intelligence Unit, Sourcing Transparency: Who should clean up supply chains?, 2017
- Bier, D. Doorenbos and Ch. Saris, Bill adopted by Dutch Parliament introducing a duty of care to prevent child labour, Lexology, 22 May 2017
- Muddassir, What is Supply Chain Management ? A Technical and Academic Definition, August 22, 2015
- 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
- ACCORD on Fire and Building Safety in Bangladesh, 2013
What National Action Plans say on Supply chains
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 the management of supply chains.
Action point 13
Strengthen and monitor the respect for human rights in public procurement
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
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
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
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
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.
- Action point 2.1 (p. 12):
“Within the following year of the Plan being launched, the Working Group will list the basic criteria applicable to decision making in the selection and awarding public procurement processes. They will then assess and analyze, jointly with such State entities with the highest procurement weight, the inclusion of such criteria in their awarding processes.”
- Action point 2.2 (p. 12):
“The Colombia Compra Eficiente agency will adjust the current public procurement system to comply with such criteria as for respect for human rights, by including them in their objectives and including measures to make sure that suppliers execute the human rights due diligence.”
- Action point 5.2 (p. 16):
“The State entities with the highest procurement volume will determine and implement due diligence mechanisms in their own procurement processes.”
- Action point 7.2 (p. 19):
“The Ministry of Commerce, Industry and Tourism will encourage large enterprises to foster and boost their human rights support
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.
- 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
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). …
- 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
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]
“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.
- 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.
- 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. …
There is no mention of supply chains in the Business and Human Rights Chapter of the Georgian Human Rights NAP.
The German NAP includes many references to supply chains and value chains throughout the NAP, as well as containing a specific section on it.
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”
“…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.”
- “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.”
- “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.”
- “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.”
I. Statement of Commitment [page 5]:
To protect human rights, Italy undertakes to:
- Reinforce, cooperate with and develop industrial relations between social partners and multi-stakeholders’ initiatives to achieve better implementation of human rights in the conduction of economic activities, in specific business sectors and along the entire supply chain.”
IV. Government Responses: Current activities and future commitments
A. Foundational Principles
GP 2 [page 11]
… As to OECD, the Italian Government -through its OECD NCP-gives particular attention to due diligence and responsible supply chain management, also through multi-stakeholder initiatives. The Italian Government endorsed the G7 Declaration including the commitments related to sustainable supply chains. On the occasion of the Meeting of the G7 Employment and Development Ministers (Berlin, 12-13 October 2015) the “Action for Fair Production” initiative was approved by Ministers in order to foster sustainable global supply chain management in compliance with the internationally recognized labour, social, and environmental standards of the United Nations, the OECD and the ILO …
B. Operational Principles
General State Regulatory and Policy Functions
GP 3 (c,d)
Responsible Business Conduct and OECD Due Diligence [page 18]
… 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. (…) Such activities at national level are accompanied by active participation to the OECD proactive Agenda projects, such as the “OECD Sector Project on Responsible Supply Chains in the Textile and Garment Sector” and other EU and international initiatives. Other OECD guidance for due diligence are promoted among companies such as the “OECD – FAO Guidance for Responsible Agricultural Supply Chain” and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-affected and High-Risk Areas …
Planned Measures [page 19]
- Support and promote the initiatives adopted by the Enterprises associations on human rights, such as the recent European project “Global Industrial Relations, Transnational Company Agreements and Corporate Social Responsibility” led by Confindustria, jointly with the German and French business confederations and the Training Centre of the ILO in Turin. The project, that deals with the respect for human rights at global level, focuses on the available instrument for enterprises for a sustainable management of the global supply chain;
With specific regard to the “OECD Guidelines for Multinational Enterprises”, the Government is committed to:
- 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.
Supporting Business Respect for Human Rights in Conflict-Affected Areas
GP 7 [page 23]
… Furthermore, the Government is involved in the process of elaboration of a EU 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” for a responsible trading strategy from minerals from conflict zones.
Ensuring Policy Coherence
GP 9 & 10 [page 25]
- Contribute through the exchange with governments and social partners on best practices and approaches to the general discussion on “Decent work in global supply chain” started in the framework of the 105th session of the 2016 International Labour Conference.
The Lithuanian NAP makes no reference to supply chains.
Introduction (pg. 9)
… The NAP is designed to complement the efforts of the Luxembourg Government towards the achievement of the SDGs by providing businesses with the information and means to enable them to respect human rights internally and throughout their economic value chains…
Part I – Rational Framework for the development, adoption and implementation of the NAP
1. International Context
1.2. European Union (pg. 13)
In its conclusions of 20 June 2016, the EU Council of Ministers emphasized “the important role that business should play in helping to achieve the Sustainable Development Goals (SDGs) and in implementing the Agenda 2030. The Council also notes that “respect for human rights in business and its consideration in business activities and value chains and supply chains are essential for sustainable development and the achievement of the SDGs”.
1.5. The Organisation for Economic Co-operation and Development (OECD) (pg. 14)
Indeed, the NCP network is currently the only government mechanism for out-of-court conflict resolution. It provides stakeholders with a platform to address grievances arising during operations carried out by companies in or from Member States. The impact and influence of this instrument goes even further if we consider that the big companies of the industrialized countries, most of them member states of the OECD, have considerable power over non-Member States through the increasingly global network of supply chains and outsourcing and, therefore, have the ability to impose their standards. It is therefore essential, as part of a process such as the PAN, to measure its full scope and the precursory role.
Part III – NAP
1. Declaration of Engagement (pg. 26)
…The overall objective of this NAP is to strengthen the protection and promotion of human rights in the context of corporate policies, governance and economic activities. With this in mind, the NAP aims to raise awareness of the UN Guiding Principles on Business and Human Rights, to see them applied at company and value chain levels and to verify their implementation.
3. Government’s Response
3.2. A joint work program (pg.30)
…In order to ensure a concrete follow-up that will allow a real measure of the commitment made by one another, it is proposed to organize training based on the UN Guiding Principles for the staff of signatory companies. To this end, a collaboration between the INDR and House of Training is encouraged in the second half of 2018. The participation of non-governmental actors can be envisaged for the development of specific training modules, for example on the topic … prevention of forced labor and human trafficking in
1. Introduction [page 5]
“The Netherlands encourages the business community to respect human rights. The aim is to prevent companies from abusing human rights either directly or within supply chains.”
2. Current policy [page 9]
“The Netherlands already pursues an active policy to promote respect for human rights by the business community and to prevent companies from abusing human rights either directly or in their supply chains. The government expects companies operating abroad, in particular in countries where legislation or enforcement falls short, to pursue the same standards for CSR and human rights as they would in the Netherlands. …
Companies bear a social responsibility for what goes on in their supply chains and for ensuring fair work under satisfactory conditions of employment. To prevent abuses in terms of working conditions, child labour, environment, corruption and human rights in their supply chains, the government expects companies to act in accordance with the OECD guidelines wherever possible.”
3.1 An active role for the government [page 14-15]
“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.”
The OECD Guidelines Proactive Agenda
“The Proactive Agenda was added to the OECD Guidelines in 2011 to elucidate the guidelines for specific sectors or situations, together with all the countries involved. In the context of the Agenda, the OECD is working with the financial sector on clarifying application of the guidelines. It is also working with the various interested parties in the extractive sector on a guide to using stakeholder engagement in their CSR policies. With the FAO, it is working on a guide for the agriculture sector on fulfilling CSR requirements such as responsible investment in agriculture supply chains and land. In the spring of 2014 a high level forum will be organised with the ILO on CSR in the textile sector. A multi-stakeholder approach to conflict minerals has proved highly successful in preventing funds being channelled into the civil war in the DCR.”
3.2 Policy coherence [page 17-18]
Sustainable procurement policy
“Under the social conditions of national sustainable procurement policy, companies supplying the government with goods and services are required to respect human rights. These social conditions have been included in all central government EU contract award procedures since 1 January 2013, and the municipal, provincial and water authorities are being encouraged to apply them, too. Suppliers can fulfil these conditions in various ways – by joining a reliable multi-stakeholder supply chain initiative (quality mark or certification institute) or, if they have any doubts, carrying out a risk analysis.”
3.3 Clarifying due diligence [page 21]
“Due diligence is a core concept of the UN Guiding Principles, as set out by Professor Ruggie. It may be defined as follows:
- 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. …
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.”
3.4 Transparency and reporting [page 28-31]
During the consultations, attention was again requested for the Production and Supply Chain Information (Public Access) Act (WOK). With this legislation, consumers, members of the public, civil society organisations and other parties who ask companies about the origins of their products and services would be assured of an answer. On the basis of the results of a study by Panteia/EIM15 in 2009, the government then in office concluded that implementation of the WOK was technically feasible, but that it would entail high costs for the business community, and its enactment would probably run into international legal obstacles.
In this light, the government does not feel that this is the right time to enact such legislation, and points to the increasing availability of information on supply chains through instruments such as the Sustainable Trade Initiative and the Sector Risk Analysis project. The SER also devotes considerable attention to promoting supply chain transparency and responsibility in its ICSR committee. Moreover, it is possible to report to the NCP on companies that are insufficiently transparent for a constructive dialogue on CSR.
3.5 Scope for Remedy [page 34-36]
“There is no essential difference between the nature of the statements the various NCPs may issue in response to complaints. The Danish NCP is the only NCP entitled to carry out investigations on its own volition into the involvement of companies in abuses in international supply chains. No criteria have been laid down for starting an investigation. When asked, the Danish NCP was unable to say on what grounds it would take the initiative to launch an investigation. To date, no such investigation has been launched.
The government is not in favour of the Dutch NCP having similar, unconditional powers to carry out investigations. The people interviewed also expressed little support for this idea. The Dutch NCP may carry out additional investigations in response to complaints. If the NCP were entitled to carry out its own investigations, the business community would ultimately lose confidence in its impartiality. Moreover, if an issue were to be investigated on the NCP’s own volition, thus not in response to a complaint by an interested party, there would be no official ‘other party’ for the mediation procedure with the company in question.
It should be noted here that, in practice, the Dutch NCP already facilitates dialogue on CSR at the request of civil society organisations and/or companies, and thus not in response to a formal complaint submitted in accordance with the OECD Guidelines. The aim of those requesting facilitation is to bring about improvements, sometimes with a view to forestalling submission of an official complaint to the NCP.
Proactive investigation of possible risks in the Dutch business community’s supply chains now takes place by means of Sector Risk Analyses, as described above. Voluntary CSR agreements will be concluded with a number of sectors on the basis of these analyses. In their letter requesting advice on how effective CSR agreements can be concluded with business sectors, the Minister for Foreign Trade and Development Cooperation and the Minister of Economic Affairs asked the SER to devote explicit attention to the role the NCP could play as facilitator or dispute settlement mechanism.“
The Norwegian NAP makes no explicit reference to supply chains.
Responsible business conduct and human rights with regards to OECD Guidelines for Multinational Enterprises [page 6]:
The OECD takes a slightly broader approach to RBC, with a clear focus on the investment context, respect for human rights, protection of consumer rights, and due diligence in business. The principles of responsible business conduct were formulated in the OECD Guidelines for Multinational Enterprises in 1976, which were subsequently updated several times. In 2011, the scope of the OECD Guidelines was expanded to also include business relationships in the supply chain, introducing the concept of due diligence on the basis of risk assessment, with the addition of a chapter on human rights.
Pillar II: The corporate responsibility to respect human rights
2. Dialogue and Exchange of Knowledge and Experience in Implementing CSR, the NAP states [page 30]:
There are four categories of corporate activities that relate to corporate social responsibility: corporate governance, employees, the environment, and the product. The activities conducted within these categories may include: (…) a responsible approach to the supply chain, including to the extraction and transport of raw materials, production and transport of intermediates, responsible investments, stakeholder dialogue, and consumer education.
Implementation of the National Action Plan
1. Education [page 53]
The public administration’s role in implementing responsible business conduct includes creating favourable conditions for shaping appropriate forms of cooperation that facilitate making a voluntary commitment to responsible development and social responsibility. Education and wide dissemination of RBC standards is an important element in this respect, including responsible supply chains and respect for human rights. These actions should be addressed both at direct producers and companies in the supply chain as well as consumers.
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
“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
“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.”
“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
“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: …
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).”
5. National Action Plan on Business and Human Rights
5.7 Pillar 1: state duty to protect
5.7.2 Operational Principles: Legislative and Information Policy Measures
Guiding Principle 3 [page 18]
PI8 Guidelines for business enterprises on implementing the UNGP
In the agricultural and food sector, the Federal Office for Agriculture (FOAG) and the Swiss Agency for Development and Cooperation (SDC), as well as the Committee on World Food Security, the UN FAO and the OECD are supporting the formulation of Principles for Responsible Investment in Agriculture and Food Systems, as well as the OECD-FAO Guidance for Responsible Agricultural Supply Chains. Both instruments stress the important role that business has to play in responsible investment, and offer relevant guidance on action. Switzerland will also actively support their Implementation.
5.7.4 Business Respect for Human Rights in Conflict-Affected Areas
Guiding Principle 7 [page 26]
PI22 Guidelines on human rights due diligence in conflict-affected and high-risk areas
Over the years, the federal government has supported the drafting of a number of guidelines addressing the situation in conflict-affected areas. These include the Guidance on Conflict Sensitive Business Practice for the extractive sector issued by International Alert and the Red Flags initiative. Switzerland also provides financial support for the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. In addition, Switzerland is a member of the multi-stakeholder group managing the implementation, spread and continued development of the Guidance. It is aimed primarily at companies operating in conflict-affected or high-risk areas in the extraction and trading of commodities.
The UK 2013 NAP states in Actions Taken that [page 10]:
“We will also continue to help develop, and monitor implementation of, OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas. The Government will also continue to encourage higher standards in the diamond supply chain.”
The UK 2013 NAP notes in regard to 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:
- emphasise the importance of behaviour in line with the UNGPs to their supply chains in the UK and overseas. Appropriate measures could include contractual arrangements, training, monitoring and capacity-building;”
The UK 2013 NAP further notes in Action for business to ensure access to remedy that [page 18]:
“The Government encourages companies to review their existing grievance procedures to ensure they are fair, transparent, understandable, well-publicised and accessible by all, and provide for grievances to be resolved effectively without fear of victimization. It is also important for businesses to require similar good practice of their supply chains, especially in areas where abuses of rights have been identified.”
The UK 2016 Updated NAP addresses supply chain already in the Introduction [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, in Actions Taken section [page 8], states that:
“To give effect to the UN Guiding Principles, the Government has:
i) introduced the Modern Slavery Act which consolidates and simplifies existing legislation, toughened penalties to allow a maximum sentence of life imprisonment, and provides safeguards for victims. Companies covered by the Act are required to produce a “slavery and human trafficking” statement for each financial year setting out what steps they have taken to ensure that slavery and human trafficking is not taking place in its business and supply chain The Act, which entered into force on 31 July 2015, also created an Independent Anti-Slavery Commissioner; …
iii) taken account of business activity in conflict and fragile states, or countries with high levels of criminal violence, within the Building Stability Overseas Strategy. Companies operating in these difficult environments have an important role to play in contributing to stability, growth, development, prosperity and the protection of human rights. We support the implementation of the OECD Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones. 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 Government will also work with EU partners and other like-minded countries to deliver increased effectiveness of the Kimberley Process Certification Scheme and higher standards of responsible sourcing in the global diamond supply chain. (…)”
The UK 2016 Updated NAP mentions supply chains in the context of the Rana Plaza case [page 12] as well as in Government Expectations of Business [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: (…) – emphasise the importance of behaviour in line with the UNGPs to their supply chains in the UK and overseas. Appropriate measures could include contractual arrangements, training, monitoring and capacity-building.”
The UK 2016 Updated NAP further provides that [page 15]:
“The Government encourages companies to review their existing grievance procedures to ensure they are fair, transparent, understandable, well-publicised and accessible by all, and provide for grievances to be resolved effectively without fear of victimisation. It is also important for businesses to require similar good practice of their supply chains, especially in areas where abuses of rights have been identified.”
Responsible Business Conduct [page 4-5]
“Globally, the U.S. government is dedicated to engaging on RBC at the most senior levels. The June 2015 G-7 Summit Leaders’ Declaration recognized “the joint responsibility of governments and business to foster sustainable supply chains and encourage best practices. The October 2015 G-7 Labor and Employment Ministerial Declaration sets out how G-7 countries will strive to lead by example in their own practices to collaborating with stakeholders to facilitating RBC by companies. The “responsible supply chains” issue is expected to be an important part of the agenda for the G-20 under the German Presidency in 2017.
The U.S. government also actively engages on these issues through the Organization for Economic Co-operation and Development (OECD) Working Party on RBC, with the Office of the United Nations (UN) High Commissioner for Human Rights and the UN Working Group on the issue of human rights and transnational corporations and other business enterprises, and with the International Labor Organization (ILO) through its work to advance Decent Work in Global Supply Chains.”
Outcome 1.1: Promoting RBC Globally
Ongoing Commitments and Initiatives [page 8-9]
“Bilateral and Multilateral RBC Statements: The United States uses bilateral and multilateral diplomacy to promote RBC and business environments conducive to RBC. Examples include the 2015 G-7 Leaders’ Declaration on sustainable supply chains and the 2015 U.S.-China statement at the U.S.-China Strategic and Economic Dialogue recognizing the importance of RBC by both countries’ firms operating abroad. State and other agencies will continue to seek to expand the number of countries adopting policies and practices conducive to RBC.” – Implementing Department or Agency: State, DOL
“International Labor Organization: The U.S. government will continue to engage with representatives of employers and workers, and with other governments, to address key issues including but not limited to: employment, protection of worker rights, and social protection. To that end, the U.S. government played an active role in the June 2016 International Labor Conference discussion on the opportunities and challenges in advancing decent work in global supply chains.” – Implementing Department or Agency: DOL, State
Outcome 1.3: Leverage U.S. Government Purchasing Power to Promote High Standards
New Actions [page 10-11]
“Research and Tools on Preventing Trafficking in Global Supply Chains: The State Department funded research on “Strengthening Protections Against Trafficking in Persons in Federal and Corporate Supply Chains” to develop a set of online tools and resources to help federal contractors and corporations analyze, prevent, and address human trafficking risks in their global supply chains. In 2016, State and nongovernmental organizations launched ResponsibleSourcingTool.org. This online platform focuses on the sectors and commodities at greatest risk for trafficking and provides guidance on developing effective management systems. State anticipates funding the development of additional sector-specific tools and the maintenance of the site over the next five years. In addition, DOL is funding research on forced labor in specific industries’ global supply chains and an ILO-led Global Business Network on Forced Labor.” – Implementing Department or Agency: State, DOL
“Compliance with Procurement Regulations: Pursuant to E.O. 13673, DOL and OMB will work with other agencies to designate agency Labor Compliance Advisors who will build greater awareness and understanding of RBC by contractors with whom those agencies do business. For example, a labor compliance advisor could support agency review efforts in the event a contractor, in accordance with requirements of the End Trafficking in Government Contracting Act (22 U.S.C. 7104c), reports a trafficking violation in its supply chain to the government.” – Implementing Department or Agency: DOL, OMB
Ongoing Commitments and Initiatives [page 11-12]
““Strengthening Protections against Trafficking in Persons in Federal Contracts,” (E.O. 13627), signed on September 25, 2012, and its associated regulatory changes, created new prohibitions on trafficking and trafficking-related activities in federal supply chains that are designed to help identify and prevent human trafficking in global supply chains. On December 8, 2016, the U.S. government published draft guidance on anti-trafficking risk management best practices and mitigation considerations for public comment. This guidance is designed to help an agency determine if a contractor is taking adequate steps to meet its anti-trafficking responsibilities under the Federal Acquisition Regulation (FAR) and the FAR Council’s regulations implementing E.O. 13627 and the National Defense Authorization Act for Fiscal Year 2013. This guidance, coordinated by OMB in partnership with DOL and State, and other agencies, will assist agencies in developing appropriate internal procedures and controls for awarding and administering Federal contracts to improve monitoring of and compliance with actions to prevent human trafficking. In addition, the Council intends to amend the regulations to provide a definition for “recruitment fees,” which is a critical component to help prevent trafficking in federal supply chains.” – Implementing Department or Agency: OMB, State, DOL
Outcome 2.1: Enhance the Value of Multi-Stakeholder Initiatives on RBC
New Actions [page 14]
“Promoting Worker Voice throughout Global Supply Chains: DOL, State, and USAID will promote worker voice and empowerment throughout global supply chains and will commit to: (1) building innovative tools to empower workers to directly report to relevant Departments concerns in federal supply chains; and (2) leverage public-private partnerships, stakeholder engagement, and labor diplomacy to promote worker empowerment throughout global supply chains. This effort will enhance the visibility of workers’ perspectives and of their representative organizations, and promote the ability of workers to organize. Various U.S. government agencies have funded and/or participated in initiatives to support stronger worker voice, such as through the Partnership for Freedom and the Supply Unchained initiatives.” – Implementing Department or Agency: DOL, State, USAID
“Promoting Best Practices for Key Performance Indicators (KPIs): The U.S. government will convene stakeholders to discuss the development and promotion of effective metrics, including KPIs, for measuring and managing labor rights impacts in supply chains. This will be done in collaboration with industry groups, auditing organizations, worker organizations, and other civil society actors.” – Implementing Department or Agency: DOL
Ongoing Commitment [page 15]
“DOL Technical Cooperation: DOL funds a range of projects involving collaboration with private sector actors on RBC issues, including:
- A $12 million project, From Protocol to Practice: Building a Bridge to Global Action on Forced Labor, supports global and national efforts pursuant to the 2014 ILO Protocol and Recommendation on Forced Labor. Among other things, this project will organize a global supply-chain forum focused on the role of business in addressing forced labor. …” – Implementing Department or Agency: DOL
“Partnership for Freedom: The U.S. government has provided funding and technical assistance for the Partnership for Freedom, a public-private partnership among NGO Humanity United and DOJ, State, DOL, and the Departments of Health and Human Services (HHS), and Housing and Urban Development (HUD). Under the second of three challenge competitions, federal agency participants committed to providing outreach and disseminating information to potential applicants for financial support from Humanity United, and to contributing technical expertise to “challenge competition” awardees that have developed technological solutions to identify and address labor trafficking in global supply chains.” – Implementing Department or Agency: DOJ, State, DOL, HHS, HUD
Outcome 3.1: U.S. Government Reports
Ongoing Commitments and Initiatives [page 18]
“Reducing Child Labor and Forced Labor: A Toolkit for Responsible Businesses: This DOL online resource, launched in December 2012, will continue to provide step-by-step guidance to businesses that seek to develop and improve social compliance systems to address child labor and forced labor in supply chains. The Toolkit is available to the public in English, Spanish, French, and Portuguese and will be regularly updated based on feedback from users.” – Implementing Department or Agency: DOL
Outcome 3.2: Build U.S. Government Officials’ Capacity to Support RBC
Ongoing Commitments and Initiatives [page 19]
“USAID New Training Module on Supply Chains and Trafficking: USAID routinely offers training to all USAID staff on Counter-Trafficking in Persons (CTIP). In 2016, a new module was developed and incorporated into the CTIP training, and replicated in USAID training for economic growth officers on effective approaches to counter labor trafficking and other labor abuse in specific sectors and supply chains.” – Implementing Department or Agency: USAID
Outcome 3.3: Capacity Building and Technical Support to Promote Enabling Environments
Ongoing Commitments and Initiatives [page 20-21]
“Eliminating Child and Forced Labor in Agricultural Supply Chains: In 2011, USDA, DOL, and State released the Guidelines for Eliminating Child and Forced Labor in Agricultural Supply Chains, developed as part of a multi-stakeholder process that included high-level officials of these agencies, representatives of business, civil society, and academics. The Guidelines’ specific elements should be integrated into any agricultural company program to reduce child or forced labor, and include adhering to ILO standards on child labor and forced labor; mapping supply chains and conducting risk assessments; providing communication and monitoring mechanisms; and developing plans and programs for remediating violations. DOL is now funding a four-year pilot project in Turkey to test implementation of the above Guidelines by a leading company.” – Implementing Department or Agency: USDA, DOL, State
Annex II: Key Domestic Executive Orders and Regulatory Efforts [page 26]
“The Executive Orders and regulations listed below are examples of U.S. government actions designed to lead by example and help promote the responsible conduct of businesses operating in the United States and abroad.
“Strengthening Protections against Trafficking in Persons in Federal Contracts” (E.O. 13627), signed on September 25, 2012, and its associated regulatory changes, created new prohibitions on trafficking and trafficking-related activities in federal supply chains to identify and prevent human trafficking in global supply chains. E.O. 13627 also mandated compliance plans for federal contracts performed overseas and exceeding $500,000 in value. …”