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Guiding Principle 17

In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed. Human rights due diligence:

(a) Should cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships;

(b) Will vary in complexity with the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations;

(c) Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise’s operations and operating context evolve.

Commentary

This Principle defines the parameters for human rights due diligence, while Principles 18 through 21 elaborate its essential components.

Human rights risks are understood to be the business enterprise’s potential adverse human rights impacts. Potential impacts should be addressed through prevention or mitigation, while actual impacts – those that have already occurred – should be a subject for remediation (Principle 22).

Human rights due diligence can be included within broader enterprise riskmanagement systems, provided that it goes beyond simply identifying and managing material risks to the company itself, to include risks to rights-holders.

Human rights due diligence should be initiated as early as possible in the development of a new activity or relationship, given that human rights risks can be increased or mitigated already at the stage of structuring contracts or other agreements, and may be inherited through mergers or acquisitions.

Where business enterprises have large numbers of entities in their value chains it may be unreasonably difficult to conduct due diligence for adverse human rights impacts across them all. If so, business enterprises should identify general areas where the risk of adverse human rights impacts is most significant, whether due to certain suppliers’ or clients’ operating context, the particular operations, products or services involved, or other relevant considerations, and prioritize these for human rights due diligence.

Questions of complicity may arise when a business enterprise contributes to, or is seen as contributing to, adverse human rights impacts caused by other parties. Complicity has both non-legal and legal meanings. As a nonlegal matter, business enterprises may be perceived as being “complicit” in the acts of another party where, for example, they are seen to benefit from an abuse committed by that party

As a legal matter, most national jurisdictions prohibit complicity in the commission of a crime, and a number allow for criminal liability of business enterprises in such cases. Typically, civil actions can also be based on an enterprise’s alleged contribution to a harm, although these may not be framed in human rights terms. The weight of international criminal law jurisprudence indicates that the relevant standard for aiding and abetting is knowingly providing practical assistance or encouragement that has a substantial effect on the commission of a crime.

Conducting appropriate human rights due diligence should help business enterprises address the risk of legal claims against them by showing that they took every reasonable step to avoid involvement with an alleged human rights abuse. However, business enterprises conducting such due diligence should not assume that, by itself, this will automatically and fully absolve them from liability for causing or contributing to human rights abuses.

What National Action Plans say on Guiding Principle 17

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PLANNED ACTIONS:

Action point 1, Elaborer une boîte à outils destinée aux entreprises et organisations concernant les droits de l’Homme [Develop a toolkit for companies and organizations on human rights], presents the action of developing, in collaboration with experts and 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 how companies can create grievance mechanisms; launch initiatives for data collection in order to prepare human rights commitments and policy statements; and apply proper human rights due diligence.

In the context of Action point 15, Intégrer le principe de « diligence raisonnable » au sein des organismes de gestion de l’entreprise, également en matière de droits de l’Homme [Incorporate the principle of “due diligence” into the management of the company, also in the terms of human rights] the NAP explains that “the OECD, and the EU, wants to make more non-financial information available. In this context, 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.” Alongside the federal government, the Wallonia, Flemish and Brussels governments are committed to encouraging the publication of non-financial reporting by large companies.

Action point 20, Promouvoir les entreprises publiques socialement responsables [Promote state enterprises that are socially responsible] also touches upon human rights due diligence. The action’s objective is to create a learning network for public enterprises, which strives to bring together knowledge, to pool expertise and exchange experiences in order to realize CSR commitments and ambitions. Particular attention will be paid to how public enterprises can integrate and promote respect for human rights within their organization through tools such as reporting and/or “due diligence”.

In the context of the Action point 22, Encourager la gestion responsable des chaînes d’approvisionnement avec une approche sectorielle [Encourage responsible supply chain management with a sector-wide approach], the NAP mentions human rights due diligence in reference to severel OECD guidelines such as:

The “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”
The “OECD-FAO Guidance for Responsible Agricultural Supply Chains”
The “OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector”

Pillar II. The Corporate Responsibility to Respect Human Rights

Strand 2: Promotion of corporate due diligence in the field of human rights [pages 54-56]

The need for the State to generate an understanding among business enterprises about due diligence in human rights was often mentioned in the citizens’ dialogues, as well as the creation of spaces allowing to clarify how to develop these processes at a local level.

2.1. The Ministry of Foreign Affairs, through the General Directorate of International Economic Relations, will: o Promote human rights in the management of public funds to promote exports carried out by ProChile, through the progressive incorporation of analysis mechanisms helping to ensure that business enterprises having access to the tools offered by this entity respect human rights. Likewise, it will establish, if relevant, requirements about sustainability and respect for human rights, as criteria to choose the business enterprises participating in programmes to promote exports and corporate activities, including SMEs and micro SMEs. o Disclose to business enterprises who are members of ProChile the United Nations Guiding Principles, thus helping, in this was and as far as possible, to incorporate them in their activities. It will do this through information available in the website, talks or sets of tools to strengthen their capabilities, and/or through the publication of handbooks containing the Guiding Principles or another suitable instrument, with special focus on information and training provided to SMEs.

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

o 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.

o Create working groups in conjunction with the Under-Secretariat of Fisheries and Aquaculture and the Under-Secretariat of Tourism, which will have the duty to analyse and create mechanisms allowing to monitor these sectors regarding their respect for human rights. It will encourage and work with SEP for the adoption of an audit system in the field of human rights.

o Support the Ministry of Energy in the development of a Guide about the impact of projects on local communities, seeing to the integration of business and human rights standards into the development of projects within communities and, particularly, containing best practices about due diligence in human rights-related issues.

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.

Propose guidelines for business enterprises to have remedial mechanisms available. o Coordinate technical meetings with SEP, CORFO, SERNAC and SERCOTEC to agree on the incorporation of targets and indicators of compliance with human rights standards in these services. o Look to generate strategic alliances with banking institutions to facilitate access to financial services to cooperatives -which projects integrate an actual and potential analysis of the contribution and impact that the business may have on human rights. o Subscribe in 2017 an agreement with a technical specialised body to develop a system to diagnose and measure the impact of small and medium size enterprises on human rights, through a digital tool of public access.

V. Human Rights Due Diligence

Defining the concept and guiding through effective implementation mechanisms [page 16]

Due diligence is understood as the set of measures systematically implemented by an enterprise acting cautiously, to fulfill its respect for human rights duty, considering the specific circumstances according to the activity, operation context, scope and similar factors. Since this is a concept to be interpreted in each case as an appropriate response to the risks of impacts on human rights by the business activities, the State must determine how companies are expected to act so they can execute human rights due diligence. Thus, it will encourage the development of mechanisms and tools allowing for the practical implementation by business and public entities of the human rights due diligence. The entities must act as follows:

5.1 The Task Force will coordinate the preparation of a guide intended to define what executing due diligence means; what the practice is, particularly applied to the high risk business activity sectors.

5.2 The State entities with the highest procurement volume will determine and implement due diligence mechanisms in their own procurement processes.

5.3 Promote the implementation of the United Nations Guiding Principles and other international standards on business and human rights by the trades and the enterprises part thereof, so they may adopt human rights policies. Thus, during the first year of the execution of this Plan, the Council to the President for Human Rights will convene high level meetings with the trades to determine the inclusion goals in the multi-actor initiatives and human rights performance follow-up mechanisms. These actions must be coordinated with the entities of the Task Force, especially with the Ministry of Commerce, Industry and Tourism and in cooperation with the Direction of Post-conflict.

5.4 The Council to the President for Human Rights and the Ministry of National Defense will encourage the implementation of the Voluntary Principles on Security and Human Rights. To that end, they will alternately engage in the areas where such issue is treated.

5.5 Develop a guide on the increasing human rights risks of the business activities in zones historically affected by the armed conflict. Thus, the Council to the President for Human Rights and the Direction of Post-conflict will coordinate with the Comprehensive Conflict Prevention and Management System the development of such guide, which must be worked upon in a participatory manner with the enterprises and the civil society.

According to the provided period to create the Comprehensive Conflict Prevention and Management System, this action must be carried out within the year following the coming into operation of such system.

5.6 The Ministry of Commerce, Industry and Tourism will promote the business efforts to adjust their policies to the OECD Guidelines for Multinational Enterprises, for which purposes it will assess, within six month from the execution of this Plan, its strategy to disseminate the Guidelines so as to make them widely known.

5.7 The Task Force will assess and analyze the formulae for enterprises to include the reporting of the human rights due diligence in their Sustainability Reports or rendering of accounts. Such assessment will be carried out within the year following the launching of this Plan and accompanied by the several sectors.

VII. Corporate Human Rights Due Diligence [page 19]

7.1 The Task Force, advised by the Expert Committee, will encourage talk fora to determine the best formulae for enterprises to establish easy-to-access, transparent and effective complaint and claims offices or mechanisms for prevention and mitigation and remedy of adverse human rights effects as may be caused by their activities.

7.2 The Ministry of Commerce, Industry and Tourism will encourage large enterprises to foster and boost their human rights support and guidance efforts for such SME they have business relationships with.

7.3 The Ministry of Labor will guarantee respect for the labor rights.

7.4 The Ministry of Commerce, Industry and Tourism will encourage business enterprises to foster talks with consumers.

7.5 The Office of the Transparency Secretary of the Presidency of Republic will support the adoption of transparency covenants by enterprises so as to contribute to the corruption struggles in corporate governments, for which purposes a year will be given upon the Plan launching.

7.6 The Task Force will tend towards enterprises, through their complaint offices, receiving and diligently managing the citizen and community claims, as considered to be affected by the adverse effects caused by their operations.

7.7 The Task Force, advised by the Expert Commission, will encourage companies to have follow-up Strategies in place to know about the progress and follow-up to the mitigation of adverse impacts caused by the development of business activities.

7.8T he Task Force, advised by the Expert Commission, will encourage business enterprises to assess their risks and impacts on people and the environment as a result of their operation.

Pillar II. The Corporate Responsibility to Respect

Due Diligence [pages 35-36]

The Government of the Czech Republic recommends that businesses consider introducing an internal due diligence mechanism to spot and eliminate human rights risks, or incorporate human rights risks – as another evaluation criterion – into their existing due diligence mechanisms.

The term “due diligence” is broadly known in the business community and denotes in-depth reviews into businesses and or the transactions they are preparing. The UN Working Group on Business and Human Rights defines human rights due diligence as a process to identify and evaluate human rights risks, a series of steps to understand how a company’s activities can affect human rights. It must also include appropriate responses to the findings. A fundamental difference between financial risk and human rights risk is that, while financial audits and financial due diligence explore the ramifications for the business itself, human rights due diligence examines the effects on third parties – the holders of human rights (customers and people living in the vicinity of a business or who are affected by its operations).

The search for and eradication of human rights risks should form part of all major commercial operations, not just because any violations of human rights that are exposed could lead to hefty financial losses (compensation, loss of customers, a tarnished reputation), but mainly because – unlike economic loss – human rights loss cannot be fixed so easily.

An effective due diligence mechanism should meet the following criteria:

Consider the internal risks (stemming from the business’s own operations) and external risks (particularly in relation to business partners and other entities with which the business works).
Identify existing risks (with a view to eliminating them) and potential risks (with a view to preventing any loss or damage).
Adapt the mechanism to the size of the business, the nature of its operations and specific local factors.
Implement the mechanism in the internal management system.
Regularly update the mechanism to reflect evolving conditions.
Leverage the experience and knowledge of independent experts who operate externally or maintain a high degree of personal independence.
Engage employees, as they should have the opportunity to draw attention to risks and provide assistance in the removal thereof.
Engage the public directly concerned, stakeholders in the community and vulnerable groups in the formation of the mechanism.

Public engagement can take many forms. First of all, this may entail consultations with those affected by businesses’ operations (holders of human rights) because these people are best placed to highlight the problems looming over them. Likewise, employees should be involved as they need to know how to deal with the knowledge they accrue in their work. Finally, public engagement may comprise external expert opinions, opposing views, etc.

Most companies have already introduced control mechanisms that can be tweaked so that they also apply to human rights risks. These tend to be compliance mechanisms, used by businesses to keep track of requirements imposed by legislation, regulators, investors and capital markets (the conditions for participating on the stock exchange etc.). Businesses should view the obligation to respect human rights as a legal compliance matter. Even if the duty to comply with human rights in the course of business operations may not derive directly from a particular country’s legal system, businesses should act as though this were the case and attribute the weight of the law to moral and ethical rules in their internal decision-making. This will enable them to incorporate human rights protection into existing mechanisms used to run checks on legal obligations. As a result, businesses will comply with their duty to respect human rights and take due care at minimum extra cost, thereby making big savings.

Human rights auditing should extend beyond the actual business to some extent and touch on the activities of external entities, such as those in the supply chains. Businesses could have a hand in violations of human rights through their own negligence, including via their subsidiaries and suppliers. Such conduct, despite not being wilful or intentional, does not relieve a business of liability as it could be viewed – by the courts and the public – as a form of negligence or failure to engage in appropriate supervision.

Although it is impossible for a business to carry out due diligence at an external entity to the same extent as internal due diligence, those areas that are most at risk should be identified, someone should be singled out as liable for infringements of rights and, where possible and feasible, specific steps to eliminate these risks should be demanded. If external risks identified, businesses should exercise any influence they have to stave off those risks, for example by sharing good practices and their own experience. Businesses lacking such influence should leverage their links with other entities (customers, suppliers, business associations, trade unions and bodies of public administration). If they have no way of influencing such conduct, they should weigh up the option of terminating cooperation.

Businesses who decide to publish the results of due diligence should:

Choose a form that the general public can readily understand. Besides conventional reports, they might consider personal meetings, online discussions and public hearings.
Choose a scope and frequency that enables them to pass on all necessary information without overwhelming the reader.
Publish not only the risks that have been identified, but also the steps to tackle them.
Withhold information that could encroach on the privacy or other legitimate interests of employees and other persons, and refrain from disclosing business secrets.

Documents and sources of information

The Office of the Government of the Czech Republic collects model documents, guidelines and materials intended for businesses to improve the performance of tasks in this chapter, and posts them on the National Corporate Social Responsibility Portal: http://narodniportal.cz/

2. State Duty to Protect Human Rights

2.3 Actions taken

Providing effective guidance on how to respect human rights [pages 13-14]

“The Danish Government is committed to continuously improving and promoting guidance provided to companies on how to work with CSR in general and human rights in particular. To ensure that companies have the right tools and the necessary guidance to handle the new due diligence requirements, the Government has updated the existing web tool, the CSR Compass and the Global Compact Self-Assessment Tool in accordance with the due diligence requirements of the UNGPs. The revised Compass includes a guide for small and medium-sized companies on how to exercise due diligence

(GP 17)

3. Expectations towards companies and support services

3.1. Clarification of due diligence [page 23]

The OECD Guidelines for Multinational Enterprises were updated in 2011. In the same connection, the UN Guiding Principles on Business and Human Rights were included in the Guidelines along with due diligence. In the OECD Guidelines, due diligence is seen as an examination process with which companies identify and prevent the actual and potential adverse impacts of their activities in their decision making and risk management. This means that due diligence is not a single action. lnstead, it is an ongoing process where the human rights impacts of business activities are assessed with appropriate and sufficient care.

Due diligence also includes the mitigation of adverse impacts and communication on how companies deal with these adverse impacts. Potential effects are dealt with by preventing or mitigating them, whereas actual impacts will be dealt with by remedying them.

By following due diligence, an attempt is made to prevent the adverse impacts which a company will either cause itself, to which it will considerably contribute towards, or which are directly related to the company’s activities, products or services through a business relationship.

The contribution refers to a situation where that contributing impact is substantial. This means activities resulting in indirect adverse impacts caused, promoted or encouraged by another party. This does not cover minor or insignificant contributions. If a company contributes to a detrimental effect on human rights, it should take the necessary measures and use its influence to prevent or alleviate the adverse impact.

In the Guidelines, business relationships cover relations with business partners, supply chain operators and other operators independent of the state and governmental operators that are directly related to the company’s business activities, products or services. If the company has a lot of suppliers, it should identify the areas where the risk of adverse impacts is highest and contribute to the prevention of these risks.

What it sufficient?

At the consultation events organised by the working group, it was suggested that a new statutory obligation on due diligence should be established for companies when implementing the UN principles on a national level.

Transforming the due diligence described above into a legally binding obligation is difficult to envisage. The problem with statutory due diligence for respecting human rights is the difficulty of defining the obligation included therein. On a national level, respecting human rights is defined in appropriate legislation, and careful actions may be important for assessing company responsibilities. Extending national legislation to international activities is even more challenging. The special questions related to the regulation of international business activities have been described above in Section 1.1.

According to the international guidelines, the sufficiency of following due diligence and the possibilities of making a difference are always weighed on a case by-case basis. The issues mentioned above (such as the size of the company, branch of activity, operating conditions, ownership and business structure) are taken into consideration. The seriousness of the adverse impacts caused is important as well. Since both the UN principles and the OECD Guidelines emphasise prevention, a retrospective assessment on sufficiency will cause challenges of its own for preparatory actions.

The discussion on the content of due diligence and the ways it is applied also continues in international organisations.

Though there is no binding regulation on due diligence, it is a central concept in

managing human rights risks related to international business activities. For these reasons, more discussion and information is required on the types of risks an possibilities related to each branch of activity, on the types of risk management needed, and on the expectations for observing due diligence in various branches of activities.

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

companies, non-governmental organisations and other key stakeholders are invited to a roundtable discussion by branch of activity. For example, the discussion could begin with the forest industry, the consumer goods trade and the textile industry.With the discussions, an attempt shall be made to create a dialogue amongst various stakeholders and to establish the essential risks for each branch of activity as well as sufficient risk management and due diligence.
In co-operation with the business sector, the collective industrial organisations and non-governmental organisations, sharing of due diligence best practices is promoted in order for companies to apply them.

Principal responsible parties: Ministry for Foreign Affairs and Ministry of Employment and the Economy, schedule by the end of 2015.

II. Business Responsibility to Respect Human Rights

1. Charters and Codes of Conduct [pages 38-39]

Charters and codes of conduct are voluntary initiatives that create legitimate expectations among stakeholders. Company charters aim to:

Set down and disclose the company’s commitments to human rights;
Explain expectations to employees, subsidiaries and subcontractors.

The following points are key to their implementation:

They must send a clear and strong message from the highest level of the business;
They must enable businesses to respect internationally recognised human rights and make commitments appropriate to their size and activity;
They must cover relationships with commercial partners and not be limited to “direct” activities.

Existing tools:

− The Guide on How to Develop a Human Rights Policy, published by the UN Global Compact, which contains recommendations for businesses on developing and implementing human rights policies (https://www.unglobalcompact.org/library/22);

− Examples of human rights commitments by international businesses, collected by the Business and Human Rights Resource Centre (https://businesshumanrights.org/en/company-policysteps);

− The charter for French businesses working in Africa, which was adopted at the AfricaFrance Summit in 2010;

− The Human Rights Reporting and Assurance Frameworks Initiative (RAFI);

− The Fibre Citoyenne initiative, aimed at businesses in the textile-garment sector, by the NGO Yamana.

III. Federal Government expectations regarding corporate due diligence in respecting human rights

Scope and practical structuring of due diligence in the field of human rights [pages 7-8]

The responsibility to exercise due diligence applies in principle to all enterprises, regardless of their size, the sector in which they operate, or their operational context within a supply or value chain with an international dimension. The nature and exercise of due diligence for any given enterprise should be commensurate with these factors; it should be possible for the enterprise to incorporate its due diligence obligations into its existing processes in an appropriate manner without the creation of undue bureaucratic burdens.

Enterprises should prevent and mitigate any adverse impact of their business activity on human rights. When due diligence in the realm of human rights is defined and exercised, consideration should be given to the beneficial effects of corporate activity and to the diverse perspectives of the company’s own employees, the relevant stakeholders and others who may be affected. Within large enterprises, these include the staff of the human resources, purchasing, compliance and sales divisions. From outside the enterprise, suppliers, customers and trade unions but also bodies from civil society, business organisations and governments should be involved. Particular attention should be given to the rights of their respective employees and to those of local populations who may be affected.

Depending on the size of the enterprise, the nature of its products or services, the potential risk of particularly adverse impacts on human rights and the operating context, the measures to be taken are likely to vary in scope. It may be appropriate to conduct certain elements of the process in combination with other enterprises within an association or industry, subject to compliance with antitrust legislation. Small and medium-sized enterprises in particular should make use of the advisory and support services to be offered by the Federal Government and business associations under the National Action Plan. The expertise of organisations within civil society and trade unions should also be brought to bear. The elements of human rights due diligence described in binding form in the following paragraphs are not to be understood as a rigid sequence. On the contrary, findings relating to one element should be used continually for the revision and development of the other elements so that learning processes can take place. There must be scope for the incorporation of present and future legal requirements for the exercise of human rights due diligence.

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. One element of that paper, among other things, is to reinforce the expectation of a responsible management of due diligence in the realm of human rights as described in the present chapter. Further information is made publicly accessible online at www.csr-in-deutschland.de. The possibility to join the “CSR consensus” is open to all enterprises that operate in Germany. The list of companies that have joined will be updated continuously and made publicly available at www.csr-in-deutschland.de.
The aim is that at least 50% of all enterprises based in Germany with more than 500 employees will have incorporated the elements of human rights due diligence described in this chapter into their corporate processes by 2020. Enterprises which have not adopted particular procedures and measures should be able to explain why they have not done so (the ‘comply or explain’ mechanism). If fewer than 50% of the enterprises defined above have incorporated the elements of human rights due diligence described in chapter III into their corporate processes by 2020 and the target is thus missed, the Federal Government will consider further action, which may culminate in legislative measures. In this context, the Federal Government will also examine, in consultation with the National Regulatory Control Council, the necessity of the corporate compliance costs arising from this plan and will consider a widening of the number of enterprises to be reviewed, in order to potentially include enterprises with fewer employees in future assessments and subsequent additional.

2. Challenges in corporate practice [page 29]

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. The ability of individual enterprises to meet systemic challenges in particular regions and/or sectors is often constrained or non-existent. It is therefore advisable for companies within a given sector to formulate a specific common definition of due diligence as described in chapter III above. Advice, experience-sharing and coordinated measures on the part of government, civil society, trade unions and enterprises help to pool resources and contribute to the creation of a global level playing field.

Section 3. Actions

II. Initial priorities for the Business and Human Rights Implementation Group

The Corporate Responsibility to Respect Human Rights [page 18]

Encourage companies and NGOs funded by the state to carry out human rights due diligence as appropriate to their size, the nature and context of operations and the severity of the risk of adverse human rights impacts.
Encourage and facilitate the sharing of best practice on human rights due diligence, including effective supply chain audits.

II. Background and Context

C. National Priorities [page 7]

(…)

The following priorities will be subject to regular review and update by the Business and Human Rights Steering Group (see par.V):

Promoting Human Rights Due Diligence Processes, aimed at identify, prevent and mitigate the potential risks, with particular focus on SMEs”

IV. Government responses

Current Activities and Future Commitments [pages 18-19]

A. Foundational Principles

– Responsible Business Conduct and OECD Due Diligence Practices

With reference to the promotion of responsible business conduct, the Italian OECD NCP4 is committed to implement the OECD Guidelines for Multinational Enterprises by promoting them through an in-depth dialogue with businesses, trade unions, non-governmental organizations, representatives of civil society.

Since the 2011 review of the OECD Guidelines, the NCP developed tools to make international standards operational especially for SMEs such as the “Due Diligence Guidance for SMEs”5 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.

Sustainable supply chain is indeed one of the main focus of the NCP action. In 2013, following the Rana Plaza collapse, the “Action Plan for Bangladesh” was launched with the involvement of Italian enterprises in the sector operating in Bangladesh. In this process, the NCP issued the “Report on responsible business conduct in the textile and garment supply chain. Recommendations of the Italian NCP on implementation of the OECD Guidelines for Multinational Enterprises”. Specific recommendations were given with regards to the adherence to the “Accord on Fire and Building Safety” and the participation to the “Rana Plaza Trust Fund” and for future action.

In this respect, the Italian Ministry for Economic Development, together with other six Ministers of EU Countries, signed the “Statement” recommending global companies to contribute generously to the Rana Plaza Donors Trust Fund, set up to compensate victims of the accident in Bangladesh. The Bangladesh case showed the need to switch from a reactive approach to a preventive approach and in this view multi-stakeholders and collective actions are favoured and supported as they are seen more effective to tackle system issues.

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. The NCP also takes direct action, cooperating with national and international organisations such as ILO and UNICEF.

3.2. Responsible Business Conduct

Due Diligence [page 33]

The 17th principle explains what is meant by due diligence.