External voice: the role of multi-stakeholder initiatives in promoting human rights due diligence
In light of the various existing and expected national and European legislation, as well as the growing number of investors requesting ESG and human rights data from portfolio companies, it is clear that human rights due diligence man will soon be a standard business requirement. for companies based in Europe.
Yet what human rights due diligence entails remains ambiguous.
The United Nations Guiding Principles on Business and Human Rights (UNGPs) define human rights due diligence as an ongoing process to identify, prevent, mitigate and report on how companies manage the risks and adverse human rights impacts that arise in their operations and global supply chains.
Although the UNGPs describe a process, they do not specify what companies operating in different sectors are expected to do. This leaves companies with a lot of room for interpretation in deciding what their most relevant human rights issues are, when and how to address them, and whether to publicly report on their mitigation strategies. In order to prevent human rights due diligence from becoming the next check-off exercise, concrete human rights standards need to be developed.
Today, human rights due diligence often refers to metrics that measure activities rather than human rights performance and impacts. In addition, some companies react to human rights due diligence requirements in ways that are counterproductive to human rights. They withdraw from difficult geographies and abandon high-risk activities and products.
Yet severing relationships with vulnerable groups of workers and suppliers has an immediate negative impact on people – the one thing UNGPs and human rights due diligence aim to prevent.
The “Decade of Action”, the plan launched by the United Nations in 2020 with the aim of achieving the Sustainable Development Goals by 2030, should also be used to explain the exact measures that companies must take to carry out a effective human rights due diligence in accordance with the UNGPs. During this period, one of the goals must be to ensure that the concept of human rights due diligence is not reduced to a whitewashing exercise, but rather effectively advances human rights. in business practice.
An effort to facilitate the implementation of human rights due diligence has been made in the context of commodity trading in Switzerland, where the government issued sectoral guidance in 2018. Although well intentioned in Aiming to clarify industry-specific human rights expectations, the guidance contains some concrete examples of the implementation of companies’ human rights commitments. It also fails to break down high-level due diligence requirements into measurable standards and metrics.
Developing a common standard for all commodities traded in the highly heterogeneous commodity trading industry could be an ambitious first step. However, developing concrete human rights standards for specific supply chains is a first step in defining good business practice. These common standards will create a level playing field for all trading companies sourcing the same commodity and ensure that engaging in human rights due diligence does not disadvantage individual companies making targeted efforts to uphold their human rights commitments.
Multi-stakeholder initiatives to define human rights due diligence
In a recent white paper, the Geneva Center for Business and Human Rights, in collaboration with the NYU Stern Center for Business and Human Rights, describes how Multi-Stakeholder Initiatives (MSIs) comprised of representatives from government, business, civil society and from academia, can support the definition of concrete human rights standards and parameters. In doing so, MSIs can complement emerging legislation on mandatory human rights due diligence.
MSIs serve as ideal platforms to discuss and formulate a common understanding of what “responsible sourcing” means in different commodity supply chains.
Academia can play a vital role in these MSIs. Having no commercial interest in the results of multi-stakeholder consultations, academics support the view that is best aligned with scientific evidence and international human rights standards. They can conduct independent studies to understand the perspective of rights holders and assess broader human rights impacts. Their technical expertise can also inform the definition of human rights measures and can train key supply chain actors in their implementation. Academics can also conduct independent assessments of human rights impacts and human rights performance of companies. As facilitators and experts in MSI negotiations, academics can also serve as a bridge between the often widely divergent perspectives of civil society and corporate interests.
As part of our research on responsible cobalt sourcing, the Global Battery Alliance (GBA) is an important MSI. The GBA brings together over 70 stakeholders from business, government, academia and non-governmental organizations to ensure that battery production not only supports the energy transition, but also protects human rights and sustainability. environmental.
The GBA’s Cobalt Action Partnership is an example of a multi-stakeholder platform that aims to develop product-specific standards. Launched in 2020, the Cobalt Action Partnership is a coalition of organizations joined by the Center in Geneva for Business and Human Rights and the NYU Stern Center for Business and Human Rights, to establish standards, metrics, and means of evaluation for responsible cobalt sourcing. from artisanal mining sites in the Democratic Republic of Congo (DRC).
MSI discussions can be long and difficult, but any standard resulting from such a process will most likely reflect strong compromises supported by engaged stakeholders. This increases the chances of widespread adoption and implementation of the standard. Supporting MSI processes can therefore be a smart business approach that pays off in the long run.
For MSI processes to be successful, the goals must be clearly defined. Prioritizing the human rights issues with the most egregious impacts and agreeing on a common standard to address these issues as a first step in the process will allow companies to launch joint implementation efforts. Demonstrating initial positive impacts in key areas can build the confidence needed to eventually expand the scope of the issues. In the context of cobalt, a first step could be to agree on common standards to eliminate child labor and health and safety risks in artisanal mines in the DRC.
MSIs as key institutions of the Decade of Action
The vision of the UNGPs is to deliver “tangible results for affected individuals and communities”. Human rights due diligence requirements without further operationalization at the industry and commodity level will not produce such tangible results.
MSIs can serve as platforms to negotiate concrete actions, such as common standards, that will lead to the tangible results sought by UNGPs. When MSIs develop concrete industry standards, metrics and assessments, they shine a light on companies’ human rights performance.
They track human rights performance over time and can break down boundaries to address systemic human rights issues that require urgent industry collaboration.
Ten years with the UNGPs
In 2011, the UNGPs were unanimously endorsed by the United Nations Human Rights Council. The UNGPs describe the duties of the state and the responsibilities of companies with regard to human rights. Since their adoption, respect for human rights has become increasingly important for the future success of businesses.
The most notable development has been the introduction of human rights due diligence legislation in several European countries. These national laws require companies to conduct their business responsibly, so as to avoid harm to people and the environment. Under these laws, companies are required to carry out due diligence on the risks and impacts of their activities on human rights. Companies that fail to exercise due diligence and cause harm to people or the environment increasingly face penalties, including criminal action.
Corporate responsibility to carry out mandatory human rights due diligence is now required in France, Germany, Norway and the Netherlands, with several other European governments preparing legislation. At European level, a similar legislative proposal is being finalized and should be adopted in the coming months. Mandatory human rights due diligence legislation will apply to all EU member states.
In Switzerland, a human rights due diligence law was proposed by the Responsible Business Initiative in 2020. While more than half of Swiss voters backed the initiative in a public referendum, it was rejected after failing to secure a majority vote at the cantonal level. Discussions leading up to the vote in Switzerland polarized Swiss society, with business associations lobbying against the initiative and civil society mobilizing public support for the initiative. Yet, although proponents and opponents of the initiative strongly disagree on how to establish corporate accountability, they all agreed in principle that corporations have a responsibility to respect human rights.