The Role of States in Ensuring Human Rights Due Diligence

http://www.dreamstime.com/-image28658141In 2011, the UN Human Rights Council endorsed the Guiding Principles on Business and Human Rights, an important step in fostering implementation of the Protect, Respect and Remedy Framework, which Special Representative John Ruggie successfully brought before the Council for endorsement in 2008. In a nutshell, the framework rests on three pillars, as laid out in the introduction to the Guiding Principles:

“The first is the State duty to protect against human rights abuses by third parties, including business enterprises, through appropriate policies, regulation, and adjudication. The second is the corporate responsibility to respect human rights, which means that business enterprises should act with due diligence to avoid infringing on the rights of others and to address adverse impacts with which they are involved. The third is the need for greater access by victims to effective remedy, both judicial and non-judicial.”

For business and human rights activists, the Framework and Guiding Principles are becoming a normative base-line against which to judge state and corporate behavior. That being said, Human Rights Watch in its 2013 World Report warns against viewing the Guiding Principles as a panacea or a “one-stop standard” for companies for good human rights practice. Chris Albin-Lackey, Human Rights Watch’s Senior Researcher for Business and Human Rights warns that:

“…without any mechanism to ensure compliance or to measure implementation, they cannot actually require companies to do anything at all. … The principles do not explicitly insist that governments regulate companies with the requisite scope and rigor; they also fail to push governments hard enough to ensure that companies respect human rights.”

For this reason, a recent report, Human Rights Due Diligence: The Role of States, is of particular interest. The report is co-authored by Olivier De Schutter, Anita Ramasastry, Mark Taylor, and Robert Thompson with the support of the International Corporate Accountability Roundtable, the European Coalition for Corporate Justice, and the Canadian Network on Corporate Accountability, and it benefited from consultations with individuals and organizations on four continents. The purpose of the report is to understand how governments can mandate and encourage companies to engage in human rights due diligence. Due diligence can address two challenges: shaping rights respecting business behavior and providing access to justice for victims of corporate wrong-doing. The authors argue that the latter is possible because human rights due diligence is a means for companies to “identify, prevent, mitigate, and account for the harms they may cause, and through which judicial and regulatory bodies can assess an enterprise’s respect for human rights.”

The authors found that due diligence is not a new concept laid out in the Guiding Principles for the first time. Rather, drawing on more than 100 examples from over 20 countries, they argue that regulatory due diligence is common to most jurisdictions and that many due diligence procedures are consistent with processes described in the Guiding Principles. And although due diligence requirements can be found in many areas – environmental protection, product safety, human trafficking, bribery, and money laundering, to name a few – that have varying degrees of implications for human rights, they nevertheless demonstrate that states can obligate companies to act with due diligence. Furthermore, they open the door to integrating due diligence for human rights into existing regimes or creating new, explicit human rights due diligence regimes.

One positive step in this direction would be to ensure that existing due diligence regimes are adequately implemented and enforced by states, which is often not the case. The organizations supporting the Human Rights Due Diligence Project hope that the report can be used by advocacy groups to push their governments to do more to ensure that companies conduct adequate human rights due diligence. The report gives numerous examples of the regulatory options states have at their disposal: criminal and civil liability and administrative penalties when companies fail to act with due diligence; due diligence as a prerequisite for regulatory approval, doing business with government, and trade and investment support; and transparency and disclosure requirements.

The question that remains unanswered is whether the problem is primarily one of failure to implement and enforce due diligence regimes, or perhaps at a deeper level shortcomings in the design and requirements of many of the regimes themselves. Of the many examples discussed, there have been to date almost no systematic efforts to assess their effectiveness – are these regimes having the desired human rights impacts?

Due diligence itself is a very encompassing concept. It is defined in Guiding Principles 17 in the following manner:

“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.”

Identifying human rights risks before they occur, changing management systems, processes, and actual business practices to prevent and mitigate risks, accounting for and remedying human rights harms that have occurred, publicly sharing how human rights impacts are addressed, and implementing a continuous process of risk identification and management would require a fundamental overhaul of how most companies do business. Many of the due diligence regimes given as examples in the report only address a small slice of a comprehensive due diligence procedure.

The commentary to Guiding Principles 17 elaborates that “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.” But herein lies a double edged sword. Just as much as due diligence regimes can be used to support criminal and civil liabilities and administrative penalties when companies fail to meet due diligence requirements, when due diligence regimes are not effective and linked to mechanisms for criminal and civil liability, corporate accountability, and judicial remedy for victims, they can provide companies a protective shield in the face of legitimate claims. Due diligence requirements, means to hold companies to account, and avenues for victims to access justice must go hand in hand.

About the Author
John Richardson is the Co-Director of the Initiative for Human Rights in Business at the Center for Human Rights and Humanitarian Law at American University Washington College of Law.