The UN Guiding Principles on Business and Human Rights (UNGPs) set out globally accepted standards around the human rights impacts of business. They introduced the concept of human rights due diligence (HRDD) to “identify, prevent, mitigate and account for” actual or potential adverse human rights impacts a company may be involved in through its own activities or business relationships, including those in the supply chain.
HRDD as defined by the UNGPs is a broader process than simply the initial screening of human rights impacts of a supplier, as could be understood under the ordinary transactional meaning of “due diligence”. Instead, it is seen as an ongoing, dynamic and context-specific approach.
“Everybody is part of everybody else’s supply chain” - Interviewee
The British Institute of International and Comparative Law (BIICL) and Norton Rose Fulbright (NRF) previously conducted a study on the law and practice of HRDD. It highlighted that HRDD is a comprehensive, contextual and ongoing system which should enable the company to address its actual and potential human rights impacts, even where corporate human rights obligations are not (yet) contained in regulation. It also showed that companies which use dedicated HRDD processes are more likely to identify human rights impacts than companies which use existing processes which do not use a human rights lens, such as those for health and safety.
One of the key themes which emerged during the previous study was the challenges in implementing HRDD in the supply chain. Many companies struggled with the question as to “how far is far enough” when undertaking HRDD in the supply chain. Common practical challenges were highlighted such as how to engage beyond the first tier, where no contractual relationships exist, and how to undertake HRDD when information about human rights risks is not readily available.
Our previous study highlighted the need for further research into the management of human rights issues in the supply chain. This study was accordingly undertaken as a follow-up to our previous project, with a specific focus on supply chains.
“All companies are on a journey and some are further along than others. We are at the start of the process” - Interviewee
Our methodology consisted of a combination of desk-based legal, policy and literature research – including a consideration of legal and other developments at international and domestic level – and empirical insights gained through semi-structured interviews with ten company representatives, as well as a roundtable. Interviews took place between August 2017 and January 2018. Interviewees were selected based on their experience with supply chain HRDD globally and in various sectors, such as electronics, finance, agriculture, extractives, manufacturing, and retail including food, consumer goods and fashion. Following the interviews, a closed roundtable attended by company representatives from various sectors was held in February 2018.