United States: Five on Friday – Five Recent Developments That We've Been Watching Closely

Last Updated: November 14 2016
Article by Sarah A. Altschuller

It's Friday and time for another overview of developments in the field of business and human rights that we've been monitoring.

This week's post includes: the first annual report from the U.K. Anti-Slavery Commissioner; a new benchmarking report from Know the Chain focused on food and beverage companies; and the results of a survey on corporate human rights due diligence efforts.

  • On October 12, the United Kingdom's Independent Anti-Slavery Commissioner  released his first annual report to Parliament. The report notes that one of the Commissioner's five priorities is "private sector engagement to encourage supply chain transparency and combat labour exploitation" and details numerous efforts that the Commissioner has made in the past year to engage the private sector in efforts to eradicate modern slavery, both through dialogue with industry associations and individual companies. Looking ahead, and with regard to the transparency provisions of the U.K. Modern Slavery Act, the Commissioner states that he will work with the "All Party Parliamentary Group on Human Trafficking and Modern Slavery to promote utilisation of an effective system that will allow for easy scrutiny and comparison of Slavery and Human Trafficking Statements. This should ensure that business can be better held to account, enabling the public, consumer groups and potential investors to compare corporate responses to addressing modern slavery."
  • On October 17, Know the Chain published its second benchmarking report, which ranked 20 of the largest food and beverage companies on their efforts to address forced labor in their supply chains.  Indicators used in the benchmarking included: whether companies have supply chain standards that require suppliers to uphold workers' fundamental rights and freedoms (as articulated in the ILO Declaration on Fundamental Principles and Rights at Work); whether companies have processes to assess forced labor risks associated with specific commodities, regions, and/or groups; whether companies require that no fees be charged during any recruitment process in their supply chain;  and whether companies have processes to provide remedy to workers in their supply chain in cases of human trafficking and forced labor. Companies that scored the highest in the initial report include Unilever, Coca-Cola, and Nestle. Know the Chain's next benchmarking efforts will focus on the apparel sector.
  • On October 17, the British Institute of International and Comparative Law ("BIICL") and the law firm Norton Rose Fulbright released a report titled Exploring Human Rights Due Diligence – Good Practices and Challenges for Business Enterprises. The report provides the results of a study on corporate human rights due diligence processes. The study involved a survey of 152 major companies and found that only 51% had conducted a comprehensive human rights due diligence assessment. The report also found that the two main incentives for companies to perform human rights due diligence are avoidance of legal risk and management of reputational concerns. At the time of the report's release, Professor Robert McCorquodale, Director of BIICL, noted that "human rights due diligence is assuming a hard legal dimension that transcends the traditional understanding of CSR and addresses actual impacts on the rights of others."  He suggested that companies that are not undertaking human rights due diligence "are failing to pick up adverse human rights impacts in their business, and with third parties, such as suppliers."
  • On October 24, the Institute for Human Rights and Business released a report titled Corporate Liability for Forced Labour and Human Trafficking. The report reviews legislation and potential corporate liability for the use of forced labor or involvement in human trafficking in eight jurisdictions, including the United States, the United Kingdom, Qatar, United Arab Emirates, Japan, Brazil, Russia, and South Africa. The report notes that "companies are at risk of criminal liability for any direct use or forced labour or involvement in human trafficking" but observes that "direct corporate liability for instances of forced labour and trafficking in supply chains is limited." At this time, as the report states,"the trend internationally is very much towards companies reporting risks and steps required to mitigate risks of violations occurring down the chain. The reputational risk, whether on in-business or supply chain issues, is high."
  • From October 24-28, the Intergovernmental Working Group held its second session in Geneva to continue its discussions with regard to a potential international treaty on business and human rights. Pursuant to the mandate provided by the U.N. Human Rights Council, the Intergovernmental Working Group's first two sessions have been "dedicated to conducting constructive deliberations on the content, scope, nature and form of the future international instrument." Some of the issues discussed during the second session include whether a treaty should apply to all companies, or only transnational corporations, and the question of how a treaty would relate to the expectations set forth in the U.N. Guiding Principles on Business and Human Rights. A digest of written submissions provided to the group can be found here. An overview of stakeholder perspectives on the proposed treaty can be found in the Business and Human Rights Resource Centre's "Debate the Treaty" blog series.

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