International: Human Rights Due Diligence – Recent Global Trends
In our previous article, we discussed the substantive elements of the “S” of the ESG (Environment, Social and Governance) movement in terms of human rights due diligence (HRDD), its importance and its context. In this article, we will take an in-depth look at recent international HRDD trends.
Global trends in human rights due diligence
The international legal frameworks for HRDD function as guidelines that companies can use to define their internal practices on a voluntary basis. However, these “soft laws” are being solidified and generalized in an enforceable manner in some jurisdictions. A number of countries have already introduced new rules on the conduct of HRDD. Although many HRDD rules are still voluntary at the national level, movements to achieve sustainable and responsible business practices in relation to broader human rights are becoming more visible. Some recent trends related to HRDD around the world are described below:
- France has enacted the Duty of Vigilance Act which has operated as essential legislation in its supply chain legal framework since 2017. The law requires certain large companies to develop a due diligence plan in order to monitor and prevent damage. possible violations of fundamental human rights in their supply chains. .
- Germany passed its supply chain law in the middle of last year. The law, which will enter into force on January 1, 2023, imposes on certain economic operators the obligation to develop preventive and corrective measures in terms of HRDD and environmental due diligence as well as reporting obligations.
- The Netherlands is considering another draft law on sustainable business conduct based on its child labor law which was passed in 2019. The obligations of companies under the bill include the conduct of HRDD in as part of the policy’s documentation requirements.
- The EU has also advanced another step for the HRDD rules. In February this year, the European Commission adopted a proposal for a Directive on corporate sustainability due diligence. This proposal establishes a comprehensive obligation for companies to conduct not only HRDD, but also due diligence to address environmental impacts. The proposal, once approved and adopted, will give EU member states two years to incorporate the directive into their national legislation. The new due diligence rules will apply not only to EU companies, but also to non-EU companies if their turnover was generated in the EU and the total number of employees is aligned with the criteria prescribed threshold. Under the current proposal, non-compliance may be subject to a fine and victims may have the option of taking legal action for damages that could have been avoided with proper HRDD.
It should also be noted that the EU has been very vigilant about human rights violations in certain industries that are prone to human rights violations, such as mining and fishing. Significant actions have taken place, culminating in the enactment of the Conflict Minerals Regulation and the Common Fisheries Policy.
- Canada has developed its supply chain legislation, which empowers the authority to prohibit the importation of goods made by forced labor or child labor.
- In the United States, the Uyghur Forced Labor Prevention Act was enacted last year. The law provides for a rebuttable presumption that all goods made in the Xinjiang Uyghur Autonomous Region are the product of forced labor and are therefore not allowed to be imported into the country.
- The Japanese government is currently drafting its HRDD guideline for its own companies. The guideline, which is expected to be released in the summer of this year, is expected to be based on EU and US HRDD practices and provide an assessment method, implementation system and sanction measures in case of violation.
It should be noted that these legal frameworks generally establish criteria for applicable companies based on turnover and/or number of employees. Some specific industries, including textiles and apparel, fishing, mining, oil and gas, may be subject to stricter regulations due to an increased trend of potential human rights violations. man.
In the following article, we will examine HRDD developments in Thailand and the potential implications of HRDD on economic operators.
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