Originally posted on 08/12/2016 – here
In-house analysis: Ahead of Human Rights Day on 10 December, Colleen Theron, founder and director of CLT envirolaw, considers the human rights issues currently facing UK businesses and explains why performance levels are still hard to gauge.
What are the top issues shaping the human rights agenda for your business in 2017?
I think a key issue will be managing supply chains and determining the extent of legal and reputational risk where human rights have been abused.
The Chartered Institute of Procurement and Supply index shows that there has been another hike in global supply chain risk. It has risen to 81.6, the third consecutive increase. Human rights issues are a key risk that has been identified.
How do businesses measure and communicate company human rights performance? Is there a need for more uniform indicators of success?
There is a varying performance on how human rights are measured and communicated. Having a policy is the first step and probably the majority of companies that have committed to a human rights agenda will have some form of human rights policy in place. Some companies that have developed their approach to human rights more will be reporting on human rights issues in their sustainability or annual reports. Under the UK Companies Act 2006, listed companies should be reporting on human rights issues in their strategic report but I am not aware of any research that has captured the extent of this.
What impact has the adoption and uptake of United Nations Guiding Principles on Business and Human Rights (UNGPs) had for UK businesses?
There has not been an exact measurement of this. We ran a survey with a number of GCs through Lexis PSL In-house Advisor (see: Business and human rights: what is in-house counsels’ role?) and there is still a lack of understanding about the principles and how they might apply to business. Currently the Joint Committee on Human Rights is carrying out a human rights and business inquiry to determine whether British business has made progress—and if so what—in carrying out its responsibility to respect human rights.
The EU has published a corporate social responsibility in practice status report on the update of the UNGPs.
What are the challenges for businesses operating in multiple jurisdictions with varying human rights agendas?
Businesses operating in multiple jurisdictions have to decide what their approach will be to protecting human rights—do they take a legal compliance approach or an approach of best practice, for example paying the minimum or a living wage.
There are also key risks surrounding recruitment and security where human rights abuses occur. Businesses have to make a decision on how much resource (internally or externally) they will spend on prioritising human rights and building their human rights due diligence programmes.
There is much higher risk of operating in conflict zones or jurisdictions where the rule of law is not implemented.
Are there any other interesting trends or developments with regards to business and human rights issues?
There is currently a proposal to develop a business and human rights treaty. If one looks at the laws on disclosure of non-financial reporting there is a definite trend in requiring more disclosure on human rights. The EU Non-Financial Reporting Directive 2014/95/EU will require certain companies to report on their human rights impacts and the policies they have in place to address these from January 2016 (see article ‘Unwrapping Businesses’ for guidance).
For lawyers, they should be more aware of how the UNGPs apply both to their practices and also to how they advise their clients (see IBA guidance for details).
The UK Modern Slavery Act 2015 (MSA 2015) and the developments in the US on transparency in supply chains are reflective of a trend for growing mandatory reporting on these issues. The fact that an amendment has already been proposed to extend the remit of MSA 2015 to include the public sector through a private members bill also highlights the increasing focus on public procurement procedures in relation to responsible human rights practices (see the LexisNexis publication on modern slavery issues in the construction industry).
2016 has also seen a number of reports from NGOs highlighting how companies are disclosing their impact on human rights and whether or not these disclosures are backed up by their company behaviour.