Human Rights Due Diligence

Transcription

1 Human Rights Due Diligence

2 Special Representative of the Secretary General (UN) (Prof. John Ruggie) ( )

3 HR Due diligence (2008/2011) Due diligence: a concept [that] describes the steps a company must take to become aware of, prevent and address adverse human rights impacts. (2008 PRR Framework) A human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights (UNGPs 15b) Business enterprises need to know and show that they respect human rights. (UNGPs 15 Comm.) 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. (UNGPs 17)

4 HR impact assessments (GP 18) The purpose is to understand the specific impacts on specific people given a specific context of operations. Based on IHRL ( rel. to env & soc IAs) Vulnerable groups Stakeholder participation ( meaningful consultation ) Prior to major transactions and periodically after

5 Environmental (and social) impact assessment Vitol Sankofa (Ghana) 2015 offshore oil and gas

6 Human rights impact assessments Arla, Human Rights Assessment in Senegal, 2015 Business model: European milk sold in Senegal as powder milk. Impacts on Senegalese stakeholders? Company asks whether through its business model it contributes and/or hinders sustainable development of the domestic dairy sector by the exclusive focus on distribution and sales? global/company overview/responsibility/human rights/arla human rights assessment in senegal november 2015_1.pdf

7 Sector Wide Impact Assessment Myanmar Tourism Sector Wide Impact Assessment (2015) Myanmar Centre for Responsible Business (MCRB), Danish Institute for Human Rights (DIHR) and Institute for Human Rights and Business (IHRB) responsiblebusiness.org/pdf/swia/tourism/00 Myanmar Tourism Sector Wide Assessment.pdf

8 DIHR s HR Compliance Assessment A self assessment tool for companies or guidance for assessors conducting HRIAs HRCA 2.0 (2010) The tool incorporates a database of 195 questions and 947 indicators, each measuring the implementation of human rights in company policies and procedures. The database incorporates the Universal Declaration of Human Rights and more than 80 human rights treaties and International Labour Organization conventions. The standards and indicators in the database are constantly updated The HRCA Quick Check, a free, condensed version of the full tool (10 percent of the questions contained in the HRCA database)

9 DIHR s HRCA Quick Check (free of charge) HRCA Quick Check (demo from 2006) PDF 96 p Demo on line (registration required) customized for your company

10 Integration (GP19) Policy be embedded into all relevant business functions Effective integration requires that Internal decision making, budget allocations and oversight processes enable effective responses to such impacts. [identified through HRIAs]

11 Tracking (the effectiveness of response) (GP20) Aim: to know if policy and actions taken work effectively Ways of tracking: Reviews (surveys and audits) & grievance mechanisms Impacts on the vulnerable/marginalized Stakeholder consultation (feedback from external sources) affected groups, experts, NGOs

12 Reporting (GP 21) HR DD as know and show respect for HR Forms of communicating: in person meetings, online dialogues, consultation with affected stakeholders, and formal public reports (annual reports, CSR reports, on line updates, and integrated financial and non financial reports) Severe HR impacts > report formally (form, frequency, detail) Verification: Independent verification of human rights reporting can strengthen its content and credibility. Reporting as accountability: Showing involves communication, providing a measure of transparency and accountability to individuals or groups who may be impacted and to other relevant stakeholders, including investors.

13 A. DD and risks: to whom? DD as risk management, but risks to whom? To business or to rightholders? Human rights due diligence can be included within broader enterprise risk management systems, provided that it goes beyond simply identifying and managing material risks to the company itself, to include risks to rights holders. (GP17) an enterprise s human rights risks are the risks that its operations pose to human rights. This is separate from any risks that involvement in human rights impact may pose to the enterprise, although the two are increasingly related. (OHCHR Interpretive Guide)

14 B. DD: To prioritize or not? Yes, prioritize those HR impacts that are severe : business enterprises should first seek to prevent and mitigate those [impacts] that are most severe. (GP 24) Severity of impacts judged by: Scale (gravity of the impact) Scope (number of individuals impacted) Irremediable character (any limits on the ability to restore those impacted to a situation at least the same as, or equivalent to, their situation before an adverse impact) (GP 14, Commentary) (OHCHR, An interpretive guide (2011))

15 DD: To prioritize or not? Most salient human rights: rights most at risk depending on sector and operating context. GPs clarify to not focus exclusively on the most salient human rights issues and ignore others that might arise. (OHCHR Interpretive Guide) Conclusion: company should prioritise its HR DD actions based on salient HR AND severity of impacts.

16 C. Due diligence an on going process On going, not one off process of assessing and acting on impacts Should be ongoing, recognizing that the human rights risks may change over time as the business enterprise s operations and operating context evolve. (UNGPs 17c)

17 PDCA risk management

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19 D. A defense of due diligence? 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. However, business enterprises conducting such due diligence should not assume that, by itself, this will automatically and fully absolve them from liability for causing or contributing to human rights abuses. (UNGPs 17 Comm)

20 E. Difficult contexts Clash between domestic laws & IHRL standards Where the domestic context renders it impossible to meet this responsibility fully, business enterprises are expected to respect the principles of internationally recognized human rights to the greatest extent possible in the circumstances, and to be able to demonstrate their efforts in this regard. (GP 23) Conflict zones and other areas where gross HR abuses are committed by other actors Risk for complicity in gross abuse > take very seriously such situations ( treat this risk as a legal compliance issue ), ensure to not exacerbate the situation, and consult externally with credible, independent experts on how best to respond to the situation. (GP 23)

21 IFC Performance Standards (2011) Obligation to respect HR: Business should respect human rights, which means to avoid infringing on the human rights of others and address adverse human rights impacts business may cause or contribute to. (PS 1, para. 3)

22 IFC Performance Standards (II) Guidance on risk management: The Performance Standards are directed towards clients, providing guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way, including stakeholder engagement and disclosure obligations of the client in relation to projectlevel activities. (PSs 2012, Overview, p. 2)

23 IFC Performance Standards (III) Obligation to set up an Env and Social Management System (ESMS): a dynamic and continuous process initiated and supported by management Drawing on the elements of the established business management process of plan, do, check, and act, the ESMS entails a methodological approach to managing environmental and social risks and impacts in a structured way on an ongoing basis. The ESMS will incorporate the following elements: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review. (PS1)

24 IFC Performance Standards (IV) Obligation to adopt env and social Action Plans Plans which will define desired outcomes and actions to address the issues with elements such as performance indicators, targets, or acceptance criteria that can be tracked over defined time periods, and with estimates of the resources and responsibilities for implementation. (PS1)

25 IFC Performance Standards (V) Obligation to engage stakeholders: Stakeholder engagement is an ongoing process that may involve, in varying degrees, the following elements: stakeholder analysis and planning, disclosure and dissemination of information, consultation and participation, grievance mechanism, and ongoing reporting to Affected Communities. (PF1)

26 Due Diligence in a broader context

27 Transactional/commercial DD & HR DD State of Play (2012) of play/state of Play Full Report.pdf

28 DD outside the UNGPs (1) DD in INTERNATIONAL LAW: State s responsibility for actions of third parties Alabama Arbitration case (1872): a neutral State is bound to use due diligence to prevent the fitting out, arming, or equipping, within its jurisdiction, of any vessel which it has reasonable ground to believe is intended to cruise or to carry on war against a Power with which it is at peace DD in IHRL: State obligation to protect HR Velazquez case (I ACtHR, 1988): forced disappearance case. Illegal act of a private person triggers State liability because of lack of due diligence to prevent the violation or to respond to it. Osman case (ECtHR, 1998) no use of term DD, but detailed reasoning in a similar way. UN Declaration on the Elimination of Violence against Women (1993). Exercise due diligence to prevent, investigate and punish acts of violence against women, whether those acts are perpetrated by the State or by private persons (art 4.c)

29 DD outside the UNGPs (2) DD in EU Law: defense if one acted with DD Employer Sanctions Directive of 2009 (liability of employers for employing irregular non EU workers). Contractor liable when subcontractors employ undocumented workers unless DD was exercised. (art 8.3 and art 4) DD in COMMERCIAL LAW: defense if one acted with DD US Federal Securities Act of 1933: issuer & underwriters of securities (shares/bonds) > registration statement > misstatements or omissions > a DD defense for inadequate disclosure of material information to investors IF broker conducted a good faith investigation: "he had, after reasonable investigation, reasonable ground to believe and did believe" there were no misstatements or omissions of material facts.

30 Definition of Due diligence Legal definition ( > amount of effort expected) Due diligence has been defined as such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent [person] under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case. (OHCHR Interpretive Guide) Definition in the UNGPs ( > systematic way of dealing with impacts) In the context of the Guiding Principles, human rights due diligence comprises an ongoing management process that a reasonable and prudent enterprise needs to undertake, in the light of its circumstances (including sector, operating context, size and similar factors) to meet its responsibility to respect human rights. (OHCHR Interpretive Guide) Conclusion: UNGPs silent about the amount of effort (that requires a case by case analysis), but very detailed about the management process and its key elements.

31 Regulatory strategies ref. DD Main regulatory approaches DD as compliance with law (direct legal obligation or defense against criminal/civil/administrative violations) DD to obtain benefits (export credits, public procurement, labeling schemes) DD and transparency laws (disclose DD measures. Also in securities laws, consumer protection laws) Olivier De Schutter et al., Human Rights Due Diligence: the Role of States (International Corporate Accountability Roundtable 2012)

32 UN Norms (2003) david weissbrodt.jpg David S. Weissbrodt - Minnesota Law School

33 UN Norms (2003) - implementation As an initial step towards implementing these Norms: adopt, disseminate and implement internal rules of operation in compliance with the Norms, (-> GPs 16 and 19) periodically report, (-> GP 21) conduct periodic evaluations concerning the impact of their own activities on human rights, (-> GPs 18 & 20) incorporate these Norms in their contracts or other arrangements and dealings with contractors, subcontractors, suppliers, licensees, distributors, or natural or other legal persons that enter into any agreement with the transnational corporation. (Art 15) (-> GPs 19) TNCs shall have the responsibility to use due diligence in ensuring that their activities do not contribute directly or indirectly to human rights abuses, and that they do not directly or indirectly benefit from abuses of which they were aware or ought to have been aware. (Commentary 1 (b))