The Geneva Center for Business and Human Rights (GCBHR)
The Geneva Center for Business and Human Rights (GCBHR) was founded in 2019 as the first Human Rights Center at a business school in Europe. The GCBHR educates future business leaders and supports companies in developing business models that align profits and human rights principles.
In light of the various existing and expected national and EU-level legislation, as well as the rising number of investors requesting ESG and human rights-related data from portfolio companies, it is clear that human rights due diligence will soon be a standard business requirement for companies based in Europe.
Yet what human rights due diligence entails remains ambiguous.
The United Nations Guiding Principles on Business and Human Rights (UNGPs) define human rights due diligence as an ongoing process to identify, prevent, mitigate and account for how businesses address adverse human rights risks and impacts arising in their global operations and supply chains.
While the UNGPs describe a process, it does not clarify what companies operating in different industries are expected to do. This leaves companies plenty of room for interpretation on deciding what their most pertinent human rights issues are, when and how to address them, and whether to report their mitigation strategies publicly. In order to avoid human rights due diligence from becoming the next box-ticking exercise, concrete human rights standards need to be developed.
Today, human rights due diligence often refers to metrics that measure activities rather than human rights performance and impacts. In addition, some companies are reacting to human rights due diligence requirements in ways that are counterproductive for human rights. They withdraw from challenging geographies and abandon high-risk activities and products.
Yet, severing relationships with vulnerable groups of workers and suppliers has an immediate adverse impact on people – the one thing the UNGPs and human rights due diligence aim to prevent.
The ‘Decade of Action’, the plan launched by the United Nations in 2020 with the target to deliver the Sustainable Development Goals by 2030, should also be used to explain the exact steps companies need to take to conduct effective human rights due diligence in line with the UNGPs. During this period, one goal must be to ensure that the human rights due diligence concept is not reduced to a whitewashing exercise, but instead effectively advances human rights in corporate practice.
An effort to facilitate the implementation of human rights due diligence was made in the context of commodity trading in Switzerland, where the Government published sector guidance in 2018. While well-intentioned in its ambition to clarify industry-specific human rights expectations, the guidance contains only a few practical examples for implementing corporate human rights commitments. It also falls short of breaking down high-level due diligence requirements into measurable standards and metrics.
Developing a common standard across all traded commodities in the highly heterogenous commodity trading industry might be an ambitious first step. However, developing concrete human rights standards for specific commodity supply chains offers a first step in defining good business practices. Such common standards will create a level playing field for all trading companies sourcing the same commodity and ensure that engaging in human rights due diligence does not disadvantage individual companies that make targeted efforts to deliver on their human rights commitments.
Multi-stakeholder initiatives to define human rights due diligence
In a recent whitepaper, the Geneva Center for Business and Human Rights, together with the NYU Stern Center for Business and Human Rights, describe how multi-stakeholder initiatives (MSIs) consisting of representatives from government, business, civil society and academia, can support the definition of concrete human rights standards and metrics. In so doing, MSIs can complement emerging mandatory human rights due diligence legislation.
MSIs serve as ideal platforms to discuss and formulate a common understanding of what ‘responsible sourcing’ means in different commodity supply chains.
Academia can play a vital role in these MSIs. With no vested commercial interest in the outcomes of multi-stakeholder consultations, academics support the point of view that is best aligned with scientific evidence and international human rights standards. They can conduct independent studies to understand the perspective of rights holders and assess broader human rights impacts. Their technical expertise can also inform the definition of human rights metrics and can train key supply chain actors in their implementation. Academics can also conduct independent assessments of human rights impacts and corporate human rights performance. As facilitators and experts in MSI negotiations, academics can also serve as a bridge between the often highly divergent perspectives of civil society and corporate interests.
In the context of our research on responsible sourcing of cobalt, the Global Battery Alliance (GBA) is an important MSI. The GBA brings together over 70 stakeholders from business, government, academia, and non-governmental organisations to ensure that battery production not only supports the energy transition, but also safeguards human rights and environmental sustainability.
The GBA’s Cobalt Action Partnership serves as an example of a multi-stakeholder platform that aims to develop commodity-specific standards. Launched in 2020, the Cobalt Action Partnership is a coalition of organisations joined by the Center in Geneva for Business and Human Rights and the NYU Stern Center for Business and Human Rights, to establish standards, metrics, and means of evaluation for responsible sourcing of cobalt from artisanal mine sites in the Democratic Republic of the Congo (DRC).
MSI discussions can be lengthy and difficult but any standard that results from such a process will most likely reflect robust compromises that are supported by committed stakeholders. This increases the chances for the standard’s wide adoption and implementation. Supporting MSI processes may therefore be a smart business approach that pays off in the long-term.
For MSI processes to succeed, the objectives need to be clearly defined. Prioritizing human rights issues with the most egregious impacts and agreeing on a common standard to address those issues as the first step in the process will enable companies to start joint implementation efforts. Demonstrating initial positive impacts in key areas can build the trust that is needed for eventually broadening the scope of issues. In the cobalt context, a first step could be agreeing on common standards for eliminating child labour and health and safety risks in artisanal mines in the DRC.
MSIs as key institutions in the Decade of Action
The vision of the UNGPs is to deliver ‘tangible results for affected individuals and communities.’ Human rights due diligence requirements without further operationalisation at the industry and commodity level will not produce such tangible results.
MSIs can serve as platforms for negotiating concrete actions, such as common standards, that will lead to the tangible results the UNGPs seek. Where MSIs develop concrete industry standards, metrics and means of evaluation, they shed light on the human rights performance of companies.
They enable the tracking of human rights performance over time, and can break down boundaries for addressing systemic human rights issues that urgently require industry collaboration.
Ten Years with the UNGPs
In 2011, the UNGPs were unanimously endorsed by the United Nations Human Rights Council. The UNGPs outline state duties and business responsibilities for human rights. Since their adoption, respect for human rights has become increasingly relevant for future business success.
The most remarkable development has been the introduction of human rights due diligence legislation in several European countries. These national laws require companies to conduct business responsibly, in a way that prevents harm to people and the environment. Under these laws, companies are expected to conduct due diligence into the risks and impacts their business has on human rights. Companies that fail to conduct adequate due diligence and cause harm to people or the environment are increasingly faced with sanctions, including criminal measures.
The corporate responsibility to perform mandatory human rights due diligence is now required in France, Germany, Norway, and the Netherlands with several more European governments preparing legislation. At the European level, a similar legislative proposal is currently being finalised and is expected to be adopted in the coming months. Mandatory human rights due diligence legislation will apply to all EU member states.
In Switzerland, a human rights due diligence law was proposed by the Responsible Business Initiative in 2020. While over half of Swiss voters supported the initiative in a public referendum, it was rejected after failing to secure the vote of a majority at Canton level. The discussions leading up to the vote in Switzerland polarised Swiss society, with business associations lobbying against the initiative and civil society mobilising public support for the initiative. Yet, although advocates and opponents of the initiative strongly disagreed over how to establish corporate accountability, they all in principle agreed that businesses have a responsibility to respect human rights.
Professor Dorothée Baumann-Pauly
Geneva Center for Business and Human Rights