Mandatory Human Rights Due Diligence
Due Diligence Directives and Laws
Laws such as the Uyghur Forced Labor Prevention Act in the United States, new supply-chain due diligence laws in Europe, and transparency rules in Canada and elsewhere all rely on the same core idea: Human Rights Due Diligence (HRDD), the process companies use to identify, prevent and address how their operations, supply chains and investments affect people’s rights. By making HRDD mandatory, states are signaling that it is no longer enough to have a policy on paper—companies must be able to “know and show” that they are not profiting from abuse. These laws require that companies contribute to remediate harms where they occur. For more on remedy, see Pillar III. Additional laws require HRDD Reporting. Visit the link below for NomoGaia’s guidance on mandatory human rights reporting
What Mandatory HRDD Looks Like in Practice
Companies tasked to scope their human rights risks may consider industry, geography and their level of spend on a commodity or service as a preliminary screen of their linkage to human rights harms. Regulators may ask that they supplement these criteria to target supply chains with known links to severe harms. Risk scoping begins with a desk-based screen and follows with an assessment of risks based on preliminary review. For examples, visit Pillar II – Human Rights Due Diligence.
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Where risk profiles are elevated, regulators can require access to documentation that demonstrates how companies are evaluating their impacts on affected people. This is a significant gap in current corporate human rights reporting – regulators can address the systemic problem of companies linking risks to remedies without evaluating on-the-ground impacts and tailoring remedies to verified harms. For examples, visit Pillar II – Human Rights Due Diligence.
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Companies are tasked to “meaningfully engage” with rightsholders about the impacts they experience. Regulators can assess the quality of this engagement through internal protocols.
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Indicators to track the remediation of identified impacts can be vetted by regulators, to assure that what is measured and managed results in reduction of harms. Some of them will be linked to the active management of grievances, as laid out in Pillar III Recommendations for Complaint Mechanisms.
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