Regulating human rights violations in business
Over the past years, the issue of the risks business poses for human rights has gained
considerable prominence. High-profile litigation in the U.S., Canada, South Africa, Australia, and
the Netherlands is an example that human rights breaches carry increasing business and legal
risks which require adequate regulation. In addition, the EU and some EU member states are
actively discussing laws that would mandate companies to undertake due diligence obligations
with respect to human rights.
The UN, leading global business groups, TRACE International and others have identified the
close connection and correlation between human rights and anti-corruption. More precisely,
human rights violations can lead to corruption and corruption can result in human rights abuses.
Global Magnitsky Acts are in force in multiple countries, including the U.S., Canada and the
U.K. The purpose of these pieces of legislation is to strictly limit the economic activity of
individuals and entities associated with alleged human rights infringements, such as rigged
elections in Belarus, forced labor in China, and security abuses in Iraq, Nigeria and Burma.
Given these developments, companies are well-advised to establish management systems or
compliance programs to address human rights risks, and to integrate them into existing
compliance systems. These systems will be rooted in the UN Guiding Principles on Business and
Human Rights (“UNGPs”), the leading set of business and human rights guidelines and best
practices. Experts from the Paul Hastings law firm comment on the six areas in which the new
management tools will be implemented:
1. Governance. Suggested programs will operate at the level of the board oversight
structure, with a board or committee charter encompassing all compliance-related risks
and expressly including human rights risks, and at the level of the day-to-day supervision
which will be based on an appropriately tailored compliance program by one or more
senior officers that expressly includes environmental, social and governance issues, and
human rights in particular.
2. Policies and Procedures. As the UNGPs make clear, a human rights policy should apply
throughout the organisation and to third parties. Critical to a human rights program are
due diligence, risk and impact assessments, as well as program testing. Assessment
exercises can include desktop research, a review of policies, procedures, and standards,
and on-the-ground interviews with employees and stakeholders.
3. Training. Training is another important component of a human rights program. That can
include live training, e-trainings, just-in-time training, and workshops. Among enlisted
training approaches tailored training is of particular significance for employees and third
parties who because of their job function, or personal or professional histories, may have
enhanced risks of negative impacts.
4. Grievance Mechanisms. Under the UNGPs, companies are expected to establish
operational grievance mechanisms “accessible directly to individuals and communities
who may be adversely impacted by a business enterprise.” These are designed to allow
individuals and communities to raise concerns directly to the company, provide
information and insights to the company, and reduce tensions.
5. Reporting. Many companies make public their policies and procedures and disclose
explicitly their salient human rights risks and the various steps they take to mitigate them.
They also publish relevant metrics, such as the number of human rights grievances filed,
the number of individuals trained, and other similar data. Companies often provide public
information related to their anti-corruption programs and some provide further detail
related to revenue transparency and similar matters.
Adopting a program that integrates substantive environmental, social and governance issues, and
human rights issues in particular, in order to develop a holistic means of addressing the company
risks are becoming a business and international imperative, especially for big companies. The
already established good practices in this regard should be enhanced and promoted.
Compiled by Media 21 Foundation from: