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Human rights due diligence is becoming a prerequisite to doing business globally. With dozens of laws and regulations passed over the past few years, businesses now face steep consequences for not making every effort to ensure human rights are protected throughout their supply chain.
Human Rights Due Diligence legislation are increasingly demanding wide-scale implementation across complex supply chains. Businesses, manufacturers, farmers and other suppliers, who hope to continue exporting to global markets, providing components, materials or products, or selling to international clientele should not risk falling behind. Those who fail to meet standards could face seized shipments and or costly fines and legal fees.
Key human rights due diligence laws come into effect in January 2023. Are you ready?
What is Human Rights Due Diligence (HRDD)?
Human rights due diligence are legal requirements facing global companies and their supply chains to ensure no harm is done to people or the environment in the creation of products or services. Most organizations and countries consider the UN Guiding Principles on Business and Human Rights, as the authority on defining HRDD principles and have used these principles as the foundation of their laws.
The UN Guiding Principles basically say states and businesses must respect and protect human rights and are responsible for finding remedy when human rights are breached. These rights can include everything from the right to food and clean water, to the right to freedom from discrimination and access to justice, as well as freedom of association and freedom from slavery.
Several countries and regions have passed laws over the last few years regulating industries and imports into their country. Laws range from issue specific to disclosure reports to national -level mandatory due diligence and reporting that cover all human rights. Here are a few: the UK, US and Australia Modern Slavery Act, and the Dutch Child Labor Due Diligence Act. The California Transparency in Supply Chains Act and the EU Non-Financial Reporting Directive (EU NFRD). Mandatory supply chain human rights due diligence laws recently passed in France, Switzerland, the Netherlands, Norway, Germany, and proposed in Canada, Japan, Spain and the EU.
The enforcement mechanisms vary from case to case and could result in hefty fines or customs’ seizure of goods. Some laws allow for indiscriminate detention of specific types of goods, meaning importers are responsible for proving their supply chains are clear of violations. Buyers will be particularly sensitive about supplier selection and retention based on ability to comply with human rights requirements.
What do the laws require (generally)?
While there are many laws and regulations you may have to comply with (we encourage you to consult your legal team), the majority are based in the UN Guiding Principles, and as a result there are several overlapping requirements and principles that can be put into place to ensure broad compliance and help protect businesses when practices are questioned.
Businesses are required to design + implement a risk management system + policy for direct business activities + suppliers to;
Identify adverse Human Rights Impacts + Risks through regular risk analysis + complaints collection;
Prevent human rights violations in direct business and supply chain;
Remediate violations to an end; and
Report + Track violations + risks identified + prevention + remediation actions taken throughout the entire supply chain annually
It’s a lot, we know. Don’t worry, Labor Solutions is here to support you.
To meet the growing need for robust human rights due diligence, Labor Solutions has launched a Human Rights Due Diligence Program. The suite of tools and advisory services include support designing and implementing scalable human rights risk assessment and improvement systems, policies, and programs in line with pending legislation in the EU, US, and Canada. Variations of our program are now functioning at scale.
Reach out to our advisory team to help you create a risk management system;
Start with a Worker Survey to help you identify your risks;
Implement WOVO’s Connect features to ensure you have an effective grievance mechanism and case management system to identify and prevent issues;
Work with our advisory team to design a remediation plan; and
Use your WOVO dashboard to report and track trends.
Labor Solutions' supplier ownership, empowerment and improvement approach, is not only scalable, but also allows companies to tackle the problem at the source and collect unparalleled data sets. Our solutions are designed to help your business go beyond tick-box solutions and meet the intention of these laws; creating sustainable solutions customized to your business and built around respect and trust between workers, buyers, suppliers, and brands.