An Overview of Supply Chain and Human Rights and Environmental Due Diligence
The UN Human Rights Council unanimously adopted the UN guiding principles on business and human rights in 2011. They introduced the concept of human rights due diligence or HRDD, which help prevent, identify, mitigate provide accountability for existing or potential human rights violation caused by an organisation either due to its business relationships or its own activities, including those pertaining to the supply chain. This requires every business and organisation to carry out human rights due diligence. Due to many new legislations, it has become mandatory for companies to adopt environmental and human rights strategies which range from compulsory human rights and environmental due diligence to voluntary initiatives led by organisations in their supply chains. As a business, it is imperative to build a due diligence framework. This requires an assessment based approach due to the many different requirements and essential issues pertaining to the supply chain. Mandatory diligence focusing on human rights and environmental diligence includes aspects of climate change or forced labour, with a view to increasing the traceability of commodities or products.
What is Human Rights Due Diligence?
Human rights due diligence involves taking steps to evaluate existing and potential risks to human rights, taking adequate measures to mitigate such human rights risks, taking actions to end human rights violations and developing remedies Or any abuse of human rights that may occur in spite of all these measures in place. Companies are also required to be proactive and transparent about their efforts areas. Since UN Guiding Principles on business and human rights and other globally recognised norms are not legally binding on companies, companies tend to ignore taking these measures for end up doing them half heartedly. Many businesses have little to no measures related to human rights due diligence in place, which leads to directions contributing to or causing human rights violations.
How do Human Rights Violations Occur in Supply Chains?
There are many pervasive human rights violations that occur all over the world in the supply chains how many businesses across various sectors. Mentioned some of the many human rights abuse cases that are common in the supply chain of companies:
- Labour Law Violations
There are millions of people working in supply chains globally, like factories producing footwear for users worldwide or creating branded apparel, farms growing tobacco that is purchased by cigarette manufacturers and mining in gold mines on a small scale, among other things. Many of these workers endure unspeakable abuses and human rights violations like poor working conditions, violations of minimum wage, child labour, forced overtime, sexual harassment, exposure to toxic materials, pregnancy-related abuses, lack of paid maternity leave and various other occupational hazards. Workers who face these abuses often lack access to efficient grievance redressal mechanisms or legal recourse, or whistle-blower protections. Under international law, local governments are required to protect labour rights, including the right to form unions and the right to protest. There are many labour rights violations that are often seen in engineering projects and large-scale construction projects. Low-paid migrant workers are often faced with hazardous and deadly working conditions with abusive employers.
- Child Labour
Child labour poses a severe problem globally. There are millions of children globally that are actively involved in child labour, with at least half of them walking in hazardous conditions that put their safety or health at risk. Many child labourers go through psychological and physical abuse, trafficking and kinds of exploitation. In addition to this, many of them are denied opportunities to get an education and are more likely never to leave the cycle of poverty. Companies and their supply chain often benefit from and contribute to child labour what employing children to mine precious materials, harvest crops, sew apparel or process leather, among other things. Under international and local laws, child labour is prohibited; however, government and local authorities often fail to take adequate steps to stop it completely.
There are many children that suffer pain, injury and sickness and even death from the many dangerous jobs that they are involved in. Globally, it is seen that most children are working in agriculture for global or local markets. Child labour in agriculture becomes hazardous when they handle harmful substances like toxic pesticides, work with heavy machinery or sharp tools or are exposed to extreme weather.
Another dangerous form of child labour is being made to work in mining. There are many children working in artisanal mines globally, and these mines rely on a large workforce and simple machinery. It is found that approximately 15% of the world’s gold comes from these artisanal mines. Many children employed in these mines are required to process gold with mercury which is an extremely toxic substance that can lead to lifelong health conditions like brain damage. Child labourers also face the risk of losing their lives while they work in unstable mining pits that often collapse.
- Violations of Right to Health and Environment Damage
Through the supply chain, many businesses run the risk of contributing to more than a dozen million deaths that can be attributed to the dangerous and unhealthy environment annually. International guidelines and local legal frameworks put the obligation on the government to protect an individual’s right to environmental health. Still, it is found that most of them need to be more adequately enforced or wholly ignored.
It is often found that many other workers walking in tanneries that produce leather for many big brands are constantly exposed to untreated tannery effluents containing sulfur, chromium, ammonium and other hazardous chemicals that can lead to highly serious health problems. Health conditions like discoloured, prematurely aged, itchy, acid-burned, peeling and rash-covered skin, fingers that have been corroded to stumps, dizziness, aches, nausea and amputated or disfigured limbs.
It is also found that mining operations also lead to environmental and health-related damages. Dumping of huge amounts of liquid mining waste into water bodies can potentially lead to health problems and environmental damage in communities located downstream. Medium and small-scale mines in India have contaminated, or destroyed sources of water switch residences depend upon for irrigation and drinking. It is found that the Indian regulatory and legal framework measures put in place to prevent these harms were often weakened due to various reasons. Small-scale and artisanal coal miners using mercury to process gold often suffer from mercury poisoning.
- Violation of rights related to water, land and food
Many communities have suffered human rights violations. Organisations acquire land for Agribusiness, large-scale mining, and commercial activities that are linked to supply chains. The rights of an entire community are at risk when large-scale deals take place, with women facing additional and distinctive threats. Under international law, the right to water, land, housing and food is protected. Governments are under obligation to take measures in order to realise access to these rights. Yet, when land acquisitions take place, local communities have been displaced to make way for commercial enterprises and their access to food, water and housing is restricted and severely impacted.
Indigenous communities are the most vulnerable when it comes to land acquisition for large-scale commercial projects because most of the livelihood and culture are often tied to the land. Under international law, the obligation is placed on companies and governments looking to work on lands where indigenous people live to take the consent of the latter before moving forward, and such consent must be informed, prior and free.
- Abuse of international humanitarian laws
It has been found that organisations and commercial enterprises have contributed to gross and direct violations of international human rights law in situations of military occupation or armed conflict.
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Reasons for Lack of Human Rights Safeguards in Organisations
There are many reasons why organisations and large commercial enterprises lock adequate human rights safeguards inter supply chains. It is essential to identify these reasons in order to tackle them and prevent and mitigate human rights abuses caused due to business activities pertaining to their supply chains. Some of the reasons for such a dearth of Human rights safeguards are mentioned below:
- Weak policies pertaining to human rights commitment and actions
As per the UN guiding principles, businesses are required to adopt and integrate an adequate human rights policy that clearly delineates how the organisation seeks to respect and protect human rights. However, it is seen that many other policies adopted by organisations are often inadequate or completely fail to address human rights violations and prevent them. It is observed that many of the leading engineering, construction, and project management firms have operations spanning globally. In spite of the severe risks of human rights abuse and violation in these operations, including that forced labour, only a few of these construction and engineering firms have adopted and implemented human rights-related policies to address these high risks and ensure that fundamental human rights fall the workers in their organisation and in the labour supply chain are protected. It has also been found out that many companies often lack adequate child labour-related policies even though it is clear that child labour takes place in the countries that they source from.
- Insufficient evaluation and monitoring of human rights violations
Companies are required to take sufficient steps to make sure that they are aware of the risks posed by that's supply chain to the human rights of those involved. They are also required to monitor and address these risks regularly. To correctly identify and examine risks posed by the supply chain to human rights, companies are required, in theory, to be familiar with every single link that is part of the supply chain. However, practically this is far from the truth as companies, most often than not, fail to get an accurate picture of human rights violations that are contributed to or caused by their supply chain. There are some companies that are not even aware of all the players involved in the supply chain.Any failure to correctly evaluate risks to human rights can also lead to violations of international human rights law.
One way to adequately evaluate and monitor human rights risks involves conducting human rights audits and inspections of production sites. However, it has been seen that businesses do not offer to conduct these visits. Companies who do visit their production sites might just conduct superficial inspections by giving advance notice to the local employer. As a result, the actual human rights violations and abuses that go on daily might be concealed or not even detected.
Enlisting third-party auditors like Corpbiz with years of proven expertise can help organisations identify, assess, monitor, mitigate and prevent risks and human rights violations caused by their supply chains.
- Weakness in assessing, preventing, and mitigating violations of human rights
Once companies have clearly identified and assessed the risks to human rights, they are also required to take steps to monitor, prevent and mitigate these risks. Depending on the context, it can include setting up regular unannounced inspections, environmental and human rights audits, whistle blower protection, and contractual obligations on suppliers, among others measures.
It is often seen that many companies often failed to include specific human rights protections and requirements in contracts with their vendors. It is often seen that many workers in the construction sector are not provided labour protections under the local law, and many firms do not even address this particular gap by making it mandatory for the contractors to put in place sufficient human rights protections.
- Insufficient human rights and environmental auditing by 3rd parties
Most organisations across various sectors engage external auditors in order to check compliance with different human rights voluntary standards, regulations and laws. This also includes respecting human rights, and responsible sourcing resources by a company is also assessed to evaluate risks to human rights. However, it has been found that most of these human rights solids hey not focus intensely on human rights and or are not carried out by experts with proven experience and the field of human rights or that these audits are limited in scope.
It is often seen that the voluntary standards that are put in place for responsible sourcing look towards ensuring respect for human rights in addition to various other goals, but external verifications of the organisation's compliance with the voluntary standards have often neglected the issue of human rights. Even when auditors visit organisations or their production sites for inspections, inspections are often profoundly flawed. Many times the auditors would not interview the workers or would visit at those times of the year when children are not present and working, or the visits are often announced beforehand. Moreover, many trade unions state that many of these audits only addressed the human rights issues of workers superficially or entirely ignored them. Most often than not, most externalFollow the checklist approach, which is focused on the detection of clerical errors and involves safety and health questions with binary answers, which often defeats the purpose of conducting such human rights audits.
Hence, it is imperative to select an external auditor to conduct an in-depth and extensive human rights audit with a view to accurately identify, assess, and monitor the risks to and violations of human rights while also providing remedies that can be adopted to prevent and mitigate human rights violations. Approach Corpbiz for its expert services to conduct a human rights and Environmental Audit of the supply chain of your business.
- Lack of adequate public reporting and external communication
The companies that carry out internal and external inspections and human rights audits often keep it a secret or only publish incomplete and summarised audit reports. Understandably, some information is required to be kept internal for legitimate reasons. However, it is prudent that companies should publicly report all the steps that they have taken in order to conduct adequate human rights due diligence. The lack of sufficient and accurate public reporting and external communication often poses a severe threat to accountability. If large companies and organisations fail to disclose all the measures taken by them to identify, assess, monitor, prevent, remediate and mitigate the risks to and violations of human rights, it shall have far-reaching consequences. Companies will start covering up abuses and find ways to evade public scrutiny.
Once companies openly disclose information pertaining to human rights due diligence about factories and organisations that produce for them, it will ensure better risk assessments and higher accountability in the industry. Many leading brands like, inter alia, Disney, Adidas, H&M, Nike, and Levi's regularly provide lists of all the factories that produce the shoes and clothing websites. By publicly providing the names and locations are these factories, it helps companies increase credibility to identify and prevent human rights violations by also taking timely actions to mitigate and remediate human rights violations in their supply chain.
- Lack of sufficient remediation
Organisations and business enterprises have contributed to or caused or have been directly linked to the abuse of human rights. They should mandatorily cooperate and provide for the remediation of these violations. However, it has been observed that many of these conglomerates and organisations have not taken sufficient steps to make sure that human rights violations caused by contributions totheir supply chains are remedied.
What Should Human Rights Due Diligence Include?
Businesses should conduct human rights due diligence across their supply chains in order to identify, prevent and mitigate any gross violations of human rights.such human rights due diligence must include at least the following measures:
Corpbiz Assistance in Human Rights Audits
It is imperative to choose the right 3rd party or external auditors that would adequately conduct environmental and human rights audits of the supply chains of companies and business enterprises. This is important to accurately identify, assess, monitor, prevent, mitigate and remediate gross abuse and violations of human rights of any of those involved due to the activities pertaining to the supply chain of the company or the business enterprise.
Conducting a mandatory human rights due diligence pertains to creating an equal playing field, assessing risks to human rights, driving accountability, providing adequate remedies and facilitating public disclosures. Building and maintaining an organisation's human rights due diligence strategy is imperative in evaluating, identifying, preventing, mitigating and managing risks to human rights. Having a mandatory due diligence effectively extends the scope of these audits deeply into the supply chain of an organisation, being mindful of every step right from responsible sourcing of raw materials to the moment it reaches the retail shelves.
In order to stay a step ahead of mandatory human rights due diligence, it is imperative to engage with rights holders and the stakeholders to deeply understand the multi-layered links between the environment, human rights and governance.
The auditors at Corpbizseek to help organisations and companies looking to conduct human rights and environmental audits in their journey at every stage, regardless of whether your organisation is just starting the process of due diligence or requires assistance on any particular due diligence activity. Our auditors have years of proven expertise in the field of human rights audits add shall assist you in the following ways:
Contact Corpbiz today to discover how our experts can help your business meet the increasing human rights and environmental due diligence requirements.