Businesses operate in an increasingly complex environment. The issue of human rights is a relatively new feature for corporate due diligence, needing new policies and practices in the operations and supply chains of companies. This is driven by the UN Guiding Principles on Business and Human Rights and new legislation on modern slavery and human rights reporting.
What is human rights due diligence with reference to workers’ rights?
Human rights due diligence involves the actions taken by a company to both identify and act upon actual and potential human rights risks for workers in its operations, supply chains and the services it uses.
Most of the due diligence systems we see today are aimed at identifying and understanding risks, but do not include action and prevention.
ETI recommends that companies’ approach to due diligence is based on multi-stakeholder engagement and collaborative action throughout the processes of:
- Investigation and analysis
- Identification of the mitigation actions to be taken
- Remediation for workers impacted by human rights violations
Monitoring, review and reporting
A fresh approach
The Ethical Trading Initiative’s recommended approach to due diligence is holistic, inclusive, cost effective and drives not only better outcomes for workers but also better business because:
- It calls for an active process based on discovery, understanding and action, rather than relying on more passive systems based on compliance;
- It builds internal knowledge and skill, rather than outsourcing intelligence and risk management;
- It delivers better analysis of risks and impacts because it draws on wide range of stakeholders to provide information on where problems exist;
- It enables better decision-making because those that are most directly affected will help to identify the most effective solutions to tackle the problems
- Lasting and meaningful change happens when all the critical actors have a say in what should be done and take responsibility for ensuring it happens.
- Companies that reflect their efforts to tackle root causes and collaborative solutions in their human rights and modern slavery reporting will be better able to stand up to scrutiny by the media, NGOs, trades unions, consumers and investors.
Effective due diligence is good for business
It enables: better visibility of and intelligence on supply chains; aids security of supply with reduced risk of disruption due to labour unrest; systems that improve supplier performance; increased productivity, reduced staff turnover, improved hiring and training; enhanced reputation and credibility.
Creating a safe space
ETI’s proven ability to create a trusted space creates an opportunity for companies, trade unions and NGOs to work together to ensure the most important risks for workers’ rights are identified and addressed effectively at each level of the supply chain. It is directly aligned with the ETI Base Code and Principles of Implementation (which are based on ILO Conventions), the UN Guiding Principles on Business & Human Rights, the OECD Due Diligence guidance tools, the SHIFT RAFI framework and the Corporate Human Rights Benchmark. It will enable companies to report and demonstrate action to tackle human rights including modern slavery, forced labour and human trafficking.