Responsible exit

Your company’s high level sourcing strategy should align with your responsibility to respect human rights. This means you should be prioritising building long-term sourcing relationships in countries and with suppliers where human rights are respected. That said whether for human rights or commercial reasons, it may at times be necessary to end a business relationship. 

Commercial drivers do not remove your company’s responsibility to respect human rights. You must consider the potential impacts of ending a business relationship, before finalising any decision to exit. This human rights impact assessment should inform the decision and actions thereafter, with the aim of preventing negative impacts to workers.

This kind of decision should be a cross-functional one. Human rights teams and relevant buyers should be included in the decision-making process—rather than being brought in to minimise harm after the decision is made. It should also be informed by engagement with the supplier and where possible workers—ideally through trade unions—and consultation with other relevant parties, such as NGOs who may be able to provide further insight.

Remember that if the consideration to exit a business relationship is due to industry or region-wide circumstances, you will likely not be the only company considering exit. The impact of several clients terminating—or significantly reducing—business will be much greater. In this case, engaging with others to consider responsible collective action may be the best way to proceed. 

Refer to the Purchasing Practices HRDD Framework to support a responsible exit process. 

Force majeure

If an extreme, unforeseeable event occurs, force majeure clauses may reduce your contractual obligations to suppliers. However, your responsibility to respect human rights still applies. 

Before taking action, you need to consider the potential impact on suppliers and workers. As with responsible exit considerations (above), do this before finalising any decisions. Consider the broader implications of the event and the collective impact if multiple companies invoke force majeure clauses at the same time. 

Prioritise good communication and joint problem solving with suppliers. Work together to find mutually agreeable solutions. 

Refer to the Purchasing Practices HRDD Framework to ensure your approach is responsible. Several references are made to force majeure and unforeseen circumstances in steps 3.1 and 3.2. If force majeure is invoked on legally valid grounds and with appropriate care, at a minimum, cover costs already incurred by the manufacturer.