Corporate due diligence
Assumption of responsibility for human rights in supply and value chains
Enterprises have a responsibility to respect human rights. Corporate due diligence constitutes the second pillar of the UN Guiding Principles on Business and Human Rights. Enterprises are important players in society and influence local structures and the lives of individuals through their business activities and relationships. They bear the risk that their corporate activities can, directly or indirectly, have an adverse impact on human rights. One reason for this is the growing connectivity of business activities across the globe and the fact that supply chains have become longer and more complex over the last several decades.
Being aware of this risk is part of corporate responsibility. The question is: which activities have the potential to adversely impact human rights and at which points in the supply chain could human rights be adversely impacted? How likely are negative impacts and how serious would they be? Businesses can prevent or mitigate adverse effects only when they have identified and know the risks.
Isn't the state responsible for protecting human rights?
Yes, when it comes to human rights, the state bears the greatest responsibility. It must respect, protect and ensure human rights. In other words, human rights are not only negative rights that make it possible for individuals to defend themselves against arbitrary actions on the part of the state such as torture or forced disappearance. The state must also ensure that people are not harmed through the actions of others – for example, enterprises. This follows from the Universal Declaration of Human Rights of the United Nations, the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights (ICESCR). These UN conventions, together with the ILO core labour standards, provide the framework for assessing the impact of business activities on human rights.
What do enterprises have to do with human rights? Why should the production of ballpoint pens or smartphones cause harm to other people?
There are a wide range of ways in which the actions of business enterprises along the entire length of the value chain and across all products can negatively impact the human rights enshrined in international agreements (see “Respecting Human Rights: An introductory guide for business”). Those rights include the prohibition of child labour, protection from slavery and forced labour, freedom from discrimination, protection from unlawful land seizure, occupational safety and health and related health hazards, the prohibition of withholding a living wage, the right to form trade unions or employee representations, the prohibition of causing harmful soil or water pollution, and protection against torture.
Not only global players, but also small and medium-sized enterprises create jobs, buy goods, inputs and services internationally and use local resources. In this way, they have an impact on the living and working conditions of those they employ as well as of others who are directly or indirectly involved or affected: customers, suppliers, local residents, the social environment, the economic context and the environment. This applies to the individual company's production operations as well as its entire supply and value chain.
The key here is to understand the potential impacts of an enterprise’s actions from the perspective of those affected. It is then not just a matter, for example, of complying with limits for water pollution, but what access those affected have to clean drinking water at all and whether they can thus exercise their right to water. What grievance mechanisms are open to them if they no longer have that access and private-sector actors are the cause? Do they have access to effective remedies?
The international community has meanwhile acknowledged that enterprises have a responsibility to respect human rights. It expressly enshrined this in the UN-Guiding Principles on Business and Human Rights on Business and Human Rights and the OECD-Guidelines for Multinational Enterprises. This also guides the actions of the Federal Government.
Federal Government expectations
The Federal Government expects all enterprises to introduce guidelines and processes to fulfil their human rights due diligence obligations - in Germany and in their operations abroad.
Five core elements of due diligence
Implementation of human rights due diligence is an individual and ongoing process for every business enterprise. Human rights due diligence is made up of five core elements. The target is for at least half of all enterprises in Germany with more than 500 employees to have incorporated the elements of human rights due diligence described in the National Action Plan for Business and Human Rights (NAP) into their business processes by 2020.