Corporate responsibility to respect human rights is the second pillar outlined by John Ruggie, the UN Special Representative for Business and Human Rights, in his three-pillar framework on business and human rights. Subsequently, it has been placed in part II of the United Nations Guiding Principles on Business and Human Rights, 2011 (UNGPs). This pillar, as elaborated in the UNGPs, demands that businesses should avoid infringing human rights and address adverse human rights impacts with which they are directly or indirectly involved. The UNGPs articulate that responsibility to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate. This article provides a critical assessment of pillar II of the UNGPs with reference to several key conceptual developments and practices evolved in this area. The central aim of the study is to explain and elaborate the dominant theme of Human Rights Due Diligence (HRDD) through which the UNGPs seek to establish the business respect for human rights. The article also analyses the grey areas in the HRDD process and considers the suitability of the emerging practice of integrating a ‘Human Rights Impact Assessment’ (HRIA) in the HRDD process.
Understanding corporate responsibility to respect human rights
The idea of corporate responsibility to respect human rights is primarily driven by societal expectations resulting from the international human rights norms and principles (Götzmann). The UNGPs recommend that companies should undertake a broad range of measures to ensure that human rights issues are properly taken into consideration in their operations. This responsibility is independent of the State’s abilities and/or willingness to fulfill their own human rights obligations and does not diminish those obligations in any event. Here, the central focus lies in the prevention and mitigation of impacts business enterprises cause or contribute to as well as those that are directly linked to their operations, products or services. In efforts to prevent and mitigate adverse human rights impacts, corporations are required to recognise the full array of internationally recognised human rights.
In the quest of advancing businesses’ respect for human rights, the UNGPs suggest three different but interrelated duties for companies. First, they must formulate a policy demonstrating their commitment and willingness to meet the responsibility to respect human rights (Foundational Principle 16(a)). Second, they should undertake a HRDD process to identify, prevent, mitigate and account for how they would address impacts on human rights (Foundational Principle 16(b)). Third, they are required to develop a system to enable the remediation of any adverse human rights impacts they cause or to which they contribute (Foundational Principle 16(c)). Among these three operational principles, the UNGPs attach central importance to the HRDD process. As observed by Ruggie, HRDD is the main vehicle for a company to discharge the responsibility to respect human rights within the framework of the UNGPs (Bonnitcha and McCorquodale).
The concept of human rights due diligence
Due diligence constitutes the nucleus of the UNGPs. It is a process involving multiple steps a company must undertake to make sure that its activities meet the expectations set out in the UNGPs. The process enables the company to be aware of any possible adverse human rights impacts which may occur as a result of its activities. While the opening paragraph of the final report submitted by Ruggie to the Human Rights Council mentions that the basic responsibility of business enterprises is to respect human rights, meaning that they ‘should act with due diligence to avoid infringing the rights of others’, the foundational principles in pillar II do not refer to HRDD. However, the operational principles explicitly address the idea of HRDD. These principles outline different processes and procedures a company should put into practice to become aware of, prevent and monitor the human rights impacts produced by its activities. The process not only enables the company to deal with its business risks leading to human rights harm but also helps them to ensure compliance with domestic laws.
What does human rights due diligence entail in practice?
According to the UNGPs, given the broad scale of actual and potential impacts of business activities on human rights, the practice of due diligence should take into consideration the entire spectrum of internationally recognised human rights. As a benchmark, the UNGPs made specific reference to the authoritative list of core human rights enumerated in the Universal Declaration of Human Rights. Furthermore, emphasis has been placed on rights contained in the ILO core conventions as set out in the Declaration on Fundamental Principles and Rights at Work. Reference was also made to the unique circumstances of different businesses which may have impacts on the rights of different groups of people, such as Indigenous peoples, women, ethnic or religious minorities, children, persons with disabilities etc. It is also mentioned that based on the specific nature and circumstances of their activities, businesses should take due consideration of these additional standards impacting group rights.
The UNGPs do not intend to refer to the due diligence process as a one-size-fits for all policy. It suggests that, in carrying out the due diligence process, companies may adjust the intensity and scale of measures in accordance with the size, industry sector and the seriousness of human rights impacts which business activities may cause or contribute. A major shortcoming identified in the UNGPs is that it does not provide any specific procedure to put the HRDD process into practice (Salcito and Wielga at 115). As a result, different dimensions of practices in attempts to fulfill the HRDD obligation have emerged. One of the most popular and common practices is the Human Rights Impact Assessment (HRIA) which has recently gained significant traction as a means of implementing HRDD obligation.
Advancing the HRDD process via human rights impact assessments
Unlike environmental impact assessments (EIAs) and social impact assessments (SIAs), the HRIA is a relatively recent phenomenon in the field of human rights and business. While an HRIA is not explicitly mentioned in the UNGPs, it however draws most of the core procedural elements from the HRDD process. It is an evidence-based process emerging as a critical tool to pursuing the HRDD obligation embodied in the UNGPs. An HRIA is designed to investigate the policies, programs and projects with a view to identifying and weighing their impacts on human rights. Since the UNGPs did not elaborate the HRDD process in practical terms, the practice of HRIA is considered to provide useful guidance in this regard (Graetz and Franks at 98). It is, however, noted that in the absence of any unified practice, current approaches to HRIA also vary considerably (Graetz and Franks at 98). Thus, what entails good practice for an HRIA is contested.
The growing practice of HRIAs drawn from the existing body of literature suggests that some key common criteria should be integrated in such a practice to make it consistent with the principal spirit embodied in the UNGPs (Götzmann at 101). At a minimum, the process should incorporate the international human rights standards and take into consideration the full scale of impacts its activities may cause, adopting a human rights-based approach throughout the entire exercise.
When undertaking the exercise of preparing an HRIA, analysis of information and the legal framework should reflect explicit consideration of human rights standards. This analysis should consider the extent to which international standards are reflected in domestic laws and practices in a particular setting. The growing body of human rights jurisprudence developed through the works of the treaty bodies should guide the process. For example, with regard to economic, social and cultural rights, a systematic consideration of the criteria of availability, accessibility, acceptability and quality need to be followed to gauge the impact that may occur.
The HRIA process may face some challenges in the application of human rights standards. For example, the scope of interpretation and precise content of a right may differ between domestic contexts. For instance, the concept of progressive realisation of economic, social and cultural rights may create dichotomy in some domestic jurisdictions when compared to international standards. In such a situation, the process should seek to adopt a context-specific analysis considering the unique experiences of the right-holders. The process should aim to make a nuanced analysis of all possible outcomes by indicating how and to what extent a right is impacted.
The process should consider the impacts in their entirety
Business enterprises may cause impacts directly or indirectly. Direct impact, for instance, may include deliberate discrimination in hiring practices, polluting the environment etc. By contrast, indirect impact may be caused through business relationships. The UNGPs expect that in considering impacts, companies should exercise leverage over any other entities involved in creating such impacts with which it has a relationship. Leverage as illustrated in the UNGPs is understood as a company’s ability to effect change in the wrongful practices of an entity with which it has business relationships.
Leverage may be exercised in many ways including, for example, amending contract terms for suppliers. The UNGPs recommend that in case a company lacks leverage, it should seek ways to increase it. This may be done by imposing sanctions on concerned entities or partnering with others to influence its behavior. Such an impact should not be measured according to the sphere of influence. Based on the sphere of influence, companies take greater degree of responsibility for impacts that are most proximate while ignoring the remote ones. However, the UNGPs require that impacts should be addressed based on its severity. For example, when considering human rights impacts on employees, environment, and supply chain and on downstream communities, the assessment process should carefully prioritize actions considering the severity of each area.
It is indeed challenging to strike the right balance in determining the severity of impacts. In this case, a combination of both quantitative and qualitative assessment should be conducted to assess and monitor such impacts. With respect to addressing the adverse human rights impacts, companies are not expected to reduce the duty of states to respect, protect and fulfill the human rights of individuals under international law.
Taking a human rights-based approach in developing HRIAs
The HRIA process is considered to produce most effective outcome when guided by a human rights-based approach (HRBA). An HRBA involves the principles of participation and inclusion; equality and non-discrimination and accountability. Participation should not be limited to mere consultation. It must be an active process enabling right holders to meaningfully engage in the process by shaping and influencing the findings and decisions. In doing so, the power dynamics between the company and the target community should be properly analysed and taken into consideration. Experts have identified that effective participation of the affected stakeholders is lacking in the current practices on HRIA. It has been observed that consultations are often held after major decisions have been made (Kemp and Vanclay).
Furthermore, the HRIA process should pay greater attention in understanding the nature of structural discrimination in the communities. It enables the companies to identify the different segments of the population with each’s varying degree of human rights impacts. While conducting the assessment, the community in question should not be viewed as a homogenous group. Such an approach is likely to overlook the experiences encountered by the diversity of people inhabiting in the area (including, for example, issues of gender, disability, age etc. In this regard, the UNGPs stressed the need for paying attention to the differential experiences of impacts on women and men, and recognise the need for disaggregated data to support the analysis (UNGPs, Commentary on Principle 18 at p 20). Furthermore, with respect to issues of non-discrimination, the HRIA process should make contextual analysis on the various vulnerable groups in a project setting.
How to integrate international human rights standards in an HRIA
In the HRIA context, right-holders should be able to access and understand the information about the company activities so that they can effectively participate in the decision-making process. The entire exercise must keep provision for accountability. Accountability in the process implies the recognition of impacted communities and the corresponding obligations of companies to handle the risks being identified, ensuring access to remedy when their rights are infringed and regular reporting on policies and activities of the company. Such a recognition hands down the affected workers and communities a legal entitlement. This process introduces the affected communities as right holders and companies as duty bearers.
Practice of formal reporting
The need for formal reporting on the due diligence process is highlighted in the UNGPs. This reporting enables the concerned stakeholders to get a clear picture of how the entire exercise was carried out. In the HRIA context, available literature suggests that many companies regularly publish reports highlighting the methodology, processes and findings of the whole process (Kotonen). According to the UNGPs, full disclosure of the information about the process is recommended except few narrowly tailored and justified exemptions (Principle 11). Also, care must be taken so that disclosure of information does not affect the rights of stakeholders. It is observed that public reporting on HRIA findings may generate concerns for companies on issues of legal liability or sensitive information being made publicly available (Massarani at 130). However, it is also evident that non-disclosure of information raises suspicion among the stakeholders and eventually hampers the image of the company. In order to avoid unintended consequences, experts suggest that companies may make direct reporting to the stakeholders and publish a summary report to be made public.
Prospects for HRIA practice to realize the objectives of HRDD
As argued by Ruggie, the quality of the HRIA process may be enhanced if it is made a harder form of state-based conditionality. Business and human rights practitioners suggest that states should make provisions of legally binding due diligence obligation. At a minimum, states should devise some basic standards in order to make an effective scrutiny and evaluation of the whole process. There should be external participation and verification in the process by way of independent monitoring review. While the UNGPs do not provide for detailed guidance on how an HRIA should be adapted to particular industry sectors or contexts, a range of sector-specific guidance has been developed by different companies who have performed HRIAs. Examples include HRIA guidance for the mining sector developed by the International Council on Mining and Metals; HRIA guidance for Indigenous people developed by the International Working Group on Indigenous Affairs and IBIS Denmark; and guidance and methodologies developed by Coca-Cola.
This growing practice indicates a positive trend towards human rights compliance by companies. However, efficacy of the HRIA process has been called into question for many reasons. Practice in many cases has proved to be incoherent. Some HRIAs have been found to be incompatible with the international human rights standards (Martin-Ortega). In addition, many companies merge their HRIAs with environmental or social impact assessments (O’Brien and Dhanarajan at 544). This dilutes the comprehensive focus on human rights issues and can lead to ineffective outcomes so far as the human rights issues are concerned. However, despite such drawbacks, HRIA practice has advanced the HRDD agenda to a great extent.
Corporate responsibility to respect human rights is not yet a legally binding responsibility in international law. However, various dimensions and methods to implementing the HRDD process is emerging and gradually making its way into mandatory legal frameworks. It is also noted that the HRDD practice is developing as a hybrid tool involving HRIAs and other traditional practices like EIAs and SIAs. Despite numerous shortcomings, the HRIA process is by far considered the most acceptable process capable of delivering what the due diligence process in the UNGPs expect companies to do. The process, therefore, should be strongly grounded in human rights standards with the aim of not only identifying and assessing the business risks to human rights but also responding to such risks by means of employing appropriate and timely prevention and mitigation measures.
Md. Abdur Razzak is a Commonwealth Scholar and Lecturer of Law at Jagannath University, Bangladesh. He completed his second LLM in International Human Rights Law with distinction at the School of Law, University of Leeds, UK in 2019. He studied refugee law at the International Institute of Humanitarian Law, Italy.