When the late John Ruggie came up
with the concept of a “smart
mix”
to endorse both voluntary and regulatory action on business and human rights, it
helped end decades of deep polarisation between business and other stakeholders
on the issue.
As day one of this year’s UN Forum on Business and Human
Rights
revisits the whole concept of the “smart mix,” the question is whether
significant moves towards mandatory due diligence
legislation
around the world will cause the previous consensus to be threatened?
However, it was the business leaders at the opening session who were adamant
that the new laws are the right next step for companies to ensure respect for
human
rights
in their global supply chains.
Most outspoken was Annie
Agle, Senior Director of
Impact and Sustainability at US apparel retailer
Cotopaxi: “I’ll speak out on what some companies
are more reluctant to say: Our supply chains are riddled with abuses and we have
to do better,” Agle told the Forum.
Her argument was that individual companies could never succeed alone in
combatting what are systemic problems.
“Two years ago — despite all our individual efforts to remediate in particular
situations — we decided that the way forward was to gather together like-minded
companies to work with trade associations, to get governments to strengthen
labour laws,” she said.
Agle gave the example of producers in Taiwan, where she told the Forum that
the problem of predatory migrant forced
labour
can only be addressed at the government — not at the individual company — level.
These sentiments were echoed by Sanda
Ojiambo, Chief Executive of the UN
Global Compact, who described the shift towards
mandatory due
diligence
as “undeniable” and argued that “hard measures drive impact.”
Ojiambo’s appeal to the Forum was to “see beyond the obstacles and seize the
moment.”
Key themes
Aside from the debate about more versus less government, other key themes are
beginning to emerge:
Consistency, cooperation in implementing new legislation
Calls for consistency rather than a patchwork of
legislation
— for better understanding and effective implementation of the new laws, and for
greater international partnership in applying the regulation — were repeatedly
raised.
Despite internal wrangling in Brussels, Europe‘s Corporate
Sustainability Due Diligence
Directive
(CSDDD) was presented as a “done deal,” with implementation due to begin
from next July.
Outgoing European Justice Commissioner Didier
Reynders addressed this global
audience, insisting that European companies would not be able to use unfair
contract causes to shift the burden of
responsibility
— that larger companies are expected to invest in their value chains and to
provide support to help small businesses to be able to comply, including in
countries outside Europe.
Reynders committed the European Union itself to working with international
partners to implement the CSDDD. International collaboration on new due
diligence
laws
may well be an important part of the next phase.
The OECD released a new
paper
at the Forum on the role of certification and other sustainability initiatives
in effectively implementing due diligence and announced the establishment of a
new, inclusive ‘cooperation policy platform’ on due diligence — open to
governments around the world and due to meet for the first time in March 2025.
In the debate about new regulatory moves, Hannah
Koep-Andrieu — Head
of Due Diligence at the OECD’s Centre for Responsible Business Conduct —
argued that this is about better implementation of principles with which
companies are already expected to
comply.
“The UN Guiding
Principles
and the OECD
Guidelines
are the common denominator for both voluntary and regulatory action — and that
isn’t changing,” she said.
Sustainable development
A final, new emphasis suggested on day one came from Chantal
Mwavita,
Minister of Human Rights for the Democratic Republic of the Congo, who
insisted that respect for human rights had to be accompanied by improved trade
relations for the Global South.
UN High Commissioner for Human Rights Volker
Türk also talked about
a “human rights economy.”
Coming one week after disappointing North-South
commitments
at the COP29 climate talks, this is the argument which will not go away.
Acceptance
Overall, there appears to be wide acceptance that a new era of mandatory human rights
due diligence for companies is about effectiveness.
The suggestion that companies would retreat into an anti-regulation
mindset
was the dog that didn’t bark.
Perhaps the “smart mix” has just gotten even smarter.
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Richard Howitt
Richard Howitt is a strategic adviser on Corporate Responsibility and Sustainability, Business and Human Rights. He is also a Board member, lecturer at Audencia Business School and host of the Frank Bold ‘Frankly Speaking’ responsible business podcast. Richard was Member of the European Parliament responsible for the EU’s first rules on corporate sustainability reporting and subsequently Chief Executive Officer of the International Integrated Reporting Council.
Published Nov 26, 2024 8am EST / 5am PST / 1pm GMT / 2pm CET