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After Covid-19: My roadmap to a cost-effective human rights compliance program

As governments cope with massive disruption to every aspect of life, businesses are struggling to maintain solvency, putting pressure on their remaining workforces and suppliers. Tensions are rising in numerous countries. These issues in combination have dramatic business and human rights impacts, creating legal, reputational, and operational risks.

Those risks include:

Workforce and labor challenges. Employees will continue to be acutely concerned about job requirements that expose them to potential new illnesses. New patterns of discrimination will emerge, and the concept of sick leave as a human right will continue to be debated.

Privacy and surveillance. Companies will continue to create and rely on new technologies and surveillance mechanisms, and communications providers and technology firms will provide data to governments to identify potential illnesses among employees or the public.

Supply chains. There will be radical shifts in global supply chains. Companies seeking to maintain or restore production levels will quickly identify alternative suppliers without robust diligence. Other companies may pressure existing suppliers to increase their capacity. Given high levels of unemployment, risks of worker exploitation, and modern slavery will rise.

Security. High levels of unemployment and ongoing economic challenges will lead to an increase in crime and violence. Responses by private and public security will inevitably lead to claims of excessive force.

A longer term trend over the past five years or so has been a consistent rise in high-profile human rights and transnational tort disputes, including litigation, arbitrations, and other state-sponsored processes. There has also been a proliferation of soft law standards — such as the UN Guiding Principles on Business and Human Rights (UNGPs), the Voluntary Principles on Security and Human Rights, and the OECD Guidelines for Multinational Enterprises. Finally, we’ve seen a dramatic increase in human rights-based legislation and regulation, including laws mandating disclosures of human rights processes that extend through a company’s operations and supply chain, mandatory due diligence laws that create a company “duty to know” about and disclose human rights risks, and criminal laws, and sanctions regimes.

These hard and soft law developments — combined with an increased interest in human rights performance by investors and other stakeholders, the enormous reputational risk that accompanies human rights violations, and increasing commercial pressures — will yield immediate increased attention on human rights compliance programs.

Developing a Human Rights Program

The UNGPs, unanimously adopted by the UN Human Rights Council in June 2011, are the starting point for developing a human rights compliance program. They have been endorsed by thousands of companies around the world and are widely considered the definitive corporate human rights framework. The UNGPs bear substantial similarities to core elements of anti-corruption compliance programs, allowing companies to leverage their existing approach, including: 

  • Governance and oversight. Anti-corruption programs generally include board-level oversight, and day-to-day supervision by a senior officer. The UNGPs recommend similar structures. Human rights mandates can be incorporated into current board committee charters, and day-to-day program responsibility can rest with compliance personnel responsible for the anti-corruption program, who are accustomed to driving compliance activities. This approach is likely consistent with UNGP 23(c), which says that companies should treat the risk of contributing to gross human rights abuses as a “legal compliance issue,” given the substantial legal repercussions flowing from human rights non-compliances. 
  • Policies and procedures. Anti-corruption policy frameworks generally include a code of conduct expressing the company’s commitment to ethical behavior, supported by a detailed anti-corruption policy and supporting procedures. UNGP 16 reflects the same conceptual approach to human rights compliance. High-level commitments to respect human rights can be added to a code of conduct and supported by a standalone policy. While anti-corruption and human rights policies are distinct, the numerous policies and procedures that support anti-corruption programs can incorporate human rights components — including procedures that require immediate escalation of concerns, supplier codes of conduct and functional unit management systems. 
  • Training and communication. Anti-corruption training platforms can readily be expanded to include human rights elements, including induction training, annual code of conduct e-training and refreshers, annual live training, or “just-in-time” training associated with specific activities. Integrated training can be substantively beneficial, helping recipients identify and consider the causal connections between the two areas, and spot and escalate relevant red flags. 
  • Operational, employee, and third party diligence. Both anti-corruption and human rights compliance programs rely heavily on assessments, program testing, and diligence approaches to identify risks and how they are being addressed. Including human rights components in anti-corruption desktop analyses can help to detect red flags since corruption and human rights abuses are frequent causes of each other. In-person assessments can likewise be combined, as they frequently involve overlapping interviews, and anti-corruption risks may correlate with human rights risks and vice versa. For employees and third parties, existing screening approaches to identify corruption risks can be expanded to include human rights elements, both for baseline and enhanced diligence. Similar controls can also be instituted for those that pose enhanced risks. 
  • Hotlines and grievance mechanisms.UNGP 29 states that companies should establish operational grievance mechanisms “accessible directly to individuals and communities who may be adversely impacted by a business enterprise.” Many companies use existing hotline frameworks to meet that expectation.  
  • Reporting. UNGP 21 conveys the importance of transparency for human rights procedures and how salient risks are being managed. Companies often use their websites for reporting, but as with anti-corruption programs, sustainability reports can also address human rights performance. Both subjects can also be addressed in combined reporting frameworks, such as the Global Reporting Initiative.

As the Covid-19 crisis recedes, substantial new challenges will lead companies to implement and expand their human rights compliance programs. Taking advantage of current anti-corruption frameworks can help drive and deepen compliance, stretch budgets, and reduce risks to the company, its employees, and the third parties impacted by company operations.

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  1. Great post, Jon! I think it’s also quite worthwhile to consider modern slavery issues in the context of an overall compliance risk assessment and to actually test/monitor for indications of non-compliance. Obviously the testing programs would be dependent on the nature of the business, but based on my experience in SE Asia, procedures can be as simple as looking at time cards and speaking with rank and file personnel.

    • I strongly agree that human rights and anti-corruption compliance should be combined. I would just rather base it on the OECD Guidelines for Multinational Enterprises. They incorporate the UN Guiding Principles and extend to all aspects of corporate responsibility. I am arguing this in my blog “Why we need mandatory due diligence in supply chains for human rights, the environment and preventing corruption” in Voices for Transparency.

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