Effective human rights due diligence is good for business

ETI has just produced a due diligence framework for companies to help them prevent labour rights violations and manage human rights risks. It will help companies understand why engagement, negotiation and collaboration are the only ways to succeed in tackling these problems in the long term. In this long form Q&A, ETI’s Head of Knowledge and Learning, Cindy Berman answers questions on why the framework is so important.

Download ETI’s human rights due diligence framework 

New advanced training course: Human rights due diligence

How did the human rights due diligence framework come about?

All companies undertake due diligence in their supply chains: they conduct risk assessments of their suppliers, legal and fiduciary matters, security, quality and volume of supply and so on. 

Yet while human rights is a relatively new feature for corporate due diligence, it is a growing area of concern.

The UN Guiding Principles of Business and Human Rights (UNGPs), unanimously agreed by all member states, has put this issue firmly on the table.

Legislation, such as the UK’s Modern Slavery Act, is also driving companies to adopt new policies and practices that specifically take human rights into account in their due diligence processes.

ETI therefore decided to develop the framework because we wanted to help member companies, and others, to be discerning about what services, advice and information they use.

We want them to have the best possible advice.

What did ETI do?

We wanted to offer an approach that could help companies address human rights in a holistic and sustainable way – for both their internal operations and through their supply chains.

The first step was to convene a Tripartite Advisory Group that comprised six senior representatives of the ETI’s corporate, trade union and NGO membership to help us develop a multi-stakeholder approach.

 And the second step was to agree the following definition:

Human rights due diligence involves the actions taken by a company to identify and act upon actual and potential human rights risks for workers in its operations, supply chains and the services it uses.

Why was having a tripartite advisory group so important and who was on it?

The Framework reflects the complementary perspectives of the different stakeholders that must each play their part in ensuring respect for workers’ rights.

It is the product of the extensive knowledge and experience of the Advisory Group, and their willingness to engage in this exercise with openness, mutual respect and constructive challenge.

And it was noticeable that each member of the Advisory Group had a different perspective.

But these differences proved to be extremely valuable – not only in understanding the root causes of labour rights violations, but also in coming up with solutions.

• Company representatives were Giles Bolton, Responsible Sourcing Director from Tesco and Gabriella Wass, Primark’s Strategy and Policy Assistant.
• Trade union representatives were Ron Oswald, the General Secretary of IUF (International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations) and Jenny Holdcroft, Policy Director from IndustriALL
• Representing the NGOs were Maggie Burns from Women Working Worldwide and Klara Skrivankova from Anti-Slavery International.

What makes this framework different from any others? 

We weren’t trying to reinvent the wheel.

Our Framework is based on the UNGPs, our Base Code and Principles of Implementation. It also builds on existing credible guidance – including the SHIFT Reporting Framework (RAFI), OECD-DAC sectoral guidance and due diligence guidance from trade unions and civil society organisations.

But because of ETI’s multi-stakeholder approach to increasing respect for workers’ rights, it is also different in many respects from some of the other due diligence guidance that is out there.

We understand complexity and acknowledge the value of different kinds of interventions.

But we point out that there are no magic bullets. And that any organization or consultant offering easy solutions to human rights due diligence is misleading companies.

We argue that while individual companies must be held to account in respecting workers’ rights, in many cases, there are no quick fixes.

Mitigating and preventing labour rights violations in the long term demands collaboration.

That means companies working with each other, as well as with other stakeholders, to address systemic problems in the country, industry or supply chain in which they operate. 

What are the key elements of human rights due diligence? 

There are five key elements.

• Freedom of association and collective bargaining are essential elements of human rights due diligence.  Trade unions and representative workers organisations are critical because they enable workers to collectively negotiate their own terms and conditions of work. And this is far more effective than audits and using costly consultancies to conduct risk assessments.
• Companies must review their own policies and practices. They need to assess whether their purchasing practices, employment practices, sourcing decisions and engagement with their suppliers creates an enabling environment for exploitation and abuse of workers, or whether it enables responsible and ethical practices.
• Companies also need to engage with one another and collaborate where possible and appropriate. Very few companies have the individual leverage to significantly improve working conditions in their supply chains. They need to build sector-wide and industry-based collaboration to make an impact in the long-term. They can learn from one another and benchmark their own practices. 
• Governments must play their part in protecting workers’ rights through effective laws, policies and ensure these are upheld. Labour inspectorates that monitor compliance with labour standards are critical.
• Civil society – NGOs, researchers and academics, the media, grassroots community organisations are important because they can put the public spotlight on abusive practices. Credible NGOs are trusted in communities and workplaces where the most vulnerable workers, including women and migrant workers, are to be found. Their advocacy campaigns, as well as good evidence, often bring companies to the negotiating table.  

Most due diligence guidance highlights what companies should know about, but not what to do. Will this framework help with that?

We offer some practical steps companies can take. But we know each company is different, so this is not a blueprint. Instead, the framework highlights questions that will guide decision-making and action.

It helps companies understand how to work with information (after all, due diligence is about information).

It provides advice on what data to trust, how to verify information and assess its credibility.

It also challenges the use of audits as the primary means of conducting checks on the treatment of workers, and provide some alternatives to compliance-driven approaches. 

What are ETI’s future plans for the framework?

We’re about to pilot the framework with our supermarket members in the Spanish salad industry where we know labour rights abuses are a serious problem. There will be other pilots too.

This will also be used as a key reference for all of ETI’s supply chain programmes, and will be part of ETI’s new work with our members on reporting and accountability.

We will offer training, coaching and mentoring in the framework’s use.  We have plans to develop more detailed guidance based on our experience of piloting this framework, so that it reflects lessons learned in applying it. We want to make sure it is as practical as possible.

We are convinced that it will be helpful to all companies that are thoughtful and honest in recognising that what they have been doing to date hasn’t worked to prevent labour rights violations.

Because responsible companies know things need to change, and want to be part of a community that is committed to long-term solutions to the growing problem of labour rights violations. 

Anything else…?

Human rights due diligence is now more important than ever before.

Global supply chains are becoming more complex, and labour markets are increasingly global. That means more workers are getting jobs, but are also more vulnerable to abuse and exploitation.

The structure and ownership of companies is becoming more complex. That makes the process of identifying corporate responsibility challenging, but companies that think they can hide from litigation are being naïve.

In today’s information age, transparency is not a choice. It’s a fact.

Information on exploitation and abuse of workers can be shared instantaneously on our phones, and can go viral through social media.

Although many remain extremely vulnerable to exploitation, workers are increasingly resisting abusive treatment and demanding that they are treated with dignity and respect.

New legislation is driving companies to be more transparent in demonstrating all the steps they are taking to mitigate and manage risk.

Human rights due diligence is critical to all of this. It’s a concept whose time has come.

Download ETI’s new human rights due diligence framework here