Reality Check: Navigating the Pitfalls of Human Rights Due Diligence
This blog post was authored by Nazrin Huseinzade. Nazrin Huseinzade is an international human rights lawyer. She currently works as Business and Human Rights Advisor at Enact, a Stockholm-based consulting firm specialised in corporate human rights due diligence. She was a speaker at the Symposium: Colonisation in, of and through Business and Human Rights, held in April 2023 in Tilburg (the Netherlands). The blog post is part of a Blog Series published on Rights as Usual.
Disclaimer: The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the official positions of any entities she represents
***********************************
Human Rights Due Diligence (HRDD) straddles a spectrum of admiration and critique. At one extreme of this debate are those who endorse with blind devotion the bible that is the United Nations Guiding Principles for Business and Human Rights, and all the legislation inspired by it. At the other are those who cast a skeptical eye, viewing HRDD as an extended arm of neoliberalism.
This post is a pragmatic blend of concurrence and dissent with both factions. HRDD is clearly not a cure to a system of international trade and investment where inequality is a structural feature, rather than a bug. However, we should still be able to appreciate it for the symptom relief it offers.
As its significance solidifies extending into both national and EU legislation, the following are some of the common pitfalls that can erode the effectiveness of HRDD, even as a palliative measure.
The myth of equal partnerships
Universality of human rights has long been challenged by TWAIL scholars both on substantive grounds, for neocolonial “efforts to universalise an essentially European corpus of human rights”, and structural grounds, due to the unilateral imposition of European/EU HRDD laws upon trading partners in lieu of an international treaty with equal participation of the Global South states.
Both of these critiques materialise in the day-to-day practices in the corporate world. As a rule, the HRDD originates in the Global North headquarters where Business & Human Rights specialists, including myself, inevitably rely on a European interpretation of international human rights standards. Under scrutiny is usually the subsidiary/supplier based in the Global South.
However, despite the contradictions of promoting a European-/Western-centric take on human rights, inaction would be an even less desirable option. Some within the corporate world still readily resort to arguments such as “our workers in factory X want to work 60 hours a week, we have to accept their work culture” or “if children work from the age of 9 in country Y, who are we to tell them otherwise?” This rhetoric shuts down or circumvents any discussion about the social costs of trade. Moreover, it dangerously conflates tolerance towards exploitation with professed cultural tolerance.
The bigger problem with HRDD legislation is that it allows an economically stronger purchaser to impose rules on a weaker seller, while implicitly also asserting moral superiority over them. In an article dedicated to the ethical compliance audits in South Indian Garment Industry, Geert de Neve (University of Sussex) writes that “at the heart of corporate ethical sourcing policies lies a set of social auditing and monitoring mechanisms through which buyers instigate a regime of control that casts western companies and consumers as knowledgeable, caring and disciplined, and their non-western suppliers as backward, uncaring and lacking self-control”.
This is a sentiment I get even today within my work, and it is supported by a willful misreading of the UNGP’s requirements on leverage and contribution, where the former (“if the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise it”) is overly stressed and the latter (“if business enterprise contributes or may contribute to an adverse human rights impact, it should take the necessary steps to cease or prevent its contribution”) is largely ignored.
Reluctance to share the costs
Standalone initiatives like Responsible Contracting Project hope to transform the way companies negotiate the terms of their relationships with their suppliers, bringing an element of self-scrutiny on behalf of purchasers and a recognition of shared responsibilities. Similarly, the text of the Corporate Sustainability Due Diligence Directive (CSDDD) contains elements of cost-sharing when doing business with SMEs (Article 7(2)d).
This is, however, far from a universally accepted standard, and the HRDD practices today still pay little heed to how the company’s purchasing practices (i.e., chasing the lowest price, irregular orders, short lead times, no guarantee of continued sourcing, unpredictable and fluctuating orders) can create an environment where upholding basic human and labour requirements is virtually impossible.
Similarly to how companies are looking for the best price-quality ratio in business negotiations, they will have to develop a habit for a good price-sustainability ratio, which will also require taking on some of the costs of compliance.
Efficiency over accuracy
As a process, HRDD is among the “odd ones out” in the world of mainstream economics. It interferes with the natural appetite for cost-cutting and does not bring any clear financial benefits, certainly not in the short term. Relying on muscle memory from other risk management procedures, companies seek quick fixes, often relying on dubious metrics and checkbox exercises.
In the practice of businesses, the starting point for an HRDD is often a so-called ESG country index/democracy index which will automatically place any company in the Global South in a higher risk category. Such geographic bias does not allow for nuanced information that might be crucial for businesses given their operational context. For example, Sweden and Finland will be ranked “low risk”, and while statistically the majority of companies in these countries might deserve this ranking, the overreliance on country rankings will overlook the systemic challenges prevalent in industries reliant on seasonal migrants, despite investigations revealing instances of forced labor (see also here).
This is just one example of how accuracy is sacrificed for scalability and conveniency of risk management tools. Here, one could hope that the shift of sustainability into the legal compliance domain would make the cost of mistakes higher for businesses and thus push for better quality services in the ESG ratings market.
Arbitrary cut-and-run
When it comes to confirmed cases of serious human rights impacts, many companies are too ready to switch suppliers. The focus is usually shifted from rightsholders to the company’s own reputational and legal risks.
In its negotiating position on CSDDD, the Council of the EU calls for a more nuanced approach to ending business relationships, and warns against worse human rights outcomes: “severe adverse impact could occur if workers are deprived of living wage by the termination of the business relationship with their employer in order to bring to an end an adverse impact consisting of breaching the right to collective bargaining”.
Yet, there are conflicting opinions among the unions, NGOs and businesses alike on the ethical considerations surrounding the exit decisions. For example, while the global union IndustriALL pushed the brands to withdraw from Myanmar following the military coup in February 2021, the Myanmar Centre for Responsible Business regretted the withdrawals by major businesses drawing attention to the negative impacts it would have on thousands of women workers in the country. In other contexts, such as child labour in cobalt mining (DRC), the exclusion of artisanal miners from supply chains is said to help large companies clean up the supply chains on paper and protect their reputations, while pushing those risking their lives in unregulated mines, away from the sight, further down the supply chain.
The concept of a “responsible exit” stands out as the most vulnerable aspect within the existing HRDD frameworks, given the degree of discretion the companies enjoy in interpreting it. With the UNGP’s HRDD concept gradually moving towards hard law, it seems that businesses might face greater accountability for failure to disengage rather than ever be held responsible for the negative consequences of their disengagement.
Conclusion
In summary, the take of this blog post is that HRDD, often regarded as the pinnacle of CSR, belongs within the confines of the existing neoliberal economic order rather than harbours hopes of revolutionising it.
However, as long as the current trade and investment frameworks persist, HRDD remains a valuable tool, and its effectiveness in alleviating the excesses of these frameworks depends on the collective efforts of various stakeholders, including lawmakers, strategic advocates, NGOs, and in-house sustainability experts.
A critical aspect of these collective efforts involves companies transitioning from a policing approach towards their business partners to truly engaging with them on equal grounds, assuming the cost of their own purchasing practices, abandoning oversimplified scoring exercises and enlisting expertise and time required for nuanced human rights analysis, as well as reevaluating the effects of their disengagement. Without these transformative shifts, HRDD runs the risk of devolving into mere virtue signaling aimed at appeasing domestic consumers and regulators.
The cooptation of BHR: the looming threat of ‘CSR capture’
This blog post was authored by Prof. Dr. Florian Wettstein – Universität St.Gallen (HSG) | unisg.ch, who was the keynote speaker at the Symposium: Colonisation in, of and through Business and Human Rights, held in April 2023 in Tilburg (the Netherlands). It is part of a Blog Series published on Rights as Usual.
**************************************************
Corporate social responsibility (CSR) has become an essential part of doing business. There is hardly any large company that does not publish a report on its responsibility and sustainability efforts, that does not have staff or even a department dedicated to CSR, that does not showcase its various responsibility projects and initiatives on its website. While some applaud such efforts, others have warned early on that their deeper aim has never been to transform, but rather to legitimize the neoliberal agenda. They have compared CSR to a ’trojan horse’, that is, an instrument for corporate capture, rather than for corporate change. Such ‘CSR capture’ poses a threat also to the critical potential of the business and human rights (BHR) agenda. How this plays out in practice can be illustrated with the example of companies’ opposition against mandatory BHR laws.
Of course, corporations opposing – sometimes vehemently – new restrictive regulation is not a new phenomenon. They have spent staggering amounts to lobby law makers to design regulatory instruments in their favor and they exert influence at all stages of the process in the lead up and enactment of such regulation. Hence, the mere fact that corporations similarly tend to reject new human rights due diligence (HRDD) legislation both in various domestic jurisdictions as well as at the level of the EU, is not surprising and it fits the usual pattern.
Nevertheless, there seems to be a new feature characterizing the opposition specifically against such new HRDD laws. While commonly the resistance against new regulations tends to invoke what can be called ‘efficiency-based’ arguments, companies seem to have shifted towards ‘responsibility-based’ argumentation in their struggle against BHR legislation. The former set of arguments claims that new social or environmental regulation hampers corporations’ efficiency and thus leads to reduced profitability. Often such arguments are connected, implicitly or explicitly, to a so-called ‘exit threat’, i.e. corporations threatening that they may move their operations elsewhere. This puts pressure on governments to abandon their plans for tighter regulations if they want to remain competitive as an attractive location for lucrative businesses.
Such arguments abound also in the public discussions around mandatory HRDD laws, but there is an increasingly prominent focus on the latter, responsibility-based, set of arguments in this context. Responsibility-based arguments do not emphasize the economic, but the social impact of such regulation, claiming that such laws would undermine the responsibility that companies are already adopting through their voluntary CSR efforts. One argument is that the potential liability risk attached to such legislation would prevent them from continuing their long-existent engagement with affected communities on the ground and thus be counter-productive when it comes to enhancing the position of local stakeholders. In other words: BHR laws are claimed to lead to less, rather than more responsibility.
Accordingly, companies’ position against such laws is increasingly voiced by a group of company representatives whom one would not intuitively associate with a position against BHR regulation: CSR managers. Thus, the very same people who welcomed the UN Guiding Principles on Business and Human Rights (UNGPs) and were at the forefront of implementing them early on are now taking a stance against mandating those very same provisions they earlier voiced support for. What may seem counter-intuitive at first glance, follows a certain logic at a closer look.
When the UNGPs were published in 2011, early implementation efforts by companies leveraged largely on existing CSR structures and resources. This domestication of BHR in and through the existing CSR organization facilitated the reframing of BHR along CSR lines – and it has turned CSR managers into the ‘gate-keepers’ of this newly framed BHR agenda in business practice. The conventional CSR perspective views corporate responsibility essentially as private responsibility, which companies adopt on a voluntary basis at their own discretion. It is corporate-centric, apolitical, and tends to be driven by instrumental considerations. Legal mandates and government involvement do not fit this conventional CSR agenda neatly. In fact, CSR is commonly seen precisely to address the realm beyond such mandates. Thus, the opposition against BHR legislation is not counter to but in line with a conventional CSR mindset. And because BHR has been reframed in the categories of such conventional CSR, such legislation can essentially be portrayed as running counter the BHR agenda itself. Thus, the BHR agenda has successfully been turned against itself.
This is not to say that the new mandatory HRDD laws are the silver bullet to advance the BHR agenda and that companies ought to accept any such proposition without any reservations. However, rather than rejecting them across the board, corporate responsibility would require companies to engage with them in sincere and constructive ways. If the design of current legislative proposals distracts from practical engagement on the ground, the response should be to include stakeholder engagement and the inclusion of marginal voices a requirement both in the process of designing such laws as well as in the actual mandate of such laws. After all, this is a demand that also BHR advocates have voiced repeatedly and thus where business support could secure real improvements of existing proposals and laws. In other words, the answer would be to advocate for stronger mandates, rather than to lobby against weak ones. The UNGPs ask governments to enact a ‘smart mix’ of voluntary and mandatory measures to give practical meaning to the BHR agenda. Corporations who have endorsed the UNGPs early on must play a constructive role not only when it comes to showcasing voluntary efforts, but also in advancing the mandatory part of the deal.
Blog Series: Colonisation in, of and through Business and Human Rights
This blog post was authored by Dr Dalia Palombo – Tilburg University.
The day I finally sent the last version of my article Transnational Business and Human Rights Litigation: An Imperialist Project? | Human Rights Law Review | Oxford Academic (oup.com) to the Human Rights Law Review, I wanted to forget about anything related to human rights and imperialism for a while. Thus, I turned to my post-submission period reading list, filled with interesting articles I did not have the opportunity to read during the writing process. The first article that sparked my attention was Betting on the Wrong (Trojan) Horse: CSR and the Implementation of the UN Guiding Principles on Business and Human Rights | Business and Human Rights Journal | Cambridge Core by Florian Wettstein. I started reading it and shivered when I realised the article analyses “[..t]he colonization of CSR by neoliberal free market ideology”. Not only could I not help ending up again on the topic of colonisation and business and human rights, but the illuminating article also reminded me that, as much as I spent countless hours analysing imperialism in business and human rights, there was a very different way to understand the topic. It could also be approached from the economic corporate capture, rather than legal transnationality, perspective. I felt that the interdisciplinarity of the topic deserved further investigation.
Thus, when I joined the Netherlands Network of Human Rights Research as a coordinator of the Business and Human Rights Working Group, I discussed the idea with my colleagues, dr. C (Chiara) Macchi – WUR , Jindan-Karena Mann | University of Amsterdam – Academia.edu, and TI (Tamara) Horbachevska – WUR, and it became clear my interest was not isolated. Thanks to funding from the Netherlands Network for Human Rights Research and the Department of Public Law and Governance (PLG) | Tilburg University, we were able to launch a call for abstracts for a symposium. The volume and quality of the abstracts received, as well as the widespread participation in the actual Symposium: Colonisation in, of and through Business & Human Rights | Tilburg University, were impressive. At the end of this long journey, we felt the need to continue our collaboration on the subject. In cooperation with N (Nadia) Bernaz PhD – WUR, we are now launching the Blog series Colonisation in, of and through Business and Human Rights on Rights as Usual | human rights & business (and a few other things). The series will run for a few months, publishing 2-3 blog posts per month. To kick off the series, we have three blog posts from Florian Wettstein (keynote speaker), Nazrin Huseinzade (symposium speaker) and myself.
The EU Parliament Position on the CSDDD : Towards Requiring Meaningful Stakeholder Engagement?
************************
Background
On the 1st of June 2023, the EU Parliament finally adopted its long-awaited position on the EU Corporate Sustainability Due Diligence Directive (CSDDD) with 366 votes in favour, 225 against and 38 abstentions. The legislative drafting process now proceeds to the trilogues, where attempts will be made to reconcile the Parliament’s position with that of the EU Commission and the EU Council in order to arrive at a final text of the directive.
The question of meaningful stakeholder engagement in the EU CSDDD has (pre)occupied scholars and civil society since the EU Commission released its draft in February 2022. This continued even after the Council’s draft in December 2022. Critics have argued that contrary to international standards contained within the United Nations Guiding Principles on Business and Human Rights (UNGPs) as well as the OECD Guidelines for Multinational Enterprises (OECD Guidelines), the commission’s proposal lacks a systematic approach to stakeholder engagement across the Human Rights Due Diligence (HRDD) process. In addition, concerns were raised about the “where relevant” formulation found in Articles 6 and 8 of the draft directive, requiring covered companies to engage with stakeholders only where relevant. Adding on to these concerns, I have elsewhere argued that a comparison of the Commission and Council positions reveals that not enough has been done in both these drafts to create the necessary architecture for meaningful stakeholder engagement in reality, given the wide discretion granted to in-scope companies. Relatedly, using a Third World Approaches to International Law (TWAIL) lens, I have previously illustrated how the EU CSDDD contributes to participatory injustice given its failure to include global south rightsholders in the processes of HRDD law making and implementation. This has serious implications for the creation and entrenching of a European epistemic and interpretive hegemony in BHR that does not do enough to ‘center the unique cultural, historical, and political experiences as well as lived realities of rightsholders from the Global South.’
The EU Parliament’s Position: Taking Critics Seriously?
Looking at the amendments proposed in the Parliament draft allows for some cautious optimism in as far as the progress towards meaningful stakeholder engagement is concerned. Amendment 34 sets the stage by introducing into the text of recital 27 a requirement that covered companies must engage with affected stakeholders throughout the due diligence process. Amendment 60 provides more detail by introducing a new recital 44c focusing on ongoing meaningful engagement. One notable development present in Parliament’s draft is the category of affected stakeholders. Covered companies are required to engage in genuine dialogue with these stakeholders and/or other relevant stakeholders such as civil society or human rights and environmental defenders where necessary. Stakeholders are to be given access to information with reasons for any refusal, and affected stakeholders must be protected from retaliation and retribution including by maintaining confidentiality and anonymity. Particularly welcome are attempts to inject policy coherence into the process of meaningful stakeholder engagement by aligning it with existing EU legislation applicable to rights to information, consultation, and participation.
As regards the operative provisions of the draft directive, a number of amendments are relevant. Amendment 121 introduces the category of affected stakeholders into the definitions laid out in Article 3(1)(n). Affected stakeholders are conceived of as ‘individuals, groups or communities that have rights or legitimate interests that are affected or could be affected by the adverse impacts stemming from a company’s activities or actions or the activities or actions of entities in its value chain.’ The legitimate representatives of such stakeholders are also granted standing. Additionally, adopting a formulation introduced in the Lara Wolter’s draft, the Parliament draft proposes amendment 122 creating a new Article 3 (1) (na) recognizing vulnerable rightsholders. These are affected stakeholders whose situations are compounded by marginalization due to intersecting factors such as ‘sex, gender, age, race, ethnicity, class, caste, education, indigenous peoples, migration status, disability as well as social and economic status.’
The most important amendment on stakeholder engagement proposed in the Parliament draft is amendment 206 which introduces a new Article 8 (d) titled ‘carrying out meaningful engagement with affected stakeholders.’ The provision is significant for a number of reasons. First, it requires engagement to be ‘comprehensive, structural, effective, timely and culturally and gender sensitive.’ In addition, it stresses the possibility of meaningful engagement involving legitimate representatives of affected rightsholders where it is not possible to engage the latter. Notably, in order to redress the information asymmetry that is emblematic of the relationship between companies and stakeholders, covered companies are required to provide ‘comprehensive, targeted and relevant information to affected stakeholders.’ Furthermore, affected rightsholders are allowed to request companies for additional information, and where such a request is refused written justifications must be given. Companies are expected to set up an appropriate framework for consulting affected stakeholders that ensures meaningful engagement throughout the due diligence process as set out in Articles 5-10 of the EU CSDDD. Special mention is made of company workers and their representatives, who must be kept informed of the company due diligence policy and engaged with throughout the implementation process. Finally, companies are required to identify and address barriers to engagement and ensure that participants are not subject to retaliation or retribution. The needs of vulnerable stakeholders must be given particular attention. Crucially, amendment 154 removes the ‘where relevant’ formulation and requires companies to carry out meaningful engagement in accordance with Article 8 (d).
What Next? A Call for Pragmatic Optimism
It is clear that the Parliament draft has laid down the legal scaffolding necessary for building an effective meaningful engagement architecture within the CSDDD. Compared to the Commission and Council drafts, the Parliament draft has arguably, and to a large extent, incorporated the concerns of critics of these earlier versions. Nonetheless, this contribution calls for the optimism with which these developments are likely to be received to be tempered with a healthy dose of pragmatism for three reasons.
Firstly, the nature of the trilogue process means that a number of tripartite meetings between Parliament, the Commission and the Council will now follow. Only at the end of this process will it be clear what version of stakeholder engagement will be captured within the final legislative text. Thus, the final text could either be stronger or weaker than the Parliament draft in this regard. Only time will tell.
Secondly, whereas the provisions in the new article 8 (d) are promising, it is not entirely clear if these provisions grant an enforceable right to stakeholders who are dissatisfied with how the company structures and carries out its meaningful engagement obligations. Will such stakeholders be able to raise a challenge against the company either through judicial or administrative proceedings – for instance within the context of the national supervisory mechanisms to be set up in each national jurisdiction? Legal rights are meaningless unless they are capable of being translated into reality. It remains to be seen whether and how affected stakeholders will actually be able to hold companies to account for any failures in their discharge of these meaningful engagement obligations.
Thirdly, as scholars such as Surya Deva and Debadatta Bose have cautioned, we must temper the enthusiasm with which we regard the move towards enhancing corporate accountability for violations of human rights and the environment through HRDD laws such as the EU CSDDD. These laws may promise more than they are able to deliver in reality, given the structural problems that characterize the global order, such as the massive asymmetries that exist between affected stakeholders and powerful Multi-national companies (MNCs) in terms of inter alia, access to resources, power and influence, and information.
HRDD laws are unable (and maybe even unwilling) to confront the material conditions of a post-colonial and neo-liberal international order that have allowed errant MNCs to be what they are today. Ultimately, even if Parliament’s version of the EU CSDDD is successful as regards the meaningful engagement provisions, this will be akin to treating only one small symptom while doing nothing to stop the disease.
The EC’s draft ban on products made using forced labour: Key measures to guarantee remediation for victims
I am very pleased to host two blog pieces which reflect on the 10 years which have passed since Rana Plaza as well as offering thoughts as to the way forward. The first one, by Rubana Huq was posted here. The second one, by Claire Methven O’Brien and Amy Weatherburn focus on the remedy gap in the Draft Regulation proposed by the EC.
These blog pieces were commissioned and edited by Sandhya Drew and Felogene Anumo for the Blog of the Business and Human Rights Journal but an IT blip on the CUP website is delaying publication, and so I have seized this opportunity. These pieces will be crossposted by the BHRJ Blog too at a later date.
*************************************************************************
Claire Methven O’Brien and Amy Weatherburn
In 2022, the European Commission (EC) proposed a new Regulation to ban products made using forced labour from the EU market. In this post, we highlight the absence of provisions in the draft Regulation to guarantee remedies for victims, and put forward five remediation measures that could be introduced to address this gap.
The EC’s proposed ban on products made using forced labour in outline
The EC’s proposal seeks to prevent goods made with forced labour from circulating on the EU market. The draft Regulation would hence empower Member State authorities, where there are indicators of forced labour in the supply chain, to investigate products and businesses (Articles 4-5) and conduct checks and inspections inside as well as outside the European Economic Area. Where forced labour is implicated in their production, goods can be withheld or disposed of (Article 6) and penalties imposed for non-compliance (Article 30). Additional EU-level measures aim to promote the law’s effectiveness. These include an EU database of forced labour risk areas and products to supply data to guide investigations and checks (Article 11) and guidance (Article 23). In terms of checks and balances, enforcement action against businesses is to be subject to review and appeal before national courts.
Remedies for forced labour victims in the draft EU Regulation: a crucial omission
Despite its prohibition in international law and its designation as one of the five fundamental principles and rights at work, forced labour is on the rise globally, with 28 million victims worldwide, 86 % in the private sector and most women. Human rights standards, including those binding on the EU, demand that individuals who fall victim to forced labour must be remediated. Remedies must be sufficient and certain in practice and context-specific, with reference to victims’ individual circumstances. While these rules generally relate to forced labour occurring within a state’s jurisdiction, the UN Guiding Principles on Business and Human Rights (UNGPs) and Council of Europe standards affirm the need for ensure remedy also in cross-border and value chain settings.
It is striking, then, that the EC’s proposed Regulation omits measures that would secure remedies for victims of forced labour. As is well-known, victims of forced labour face extreme difficulties in securing remediation, facing obstacles such as trauma, precarity, resource constraints, language barriers, lack of rights awareness and risks of reprisals. As remarked also by stakeholders, this lack of remedy perpetuates injustice, undermines the rule of law, exacerbates risks of re-victimisation and hence stands to frustrate the policy goals of the draft Regulation as well as broader EU and international human rights and sustainable development objectives.
Fixing the EU Regulation’s remedy gap: A package of proposals
The European Parliament is currently developing its position on the EC’s draft forced labour Regulation. There is therefore still time and opportunity to fix the failure of the EC’s draft to advance remedy for forced labour victims. As we analysed in our recently presented Briefing for the European Parliament, this goal might be promoted through the following mechanisms.
First, the Regulation should explicitly affirm the goal of preventing and remediating harm for victims. What after all is the point of EU legislation in this area, if not redressing the affront to human dignity and significant harm to human beings inflicted via exploitative labour practices?
Second, the draft Regulation should require economic operators to provide evidence of remediation as a condition of having bans or restrictions lifted. Such evidence could relate to, for example, financial and non-financial compensation; restitutionary measures; formal apologies or future-oriented preventative measures or guarantees of non-recurrence.
Third, the proposed EU Regulation could direct fines and administrative penalties into a trust fund for victims. This could then be drawn on to secure remediation in cases where perpetrators cannot be identified or fines enforced, well known obstacles to recuperating compensation where it has been awarded. Such a fund could draw lessons from and coordinate with existing initiatives, such as the UN Voluntary Trust Fund on Contemporary Forms of Slavery and Alliance 8.7.
Fourth, the foreseen Union Network Against Forced Labour Products (Article 24) should be leveraged to involve stakeholders in identifying cases of forced labour as well as monitoring and following up on the implementation of remediation. The network could also facilitate stakeholders in the process of evidence gathering for investigations as this can be a burdensome task for organisations with limited resources given the covert character of forced labour practices, and can dissuade them from pursuing legal action that would hold businesses accountable for forced labour practices. Given the latter, competent authorities should also have a duty to identify and inform potential victims, or their representatives, of the right to remediation in the course of investigations or remedial action.
Fifth, the Regulation should be articulated with other controls on market access. EU public procurement law already provides for exclusions from eligibility to bid for public contracts based on corporate misconduct and corruption and multi-lateral development banks operate a scheme of cross-debarment on a similar basis. Adverse determinations against businesses under the new EU Regulation should activate these or similar exclusions with the possibility, as under EU procurement law and debarment regimes, for ‘self-cleaning’ based on remediation for victims as well as improvements to business systems.
Conclusion
Ten years ago more than 1,110 garment workers lost their lives in the Rana Plaza disaster. Despite some advances, today millions of workers across the world and their families still suffer the immediate and long-terms consequences of serious breaches of minimum labour, health, safety, and environmental standards. Even in cases where activists and workers have won remediation for victims , the risk of reoccurrence and re-victimisation remains high. An unequivocal commitment in principle to securing remedies for forced labour victims, as EU actors claim, is therefore crucial. By integrating the measures outlined here into the draft Regulation, we suggest, the EU would help to put that principle into practice.
My name is Nadia Bernaz and I am Associate Professor of Law and Governance at Wageningen University in the Netherlands.
My main area of research is business and human rights. I look at how corporations and businesspeople can be held accountable for their human rights impact through international, domestic and transnational processes.