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Business and Human Rights

Demonstrating respect for human rights is increasingly important for businesses. We have been at the forefront of this emerging area and have the experience, perspective and innovative approach necessary to help you meet its challenges.

Showing respect for human rights, and implementing robust policies and processes to identify, prevent or mitigate adverse human rights impacts, are increasingly relevant to investor relations, brand management, access to finance, and to minimise the risk of litigation and reputational damage. When managed successfully, these can be a significant brand and business enabler.

Over recent years, there has been widespread business convergence around ‘soft law’ human rights principles and standards, such as the UN Guiding Principles on Business and Human Rights. Increasingly these standards are being reflected in mandatory reporting and other requirements introduced by Governments around the world. In light of these, many businesses are refining their human rights policy commitments, and implementing them in earnest through due diligence processes, impact assessments and compliance systems.

There are also circumstances in which businesses may wish to take action to enforce their own rights as protection against certain forms of State intervention, in the context of legal proceedings and/or regulatory investigations.

Linklaters' cross-border Business and Human Rights practice has been at the forefront of advising on these emerging themes. Click on the banners below for more information.

Human rights reporting

Increasingly companies are required to be transparent about and report publicly on their business practices. This trend has gained significant momentum over recent years. Regulatory reporting requirements are expanding to cover social, community and human rights issues as well as information about related policies and their effectiveness. The “transparency in supply chains” provision of the UK’s Modern Slavery Act 2015 is a recent example, as is the EU’s Non-Financial Reporting Directive.

We have an in-depth understanding of this area, from the systems that may need to be put in place to gather information, to the drafting and preparation of reports and statements and addressing any follow-up action taken by stakeholders.

Our most relevant recent experience
  • Advising a number of multinational companies on UK human rights reporting requirements, and the content of their modern slavery and human trafficking statements, strategic reports and sustainability reports
  • Assisting companies in the extractives and logging sectors to apply EU and UK requirements to report payments to governments, and designing methodologies to gather data from group companies

UN Guiding Principles on Business and Human Rights and other 'soft' law standards

The UN Guiding Principles on Business and Human Rights were endorsed by the UN in 2011. There has been widespread business convergence around them, and they are setting the standard for international corporate best practice in this area. Regulators are using them as a reference point with increasing frequency.

Linklaters partnered with the UN Global Compact to interview General Counsel across a wide range of organisations to develop a Guide for General Counsel on Corporate Sustainability. This provides practical guidance on how to advance corporate sustainability issues, while reinforcing the UN Global Compact’s Ten Principles that focus on human rights, amongst other things.

Our most relevant recent experience:
  • Advising on the application of the UN Guiding Principles on Business and Human Rights remedy criteria in the context of a high profile product liability issue
  • Designing the methodology for and conducting a human rights impact assessment, with a focus on a proposed relationship with a defence sector customer
  • Assisting an energy company on human rights due diligence for the purposes of M&A transactions
  • Advising a major ICT company on the design and implementation of a human rights compliance programme incorporating the requirements of the UN Guiding Principles on Business and Human Rights
  • Undertaking a gap analysis and benchmarking exercise for an extractives sector company to assess its position on key requirements under ‘soft laws’ on human rights

Human Rights policies

A clear human rights policy commitment marks the foundation of a robust human rights risk management and compliance programme, and sets the “tone from the top” for an organisation’s approach to human rights issues. The UN Guiding Principles on Business and Human Rights require that a policy is approved at the most senior level, prepared with expert advice and made publicly available, amongst other things.

Increasingly, companies are developing and publishing specific human rights policies, or expanding existing policy commitments to cover human rights issues. But preparing a policy is only the beginning of the journey for most businesses. We help our clients design clear and concise policies that can be implemented in practice into their operations, business practices and ethos.

Our most relevant recent experience:
  • Advising a FMCG company on a programme of governance reform and cultural change required to roll out and implement policy commitments and associated processes
  • Advising a transport company on the updating of its human rights policy, taking into account particular sensitivities around freedom of association
  • Advising an energy company embarking upon developing a human rights policy, including in relation to treatment of indigenous peoples

Managing supply chain risks

Companies are now looking beyond more traditional methods of supply chain management, which have focused on the commercial aspects of procurement and on contingency planning, with a view to ensuring favourable supply terms and business continuity. Ethical sourcing and supplier compliance with human rights standards are rapidly attracting greater scrutiny from a range of stakeholders, including investors, customers and NGOs.

The “transparency in supply chains” provision of the UK’s Modern Slavery Act 2015 has thrown this into sharp focus for many, and we have been leading the charge in advising companies on applying these reporting requirements.

Our most relevant recent experience:
  • Advising a large number of major corporations on US, EU and UK law and policy on modern slavery and human trafficking and their impacts on global supply chain risk management
  • Developing supplier codes of conduct for a number of multinational corporations, some with supply chains incorporating particular areas of human rights risk

Human rights due diligence and impact assessment

Due diligence is an important tool which can assist companies manage risks and compliance with laws, regulations and standards. The UN Guiding Principles on Business and Human Rights state that organisations have a responsibility to respect human rights by acting with due diligence to avoid infringing on the rights of others.

Understanding what type of due diligence to conduct, and when to conduct it, is critical to fulfilling this responsibility and effectively managing risks and impacts. We have helped our clients develop bespoke systems and methodologies to manage this process and advise on how to manage due diligence findings and challenging situations.

Our most relevant recent experience:
  • Delivering training on how to identify human rights issues in the context of transactional due diligence exercises
  • Designing the methodology for and conducting a human rights impact assessment, with a focus on a proposed relationship with a defence sector customer
  • Assisting an energy company on human rights due diligence for the purposes of M&A transactions
  • Advising a FMCG company on human rights due diligence for the purposes of its joint venture arrangements and M&A activities

Compliance systems and risk management

A range of soft law standards require businesses to respect human rights and set clear practical expectations by providing a framework within which companies can build structured processes to identify and manage their impacts.

We have been advising forward-thinking companies on the review of their risk management and compliance systems to ensure that they take human rights issues into account. Where gaps are identified, we are helping them design and implement new measures, or upgrade existing systems, to ensure that they are able to manage their impacts and eliminate or mitigate risks to their, and their stakeholders’, satisfaction.

Linklaters has also partnered with the UN Global Compact to interview General Counsel across a wide range of organisations to develop a Guide for General Counsel on Corporate Sustainability. This provides practical guidance on how to advance corporate sustainability issues, while reinforcing the UN Global Compact’s Ten Principles that focus on human rights, amongst other things.

Our most relevant recent experience:
  • Advising a major ICT company on the design and implementation of a human rights compliance programme incorporating the requirements of the UN Guiding Principles on Business and Human Rights
  • Undertaking a gap analysis and benchmarking exercise for an extractives sector company to assess its position on key requirements under ‘soft laws’ on human rights

Human rights and major projects

As financial institutions increasingly recognise that environmental, social and governance issues are relevant to credit risk and reputational risk, sustainable finance is fast becoming the benchmark for global financial and investment transactions particularly in the extractive and infrastructure sectors. Recent revisions to soft law standards in this area explicitly incorporated references to human rights.

We have the leading team on soft law standards and we are acutely aware of the need for both borrowers and financial institutions to consider and report on the environmental and social impact of their activities and to frame contractual requirements in a practical and commercial way.

Our most relevant recent experience:
  • Advising on the application of social and human rights aspects of the Equator Principles, IFC Performance Standards and OECD Common Approaches on a range of market-leading project financings
  • Advising an agri-commodities corporation on legal risks associated with modern slavery allegations made against a target company and drafting relevant contractual protections in M&A documentation
  • Advising companies on the potential human rights implications of stabilisation arrangements
  • Advising on resettlement, land rights and processes for free prior informed consent of indigenous peoples

Human rights as a defence tool

In certain jurisdictions, businesses also have human rights of their own. There are circumstances in which they may wish to take action to enforce those rights as protection against certain forms of State intervention, in the context of legal proceedings and/or regulatory investigations.

Our most relevant recent experience:

Our recent experience includes proceedings before civil, constitutional and criminal courts, the European Court of Human Rights, regulators, arbitral tribunals and the European Commission, invoking:

  • rights to property and non-discrimination rights, against legislation which has the direct or indirect effect of expropriation
  • the right to freedom of expression, where State intervention has limited media pluralism
  • general principles of EU law, such as free movement of services and capital and the prohibition of State aid, when national legislation discriminates between competitors from multiple EU Member States
  • the right to a fair trial, when limited protection of due process has been available under domestic legislation in the context of regulatory investigations
  • the right to a fair trial in criminal proceedings, and in the context of parliamentary enquiries
  • the right to privacy, to protect business secrets and in relation to search and seizure warrants

Our experience

Policy commitments

  • advising a transport company on the updating of its human rights policy, taking into account particular sensitivities around freedom of association
  • advising an energy company embarking upon developing a human rights policy, including in relation to treatment of indigenous peoples

Due diligence and impact assessments

  • designing the methodology for and conducting a human rights impact assessment, with a focus on a proposed relationship with a defence sector customer
  • assisting an energy company on human rights due diligence for the purposes of M&A transactions
  • advising a FMCG company on human rights due diligence for the purposes of its joint venture arrangements and M&A activities

Compliance programmes

  • advising a major ICT company on the design and implementation of a human rights compliance programme incorporating the requirements of the UN Guiding Principles on Business and Human Rights
  • undertaking a gap analysis and benchmarking exercise for an extractives sector company to assess its position on key requirements under ‘soft laws’ on human rights

Supply chain risks

  • advising major corporations on US, EU and UK law and policy on modern slavery and human trafficking and their impacts on global supply chains
  • developing supplier codes of conduct for a number of multinational corporations, some with supply chains incorporating particular areas of human rights risk

Human rights in major transactions

  • advising on the application of social and human rights aspects of the Equator Principles, IFC Performance Standards and OECD Common Approaches on a range of market-leading project financings
  • advising an agri-commodities  corporation on legal risks associated with modern slavery allegations made against a target company and drafting relevant contractual protections in M&A documentation
  • advising companies on the potential human rights implications of stabilisation arrangements
  • advising on resettlement, land rights and processes for free prior informed consent of indigenous peoples

Human rights reporting

  • advising a number of multinational companies on UK human rights reporting requirements, and the content of their strategic reports and sustainability reports
  • assisting companies in the extractives and logging sectors to apply EU and UK requirements to report payments to governments, and designing methodologies to gather data from group companies
 

Litigation and liability risks

  • advising a multinational corporation on emerging law and policy in a number of jurisdictions on the liability of parent companies for human rights abuses or complicity by their subsidiaries
  • reviewing the liability risk exposure of a mining company and its parent from claims that a subsidiary had been complicit in human rights abuses by security forces
  • advising on the litigation and legal obligations relevant to companies in respect of adverse human rights impacts
  • advising on the OECD National Contact Point complaints process and the "case law" this has created

Our human rights video series

Our clients are now telling us that human rights risks are rising up the corporate agenda and increasingly treated as a compliance issue. In our human rights video series, our team discuss some of the most common issues for businesses, including the proliferation of ‘soft law’ standards, the transition from ‘soft law’ to ‘hard law’ and the consequences of non-compliance.

Discover the series

Business and Human Rights Arbitration: Widening the net of remedies

International arbitration moves closer to becoming a forum for business and human rights (“BHR”) disputes with the publication of draft BHR arbitral rules. Whilst some technical considerations remain, BHR arbitration offers many exciting advantages to current dispute resolution mechanisms and would be a welcome option for many.

Find out more

Ethics in Banking and Finance

This report, which has been prepared in partnership with UK Finance, is designed to help firms more easily engage with the many and varied sources of those requirements and evaluate whether they are living up to these expectations and the values they have set for themselves.

Explore the report
Key contacts
For more information on how our Business and Human Rights team can support you, please get in touch with one of the contacts below.

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