Business and Human Rights - all guides and insights
As we pass the five-year anniversary of the entry of the UK Modern Slavery Act 2015 into force, we reflect on the implementation of the reporting regime; look at recent developments; and provide an overview of the direction of travel and international developments in this area.
Companies seeking concrete tools to implement human rights protections in their supply chains should look to the forthcoming “Version 1.1” of the Model Contract Clauses (“MCCs”) for International Supply Contracts, published by the American Bar Association (“ABA”).
Read our update on what the 2018 MCCs cover and what updates can be expected in Version 1.1.
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.
A year after publishing its Zero Draft, the Human Rights Council publishes version two of its draft treaty on business and human rights. But what’s changed..?
The UK Modern Slavery Act: Refresher
The Home Office has recently written directly to chief executives of 17,000 businesses requesting increased reporting on the steps they are taking to ensure there is no modern slavery and human trafficking in their supply chains under section 54 of the UK Modern Slavery Act 2015 (the “MSA”).
The government has announced an independent review of the UK Modern Slavery Act 2015 at the end of July 2018, chaired by Frank Field MP, Maria Miller MP and Baroness Butler-Sloss.
On 16 July 2018, a draft treaty on business and human rights (the “Draft Treaty”) was published by the relevant United Nations (“UN”) working group established by the Human Rights Council (“HRC”).
Supply chains: a continued focus on the palm oil sector
In the last four years, scrutiny of the palm oil sector has increased significantly. Non-governmental organisations (“NGOs”) have continued to focus on linking palm oil production to deforestation and habitat degradation, and on bringing pressure in relation to these issues on fast moving consumer goods companies in particular.
The reporting on payment practices and performance regulations: a new transparency obligation
The Reporting on Payment Practices and Performance Regulations 2017 (the “Regulations”) impose a duty on the UK’s largest companies to report on their payment practices, performance and policies on a half-yearly basis. An estimated 15,000 businesses will need to report. To report accurately, affected companies will wish to verify the effective implementation and effectiveness of current invoice tracking systems and policies in the context of the UK Government’s renewed focus on this area.
In recent years, corporate transparency and disclosure, particularly with respect to examination of supply chains, has moved to the forefront of business and investor consciousness through pressure from both legislative agendas and consumer purchasing power.
The Government has updated its guidance on slavery and human trafficking statements. Organisations are now explicitly required to report on all six areas set out in the MSA in relation to slavery and human trafficking; keep historic statements online; publish their statements as soon as possible after financial year end and show progress year-on-year in their efforts to ensure that modern slavery and human trafficking are in neither their own operations or supply chains.The Joint Committee on Human Rights has published a report highlighting the gaps in the Modern Slavery Act and its implementation. The Report contains a number of criticisms and recommendations, aimed at continuing the recent drive for increased transparency.
Effective whistleblowing policies and procedures play an important role in helping to eliminate modern slavery and human trafficking in supply chains
We are approaching the first anniversary of the “slavery and human trafficking” reporting period. Now is a good time for organisations to reflect on their first statements and to consider whether they have effective whistleblowing policies and procedures in place.
A new French law has been passed which requires some companies to implement a plan concerning corporate social responsibility to identify risks and prevent violations of human rights and fundamental freedoms.
The European Parliament and Council have agreed the framework for a new regulation regarding the import into the EU of tin, tantalum, tungsten and gold which will see 95% of those imports covered by due diligence provisions as of 1 January 2021, although the wording is still be finally agreed before the regulation is passed. Linklaters has distilled this for our clients to help them be aware of, identify and manage the new obligations to be imposed upon them under the regulation.
The Sustainable Development Goals set out a framework for development policies to be implemented until the end of 2030. Businesses may find the goals a useful reference point for future strategy planning.
The UN Guiding Principles on Business and Human Rights state that businesses should respect human rights and set clear practical expectations, providing a framework within which companies can build structured processes to identify and manage their impacts.
The International Corporate Governance Network’s April 2015 Viewpoint Report highlights the growing importance of human rights from both a business ethics and risk management perspective, and encourages companies to view human rights through a corporate governance lens.
Demonstrating respect for human rights is increasingly important for investor relations, brand management and to minimise the risk of litigation.
There is a steady trend for plaintiff lawyers to argue that corporate groups should be seen as more unified organisms. Particularly where adverse human rights impacts are concerned, parent companies are increasingly finding themselves exposed to the risk of litigation for the activities of their subsidiaries.
As supply chains become increasingly globalised and complex, they are attracting greater scrutiny from consumers, businesses and regulators alike.