The first wave of legislative action was aimed at promoting transparency in business and introducing reporting requirements for companies to disclose their human rights risks within their operations or supply chains. However, these requirements were largely voluntary, with no effective mechanisms to enforce compliance and provide remedies. Now, the second wave of legislation goes beyond companies disclosing their due diligence methods, and aims to embed human rights due diligence into the law, for example at the national level, France’s duty of vigilance law and the upcoming Swiss human rights and environment due diligence law that is to be put to a referendum this year. Philip Bloomer notes that this has occurred for two reasons. Firstly, there is frustration with the pace of change. Since the unanimous endorsement of the UNGPs in 2011, states have only taken small steps to embed corporate respect for human rights into binding laws. Secondly, there is a growing fear and awareness of the threats that are happening to the fundamental social values and climate change.
This growing trend of linking human rights and the environment, alongside the need for mandatory due diligence, makes it unsurprising that on April 29, 2020, the European Commissioner for Justice, Didier Reynders, announced that the European Union plans to develop a legislative proposal by 2021 requiring businesses to carry out due diligence with the potential human rights and environmental impacts of their operations and supply chains. Also, the Council of Europe is also working on a HELP Programme which will highlight the connection between human rights and the environment through a new online training course for legal professionals. European organisations are not the only ones that have recognised the increasing need to link human rights and the environment. According to Arnold Kreilhuber (United Nations Environment Programme (UNEP), Director Law Division), UNEP is looking to provide additional clarification on the extent to which responsible business conduct guidance tools align with environmental concerns. They are also jump-starting a project with the OECD with a set of practical guidelines going forward to help address environment-related risk and to help them address environmental challenges with supply chains.
In parallel, several states have also expressed commitments to implementing mandatory due diligence, such as Switzerland and Norway. In November 2019, Norway published the draft text of its mandatory human rights due diligence law, which introduces due diligence and disclosure requirements on companies as well as monitoring and enforcement powers for state entities. In Switzerland, proposals for the Responsible Business Initiative which would make both human rights and environmental due diligence mandatory will be put to a referendum this year.
There are also developments towards mandatory due diligence in the UK. The current political environment is difficult in light of Brexit implications and Covid-19 complications. However, the sentiment for strong due diligence obligations and a greater focus on the environment is not new. In a 2016-17 inquiry, Parliament’s Joint Committee on Human Rights made the radical proposal that the government: introduce legislation which imposes a duty on all companies to prevent human rights abuses, require all companies to put in place effective human rights due diligence processes for both their subsidiaries and whole supply chain and include a defence for companies that have conducted effective human rights due diligence, and the burden of proof to prove effective due diligence falls on the company. This statement continues to influence debates. In 2019, civil society organisations called for a UK law on mandatory human rights and environmental due diligence HRDD. The Environment Bill has started to make its way through Parliament and there may be a possibility to include a specific environmental due diligence obligation or a legal duty of care to protect the environment.
These developments of potential parent company liability for violations by foreign subsidiaries and enforceable due diligence obligations greatly narrows the scope for businesses to treat human rights and environmental due diligence as a voluntary exercise. Therefore, all corporations should be gearing towards compliance. If COVID-19 has taught us anything, it is that we need to prioritize the environment as well as the health, safety and rights of all human beings. This means that now is the time for corporations to fully understand their human rights and environmental impacts, as well as understand what they need to create a framework that effectively mitigates potential and actual impacts.