Editors: Larry Catá Backer and Claire Methven O’Brien
Frontmatter
Preface/Contents
CONTENTS
PART I. INTRODUCTION: TEXT AND CONTEXT
Chp 1: The Current State, and Future Trajectories, of Human Rights Due Diligence Laws — Larry Catá Backer and Claire Methven O’Brien
Abstract: This introductory chapter has two principal purposes. The first is to consider the concept of “due diligence” from distinct perspectives. These include situating due diligence as a general conceptual principle for measuring expectations of what ought to be undertaken, and by whom, in the context of human interaction. A related perspective focuses on its linguistic genesis and application as a business expectation and as a legal concept, especially as it came to be applied in the context of economic activity. More specifically, this chapter considers the alignment of notions of due diligence as they emerged through the end of the 20th century with the principle of human rights due diligence (HRDD) as set out in the U.N. Guiding Principles for Business and Human Rights (UNGP). That context then provides the framework for considering the scope of the possibilities for transposing the concept of HRDD from an expectation embedded in the UNGP’s 2nd Pillar (corporate responsibility to respect human rights) into a mandatory legal measure through exercises of the 1st Pillar State duty to protect human rights. The second purpose of this introductory chapter is to situate the contributions in this volume to contemporary efforts to develop approaches to the crafting and operationalization of mandatory HRDD measures. Important contemporary trends underscore the importance of due diligence as both method and compliance-accountability norm. The contributions suggest the broad variation in approaches.
PART II. HRDD in & BEYOND THE UNGPs– SOURCES AND FRAMEWORKS
Chp 2: Human Rights Due Diligence in the UNGPs – Larry Catá Backer
Abstract: This chapter seeks to situate the concept of human rights due diligence from its origins in the UN Guiding Principles for Business and Human Rights. The elaboration of the concept is examined with reference to its development between 2006, the start of the mandate of John Ruggie as Special Representative to the UN Secretary General to the unanimous endorsement of the UNGP in 2011 by the Human Rights Council. The transformation of the concept from an operational level mechanism at the core of the corporate responsibility to respect human rights in the UNGP 2nd Pillar to its key role as the embodiment of compliance-based legality respecting the management of global production through layers of “smart mixes” of public regulatory authority is then considered. The shape of plausible approaches and of the debates, especially around mandatory HRDD processes, are dependent, in the first instance, on a better understanding of the possibilities and limits of HRDD built into the UNGPs. The object of this contribution is to provide that more focused consideration of the text of the UNGP and its HRDD principles as a function of the vision for the operation of the UNGP as a whole. This contribution is organized as follows. It first considers the structures and forms of human rights due diligence developed within the UNGP’s 2nd Pillar—the corporate responsibility to respect human rights. It then considers the extent that the UNGP either encourages or suggests a role for the State within the 1st Pillar State duty to protect human rights and the way in which HRDD can be made mandatory within that framework. Lastly, it considers what the remedial Pillar 3 suggests about the inter-relationship between State and enterprise as a function of the overarching objective of the UNGP—to prevent, and if not prevent then to mitigate, and if not to mitigate then to remedy negative or harmful human rights impacts attributable to the economic activity of actors subject to its principles. The flexibility in the transposition of these mechanisms to other regulatory frameworks is then explored.
Chp 3: State Obligations and Corporate Responsibilities: The Notion of “Due Diligence” in the UN Guiding Principles on Business and Human Rights – Maria Monnheimer
Abstract: This chapter considers human rights due diligence in international law frameworks. Due diligence is among the most ambiguous terms employed in international law. While the term is referred to in a growing number of international legal instruments, no general definition has been agreed upon. Especially in the business and human rights context, “due diligence” is at the heart of many controversial debates and recent political developments. It is exactly in the business and human rights context, however, that the term “due diligence” is used even more ambiguously than in other areas of international law because two different types of obligation lie at its core: obligations of states to respect, protect and promote human rights on the one hand; and obligations and responsibilities of businesses to adequately address human rights risks linked to their activities on the other. Important international and domestic legal instruments invoke both of these types of due diligence obligations while their precise content and relation to each other is often not sufficiently clarified. Such confusion creates uncertainty about the extent of the respective obligations and responsibilities. Clarifying the different concepts of due diligence, especially within the context of the UN Guiding Principles on Business and Human Rights, will thus facilitate to determine in a more precise manner what is expected of states and businesses to ensure effective human rights protection.
Chp 4: Lessons for Human Rights Due Diligence from Due Diligence in International Environmental Law – Sara Seck
Abstract: The concept of due diligence has a long history in international environmental law. It is often associated with Principle 2 of the 1992 Rio Declaration on Environment and Development and frequently described as the ‘do no harm’ principle. While this principle could be interpreted to impose an obligation of result, it has generally been understood as an obligation of due diligence. The do no harm principle also underlies influential work of international legal bodies, notably the International Law Commission’s contributions on transboundary environmental harm. This chapter will trace the history of due diligence in international environmental law, its relationship to sustainable development, and its scope, process, content and implications for remedy in light of the 2024 Advisory Opinion on climate change of the International Tribunal on the Law of the Sea. The chapter also considers normative evolutions including recognition by the UN General Assembly of the human right to a clean, healthy and sustainable environment. Considering the lessons international environmental law can provide business and human rights due diligence, and vice versa, the chapter concludes that the most important lesson may be the need to overcome the assumed human/environment divide.
Chp.5: The Growing Relationship Between Tort Law and Human Rights Due Diligence – Carola Glinski
Abstract: Human rights and sustainability due diligence of business enterprises have for long been discussed in the international arena but have only recently led to national legislation based upon the UN Guiding Principles for Business and Human Rights (UNGPs). Based upon tort law doctrine and case law developments, this chapter analyses the impact of the UNGPs and of different national supply chain laws on the liability of parent or leading companies for damage caused by their subsidiaries or suppliers. It argues that although tort law doctrine provides criteria to hold parent or leading companies liable for not having carried out due care with regard to production patterns abroad, courts used to be reluctant to impose liability. This has only changed recently, influenced by changed social norms as codified in the UNGPs. Due diligence laws could further strengthen tort liability – with or without codifying it directly.
PART III. THE LEGALIZATION OF HRDD IN DOMESTIC LEGAL ORDERS
Chp 6: Can the French Law of Vigilance Apply to the Extraterritorial Violations of Indigenous and Human Rights? – Cannelle Lavite and Jérémie Gilbert
Abstract: Building on the civil lawsuit filed in France against the French energy giant EDF whose windpark project is reported to violate rights of a Mexican indigenous community, this article explores interactions between human rights due diligence in renewable energies projects and indigenous rights. The article unpacks the potential extraterritorial reach contained by the French duty of vigilance law by providing a preliminary overview of how initial implementation of the law before French courts have realized this potential. More specifically the authors examine to what extent the law has been able to offer a platform to challenge decisions made by multinational corporations from those affected, and how the complex extraterritorial reach of the law have been approached in practice by the French tribunals. After having reviewed the main mechanisms of the law, the authors analyse some of the first cases that have been brought under it. The chapter then focuses the specific case study concerning indigenous peoples’ claims against the French multinational EDF. The authors provide reflections on whether French courts may, or not, examine claims based on both international and foreign norms, in particular indigenous peoples’ rights, which are otherwise not recognised and rejected by the French legal system.
Chp 7: Supply Chain Due Diligence Law in Germany – Birgitte Spiesshofer
Abstract: This chapter considers the Supply Chain Due Diligence Law in Germany. On July 22, 2021, the Act on Corporate Due Diligence Obligations in Supply Chains (Supply Chain Act) was published in the German Federal Law Gazette and came into force on Jan. 1, 2023. Roma locuta, causa finita? Not at all. The German Supply Chain Act is only a further milestone in the regulatory program laid down in particular in the UN Guiding Principles on Business and Human Rights (UNGP), the OECD Guidelines for Multinational Enterprises, and the National Action Plan for Business and Human Rights (NAP) – international and national soft law – and paves the way for corresponding EU supply chain legislation and its Europe-wide implementation. The Act establishes the responsibility of companies for the implementation of human rights and environmental due diligence in their own organization and group of companies as well as in their supply chains as their own duty of care, the key elements of which are laid down in §§ 3 et seq. Supply Chain Act. The human rights and environmental due diligence introduced by the Supply Chain Act raises many questions, both in principle and in detail. One of the key issues is whether the due diligence obligations are (merely) procedural obligations, in particular, whether they require (only) to undertake best efforts, or, whether at least some of the provisions contain a duty to achieve results. The EU Corporate Sustainability Due Diligence Directive takes up the basic conceptual features of the Supply Chain Act. However, it does contain significant deviations that may lead to an adjustment and revision of the Supply Chain Act.
Chp 8: Mandatory HRDD in the E.U. – Claire Methven O’Brien
Abstract: In 2022, the two successive draft texts were published for a European Union corporate sustainability due diligence directive, first, by the European Commission, and then by the European Council. This chapter first presents the background and context for these proposals, both of which anticipate due diligence duties for large companies relating to corporate harms to human rights and the environment, as well as climate change. This part also addresses the process relating to the draft laws in the EU Regulatory Scrutiny Board. Next, the chapter outlines the main features of the regulatory scheme envisaged in the EU’s 2022 draft due diligence laws. The chapter then evaluates the draft Directives’ approach on important elements from point of view of human rights standards, including the UNGPs, as well as wider European human rights jurisprudence and tort law. Finally, the chapter identifies key transformations and deformations implicit in the EU’s putative approach to the legalization of the corporate human responsibility to respect human rights and due diligence and highlights associated challenges for implementation, remediation, and accountability.
Chp 9: US Measures to Give Legal Effect to Human Rights Due Diligence – Rachel Chambers and Eric R. Biel
Abstract: This chapter examines US measures on Human Rights Due Diligence (HRDD), exploring the reasons that it is unlikely that any U.S. measures to give legal effect to HRDD will not be similar in structure to that of the EU. Key elements of the U.S. approach include trade measures such as enforcement of Section 307 of the Tariff Act of 1930, as amended in 2016; the Uyghur Forced Labor Prevention Act, signed into law in December 2021; and the novel factory-level “rapid response mechanism” procedure under the US-Mexico-Canada Agreement. Another area currently receiving increased attention – including in the context of the NAP – is public procurement, where there can be both “carrots” and “sticks” to incentivize and/or punish corporate performance. In the United States, reporting and disclosure efforts have been led at the state level, notably in California. However, there now is a range of work at the Securities and Exchange Commission (SEC) centered on the different pillars of Environmental Social and Governance (ESG): the criteria used in particular by investors to assess companies’ “sustainability” behavior and the attendant risks of investing in them. SEC regulatory activity is much further along to date on the “E” and “G” elements – environmental and governance – with the “S” as a significant laggard. But there is now a heightened focus on what has been termed “human capital” disclosure – which, depending on its scope, could reach beyond a company’s own operations to also cover labor rights issues in its supply chains. If sustained advocacy from civil society organizations succeeds in prompting greater interest from both executive and legislative branch officials, and if some businesses see focused human rights/labor measures as in their own interest (as has happened in the EU), we could see an SEC-enforced HRDD disclosure process as a more focused U.S. approach that is most comparable to the EU’s regulatory measures.
Chp 10: Horizontal Legislation: Cascading Due Diligence Through Model Contract Clauses– Susan Maslow, Patrick Miller, and David Snyder
Abstract: Human rights due diligence (HRDD) norms can be legalised and operationalised through contractual commitments. Contractual obligations are binding as a matter of contract law regardless of whether any obligation is imposed by legislative act or judicial decision. By entering into contracts requiring HRDD, companies can turn soft law, or even mere norms, into hard-law obligations. Where there are preexisting hard-law obligations, contracts can tailor the contract terms to the needs of the parties and the industry, transforming vague legislative or regulatory standards into concrete industrial contexts, and can also expand the obligations imposed by legislation or regulation. To facilitate the drafting of such contracts, a working group of the American Bar Association Business Law Section published Model Contract Clauses (MCCs). These MCCs reflect the UN Guiding Principles on Business and Human Rights and the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct. The MCCs thereby enable companies to make HRDD compliance legally effective (the contract can impose a legal remedy for any breach) and operationally likely (the contract can include specifications for both the end product and the process by which it is made, harnessing the operational function of contracts). This chapter will address the evolution of direct and indirect global HRDD requirements, and the role contracts can play in establishing enforceable HRDD obligations.
PART IV: IMPLEMENTATION CONTEXTS: FRAMEWORKS AND CHALLENGES
Chp 11: What are the Lessons from Sectoral Approaches to Human Rights Due Diligence – Justine Nolan and Shelley Marshall
Abstract: Human rights due diligence (HRDD) has emerged as a key tool in efforts to better respect and protect human rights in global value chains, but questions remain about how it can be most effectively developed in theory and practice. A sector-specific approach to HRDD allows a law or initiative to target market actors who perform specific activities within a market and address the risks that are posed by such activities and have the potential to provide more meaningful guidance for companies in embedding HRDD in their processes. This chapter considers the lessons learned from select key sectoral (binding and non-binding) that incorporate HRDD. It highlights the need to apply consistent international standards on HRDD, ensure effective stakeholder engagement and incorporate a strong supervisory role for the state.
Chp 12: Human Rights Due Diligence and Disclosure Regimes – Rachel Chambers and Anil Yilmaz Vastardis
Abstract: This chapter addresses the legalisation of human rights due diligence (HRDD) via disclosure requirements, the interactions between these areas and the consequences of their conjunction. Early legislation in the business and human rights field, such as Section 1502 of the Dodd-Frank Act (2010), the EU Non-Financial Reporting Directive (2014), and the California Supply Chain Transparency Act (2012), made disclosure and transparency standards mandatory, with an expectation that companies would conduct HRDD before issuing reports. These legal frameworks provide valuable insights into the effectiveness of legalisation and in particular of disclosure laws in promoting HRDD. The chapter specifically addresses the evolution of disclosure laws into HRDD laws, such as the French Law on the Corporate Duty of Vigilance, and how mandatory disclosure requirements can indirectly enforce HRDD. The chapter further explores how disclosure can encourage HRDD and how HRDD practices can improve the quality of disclosures. Ultimately, it highlights the evolving role of disclosure in driving corporate responsibility and human rights accountability.
Chp 13: Human Rights Due Diligence and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct – Jernej Letnar Černič
Abstract: Since the 1970s, the Organization for Economic Cooperation and Development (OECD) has sought to develop a set of standards to guide states in developing coordinated and aligned standards for the management of multinational enterprises. The original object of these Guidelines for Multinational Enterprises, to provide a set of standards addressed to states which would create a seamless standards based structure applicable across supply chains has also acquired a form of disciplinary mechanism in the form of National Contact Points. The OECD continues to seek to align its principles with those of emerging international standards, including in the UN Guiding Principles for Business and Human Rights and the adoption of the UN’s 2030 2030 Agenda for Sustainable Development (and its Sustainability Development Goals). Due diligence has formed a substantial part of the OECD Guidelines framework, and is an essential element in compliance with its standards. These have evolved as institutions have sought to align their methodologies and operations to increased expectations of effective compliance. This chapter discusses the normative framework of due diligence under the OECD Guidelines. After that, it analyzes the recent case law of the selected National Contact Points concerning human rights due diligence. Equipped with the knowledge, the chapter proposes some normative ideas for strengthening human rights due diligence processes in practice.
Chp.14: The Corporate Sustainability Due Diligence Directive (EU) and Its Impact on Barriers to Remedy in Transnational Litigation – Lucas Roorda
Abstract: This chapter considers HRDD and foreign liability claims. An increasing number of states are adopting mandatory human rights due diligence (mHRDD) legislation, a development which may gain a significant boost once the European Union adopts its Directive on Corporate Sustainability Due Diligence. The current proposal for the Directive contains a provision that would allow victims to sue parent or lead companies within the scope of the Directive for harms arising out of insufficient due diligence policies or practices, regardless of where those harms actually took place. The Directive is still under negotiation and its scope and content may be subject to change, but in broad terms, civil liability for failing to do proper human rights due diligence has broad support: not just in the EU, but also globally given its inclusion in drafts of the proposed binding instrument on business and human rights. This contribution maps the potential impact of such provisions on existing litigation against corporate human rights abuses, which mostly consists of ‘foreign direct liability’ (FDL) lawsuits. Specifically, it discusses how civil liability for violating mHRDD provisions affects procedural obstacles in FDL cases: adjudicative jurisdiction, applicable law, disclosure and access to information, and financing. While none of these obstacles are intentionally or explicitly addressed by the proposed Directive, nor by other domestic mHRDD instrument, the construction of their respective liability provisions can result in indirect impacts on how victims experience and overcome such obstacles. The contribution identifies which parameters determine the effectiveness of these indirect impacts from the perspective of the victims’ right of access to court, and closes with a general reflection on the desirability of these indirect results versus more explicit amendments to civil procedure and practice.
PART V. SUMMING UP AND LOOKING FORWARD
Ch.15 Epilogue: Legalising Human Rights Due Diligence from the Present into an Uncertain Future — Larry Catá Backer and Claire Methven O’Brien
Abstract: This contribution summarizes the state of the efforts to institute regimes of mandatory human rights due diligence (HRDD) explored by the contributors to this volume, and then to explore possible future trajectories for mandatory HRDD measures. The object here is to take stock of measures and regulatory trajectories that have emerged especially in the second and third decades of this century. That stock taking then serves as the basis for considering where these legalization trajectories may take the project. Here one explores the relationship between due diligence as stand along legislative projects and their attempted embedding in an international instrument for business and human rights. One here considers, as well, the value of a focus on human rights in a context in which human rights itself may be operating within a broader regulatory ecology of sustainability, climate change, and biodiversity. Lastly the relationship between this due diligence legalization project and the transformation of the structures, manifestations, operations, and conceptualizations of globalization must be considered.
INDEX
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