The seminar on “Human Rights Due Diligence (HRDD): strengthening social partners, workers' representatives and (European) works council members to actively integrate upcoming national and European HRDD legislation in the social dialogue” was organized by BIE Int. (Bouw-Industrie & Energie International), with the support of EZA and funded by the European Union, on February 15 and 16 in Brussels, Belgium.
40 trade union representatives from 12 different European countries actively participated in the seminar. The countries represented were Belgium, the Netherlands, Sweden, Denmark, Italy, Spain, Poland, Bulgaria, Hungary, Romania, the United Kingdom (as guests), France, Austria and Turkey.
During this seminar, we zoomed in on the social dialogue within multinational companies. And also on the behavior of these companies whose value chains sometimes extend to the smallest corners of our planet and where respect for people and nature is not always obvious. Countries, citizens, workers and consumers increasingly want to be sure that the products they buy have been manufactured within a framework of due diligence. And that it is done with respect for the environment and human rights.
Several experts gave us an overview of the European and global challenges in the field of HRDD. We would like to express our sincere gratitude to the various speakers.
The concept of due diligence
The seminar began with a detailed introduction to the topic of due diligence, explaining step-by-step why and how companies should avoid violating the rights of others and address the negative impacts they face by identifying, preventing, mitigating, and reporting on how they address their rights impacts.
The concept of due diligence is not new; it was introduced by the UN Guiding Principles on Business and Human Rights ("UNGPs"), and incorporated into the OECD Guidelines for Multinational Enterprises ("OECD Guidelines") to extend to other areas of responsible business conduct, such as environment and climate change, conflict, labor rights, bribery, disclosure and consumer interests, as well as in the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy ("MNE Declaration").
Legislative progress towards national & European due diligence laws
An overview of the status of the various debates underway in the different jurisdictions, as well as the commitment made by the European Union to adapt European legislation were presented and discussed with the participants during the seminar.
Eight components of effective & binding due diligence legislation
Initiatives are being discussed at various levels of government, but there are various obstacles to adopting clear and binding legal frameworks.
Multi-stakeholder initiatives are numerous and sought after by brands to address their reputational risk. These initiatives are partnerships between business, civil society, labor, and sometimes government representatives, who seek to work together to address common challenges to responsible business conduct. Multi-stakeholder initiatives can be useful in engaging with companies, but only to the extent that trade unions can play an influential role in setting standards and monitoring mechanisms.
During the seminar the focus on mandatory due diligence legislation, and the different components to make it effective, was emphasized.
We may conclude that to be effective and binding, the duty of care of companies must:
- Concern all companies, regardless of their size, and all sectors;
- Apply to the entire value chain of companies and their subsidiaries;
- Impose respect for all internationally recognized human, social and environmental rights, including labor and trade union rights;
- Be transparent;
- Incorporate civil liability (providing compensation for victims when harm has occurred) and administrative liability (for failing to meet obligations);
- Provide for control and sanction mechanisms, as well as remedies: ➔ real access to justice for victims;
- Reverse the burden of proof;
- Ensure the full involvement of trade unions throughout the process.
(Inter)national instruments of human rights due diligence & social dialogue
The labor movement can use its influence at different levels of the value chain to work for a better approach to workers' rights in countries with (little) union presence.
Different tools do exist today;
- National Legislation(s)
- Future European Directive
- In sectors considered more affected by human rights and environmental violations, the EU has adopted sectoral regulations that have the force of law. This means that member states are required to introduce sanctions in the event that a company fails to meet its due diligence obligations.
- Future United Nations treaty; International treaty under discussion: The UN is currently engaged in extensive discussions to develop a treaty on business and human rights that, once ratified by countries, would create a binding HRDD framework for multinationals.
- United Nations Guidelines on Business and Human Rights (non-binding)
- OECD Guidelines for Multinational Enterprises (non-binding)
- Tripartite Declaration on Multinational Enterprises and Social Policy (ILO - nonbinding)
- EU sectoral regulations (e.g. Conflict Minerals Regulation, Timber Regulation)
- Non-financial reporting (future directive on sustainability reporting)
- Other national initiatives (French, German law,...)
- Multi-stakeholder initiatives (e.g. TruStone initiative)
- Global framework agreements; A global framework agreement commits the company to freedom of association and the right to collective bargaining. They establish channels of communication between management and unions, as well as monitoring mechanisms to give workers a role in ensuring responsible corporate conduct.
- Agreements between companies and trade unions (e.g. International Agreement - Bangladesh Agreement); Bangladesh Accord, following the Rana Plaza disaster: In its current form, the Accord provides for independent inspections and remediation programs. Training programs are in place. The agreement also aims to protect workers' right to refuse unsafe work and freedom of association.
Due diligence & social dialogue – what is the role of (E)WCS?
The HRDD directive requires companies to work closely with "stakeholders" and thus with trade unions. EWCs can therefore become an additional lever for the influence of trade unions.
Information about a company's due diligence practices is primarily found in the nonfinancial annual report = sustainability reports, but the information provided is often incomplete and sometimes misleading. Other sources of information should be investigated.
From a trade union point of view, the objective is to ensure that the duty of care is a permanent and continuous process, integrated into all the company's activities, and that it is part of the company's business policy, and not just a one-off exercise.
HRDD must become a recurring item on the agenda of national and transnational consultation bodies, including EWCs.
A continuous dialogue must be established and management must be held accountable for the results of the measures taken.
Conclusion
The seminar attempted to shed light on the possibilities of using due diligence as a tool to promote - or enforce - greater respect for human rights in European and global supply chains. Not surprisingly, this is not an easy task. But it is also not a task that should be taken lightly.
The COVID pandemic has painfully demonstrated that we are still a long way from achieving sustainable and inclusive supply chains. Existing regulatory and non-regulatory frameworks already offer many opportunities to integrate human rights into global supply chains. At the same time, the EU directive, and consequently national procurement legislation, continues to emphasize voluntary action by public and private actors.
The evolution of human rights and environmental due diligence for EU companies is illustrated by specific human rights and environmental due diligence laws in France, the Netherlands and the United Kingdom. There are also proposed law in Germany, Belgium, Denmark and Finland. These texts show that EU companies increasingly expect to be subject to human rights and environmental due diligence obligations.
In Flanders and Belgium, as elsewhere, public purchasers are taking tentative steps towards more socially responsible purchasing practices. This includes a growing number of pilot initiatives in the area of human rights and labor conditions in global supply chains, such as the TruStone initiative. Yet the long-term sustainability of these efforts risks being undermined by the lack of a coherent and comprehensive policy framework that provides clear guidance and support to public purchasers or companies involved in public procurement.
One of the most important lessons learned from the seminar discussions concerns the limitations of a policy approach based solely on legislation. Our interactions with participants clearly suggest that legislation alone will not do the trick. Instead, legislation must be part of a balanced and intelligent mix of policy measures, but it must also encourage companies to reach out to other stakeholders (consumers, trade unions, etc.).
Meaningful stakeholder engagement is an important part of the overall due diligence process. It is important to engage potentially affected stakeholders and rights holders before making any decisions that may impact them. Industrial relations is a form of stakeholder engagement that ensures ongoing engagement between companies and unions. Companies should therefore partner with or enter into agreements directly with trade unions to facilitate worker participation in the design and implementation of due diligence processes, the enforcement of worker rights standards, and the filing of grievances. At the same time, it should be made clear that the rights to freedom of association and collective bargaining are rights in their own right that the company is obligated to respect and exercise due diligence on.