Businness, human rights, and due diligence

You’re an employer, and want to avoid any unnecessary risks in your global production business. You certainly don’t want to become liable for failing to exercise due diligence in your human rights practices.

But what is due diligence?

An authoritative answer to that question has come from John Ruggie, the UN Secretary General’s special representative on human rights and business. Ruggie gave the keynote address to a conference sponsored on February 25 in Atlanta by the U.S. Council for International Business, the U.S. Chamber of Commerce, and the International Organization of Employers.

Ruggie identifies four components of human rights due diligence for companies:

1. A statement of policy articulating the company’s commitment to respect human rights;
2. Periodic assessments of actual and potential human rights impacts of company activities and relationships;
3. Integrating those commitments and assessments into internal control and oversight systems; and
4. Tracking as well as reporting performance.

The process “has to go beyond simply identifying and managing material risks to the company itself, to include the risks a company’s activities and associated relationships may pose to the rights of affected individuals and companies,” Ruggie points out, adding:

“In a world of 80,000 multinationals, ten times as many subsidiaries, and countless national firms,…[the process] necessarily will vary with circumstances.”

Ruggie offers several reasons why following a meaningful process of due diligence is well worth the effort it requires. One advantage is that it offers a corporate board “strong protection against mismanagement claims by shareholders, [which in the context of lawsuits]…can only count in its favor.”

In carrying out his mandate from the UN Human Rights Council, Ruggie will in the coming months be working with a number of organizations, including:

• The OECD as it updates its "Guidelines for Multinational Enterprises."
• The International Finance Corporation as it revises its Performance Standards.
• The European Commission, as it explores new approaches to ensuring responsible behavior overseas by European firms.

For the full text of Ruggie’s address, click
http://www.business-humanrights.org/Links/Repository/153835/

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