Shift Submission to Public Consultation on Italian National Action Plan

Below is the text Shift submitted to the Italian government as part of the public consultation. | Learn more about Shift’s engagement with regulatory and policy developments

Submission for the Public Consultation on the Italian National Action Plan on Business and Human Rights

Shift is pleased to submit these recommendations to the Italian Government as part of its public consultation on the revision of its National Action Plan on Business and Human Rights (“NAP”). We support the initiative of the Government to review and build upon its first NAP and further its commitment to implementing the UN Guiding Principles on Business and Human Rights (“UN Guiding Principles”). The revision of the NAP should encourage greater uptake of the UN Guiding Principles in Italy and facilitate stronger cooperation between companies, government institutions and their stakeholders.

As one of the first countries to develop a NAP on the UN Guiding Principles, the Italian Government now has the opportunity to assess the effectiveness of its approach to date. Owing to the fact that many goods and services found around the world are produced by Italian companies – which operate both within Italy and abroad – the revision of the NAP is also an important opportunity for the government to show critical leadership on business and human rights.

This submission responds to the draft published by the Inter-Ministerial Committee for Human Rights (CIDU) at the Italian Ministry of Foreign Affairs and International Cooperation. It addresses three areas that we believe are particularly important in considering the revision of the NAP:

  1. Advancing the State Duty to Protect, in Italy and Abroad
    Suggestions on advancing business and human rights within the institutions of the Italian Government, both in Italy and abroad. 
  2. Facilitating the Corporate Responsibility to Respect
    Assisting and where appropriate requiring Italian companies to respect human rights throughout their operations, including through the use of formal reporting that helps to drive improved performance. 
  3. Improving Access to Remedy
    Further building capacity within the Italian Government in understanding the UN Guiding Principles and responding to cases involving business-related violations of human rights, both within Italy and through the impact of Italian business abroad. 

Further building capacity within the Italian Government in understanding the UN Guiding Principles and responding to cases involving business-related violations of human rights, both within Italy and through the impact of Italian business abroad. 


1. Advancing the State Duty to Protect

The National Priorities set out in the draft NAP suggest an ambitious program to tackle several key areas that pose significant risk to human rights. We welcome the inclusion of issues such as dealing with irregular or grey work (ex. caporalato) in the agricultural sector within Italy, and bolstering human rights in Italy’s development cooperation.

In strengthening the NAP, there are several areas which could be explored at greater length to highlight the role and responsibilities of Italian companies in respecting human rights through their business operations and business relationships. One particular instance includes the “Legality Law” (or “Rating”) and its strength in addressing a company’s respect for human rights. At present, the “Rating” is assigned in the form of a certificate released by the Italian Antitrust Authority as a certification of adhering to various aspects of responsible business. Designed to evaluate business ethics, banks and other financial institutions in Italy may consider a company’s rating in granting access to finance. Yet at present, the rating process and indicators used to measure ethical standards of firms do not require companies to proactively seek to address or mitigate human rights risks in their supply chains, whether their operations are within Italy, our outside of the European Union. 

  • A government-sponsored certification scheme connected with responsible business conduct provides a natural opportunity for companies to demonstrate how they seek to respect human rights in line with the UN Guiding Principles. In order to strengthen the consideration of respect for human rights as part of the rating’s evaluation of responsible business conduct, we encourage the Italian Government to explore how to link “human rights due diligence” to the criteria.

A growing number of national Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) are bringing a human rights lens to bear on their existing environmental and social due diligence, including by adopting new policies and human rights due diligence procedures informed by the expectations of the UN Guiding Principles. Given this context, we are pleased to see that the NAP references both SACE, the Italian ECA, and SIMEST, the Italian DFI. Drawing on our work with the IFC, as well as with various countries’ ECAs (such as those of Norway and Canada) and DFIs (such as those in the Netherlands, Germany and France), we see a growing number of financial institutions strengthening their existing environmental and social due diligence approaches to incorporate human rights due diligence more directly. This is first and foremost about preventing risk to people, but it can also help prevent risk to the investments at issue.

  • A general focus on conducting social and environmental impact assessments, as currently set out in the NAP, is likely to be insufficient to fully explore human rights risks connected to individual clients or transactions. We encourage the Italian Government to commit to reviewing the existing approaches of SACE and SIMEST through the lens of human rights due diligence and identifying how to proactively incorporate human rights due diligence into their approaches. This will be essential as part of Italy’s implementation of the revised OECD “Common Approaches” for all OECD member states’ ECAs.
  • We also urge the government to build the capacity of the Italian Trade Agency (ICE) to deal with business and human rights and understand the breadth of the UN Guiding Principles in operationalizing trade support and promotion, following the lead of other countries such as the UK.

Shift is pleased that the Italian NAP includes critical reference to both state owned enterprises (SOEs) and public procurement. Just as businesses are expected under the UN Guiding Principles to include their supply chains in their human rights due diligence processes, so too should the government, including its (public) enterprises. A tangible step would be to require suppliers to demonstrate that they have adequate human rights policies in place as well as the necessary processes to identify and address the most severe risks to people that their operations may pose. Given the large number of suppliers to the Italian government and its SOEs, those suppliers whose sectors, countries of operation, products or services are known to carry particularly significant risks to human rights could be prioritized for scrutiny. This would align with the approach being taken by the world’s biggest procurer of goods and services, the US Federal Government, through the Federal Acquisition Regulation requiring due diligence in relation to the risks of slavery and trafficking in the supply chain.

Shift welcomes the progress in transposing the 2014 EU Procurement Directives that allows contracting authorities to take into account social considerations. At the same time, we believe that more is needed to ensure that human rights are appropriately considered when purchasing goods, works and services. As indicated in the NAP, the Italian Anti-Corruption Authority (ANAC) has a leading role here. While anti-corruption is crucial to responsible business conduct, it is also closely associated with heightened human rights risks.

  • We recommend that the Italian Government take advantage of the transposition process to commit to develop clear guidance for relevant authorities on how to integrate consideration of human rights into the bidding process for public sector contracts, beyond anti-corruption risks alone, as well as what the appropriate consequences should be where human rights are not respected in practice by business suppliers.
  • In supporting the uptake of the social and environmental amendments to the Procurement Directive, Shift recommends that the Italian government provide support to public authorities on procurement within the context of business and human rights. Other countries have developed, or are in the process of developing, guidance and e-learning tools on this topic which could be built on.

With Italy’s long industrial and commercial history in certain sectors, human rights risks may be particularly relevant in some of those sectors such as agriculture and textiles. In terms of the former, addressing the caporalato is a welcome initiative. Undeclared, grey or seasonal work which is not supported by decent work measures can result in extreme risks to people and also in material risks to enterprises themselves. In relation to the textiles sector, there are known human rights risks in the textile supply chain, including for luxury brands, within Italy. In addition, a high concentration of firms within – or associated with – the textile sector in Italy increasingly source from countries outside of the European Union, which can pose different and additional human rights risks. Shift is aware that a number of leading Italian companies associated with the textile sector would welcome greater guidance and support on how to meet their responsibility to respect human rights.

  • Shift recommends that the Italian government, supported by the Italian Ministry of Foreign Affairs, Ministry of Economic Development and the Ministry of Labour and Social Policy, provide sector-based support to businesses that pose the highest risks to human rights (for example in agriculture and textiles), looking both at domestic risks as well as risks in business relationships/supply chains abroad.

Regarding development cooperation, the recently reformed Italian Agency for Development Cooperation (AICS), linked to the Italian Ministry of Foreign Affairs, provides an excellent opportunity to align Italy’s development agenda – including its commitment to the Sustainable Development Goals – with decent work in global supply chains. Further, Italy committed to supporting a better application of labour, social and environmental standards in global supply chains at the the G7 in Elmau, Germany in 2015. These commitments also reflect the EU Council Conclusions on Responsible Global Value Chains, agreed upon by all EU Member States in May 2016. Shift welcomes the suggestion that this might be a priority area of work.

  • We urge the Italian government to extend the expectation of human rights due diligence to AICS’ technical areas of economic development (i.e. private sector development and trade), human development, rural development and environment/natural resources. The current horizontal focus on human rights with respect to gender and youth is notable, however business and human rights extends far beyond these areas. The various technical areas/work steams could be strengthened to include reference to business and human rights and decent work. These measures could also link to sectoral initiatives as suggested above (such as in agriculture and textiles).


2. Facilitating the Corporate Responsibility to Respect, in Italy and Abroad

States have a range of tools at their disposal to encourage, incentivize and require companies to respect human rights. This includes, as Guiding Principle 3(d) makes clear, the role of the state to: “Encourage, and where appropriate require, business enterprises to communicate how they address their human rights impacts.” There have been several significant developments on human rights reporting in Europe and the United States, including the EU Directive on Non-Financial Information Disclosure 2016, the UK Companies Act 2006 and the UK Modern Slavery Act 2015. In the US, the California Transparency in Supply Chains Act 2010, the Dodd-Frank Act’s provisions with regard to conflict minerals due diligence, and the State Department’s Myanmar Reporting Requirements have all contributed to heightened expectations of companies.

Disclosure requirements can help drive accountability and improved performance: they focus senior management minds on what the company is (or is not) doing, and they provide the information necessary for better engagement by the company with stakeholders on how it is managing its human rights impacts. But they only do so if the expectations for disclosure are meaningful. To date, human rights reporting has been by far the weakest area of company reporting. This is a key reason why Shift, together with our project partner the international accountancy firm Mazars, led the development of the UN Guiding Principles Reporting Framework.

The Reporting Framework is the first comprehensive guidance for companies to report on how they respect human rights in line with the UN Guiding Principles. As Professor John Ruggie stated at its launch, “The business community very strongly endorsed the UN Guiding Principles when they came out, but until today they haven’t had the actual reporting tool that enables them to know and show that they respect human rights.”

The Reporting Framework is designed to help all companies, regardless of size, sector or operating context, to see how far they have progressed in implementing their responsibility to respect human rights and how to communicate that publicly. The Framework is organized according to a phased approach that incentivizes companies to improve over time. It also includes linkages to other broader reporting frameworks, including those of the Global Reporting Initiative, the International Integrated Reporting Council and UN Global Compact, and issue and industry-specific initiatives to show how responding to their requirements can help answer questions in the Framework.

Since its launch, the Reporting Framework has received strong support from a broad range of stakeholders including businesses, civil society and other EU Member States. A current summary can be found on the website. Importantly, the UNGP Reporting Framework has the support of an investor coalition representing USD $4.8 trillion in assets under management worldwide, and a number of governments have recommended (Sweden, Norway, UK) or are considering recommending the Reporting Framework in their NAPs. The UN Working Group on business and human rights supported the development of the Reporting Framework.

The translation of the UNGP Reporting Framework has been made possible by a number of organizations and governments. Support has been received for translations into French, Spanish and Chinese. Funding from the German government has allowed for its translation into German and a Polish translation has been facilitated by the Polish Institute for Human Rights and Business (PIHRB). Shift is actively exploring translation opportunities beyond these languages, subject to funding.

  • We urge the Italian Government to consider the particular relevance of the UNGP Reporting Framework in providing guidance to companies with regard to the human rights requirements of the EU NFI directive and the provisions of the “Legality Law/Rating.” We also invite the Government to consider recommending the use of the Reporting Framework to Italian companies more broadly as a tool to help them meet their responsibility to respect human rights under the UN Guiding Principles.

 
3. Improving Access to Remedy

Guiding Principle 25 affirms the need for effective state-based remedy, both judicial and non-judicial, as the foundation of a wider system of remedy for business-related human rights harms. Guiding Principle 26 identifies common legal and practical barriers to accessing judicial remedy for such harms.

Guiding Principle 26 could only address barriers to judicial remedy in very broad terms because their precise nature, and the most appropriate solutions to them, must necessarily be determined at the national level. Doing so requires detailed analysis and review of the existing situation, taking into account broader access to justice considerations that go well beyond the business and human rights sphere, and will necessarily involve difficult judgments. Yet it is essential to meeting the duty to protect in practice. It is therefore very concerning that no existing NAP fully engages with this principle. The recent EU Council Conclusions on Business and Human Rights have reaffirmed this notion, and called upon EU Member States to proactively address the issue of remedies for victims of business-related human rights abuses within their National Action Plans.

Further, in March 2016, the Council of Europe (CoE) adopted  recommendations for CoE Member States on human rights and business (Recommendation CM/Rec(2016)3 on human rights and business). The reccomendations provide specific guidance to assist CoE Member States, of which Italy is an actice member, to prevent and remedy human rights violations by business enterprises. The reccomendations illustrate a recommittment to meaningful action on access to remedy, specifically access to judicial remedy. In addition, the Office of the UN High Commissioner for Human Rights’ Accountability and Remedy Project has developed concrete guidance for states on how to advance implementation of the UN Guiding Principles’ provisions on state-based remedy.

In terms of non-judicial state-based remedy, it is important that negative findings by such mechanisms are linked to meaningful consequences for the businesses involved. A recent example can be found in the revised Canadian Extractive Sector CSR Policy, which formally links poor corporate performance and refusal to cooperate in various dialogue processes, including those of the Canadian National Contact Point (NCP), to limitations on export credit and other official trade promotion support.

  • We urge the Italian government to specify concrete steps with regard to reviewing and addressing any gaps in access to state-based remedy, including judicial remedy. We also encourage the Government to consider appropriate consequences for companies that refuse to engage with the Italian National Contact Point or are subject to negative findings and do not take the necessary steps to address the concerns. For example, such instances should inform decision-making by SACE and SIMEST.

In closing, we appreciate the opportunity to make this submission and would be pleased to provide any further information that may be of use.

Where We’re At: Taking Stock of Progress on Business and Human Rights

A little over five years ago, we were sitting in a room at the United Nations in Geneva, eagerly awaiting the endorsement of a groundbreaking standard on business respect for human rights. On June 16, 2011, the UN Human Rights Council unanimously gave that endorsement to the UN Guiding Principles on Business and Human Rights.

By mid-July, we had established Shift, with our mission to put the Guiding Principles into practice.

Five years later, significant progress on business respect for human rights has been made, thanks to the tireless work of the entire community of business and human rights practitioners, supporters and advocates. But we still have a long way to go.

On our fifth anniversary as an organization, we offer here five reflections that give us confidence that progress is real and accelerating – and five reflections on issues that remain a brake on the pace of change that is needed.


Five Reflections on Meaningful Progress

1. Reaching far beyond the usual crowd

Five years ago, companies active in the business and human rights debate were mostly large Western extractives, brands and retailers. Today, the conversation has moved far beyond those groups and into business to business relationships. This dynamic has advanced far and fast due to a mix of regulatory developments that are driving human rights due diligence through global supply chains, such as the US federal government procurement requirements on trafficking and the UK Modern Slavery Act, company efforts such as those driven by the Global Business Initiative on Human Rights, and NGO and trade union campaigns on abuses in companies’ operations in a wide range of contexts.

Moreover different kinds of “enterprises” are understanding that the Guiding Principles speak to them as well. Institutional investors are recognizing that they themselves are exposed where they invest in companies that have severe human rights impacts. Our recent work with John Ruggie to develop recommendations for embedding respect for human rights at FIFA shows the relevance of this agenda for major sports organizations too. We hope to see that trend grow further through the work of the Institute for Human Rights and Business on mega-sporting events.


2. Meaningful communication instead of PR

Meaningful communication is a real driver for improved management of human rights issues — leading to a positive change in people’s lives.

With most people around the world easily able to share news and information, corporate impacts on people’s rights can hardly be kept a secret. Few people are convinced by company reports that avoid these challenges, suggest they are neatly resolved, or offer the number of people trained or audits conducted as a sign that it’s all under control.

We now have a growing cadre of companies – the likes of Unilever, Nestlé, H&M, Newmont, Marks & Spencer, Ericsson and Microsoft – offering far more meaningful insights into their human rights challenges, processes, outcomes and forward plans. We are proud at Shift to have worked with Mazars to develop the UN Guiding Principles Reporting Framework that is driving this new trend with the support of a large coalition of investors. This kind of meaningful communication sets the scene for more valuable discussions with all stakeholders — and it is also a real driver for improved management of human rights issues, leading to a positive change in people’s lives.


3. Follow the money: driving change through public finance

When those with the money ask questions, companies pay attention.

Public financial institutions, like national development finance institutions and export credit agencies, can play a critical role in helping to set expectations for many other industry sectors. Their practices enhance or undermine states’ implementation of their own duty to protect human rights.

For over two decades, many have sought to address environmental and social risks through the adoption of risk management approaches based on the International Finance Corporation’s Performance Standards. But leading public financial institutions are now asking whether these existing approaches are sufficient, and how they might need to evolve to meet the expectations of human rights due diligence. This shift in focus is likely to increase as a result of the 2016 revision of the OECD “Common Approaches,” which introduce new human rights expectations that apply to export credit agencies in all OECD countries.

When those with the money ask questions, companies pay attention.

Through our work with organizations like Norway’s export credit agency, the UK’s development finance institution and Peru’s independent banking regulator, we’ve explored what public financial institutions can do to strengthen their own approaches. And we’re excited about the leadership role that these institutions can play in driving broader conversations among their peers.


4. Delivering wise legal counsel

Whether as in-house counsel inside major corporations, or as external advisors in large law firms, lawyers have the potential to significantly hinder, or to advance, companies’ efforts to respect human rights. We are proud of the leadership of our own General Counsel John Sherman in chairing a working group of the International Bar Association that developed groundbreaking guidance for business lawyers globally on what the Guiding Principles mean for their practice. The guidance recognizes the distinct and special responsibilities that lawyers have to their clients, and helps them explore some of the challenges that may arise.

With the unanimous endorsement of the guidance by the IBA in June 2016, the question of whether or not corporate lawyers have a role to play in implementing the Guiding Principles has been laid firmly to rest. We can now all get on with exploring what this actually looks like in practice.

With the unanimous endorsement of the guidance by the IBA in June 2016, the question of whether or not corporate lawyers have a role to play in implementing the Guiding Principles has been laid firmly to rest. We can now all get on with exploring what this actually looks like in practice.


5. New ways of working together

It has become a cliché to say that companies cannot address systemic human rights challenges alone. The need for collective action has been recognized for some time. These initiatives, whether within industries or in multistakeholder settings, can no longer just be a means to share practice or – worse still – to hide in the pack. So we welcome the new dynamic towards impactful action around specific (yet big) challenges. Take the Bangladesh Accord tackling building safety in that country, or the ACT initiative to see how industry-wide collective bargaining can advance living wages in the apparel sector.

These are targeted initiatives with a clear ambition that recognizes the critical role of trade unions as a partner in advancing solutions. The commitment of the Consumer Goods Forum to take on forced labor should be another such example, matching their environmental commitment to “zero net deforestation” by 2020. A focus on specific outcomes around big challenges with a defined scope and the right partners, and based on clear commitments and accountability, is the new expectation for collective action. | See an example of how Shift is supporting the Dutch government in facilitating collaborative dialogue on human rights risks


Five Areas Urgently Needing More Progress

1. Putting the action into National Action Plans

Government commitments to develop National Action Plans on business and human rights (NAPs) to implement the Guiding Principles have been far too slow to materialize. Over 25 NAPs (and substantially more by some counts) are in the works, which is potentially good news. Processes with strong civil society contribution, such as that coordinated by Poder in Mexico, or with leadership and expertise from the National Human Rights Institution, such as provided by SUHAKAM in Malaysia, offer particular hope. 

But inevitably each state that develops a NAP will look to those that went before. And of those already on the table, there are few that live up to the billing of their own titles. A National Action Plan must first and foremost be about future plans for action, not descriptions of legislation or recaps of past action. Governments that see this process as a tiresome necessity will entirely miss the opportunity that the Guiding Principles provide them with to engage with both business and with civil society on initiatives that can address not just business and human rights but also poverty, income inequality, social justice and sustainable development. | Learn more about Shift’s contributions to NAP processes in Germany, the UK and the US


2. Moving remedy beyond the rhetoric

The third pillar of the Guiding Principles, access to effective remedy, is sometimes described as the “forgotten pillar.” At Shift, we don’t see it as forgotten, nor inherently weak, but as uncomfortable and hard to talk about.

That’s in part why we haven’t yet seen any National Action Plan on business and human rights meaningfully address judicial remedy, despite this being one aspect of the Guiding Principles that depends entirely on states for its effective implementation. It’s also why discussions among companies often get bogged down in concerns about exposure to liability rather than realizing the critical early warning role that effective grievance mechanisms can play. Surely it’s much better to know about human rights problems before they become liabilities? 

Surely it’s much better to know about human rights problems before they become liabilities? 

In terms of progress on access to judicial remedy, we were encouraged like many others to see the Council of Europe’s recommendations on this topic in early 2016. And we were pleased to help facilitate government workshops as part of the Office of the High Commission for Human Rights’ (OHCHR) work on improving accountability and access to judicial remedy. Their work was welcomed by the UN Human Rights Council in June and culminated in guidance for states. So now we have states committing themselves to take action on judicial remedy and guidance on how they can do so – two key ingredients for urgently needed progress in this area. 


3. Changing the discourse on human rights and development

The Sustainable Development Goals (SDGs) were adopted by the United Nations last year. These 17 goals aim to end poverty, fight inequality and injustice, and tackle climate change by 2030. They include the need to end hunger and promote sustainable agriculture, to achieve gender equality and promote decent work for all.

Advancing human rights is critical to achieving most of the goals, as illustrated so well by the Danish Institute for Human Rights. And respect for human rights should sit at the heart of any company’s strategy for how it will contribute to the SDGs.

Respect is positive, it is transformative, it is essential. It is the hallmark of a lasting and future-ready, competitive company.

Yet there is a risk that companies see the Guiding Principles as just a “do no harm” standard, a matter of compliance, or “the starting point” en route to more exciting and innovative ideas for how they can support the SDGs. This overlooks the SDGs’ potential to drive positive change for hundreds of millions of the poorest and most marginalized people.

When a company drives diversity and inclusion through its workplaces, it not only reduces risks of discrimination but can open opportunities for women, minorities and others and help change attitudes in society. When a company collaborates with others to push forced labor or poverty wages out of its supply chain, it both reduces risks of abuses and helps workers around the world begin to build lives with dignity and opportunity for themselves and their families. When a company builds a new dam or digs a mine following meaningful dialogue with communities to gain their consent, it protects people from dispossession and empowers them to expect a say in decisions that affect their basic welfare.

In short, there is no more pressing, nor more powerful, way for companies to contribute to the SDGs than to advance respect for human rights across their value chains. Respect for human rights is not “just” an exercise in compliance or risk management. It is positive, it is transformative, it is essential. It is the hallmark of a lasting and future-ready, competitive company.


4. Standing up for human rights is not a crime

It is impossible to reflect on the issues that need urgent action without acknowledging the murder this year of Berta Cáceres as well as the violent deaths of other leaders of her organization COPINH, and the extreme risks that many other human rights defenders like them face on a daily basis. Whether standing up to companies or to states, their bravery is extraordinary.

The Guiding Principles place potentially affected stakeholders, including human rights defenders, in a central role — their perspectives are at the heart of human rights due diligence. If they are afraid of raising concerns, if they face threats for simply naming hard facts, then the fundamental premise of human rights due diligence starts to break down. 

The International Corporate Accountability Roundtable, together with the International Service for Human Rights, have developed practical guidance for states on how to meaningfully involve human rights defenders and address threats to them as part of National Action Plan processes. And the Coalition for Human Rights in Development has been drawing development finance institutions’ attention to the urgency of this issue.

Persecution of human rights defenders should deeply concern all of us who want to see the Guiding Principles fulfill their promise.


5. Ending hypocrisy: say what you mean, do what you say

Respecting human rights isn’t something a company does in just one part of its business and it is not something that can be given to one department to “fix” and then ignored. If a company is serious about meeting its responsibility under the Guiding Principles, it needs to take a tough look across all parts of its business, including those that are integrally connected to its organizational strategy. Two that require particular scrutiny are taxation arrangements and government lobbying activities.

When companies pursue offshore tax structures and other means designed to avoid paying appropriate taxes where they earn their profits, they cut into the revenues governments need to meet their own obligations to respect, protect and fulfill people’s human rights. Too often those same companies will bemoan that governments do not play their part in implementing their own labor and environmental laws, oblivious to the irony of what they’re saying. Similarly, when companies lobby – directly or through third parties – against improved labor standards, higher minimum wages or greater consultation rights for communities, they both fail in their own responsibilities and undermine the role of the state.

These will be crucial next frontiers on the road to more fully putting business respect for human rights into practice.

Rachel Davis and Caroline Rees are the co-founders of Shift and leading experts on how companies can implement the UN Guiding Principles on Business and Human Rights. 

IBA Issues Groundbreaking Practical Guide on Business and Human Rights for Business Lawyers

Shift supported the development of the guidance | Jump to the guidance

This news announcement originally appeared on the International Bar Association website.

Also see: Guest Viewpoint on the guidance from IBA President David W. Rivkin

The International Bar Association (IBA) has endorsed groundbreaking guidance for business lawyers on how to practice law with respect for human rights. On May 28, 2016, the IBA Council, the organization’s governing body, voted by majority to adopt the IBA Practical Guide on Business and Human Rights for Business Lawyers during its mid-year meeting in Barcelona. Shift Senior Advisor and Legal Counsel John F. Sherman III chairs the IBA Business and Human Rights Working Group, which developed the guide over an 18-month global consultation process.

Read the complete news announcement here.

John Ruggie Letter to ILO Director General Guy Ryder

On May 30, 2016, ahead of the 2016 International Labour Conference, Shift Chair and author of the UN Guiding Principles John Ruggie wrote a letter to ILO Director General Guy Ryder on specific aspects to be addressed at the Conference related to the Guiding Principles.

This letter was originally published by the Business and Human Rights Resource Centre. 


Dear Guy,

I have been following with great interest the preparations for discussions on decent work in global supply chains at the upcoming International Labour Conference. And I very much welcome the references to the UN Guiding Principles on Business and Human Rights (UNGPs) in the ILO background report (“Decent work in global supply chains”). As you know, the UNGPs carefully frame corporate responsibility in supply chain contexts in a manner that all stakeholder groups have found useful, and which contributed to the UNGPs’ unanimous endorsement by the UN Human Rights Council.

In the interest of sustaining and building on that consensus, allow me to allow two points of clarification intended to ensure that the excellent background paper is not misunderstood on the subject of the UNGPs. (I will share this letter with interested stakeholders.) The first point concerns the concept of “control” by lead firms, and the second the “cause/contribute/linked to” distinction embodies in the UNGPs.

Click here to see the complete letter.

New Guide Helps Directors to Set the Tone on Human Rights

Jump to guide | Jump to collaboration

This press release was originally published by the Equality and Human Rights Commission

If corporates are to thrive they must recognize their vital role in improving the human condition of which human rights are a fundamental component. This short guide is essential reading in thinking how they should go about it and reporting on the outcomes.

Mike Ashley, Chair of Audit Committee at Barclays PLC and member of our Expert Advisory Group

Business leaders should be seizing opportunities to secure their futures and safeguard their brand by adopting progressive human rights policies.

The call comes as the Equality and Human Rights Commission launches a simple five-step guide to help UK board directors show leadership in ensuring their businesses fulfill their responsibility to respect human rights.

Reputational harm, operational delays and an inability to recruit the top talent are just some of the risks to businesses failing to respect people’s human rights. 

Whereas companies that operate with a culture of respect for human rights become businesses that people want to invest in and work for as well. And they will see their brand value increase.

Business and human rights: A five step guide for company boards will help directors create the right culture and understand what they need to do to know and show their company respects human rights in practice.

In producing the guide the Commission drew upon the experience of an Expert Advisory Group, made up of business leaders and corporate governance experts.

The guide has been written in partnership with Shift and it follows the publication of the government’s updated National Action Plan for implementing the UN Guiding Principles on Business and Human Rights yesterday.

Mike Ashley, Chair of Audit Committee at Barclays PLC and member of our Expert Advisory Group, said: “If corporates are to thrive they must recognize their vital role in improving the human condition of which human rights are a fundamental component. This short guide is essential reading in thinking how they should go about it and reporting on the outcomes.”

Caroline Waters, Deputy Chair of the Equality and Human Rights Commission, said: “Human rights make business sense. Companies that make human rights a cornerstone of their operations thrive – with their reputation enhanced. This short guide will empower boards to ask the right questions of their executive teams, and to champion human rights from the top-down. Rather than treating human rights as an issue of compliance, boards can ensure that UK businesses lead the world in integrating human rights with business.”

Professor John Ruggie, Chair of Shift and the author of the UN Guiding Principles on Business Rights, said: “Five years after the adoption of the global standard on human rights — the UN Guiding Principles — it is increasingly evident that the strongest, most sustainable companies demonstrate a tone from the top that states clearly, ‘human rights are a core matter for this company. I am very pleased to see this guidance being issued for UK Boards and urge company leaders in all countries to act upon its concise, need-to-know guidance.”

What Do Company Directors Need to Know About Human Rights?

Also see: Guidance | Information about this collaboration

This Viewpoint was originally published by the UK Equality and Human Rights Commission.

The UK Equality and Human Rights Commission launched a short but significant guide today for the directors of UK companies, developed in collaboration with Shift. Its title says it all: “Business and human rights: A five step guide for company boards.”

These days it seems that business and human rights stories are never far from the news: be it bonded labor in a mattress factory in Yorkshire or discrimination through blacklisting of workers by UK construction companies.

By now, it’s pretty obvious – or it should be – that companies large and small can become involved with human rights abuses, whether in their own operations or, more typically for UK companies, through their ever more complex value chains.

Equally obvious are the tremendous risks this can bring to companies themselves, from lawsuits to reputational harm, to the loss of business opportunities, investments or the chance to recruit the best new employees.

Yet the origins of how these stories arise are often far less obvious than their results. They lie in a thousand business decisions and actions a day in which the people who may be impacted are often far away in time, space and the consciousness of those who make the decisions. Meanwhile, the decisions themselves are needed in the here and now: whether to tell that supplier to adjust an order’s design to meet consumer demands without the budget to pay more; whether to double the numbers of staff on contract to trim the costs of benefits and help make budget; whether to proceed with purchasing that valuable asset on land that was acquired in the face of community protest.

These are decisions made typically without thought to harming anyone anywhere. But they are decisions that can contain the seeds of often damaging outcomes.

Five years ago next month, the United Nations Human Rights Council endorsed the UN Guiding Principles on Business and Human Rights, responding to this reality. They set out the duty of states to protect human rights against abuse by business, and they set out a blueprint for what companies need to do to avoid being involved with harm to people and to address any negative impacts that may nevertheless occur.

The standards are clear, and expectations of companies are set. But there is no check list for getting this right in practice. As the growing ranks of UK companies that are taking these issues seriously can attest, it takes time and effort. No organization, business or other, can embed new ways of thinking across hundreds, thousands or tens of thousands of people overnight.

And that’s where this guide comes in. Respecting human rights is not a compliance challenge, nor a task to tick off the list. Companies will never get it right if they treat it as a game of whack-a-mole: when a problem pops up in one place you bring your hammer down on it, only to find a similar one pops up somewhere else and respond likewise.

It takes the right policies, processes and systems, but it also takes the right leadership, accountability and governance. It requires a board of directors that recognizes that respecting human rights must become part of how business gets done and makes it part of their job to ensure that happens.

The advent of the Modern Slavery Act brings this into sharp relief. Company boards now have to sign off statements on what they are doing to avoid slavery and trafficking in their supply chains. Those companies that treat this as an isolated legal compliance exercise will compare poorly with those that have a clear and coherent narrative about what their company does to respect for human rights, of which this forms one part. See Shift’s brief on the UK Modern Slavery Act and the UN Guiding Principles.

The Commission’s new guide sets out just five key steps for board directors. It signposts what directors need to do in order to know and show that their company is respecting people’s human rights in practice. Companies that are getting this right are able both to meet the expectations of the UN Guiding Principles and to respond to new UK reporting requirements. They can see the benefits of stronger reputations, reduced risk to the business, increased business opportunities: in short, an enhanced ability to protect and create value sustainably.

Seems like a no-brainer.

OECD Includes Human Rights Due Diligence in Recommendations for Export Credit Agencies

Learn more about our work with financial institutions on the Guiding Principles

Export Credit Agencies (ECAs) act as intermediaries between governments and a country’s exporters to provide export financing of various kinds (either direct financial support or credit insurance and guarantees).

For over a decade, the OECD has promoted recommendations for ECAs with respect to the environmental and, more recently, the social due diligence that they should conduct on applications for export credits. Known as the “Common Approaches”, these recommendations apply to all OECD member states and are intended to guide the work of their official ECAs. While the Common Approaches were updated in 2012 to recognize the relevance of the Guiding Principles to the provision of export credits, they did not provide any further guidance on how human rights due diligence relates to ECAs’ existing environmental and social due diligence.

Now for the first time, in the revised Common Approaches published by the OECD Council on April 7, 2016, there is an explicit statement that ECAs should screen all applications covered by the Common Approaches for severe human rights risks (para 6). A risk could be severe because of the gravity of the harm, its widespread nature, the extent to which the impacts can be remediated, or the general operating context (footnote 2). Where screening identifies a high likelihood of such risks, ECAs should further assess them, including potentially by complementing their existing environmental and social due diligence with human rights due diligence (paras 8 and 14).

This update starts to recognize the changed environment since 2012. This includes the fact that leading ECAs have been updating their policies and practices to integrate a human rights lens into their existing due diligence processes by focusing on the severity of risks to people, in line with the UNGPs.

Other financial institutions tend to face similar challenges about integrating human rights into existing due diligence. Shift has supported a number of financial institutions to strengthen their approaches in this area, including the Norwegian ECA (GIEK) and the Dutch, German and UK Development Finance Institutions. We have also explored these issues with the International Finance Corporation in relation to the IFC’s own Performance Standards. Our report on identifying and assessing high risk human rights circumstances, drawing on all this work, can be found here.

In relation to the OECD, also see:

Independent Report Recommends how FIFA Needs to Manage the Far-Reaching Human Rights Risks of its Global Enterprise

Shift supported the independent review and helped develop its recommendations 

An independent report issued today by former Special Representative of the UN Secretary-General and Shift Chair John Ruggie recommends how FIFA — the global governing body of football — needs to manage the far-reaching human rights risks associated with its activities and relationships. Risks include the displacement of communities to make way for stadiums, risks to workers building tournament infrastructure or manufacturing FIFA-branded goods, and systemic challenges such as gender discrimination throughout association football.

Ruggie agreed to review FIFA’s existing policies and processes to manage human rights risks at FIFA’s request, following its mid-2015 announcement that bids for the 2026 Men’s World Cup will have to meet human rights criteria. He undertook the task on the basis that it would result in a public report, subject to his editorial control. The report sets out 25 recommendations for action.

“FIFA governs and supports a global network of over 200 national football associations and is connected through its tournaments to thousands of businesses. As for any international sports organization today, this kind of global footprint brings with it significant risks to people’s basic dignity and welfare. And that reality demands a robust and proactive response. FIFA is not solely responsible for solving these problems where the actions of others are the primary cause. But it must use its influence to address these human rights risks as determinedly as it does to pursue its commercial interests,” said Ruggie.

Ruggie’s recommendations for FIFA are based on the UN Guiding Principles on Business and Human Rights, the global standard on business and human rights of which he is the author. In its revised Statutes, adopted in February 2016, FIFA introduced a new provision committing it to respect all internationally recognized human rights.

“The key now is implementation. For my report to have the necessary impact, FIFA’s top leaders need to follow through on its recommendations. That means resourcing the administration adequately for the task and integrating the results of their work into political decision-making. I met with FIFA’s new President Gianni Infantino yesterday and valued the opportunity to discuss my findings and necessary changes at FIFA. It is my sincere hope that he will make this work a priority under his leadership,” said Ruggie. “FIFA’s reputation depends on it.”

Ruggie and Shift’s Managing Director Rachel Davis will speak about the report next week at the 2016 Asia Regional Forum on Business and Human Rights, convened by the UN Office of the High Commissioner for Human Rights, on April 19-20 in Doha, Qatar.

Read the report

Press releases: Harvard Kennedy School | FIFA

Database of Companies’ Reporting on Human Rights Launches

A new database launched today gathers together for the first time companies’ own reporting about how they are implementing the UN Guiding Principles on Business and Human Rights. The UN Guiding Principles Reporting Database, developed by Shift, shows how companies’ current disclosure responds to the key questions about their performance posed in the UN Guiding Principles Reporting Framework. The UNGP Reporting Framework, launched in 2015 by Shift and Mazars, is the world’s first comprehensive guidance for companies to report on how they respect human rights.

Read the complete news announcement on the UNGP Reporting Framework website.

The Sustainable Development Goals and the Guiding Principles

This open letter was authored by Shift Chair John Ruggie and sent to the heads of the Global Commission on Business and Sustainable Development (now called the Business and Sustainable Development Commission). It discusses the relationship between the Guiding Principles and the Sustainable Development Goals.

Also see: Our November 2016 position paper commissioned by the Business and Sustainable Development Commission, which examines the Guiding Principles-SDGs connection

To:

Mark Malloch-Brown, Co-Chair
Paul Polman, Co-Chair
Peter Bakker, Commissioner
Global Commission on Business and Sustainable Development

February 16, 2016

Dear Mark, Paul and Peter,

I was delighted to learn about the creation of the Global Commission on Business and Sustainable Development and warmly welcome your continuing leadership in shaping the business community’s role in achieving the Sustainable Development Goals. It is heartening to see the positive response of so many business executives in support of this critical agenda.

But I am writing to call to your attention a particular risk I see in the current business discourse around the SDGs, in the hope that you may be able to turn it instead into the opportunity it should be: companies’ social development initiatives cannot substitute for measures to address the negative human rights impacts their operations and relationships may have.

Companies have long embraced the idea that successful development and prosperity depend in part on reducing the negative environmental impacts of business activities. Indeed, companies find positive ways to frame their impact-reducing targets and activities to gain customers and motivate their employees.

However, when it comes to the social side of the development picture too many companies are quick to jump to promotional initiatives, skipping the essential starting point of reducing negative impacts on people associated with their own business activities and value chains.

As you know, the UN Guiding Principles on Business and Human Rights, which I authored, address exactly this impact­ reducing aspect of social development. Where people’s human rights are not fully respected, their ability to enjoy the fruits of development are much reduced, and the disparities between the poor and most vulnerable and the rest of society only grow.

By contrast, where companies focus resources on reducing the risks to people’s human rights along their value chains, they not only reduce harm but also help advance development. Workers and communities are better equipped to claim their rights; living wages support families and enable the education of children; communities that are engaged as partners and provided due process and compensation for impacts on their land and resources are better able to sustain and direct their own livelihoods; women and girls free of sexual harassment and discrimination can reach their economic potential, and so forth. None of this is new to you, of course. But it can be easily forgotten by others.

My point here is not one of semantics. Too many companies today put resources into social development initiatives that are worthy on their face, while ignoring serious negative impacts on people in their own operations and value chains. So they end up giving with one hand while taking away – or enabling others to do so – with the other. This is not a pathway to sustainable development.

Therefore, we need a discourse on the social aspect of the SDGs that mirrors the discourse on the environmental side. The starting point must be a reduction in negative human rights impacts associated with core business activities. The UN Guiding Principles provide the standard for achieving this and there is fast-growing experience of what it means to translate them into practice across different sectors and contexts.

As with environmental risk reduction, respect for human rights can and should be communicated in ways that motivate staff and support strong corporate reputations, as Unilever’s 2015 human rights report Enhancing Livelihoods, Advancing Human Rights helps demonstrate. Successful human rights risk management strategies reduce risks to the business — be it operational, reputational, financial or legal risk. They also create real and growing opportunities to find new customers, investors, partners and employees.

In sum, we have a tremendous opportunity now to recast this aspect of the business discourse around sustainable development as we begin the task of achieving the SDGs. I hope you can help us, through your own leadership, to make sure that respect for human rights becomes firmly recognized as the starting point for all companies in advancing social development, and integral to how we measure success.

Yours truly,

John Ruggie
Chair of Shift
Berthold Beitz Professor in Human Rights and International Affairs, Harvard Kennedy School
Former Special Representative of the UN Secretary-General on Business and Human Rights