Let’s Talk Mandatory Measures: Supporting a Meaningful Discussion Among all Stakeholders

Under Pillar 1 of the UN Guiding Principles, all states “must protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises”. To do so, states “should consider a smart mix of measures – national and international, mandatory and voluntary – to foster business respect for human rights.”

Yet despite this encouragement to consider them, mandatory measures have not been a central part of the mix considered by states in the initial years of UNGPs implementation, outside of certain reporting requirements. That is now changing, particularly in Europe. A growing number of states are actively considering the use of mandatory due diligence measures to advance business respect for human rights.

In France, the Netherlands, Germany, Finland, the UK, Norway and Switzerland, we see governments and legislatures adopting or exploring mandatory measures as part of a mix of policy tools to incentivize business respect for human rights. In a growing number of cases, these measures go beyond reporting obligations to encompass comprehensive human rights due diligence. Continue reading…

“The UNGPs always envisaged that states would adopt a smart mix of measures – voluntary and mandatory – to ensure that businesses respect human rights. We’ve heard the phrase a lot over the last eight years, but it’s mostly been used to describe voluntary measures and states have generally been less willing to explore the mandatory part of the picture. That is now starting to change. As the company, government and civil society voices highlighted here show, there is a growing consensus that we need to get better at talking about what mandatory measures could look like. At Shift, we have made it a priority to support this conversation.” 

Rachel Davis – Vice President of Shift   

Shift to Support the Finnish Presidency of the Council of the European Union with its Flagship Conference on Business and Human Rights

New York, NY. – Shift is proud to be supporting the Finnish Presidency of the Council of the European Union in convening its flagship conference ‘Business and Human Rights: Towards a Common Agenda for Action’, to take place in Brussels on December 2, 2019. This is part of Shift’s broader support to the Ministry for Foreign Affairs on advancing business and human rights as part of the Finnish Presidency.

The Conference will bring together high-level EU Member State representatives, members of key EU institutions, senior representatives from business and civil society to discuss the present and future roles of different stakeholders in accelerating the implementation of the UN Guiding Principles at Member State and EU level.

Key topics will include state financing for doing business abroad, the role of regulatory measures as part of a mix of state measures, and the use of collective leverage and cooperation to enhance human rights outcomes for those most vulnerable to harm, especially human rights defenders.

The keynote speaker will be Professor John Ruggie, Chair of Shift and author of the UN Guiding Principles on Business and Human Rights. The event will culminate in the release of a conference outcome document, an Agenda for Action, with the objective to strengthen the EU’s actions on business and human rights.

The full draft program may be found here and will be updated as speakers are confirmed.

Shift looks forward to working with all the key stakeholders involved, in line with our commitment to advocate for the meaningful implementation of the UN Guiding Principles, in order to build a world where business gets done with respect for people’s dignity.

About Shift

Shift is the leading center of expertise on the UN Guiding Principles on Business and Human Rights. Shift’s global team of experts works across all continents and sectors to challenge assumptions, push boundaries, and redefine corporate practice, in order to build a world where business gets done with respect for people’s dignity. Shift is a non-profit, mission-driven organization, headquartered in New York City. Visit shiftproject.org and follow us at @shiftproject.

About the Finnish Presidency of the Council of the European Union

Together with the European Parliament, the Council is the main decision-making body of the EU. Its presidency rotates among the EU member states every 6 months. Finland holds the Presidency of the Council from July 1 to December 31, 2019, with the motto ‘Sustainable Europe – Sustainable Future’. The Finnish Presidency will be the first to integrate the new priorities of the Strategic Agenda 2019 – 2024 into the Council’s work. Learn more at eu2019.fi

Addressing Sector-Wide Risks Through Negotiated Covenants in the Netherlands

Seven agreements have been signed as part of this process: garment and textile | banking | gold | natural stone (pilot) | food products | insurance | pension funds |

Shift is pleased to be providing expert support to the SER, and the Dutch Ministry of Foreign Affairs, as part of a pioneering process that has brought together companies, governments, unions and civil society, across key business sectors, to try to prevent human rights risks and ensure responsible business conduct in critical global value chains.

The process also seeks to address environmental impacts, corruption and taxation practices and other negative impacts covered by the OECD Guidelines for Multinational Enterprises.

“In our work on fostering sustainable supply chain management among Dutch industry, Shift has been extremely helpful in elevating the policy discussion and business practice in the area of business and human rights. The Shift team’s unique combination of strategic policy advice and practical experience with companies and other stakeholders has been invaluable to our work.”  

Mariëtte Hamer, President, Social and Economic Council of the Netherlands

This work is being undertaken in close collaboration with the SER – the advisory and consultative body of employers’ representatives, union representatives and independent experts that has been fostering sustainable supply chain management among Dutch industry since 2008. | See our explanatory note on prioritization of human rights risks prepared for the SER

In each sector, parties have identified severe risks that they are facing and developed individual commitments and collaborative approaches to address them. With the support of Shift, the SER has developed guidance -contained in its Advisory Report– to help parties ensure that the measures developed are credible, and aligned with international standards.

The expectation is that parties:

  • Use credible methodologies, aligned with leading international frameworks, to identify sector-wide human rights, environmental, corruption and related risks;
  • Identify collaborative approaches to building and exercising the leverage of sectors and their stakeholders to address such risks;
  • Involve relevant stakeholders in credible, dialogue-based multistakeholder processes.

Shift has played a key role in building the capacity of all parties to play their envisioned roles as leaders, participants and conveners of a credible process aiming to assess and address sector-wide risks. This support has included workshops for a number of sector associations, together with expert stakeholders, held in The Hague and hosted by the SER. | Learn more about how Shift facilitates multistakeholder dialogue on business and human rights

Over the past years, Shift has also supported implementation of a number of specific agreements, most notably the Dutch Banking Sector Agreement. Our support to the parties involved in that agreement has included:

  • Facilitating a workshop on human rights reporting, which led to the issuance of the first human rights reports by ING and Volksbank (Dutch) and of a second report by ABN AMRO.
  • Providing expert input and leading the drafting of paper capturing learning from the “enabling remedy” working group, which among other themes, included exploring the concept of a “remedy ecosystem.”
  • Supporting the “value chain mapping” working group by helping to shape its methodology and facilitating the process for the cocoa value chain mapping and part of the process for the palm oil value chain mapping.

In 2017, the Dutch Government recommitted itself to the process and is scheduled to undertake an evaluation in late 2019. The coalition agreement includes a provision to consider binding measures in case insufficient progress is deemed to be made. Shift looks forward to being a part of the evaluation process and discussions about what more is needed.

To learn more about the Sector Agreements, click here.

Fulfilling the State Duty to Protect: A Statement on the Role of Mandatory Measures in a “Smart Mix”

There is a growing number of national and international debates around mandatory measures to ensure business respect for human rights, and specifically a) a binding international instrument on business and human rights and b) national legislation on mandatory human rights due diligence. In these debates, the UN Guiding Principles’ expectation of a “smart mix” of implementation measures is often cited. As a contribution to these discussions, Shift has developed the following statement on the role of mandatory measures in a “smart mix”.


The State Duty to Protect is not a passive duty, but a proactive one.

Under UN Guiding Principle 1, all states “must protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises”. This “requires taking appropriate steps to prevent, investigate, punish and redress human rights abuse through effective policies, legislation, regulations and adjudication”.

This should be understood as a proactive duty. States should actively assess the effectiveness of what is currently in place, understand what gaps there are, and identify ways to address them. Yet most “National Action Plans” on the UNGPs to date reflect a more passive approach; they are a catalogue of existing measures rather than robust assessments of what more is needed.


The State Duty to Protect is fulfilled through a smart mix of measures.

To fulfill their duty to protect, states will need to use a range of approaches. The commentary to UN Guiding Principle 3 elaborates on this when it says that states “should consider a smart mix of measures – national and international, mandatory and voluntary – to foster business respect for human rights.” States should go beyond enforcing existing laws to “periodically assess the adequacy of such laws and address any gaps” in light of evolving circumstances.


A smart mix of measures necessarily involves legislative and regulatory measures.

A truly “smart mix” means looking at all four aspects (national, international, mandatory and voluntary), not just the one or two that are most convenient or already in place. It follows, therefore, that the state duty to protect necessarily involves legislative and regulatory measures at the national level, and the supportive infrastructure (such as enforcement, incentives and guidance) needed to make them meaningful in practice. Without these, the UNGPs will never fulfill their true potential.

The UNGPs also clearly contemplate mandatory international measures as a natural part of this “smart mix”. Shift follows with interest the current discussion of a new treaty in this area.


Measures that involve Mandatory Human Rights Due Diligence are in line with the UNGPs, and there are strong reasons for states to consider them.

While the UNGPs do not demand that states adopt legislation requiring companies to carry out mandatory human rights due diligence (HRDD), clearly such legislation is entirely in line with the UNGPs.

Some elements of HRDD are already embedded in national laws, such as in health and safety regulations, environmental legislation, privacy laws or in some corporate reporting regimes. However, there are often strong reasons for states to also consider more comprehensive mandatory HRDD legislation.

In Shift’s experience, practical reasons to consider mandatory human rights due diligence can include:

  • The powerful effect it can have in driving top-level attention to human rights in companies, as well as engaging functions across the business;
  • Leveling the playing field across companies and sectors, including through engagement with business partners in a company’s value chain;
  • Obliging companies to consider the interests of stakeholders other than shareholders;
  • Incentivizing collaborative approaches to address systemic human rights risks; and
  • Enabling (where civil liability is included) a clear cause of action for individuals who are harmed to pursue remedy.

To be effective, such legislation should take account of critical aspects of the responsibility to respect. These include that:

  • It should not undermine the scope of the responsibility to respect, which extends throughout the value chain, even if liability is attached to a narrower set of relationships;
  • HRDD is a standard of conduct not result, meaning that mandatory measures should allow consideration of the quality of a company’s efforts to respect human rights; and
  • Meeting the responsibility to respect in practice will always involve going beyond compliance alone as good practice continues to evolve.

Beyond Voluntary: What it Means for States to Play an Active Role in Fostering Business Respect for Human Rights

As a senior legal advisor to former UN Special Representative John Ruggie during his mandate, Shift’s Rachel Davis played a key role in the drafting process of the UN Guiding Principles on Business and Human Rights. Seven years into the implementation of the UNGPs, she reflects on the relevance of mandatory measures in the State Duty to Protect and the growing debate around comprehensive mandatory human rights due diligence legislation.

For more, see Shift’s full statement: Fulfilling the State Duty to Protect: A Statement on the Role of Mandatory Measures in a “Smart Mix”

  1. Pillar I of the UNGPs focuses on the role that states should play in fostering business respect for human rights. What is the role of mandatory measures in meeting that responsibility?

    The UNGPs always envisaged that mandatory measures by states – at both the national and international levels – would be part of their implementation. It’s right up front in Guiding Principle 1, which says that states must have effective legislation and regulation, as well as policies and other measures, to protect against human rights harms by businesses. It’s also in the definition of the “smart mix” of measures that is needed under Guiding Principle 3 to meet the state duty in practice. Yet we often hear the term “smart mix” being used to really just mean voluntary measures. That’s a misreading of what the UNGPs say.

    When we were developing the UNGPs, there were already relevant laws on the books in many states that made aspects of the corporate responsibility to respect human rights mandatory,  like workplace health and safety legislation, environmental legislation, privacy protections and so forth. In the last few years, we’ve seen a growing number of legislative initiatives, including those aimed at introducing comprehensive human rights due diligence as a requirement for companies, helping to drive more effective implementation of the UNGPs.
  2. So, does that mean that all states should implement comprehensive mandatory human rights due diligence legislation as part of a “smart mix” of measures?

    A smart mix is exactly that – the right combination of mandatory, voluntary, national and international measures that is needed to effectively foster business respect for human rights in a particular context.

    At the national level, that is going to look different in different countries, depending on what currently exists, how effective it is in practice, and what can be done to address the gaps. The UNGPs don’t require states to implement comprehensive mandatory human rights due diligence regimes, but as we explain in our statement on this topic, they are clearly in line with the UNGPs and there are positive reasons for states to consider them.

    I think many stakeholders hoped that National Action Plans (NAPs) on the UNGPs would be a vehicle for states to proactively explore tailored mandatory measures. And it’s true that some NAP processes have provided important moments for governments to engage business and civil society stakeholders, bringing everyone around the table. But in terms of new measures, particularly mandatory measures, most NAPs have ended up just cataloguing what currently exists in a specific context, rather than identifying what more might be needed.
  3. What about binding international measures? Do the UNGPs expect states to use those too?

    Mandatory international measures are part of what the UNGPs mean by a smart mix. In my view, it’s only natural, and entirely predictable that the appropriate role of binding international measures should be actively considered as part of effective implementation of the UNGPs. Indeed, when John Ruggie presented the UNGPs to the Human Rights Council in 2011, one of his five follow-up recommendations specifically called for the development of a new international instrument. It was the only one that wasn’t taken up.

    At Shift, we’re paying close attention to the discussion of the “Zero Draft” treaty. We are very interested in exploring how a binding instrument could drive the most meaningful change in state practice in this area.
  4. Some laws have been criticized for incentivizing a tick-box approach by business to human rights risks. Don’t mandatory measures just lead to more compliance-based thinking that goes against how the UNGPs are trying to change company mindsets?

    States have had to tackle this challenge in other areas of law that aim at changing company behavior like anti-corruption or health and safety, and there are plenty of lessons to learn from what has and hasn’t worked in those areas. It certainly requires up-front thought about who within the state is going to have the capacity and expertise to oversee the legislation, and assess whether its expectations are being met. Authoritatively calling out what meaningful compliance looks like, and what is merely superficial, is an important element in making such legislation effective in practice. And for it to be authoritative, the state needs to be playing a role in making these assessments.
  5. Some have suggested that stringent laws can have perverse consequences, leading companies to avoid high-risk contexts, or to disengage rather than seek to influence high-risk suppliers, as a way to avoid liability. What is Shift’s perspective on this?

    The UNGPs are trying to shift companies’ response to high-risk contexts or suppliers from one that seeks to manage risk to the business alone – by not investing in challenging contexts, or by immediately terminating relationships when human rights harms are found – to a more thoughtful approach that is driven by consideration of risk to people. This is why the quality of a company’s human rights due diligence matters. Legislative and regulatory regimes need to allow companies the space to show that they genuinely tried to use leverage creatively and consistently to address a situation. Legislation should also be designed to incentivize companies to put in place more robust internal processes for deciding to divest or withdraw from a relationship – processes that consider the severity of the impacts involved, and whether there could be additional harm to people from a decision to disengage.
  6. Another specific risk that’s been raised is whether legislation could lead to companies reducing the scope of their human rights due diligence to the scope of their liability for impacts. Is this risk real?

    The scope of due diligence expected under the UNGPs is likely to always be broader than the scope of legal liability for impacts a business is connected to. It’s true that the leading model of comprehensive mandatory human rights due diligence that has been enacted to date – the French Duty of Vigilance law – takes a narrower approach to the scope of due diligence, focusing it on those business relationships that could also give rise to liability. It will be very interesting to see whether companies limit their vigilance plans and their due diligence solely to the relationships covered under the Act, or whether they maintain a broader scope. We will be assessing how this plays out in practice against the baseline evaluation of French companies’ human rights reporting that we published last year.

    The mandatory human rights due diligence proposal (or ‘popular initiative’) in Switzerland takes a different approach. It proposes that the scope of due diligence should be broad (throughout the value chain, as in the UNGPs) but that liability should only attach to harm caused by certain controlled entities like subsidiaries. We’ve been actively supporting the debate on the proposal in Switzerland for over 18 months now, through our engagement with both business and civil society partners and allies, and will continue to do so.
  7. Are there specific elements that all states should consider when drafting legislation that includes aspects of mandatory human rights due diligence? Are there good practices – or issues to watch out for – that states could learn from?

    Absolutely. We’ve already seen how important it is to provide clarity on key terms to ensure that they correspond to what businesses -and their stakeholders- are expected to do under the UNGPs. For example, don’t just use the term “supply chain”, which many companies may give a narrow meaning to, but clearly define it to include the full value chain connected to a company’s operations, products or services. We already see a difference in how the Australian Modern Slavery Act (MSA) handled this point, compared to the UK Act’s approach. In Australia, we had the benefit of learning from what hadn’t worked with the original MSA.

    States will also want to consider how to avoid drafting legislation that facilitates action only at corporate headquarters and not at the operational or country level, or that creates perverse incentives for companies to avoid engaging publicly about human rights risks due to fears of liability. That’s not helpful for anybody.

    This whole area concerning legislation as a part of a smart mix is one we’re going to be doing a lot more thinking about at Shift as the examples of mandatory human rights due diligence proliferate – and we look forward to sharing our thinking widely over the coming year.

Read our full statement: Fulfilling the State Duty to Protect: A statement on the role of mandatory measures in a “smart mix” when implementing the UNGPs

Tackling Modern Slavery through Financial Sector Leverage

This briefing paper was commissioned by the United Nations University, as part of the Liechtenstein Initiative for a Financial Sector Commission’s efforts to push beyond the boundaries of compliance towards creative financial sector action to prevent and address modern slavery and human trafficking.

Senior Advisor David Kovick and Managing Director, Rachel Davis provide observations and specific examples of what implementation of the UNGPs and related efforts by financial institutions looks like in practice today, including leading approaches, recurring challenges and immediate opportunities. 

Shift Submission on Potential Modern Slavery Act in Australia

Below is an excerpt from our submission to the Australian Joint Standing Committee on Foreign Affairs, Defence and Trade. Download the PDF to view the entire submission.

Also seeOur explanation of how the UK Modern Slavery Act compares to the expectations of the UN Guiding Principles

Joint Standing Committee on Foreign Affairs, Defence and Trade
PO Box 6021
Parliament House
Canberra ACT 2600

May 19, 2017

Dear Committee Members,

We are pleased to write to you in response to the opportunity to comment on a potential Modern Slavery Act in Australia to tackle a pervasive and severe human rights abuse, which can often be involved with business activity. With the International Labour Organization estimating that 20.9 million people around the world are subjected to forced labor, with 90% of those exploited in the private economy, your leadership in initiating this inquiry is both welcome and timely.

Shift is the leading center of expertise on the UN Guiding Principles on Business and Human Rights, the authoritative global standard on business and human rights, unanimously endorsed by the UN Human Rights Council in 2011. As a non-profit organization chaired by the author of the Guiding Principles, former Special Representative of the UN Secretary-General, Prof. John Ruggie, we work with businesses, governments, investors, regulators, civil society and other key stakeholders around the world to put the Guiding Principles into practice.

Given our experience, our submission will focus on the effectiveness of The Transparency in Supply Chains provision in the United Kingdom’s Modern Slavery Act (Section 54) and how the introduction of a similar measure in Australia could build on the strengths of that provision while also ensuring greater alignment with the Guiding Principles in the actions that businesses are expected to take. Specifically, a Modern Slavery Act in Australia should:

  1. Replicate the requirement in the UK Act for board level approval of, and a director’s signature on, a company’s slavery and human trafficking statement;
  2. Ensure that the senior level attention brought to the issue of modern slavery by this requirement supports the broader goal of businesses introducing and strengthening human rights due diligence processes that identify, prevent, mitigate and account for how they address all of their leading human rights risks, not only modern slavery. The Act should clarify that due diligence processes should focus on impacts in a company’s operations and business relationships throughout its value chain, not just on impacts at the level of first-tier suppliers;
  3. Ensure that businesses report on their broader human rights due diligence processes in their modern slavery and trafficking statements. The Act should highlight the UN Guiding Principles Reporting Framework as practical guidance for companies on how to meet the reporting requirement and ensure they are providing meaningful information when doing so…

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.

Business and Human Rights in New Zealand

This series took place the week of August 8, 2016 as part of the New Zealand Human Rights Commission inaugural Business and Human Rights Forum

In collaboration with the New Zealand Human Rights Commission and the New Zealand Superannuation Fund, Shift is pleased to have delivered an education and awareness series about the Guiding Principles for government representatives, parliamentarians, investors, directors, CEOs, company practitioners and civil society representatives in New Zealand. The series took place in August 2016.

Topics that were addressed during the weeklong series in Wellington and Auckland include global uptake of the Guiding Principles, various governments’ actions on business and human rights including in the areas of procurement and disclosure, sharing of leading practices by investors in assessing human rights risks, the role of board directors in overseeing their company’s management of human rights, and exploration of specific business and human rights risks in the New Zealand context. The Australian Human Rights Commission also participated in the program as part of their collaboration with the Commission of New Zealand.