Are employers required to conduct human rights due diligence in their global operations?

The scope and scale of many employers’ global operations and their global supply chains are expanding. This expansion has led to a greater focus on the risk of corporate human rights abuses such as forced labor, child labor, and other forms of modern slavery.

An increasing number of jurisdictions are passing laws that place obligations on employers that sit at the top of global supply chains to address these human rights abuses.

The precursor to these recent laws was a set of nonbinding guidelines called the UN Guiding Principles on Business and Human Rights. These guidelines stated that companies may not violate human rights, that they exercise “due diligence” to avoid or mitigate such violations, and when violations do occur, that they provide effective access to remedies.

Many companies voluntarily followed these guidelines to address human rights risks, but various actors including certain governments sought to transform the “soft law” nature of the UN Guiding Principles into hard law.

The current wave of laws in this space are mandatory due diligence laws. These laws require disclosures, and also require companies to conduct due diligence of their global operations to identify, mitigate and prevent human rights risks. This due diligence includes, for example, mapping the company’s global supply chain, putting in place certain corporate policies that place obligations on suppliers to respect human rights, instituting a complaints mechanism for all stakeholders, auditing suppliers’ operations, and terminating suppliers’ contracts if any human rights abuses occur.

Many EU countries have already enacted these mandatory due diligence laws, and many more will follow suit as a result of an EU directive that is slated to pass in the Summer of 2024.

These laws that place human rights obligations on employers are only increasing in number and complexity. The exercise of addressing human rights abuses in a company’s global operations poses financial, logistical, and cultural challenges, which vary depending on the size, industry, and geographic location of the company. So, there is no “one-size-fits-all” solution here. Instead, employers should engage internal stakeholders and experienced counsel in the complex, risk-specific exercise of ensuring that their global operations comply with their human rights obligations.

To address your individual concerns around human rights due diligence, connect with your favorite Littler attorney for more information.