Here are eight steps that companies can take to begin to address their human rights risks:
- Human rights policy and procedures - Companies should adopt a human rights policy setting out their responsibility to respect human rights. Procedures should be put in place which proactively manage supply chain risk. This needs to be tailored to the business and to the sector. In addition, companies need to establish strong management systems (including contractual terms) for responsible supply chains.
- Training - Senior managers, legal, risk, procurement teams and other relevant personnel (including, potentially, supplier staff) should be trained and policy standards entrenched across the business.
- Map the supply chain - Companies need to map and track the moving target of their supply chains. Once the value chain has been identified, companies can benchmark their performance and prioritise business relationships for which it is most critical to conduct human rights due diligence.
- Due diligence - Carrying out effective and proportionate due diligence is critical to identifying and assessing risks in supply chains. It is only once these risks are identified that companies can begin to design and implement a strategy to respond to the same.
- Collaborate - Collaborative approaches are more likely to mitigate risks to human rights. Engagement with key stakeholders is critical, including, wherever possible, representatives of potentially affected groups.
- Communicate - Companies should be transparent about their expectations of their suppliers and their efforts to ensure compliance - both internally and externally. In-country business partners should be met face-to-face and engaged with to ensure understanding and joint commitment to positive behaviours.
- Report - Companies should ensure that they report on their due diligence, behaviours, policy, approach and any potential human rights impacts. The company should ensure that any remedy is also reported. They should dovetail this with relevant reporting standards and statutory requirements.
- Remedy - Any impacts should be avoided or remedied. This means taking action to mitigate the supply chain human rights impacts identified. This could include developing longer-term, trust-based supplier relationships, offering financial incentives for suppliers, rewarding them for transparency and compliance and appropriate product pricing, as well as having corrective action programmes.
DLA Piper has the reach and experience to identify and mitigate salient risk in the supply chain. We can integrate ourselves within your company's existing risk management approach and help your company align policies and procedures to keep pace with the rapidly evolving human rights agenda. We can review reporting approaches and content to safeguard against misstatements.
We have the knowledge to dive deep on risk assessments; manage investigations and sensitive issues from an early stage and ensure that risk in the supply chain is managed effectively. Find out more by contacting Jonathan Exten-Wright or John J. Clarke, Jr.
This article was updated in March 2016.