Human rights compliance programmes in the Life Sciences sector

The risk of adverse environmental, social or human rights impacts is one that Life Sciences businesses will be familiar with.

According to the Sustainability Accounting Standards Board, the financially material sustainability issues arising across the 6 Life Sciences-related industries include waste & hazardous materials management, data security and privacy, access to products, product quality & safety, customer welfare, selling practices & product labelling, labour practices, health & safety, product design & lifecycle management, sourcing & supply chain management, community relation and impacts on indigenous peoples, anti-corruption. All of these issues have the potential to create adverse human rights impacts.

Common human rights issues that can arise in the Life Sciences sector include, for example:

• Inadequate access to (and affordability of) medicines and healthcare services
• Impacts on patient safety
• Unethical or exploitative conduct in clinical research and trials
• Engagement with indigenous peoples and affected communities, in particular, impacts on cultural heritage and knowledge
• Labour exploitation and modern slavery in the production of hardware and devices, including use of forced and child labour, abuse of migrant labour, gender discrimination, working hours, freedom of association
• Health, safety and working practices

Despite the varied nature of business activities, supply chains and relationships in the Life Sciences sector, common examples of factors that can elevate these risks include, for example:

• Supply chains extending to areas where corruption and bribery are prevalent leading to, for example corrupt market access or avoidance of regulatory inspections in factories
• Drug diversion, counterfeit and substandard medicines entering supply chains
• Failure to obtain free, prior and informed consent of indigenous peoples when using their cultural heritage and knowledge to develop pharmaceutical products
• Misuse of products for alternative purposes
• Lack of or inadequate enforcement, implementation or monitoring of health, safety and relevant regulation

Historically, drivers for human rights due diligence have included reputation risk and compliance with best practice and “soft-law” standards. However, the global legal landscape is evolving rapidly and human rights due diligence is a regulatory requirement in a growing number of jurisdictions with a focus on identifying, mitigating and reporting on human rights risks. Mainstream investors’ expectations are converging around a number of common elements in human rights compliance programmes, namely:

• A policy commitment to respect internationally recognised human rights
• Human rights governance structures
• Human rights due diligence and risk assessment processes
• Disclosure and reporting
• Effective grievance mechanisms

The anti-corruption and business human rights agendas both seek to drive attitudes and behaviours that create a rights-respecting culture of integrity – these fundamental objectives are the same and merit integration where possible, appreciating that this may require something of an expanded focus from risks to the business to risks to people. The business benefits of doing so are many, from ensuring a holistic understanding of both types of risk, to making efficient use of compliance budgets and guarding against due diligence fatigue.

Access a copy of our article here outlining some of the points of alignment between the two agendas.