8 - Human rights due diligence - Why

8

Human rights due diligence
What does this mean for your organisation?

Why is human rights due diligence important?

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HRDD is necessary for any organisation to know and show that it is respecting human rights in practice.

Some organisations’ operations, products or services are inherently risky, while for others the context or circumstances of their operations (e.g. rule of law issues, lack of enforcement of human rights standards, behaviour of other actors along the supply chain) may increase the risks. Due diligence should help organisations anticipate and prevent or mitigate these adverse human rights impacts.

Effective prevention and mitigation of adverse human rights impacts will help an organisation maximise its positive contributions to society, improve stakeholder relationships and protect its reputation. An organisation can also carry out due diligence to help it meet legal requirements.

Due diligence can help organisations create more value, including by:

Identifying opportunities to reduce costs;
Improving understanding of markets and strategic sources of supply;
Strengthening management of specific business and operational risks;
Decreasing the probability of incidents;
Decreasing exposure to systemic risks.

Human rights impact assessments can provide a process for organisations to understand and address adverse human rights impacts. The assessments can facilitate dialogue between an organisation and stakeholders, and can give insight on the stakeholders’ perception of the organisation. The assessment enhances the accountability of organisations through publicly documenting the impacts identified, as well as the responses to address these impacts.

What does this mean for your organsation?

Large corporations

Human rights due diligence is the process that businesses should carry out to identify, prevent, mitigate and account for how they address actual and potential adverse human rights.

Businesses should manage their entire supply chains responsibly, meaning that they should ensure that every relationship in their supply chain respects human rights.

Human rights due diligence is not the same as the investigations undertaken by businesses prior to signing contracts or making investments. Human rights due diligence is concerned with impacts on people, not the company.

Small and medium-sized corporations

Human rights due diligence is the process that organisations should carry out to identify, prevent, mitigate and account for how they address actual and potential adverse human rights impacts in their own operations, their supply chain and other relationships.

The extent of the human rights risks, not the size of the business, determines the responsibility to conduct due diligence.

Small and medium-sized corporations can carry out due diligence in collaboration, for instance through multi-stakeholder and industry initiatives. However, participation in an initiative does not shift responsibility from the business to the initiative for adverse impacts that the business causes, contributes to, or to which it is directly linked.

non-profit corporations

Human rights due diligence is a risk management tool that is equally relevant for non-governmental organisations and universities.

Stakeholder engagement is a required action throughout the due diligence process, because due diligence is about the people that are affected or could be affected by an organisation.

state-owned corporations

In its National Action Plan, Belgium promotes socially responsible public businesses. Particular attention is paid to how public businesses can integrate and promote respect for human rights within their organisation through tools such as reporting and due diligence.

Businesses should manage their entire supply chains responsibly, meaning that they should ensure that every relationship in their supply chain respects human rights.

public entities