UN Forum on Business and Human Rights 2020 – part 1 – “Building forward” from COVID-19, EU supply chain legislation, climate change

Last week, stakeholders from government, business and civil society discussed the most pressing challenges in business and human rights, particularly the ongoing COVID-19 crisis. 

This year’s forum was held virtually for the first time, bringing together more than 4,000 registered participants from 140 countries; 40 per cent of participants came from the private sector.

We are excited to share insights from some of the three-day event’s sessions. (Our summary is divided into two: the second part focuses on establishing a level playing field through legislation and a legally binding instrument.)

UNGPs always apply and are evolving

Michelle Bachelet, UN High Commissioner for Human Rights, opened the Forum by arguing that the COVID-19 crisis could be an opportunity to build a better future, though she also stressed that the UN Guiding Principles (UNGPs) apply at all times and in all contexts.

Anita Ramasastry, Chair of the UN Working Group on Business and Human Rights, talked about the UNGPs 10+ / Next Decade business and human rights project, which will take stock of the first ten years of the UNGPs and design a roadmap for implementing the UNGPs more broadly in the next decade.

COVID-19: “building forward better”

Panellists said that some of the consequences of COVID-19 could have been mitigated by strengthening laws, policies and institutions that uphold human rights. Asako Okai, UN Assistant Secretary General at the UNDP, emphasised that, in contrast to the often-used “building back better”, we should strive to “build forward better” to avoid regressing to old behaviours.

Accelerating uptake of responsible business conduct standards

Speakers also highlighted the importance of accelerating the pace of uptake of responsible business conduct standards. Christine Kaufmann, Chair of the OECD Working Party on Responsible Business Conduct, announced a forthcoming stocktaking of the OECD Guidelines next year. It is important that standards are clear, coherent and credible, and benefit people, the planet and markets to prevent the next crisis. Ongoing discussions should be anchored in broadly accepted standards of responsible business conduct such as the UNGPs and the OECD Guidelines, Christine said, pointing to mandatory human rights due diligence as an important complement to the smart mix of tools that help governments support a resilient recovery and prepare for future crises.

EU National Action Plans and mandatory supply chain legislation 

EU Justice Commissioner Didier Reynders said that 15 EU member states have developed National Action Plans on Business and Human Rights, with Netherlands and Germany being the pioneers. The Commissioner reaffirmed the Commission’s intention to adopt a proposal on sustainable corporate governance, including mandatory supply chain due diligence and clarifying directors’ duties to take a company’s long-term interest into account. A public consultation, seeking the views of a broad range of stakeholders, is open until 8 February 2021.

The Commissioner sees support for mandatory human rights due diligence rules with the purpose of establishing a level playing field and guaranteeing legal certainty from businesses, investors and citizens all over the EU. He emphasised that the envisaged EU human rights legislation will start with a horizontal approach applying to all companies and in all sectors (with certain exceptions for SMEs). The forthcoming EU Action plan on human rights and democracy will also include concrete proposals for promoting the implementation of the UNGPs.

Dutch NAP under revision, German debate on human rights law, Ukraine national baseline assessment 

Representatives from the Dutch and German governments stated that they both welcome the European Commission’s intention to adopt mandatory supply chain due diligence. Sigrid Kaag, Dutch Minister for Foreign Trade and Development Cooperation, also announced that the Dutch National Action Plan is currently being revised in light of experiences and that the Netherlands is conducting a baseline assessment on the degree of compliance of Dutch legislation and policy with the UNGPs.

Bärbel Kofler, Federal Government Commissioner for Human Rights Policy and Humanitarian Assistance at the German Federal Foreign Office, said the UNGPs are an ideal framework for countries to develop a National Action Plan on business and human rights. Bärbel Kofler also mentioned the conclusion of a large-scale study on the German National Action Plan this summer, suggesting that a voluntary approach has not worked as only 17 per cent of German companies surveyed are meeting the minimum due diligence requirements. In addition to current EU developments, Germany is, therefore, also intensifying its debate on a German human rights law.

Valeria Kolomiets, Deputy Minister on European Integration at the Ukrainian Ministry of Justice, announced that the Ministry has launched a national baseline assessment of Ukrainian legislation, public policies and practical cases against business and human rights standards in accordance with the methodology developed by the Danish Institute for Human Rights. Ukraine is currently also in the process of developing a National Action Plan.

Preventing a climate crisis

Another session looked at how the concept of “building back better” can be used to help prevent a future climate crisis. Panellists made a clear connection between climate change and human rights: “Climate change is the result of a wrong economic model – the biggest economic failure we´ve lived through,” said Cristina Tebar Less, Head of the OECD Centre for Responsible Business Conduct. Rob Cameron, Global Head of Public Affairs and Sustainability at Nestlé, called climate change the “silent crisis”.

Cristina Tebar Less explained that there is currently no single legal instrument that addresses climate change and its consequences in an appropriate way: the Paris Agreement tries to guide governments to change their economic model, but the agreement doesn’t talk to businesses. The OECD Guidelines seem better placed to cover this and give openings to address the connection between climate change and human rights, but she asked if the OECD Guidelines should include a separate chapter on climate change.

Panellists also agreed governments must address climate change and protect citizens from its impact, although businesses also bear responsibility for climate change mitigations. Businesses need to avoid stranded assets and change the direction of investments. In the view of Panel members businesses risk violations of their fiduciary duty towards their shareholders and can be held liable. More than 70 per cent of the economy is dependent on fossil fuel so faster change is need. Panellists discussed that linear thinking must be overcome and replaced by a circular economy.

Rob Cameron described climate change as an environmental problem that also includes food security, health, displacement, water access and human rights.

Solutions will come only from a broader dialogue, he argued. As an example, he spoke about deforestation. Halting deforestation would be a great step towards achieving zero-emissions. But those involved in logging would lose their business and daily earnings. A transition to achieve climate change goals should aim to leave no-one behind.

Rob Cameron stated Nestlé’s commitment to support regulation as currently planned in the EU. The exact wording and the responsibilities set out in such regulations should be drafted carefully to avoid a focus on fewer and major suppliers of multinationals, risking excluding smaller suppliers from supply chains.

Surya Deva, member of the UN Working Group on Business and Human Rights, concluded that the “trinity of rights” need to be considered when tackling climate change and human rights: human, labour and environmental rights.

Key take-aways

In light of the current crisis and taking into account that future government support is expected to be contingent on businesses respecting human rights and standards of responsible business conduct, companies should start thinking about incorporation to become “fit” for a sustainable future. For businesses operating in the EU, it will be particularly important to establish robust human rights compliance systems. Climate change ambitions should be pursued in a joined-up approach across the relevant departments, since their complexity needs a multi-stakeholder solution to ensure a just transition that leaves no one behind.