By Raquel Florez and Emily Holland
Spain and Chile have approved National Action Plans (NAPs) on business and human rights. In doing so, they join a number of countries – France, Germany, Switzerland and the United States most recently – that have more clearly defined their commitments to the UN Guiding Principles (UNGPs) and prepared the ground for potential, downstream national laws and regulations in the field. Here, we highlight key developments from some recently released NAPs for the business community.
By way of background, NAPs are government-commissioned strategies to help states fulfill their responsibility to protect against human rights abuses within their territories and/or jurisdictions by third parties, including businesses. They establish states’ forward-looking priorities, including legislative and regulatory goals, and address issues related to accountability, transparency and participation.
The UNGPs do not explicitly require NAPs, or even mention them. They do highlight the need for policy coherence to promote corporate respect for human rights. Principle 8 asks states to ensure that government agencies and institutions tasked with shaping business practices are informed of and observe states’ human rights obligations. Principle 9 addresses the need for an appropriate domestic policy space that enables states to meet their human rights obligations with other states and business enterprises. Principle 10 encourages states to use their membership in multilateral institutions constructively, which is to say ensure that they do not deter other states from meeting their duties to protect human rights or impede companies from respecting human rights.
Several institutions have urged the development of NAPs or recognized their importance. The European Commission issued a request to EU Member Countries to produce plans for the implementation of the UNGPs in 2011. The UN Working Group on Business and Human Rights has developed dedicated guidance for states on best practices for developing, implementing and revising plans. A recent declaration from the G20 Leaders Summit committed participants to establish “adequate policy frameworks … such as national action plans on business and human rights and underline the responsibility of businesses to exercise due diligence.”
Several countries, the majority of them European, have implemented NAPs in response. The UK was the first to do so in September 2013; that plan has already been updated in May 2016. It was followed by the Netherlands in December 2013; Denmark and Finland in April and October 2014; Lithuania, Sweden, Norway and Colombia throughout 2015; Germany, Italy, Switzerland and the United States in December 2016; France in April 2017; Spain in July 2017; and Chile in August 2017. Publicly available data from the UN Office of the High Commissioner on Human Rights and the Business & Human Rights Resource Center suggests that a number of other countries, particularly in Latin America and Africa, are either drafting NAPs or have announced that NAPs will be developed, or that national human rights institutions or CSOs are encouraging their development.
While the plans vary in scope, as noted in several assessments including a recent report from the International Corporate Accountability Roundtable, there are certain features common to all (or most): reference to and/or integration of the Ruggie “Protect, Respect and Remedy” Framework and/or the OECD Guidelines for Multinational Enterprises; identification of relevant, domestic legislation and policies; defined expectations on what constitutes appropriate business conduct; and activities that are in progress, planned or being considered to address specific policy issues.
Thus far, the reception to NAPs has been mixed, with both accolades and criticism levied upon governments for the processes used to develop NAPs, as well as their content. Blame, where it occurs, generally focuses on states’ silence on or perceived reluctance with respect to introducing binding mechanisms that would require human rights-related due diligence or reporting. What follows are key takeaways from recently released plans, including those of Spain and Chile.
The Swiss NAP, released on 9 December 2016, discusses the corporate responsibility to respect human rights and the government’s expectations for business in general terms. For the most part, it focuses on Pillars I and III, as opposed to Pillar II of the UNGPs (which articulates that corporates have a responsibility to respect human rights). As the plan notes, Switzerland has adopted a separate Corporate Social Responsibility policy that addresses a variety of issues, including human rights, working conditions, the environment and corruption. The NAP describes this policy as “complementary and of equal status” to the NAP for the purpose of fulfilling the “Ruggie Strategy for Switzerland” adopted by the Swiss parliament in 2012. Noteworthy features include: (i) the NAP’s reference to the “smart mix” of binding and non-binding mechanisms that, according to the plan, the Swiss government looks to in order to fulfil its duty to protect against human rights abuses; and (ii) a description of mechanisms the government uses to encourage human rights-related due diligence and reporting, neither of which is required by law. Among other things, the plan commits the government to establish a “good practice award” to recognize companies with exceptional contributions to the field of business and human rights.
The US NAP, released on 16 December 2016, discusses responsible business conduct broadly as opposed to focusing on business and human rights specifically. The plan exhorts companies operating abroad, and in conflict-affected areas in particular, to conduct due diligence and reporting; business-related human rights issues on US soil are not discussed. In light of what the plan describes as “sparse” tools and resources that are available to companies, it references thematic government reports and international company profiles that the government has made available to help businesses navigate investments and potential business partners. The plan also pledges to create a repository of US government reports relevant to operating environments in particular countries. The NAP finally refers to enhanced enforcement around US laws relating to forced labor or convict labor, identifying the Trade Facilitation and Trade Enforcement Act of 2015, which empowered US Customs and Border Protection with the right to seize goods suspected of being produced with child or forced labor at the border (see here and here for further analysis). No additional, future regulatory measures are discussed.
The German NAP, issued on 21 December 2016, articulates the government’s expectation that all businesses, but especially those working in countries considered to be high-risk from a human rights perspective, incorporate ongoing human rights due diligence into their operations. According to the plan, this encompasses: (i) issuing public statements; (ii) assessing potential negative impacts on human rights; (iii) defining and periodically assessing measures to prevent potential negative impacts on human rights; (iv) implementing information and reporting systems; and (v) introducing complaints mechanisms. Of note, starting in 2018, the government will annually assess how companies apply these key elements on human rights due diligence. Furthermore, the NAP sets a target whereby at least 50 percent of German companies with more than 500 employees must integrate the key elements of human rights due diligence by 2020. Should German companies fail to reach this target, the government may consider possible steps, including “legal avenues” (i.e., potential laws and regulations), to compel behavior.
France’s recently passed Corporate Duty of Vigilance Law, described in a previous post, requires large French companies (those with over 5,000 employees in France or over 10,000 employees worldwide) to design and implement vigilance plans to identify and prevent human rights breaches due to their activities in France or globally. The French NAP, released on 26 April of this year, indicates that government activities are actively underway to: (i) enforce this law; (ii) promote the concept of a “duty of vigilance” at the European level, with a view to the adoption of a common framework on the basis of the legislative framework adopted in France; and (iii) engender in France and in Europe more broadly investment policies taking the duty of vigilance into account. The plan pays particular heed to the OECD National Contact Point (NCP) process: emphasizing a need to ensure the proper functioning of the French NCP, asking for better cooperation between NCPs and civil society, requesting increased support from the OECD to NCPs in general, and highlighting the need to continue disseminating a report from the French NCP following the Rana Plaza incident and implementing and monitoring various recommendations it made with respect to the French clothing and textiles industry.
Spain and Chile
With respect to the latest plans, neither Spain’s nor Chile’s NAPs reference proposals to issue binding commitments to compel human rights due diligence or reporting. The Spanish NAP, released on 28 July 2017, encourages businesses to release human rights policy statements and to conduct human rights due diligence and prioritizes companies where it holds a financial, political or diplomatic interest. The plan also includes commitments by the government to encourage company reporting on human rights-related issues and due diligence that companies conduct. The Chilean NAP, released on 21 August 2017, focuses in large part on what ministries will do to socialize the NAP through a variety of engagement tools. It promotes human rights due diligence within business operations and supply chains and references industry guides that will be developed by the Ministry of Economy, Development and Tourism to help companies in this regard, and another guide for public companies to help them report on human rights and corporate responsibility issues.
Much remains to be seen as to how effective the NAPs are and, with respect to Spain’s and Chile’s plans, how they are received. Further information on NAPs published to date can be found through the Business and Human Rights Resource Center and the website of the UN Office of the High Commissioner on Human Rights.