A new decade of business and human rights: Making due diligence effective for rightsholders

Combatting the human rights violations associated with commodity value chains is an ongoing struggle. A decade ago the Human Rights Council endorsed the creation and adoption of the UN Guiding Principles on Business and Human Rights (UNGPs), which aimed to address these concerns. At the time, many reports had already documented violations of indigenous peoples’ rights by extractive industries and agricultural investments, such as oil palm production. 

The UNGPs aimed to define human rights standards for state and corporate actors, and to “achieve tangible results for affected individuals and communities”. The guidance recommended that businesses undertake human rights due diligence (HRDD) to identify, address, track, and monitor a company’s human rights impacts. The commentary to the UNGPs noted the need for states to provide guidance on expected rights outcomes and how businesses should meet their responsibilities, recognizing “the specific challenges that may be faced by indigenous peoples”.  

In the ten years since the UNGPs were adopted, though, the human rights track record of the business world has seen limited improvement. According to a report by the Corporate Human Rights Benchmark (CHRB), the past decade has seen more companies developing better human rights policies and processes, but these are not translating into improved outcomes.  

The CHRB found that of 229 companies investigated, 104 had at least one serious allegation of human rights abuse against them. Companies only consulted with rightsholders in fewer than one third of the cases and provided effective remedy in just 4% of cases.  

For indigenous peoples, they continue to face such abuses as loss of their customary lands and resources, forced evictions, and violence against indigenous rights defenders. This is in spite of the increased recognition of indigenous peoples’ rights in sectoral standards such as those developed by the Roundtable on Sustainable Palm Oil (RSPO), the Forest Stewardship Council (FSC), and the International Council on Mining and Metals.  

Even when certification bodies discover that their member companies are responsible for rights abuses, they often fail either to sanction them and/or to provide effective remedy for victims.  

For example, RSPO member miller Oleaginosas del Peru S.A. maintained its membership even when it was found to be buying oil palm fruit from a plantation previously condemned by the RSPO for violations of indigenous land rights.  

In another case, an investigation by the FSC found that logging companies associated with the Roda Mas Group in Indonesia violated the rights of indigenous communities. However, although two companies’ certifications were terminated, the Roda Mas Group continues to hold FSC certification and they provided no remedy to the communities affected. However, the group is now under investigation after renewed complaints. 

In 2017 and 2018, Nestle and Cargill suspended their supply relationship with Reforestadora de Palmas de El Petén, S. A (REPSA) over its responsibility for severe river contamination and associated harms to local communities, as well as alleged involvement in the murder of a human rights activist in Guatemala. Although the company has since improved its human rights and environmental policies, there is no evidence that the company provided remedy for past harms. In the past year, REPSA attained RSPO certification and Nestle and Cargill both recommenced sourcing palm oil from REPSA. Neither Nestle nor Cargill have published evidence of any due diligence done to provide remedy for past harms and to prevent future harms. The affected communities had no say in the decision to renew the supply relationship.  

The limitations of soft law instruments and voluntary standards has led to a global push for hard laws on business and human rights. A number of countries have over the past year begun to draft legislation to mandate companies to conduct human rights due diligence. However, past experience has shown, that even when due diligence is required by law, it is not always effective. To combat this, policymakers and corporate executives must ensure that HRDD processes are conducted in ways that are outcome-oriented and that address the circumstances faced by rightsholders such as indigenous peoples. 

A few examples of key characteristics of effective due diligence are: 

• Due diligence must be conducted across the entirety of a business’s value chain. 

Businesses that do not directly extract or produce commodities must nonetheless be accountable for what happens along the supply chain. Often, these value chains are linked to dispossession of and damage to indigenous peoples’ traditional lands, as well as harassment, threats, and violence against indigenous peoples. Businesses thus have a responsibility to ensure their due diligence covers their direct and indirect suppliers or investees and addresses violations of indigenous rights. 

• Due diligence must be dynamic. 

Businesses are expected to progressively improve their due diligence over time. This way, they can achieve comprehensive coverage across all of their value chains and adjust their business practices, policies, strategies, model, operations and relationships as needed to address systemic drivers of negative human rights impacts. Those improvements need to be measured against, and drive improvements in, human rights outcomes. 

• Due diligence must centre rightsholder participation and engagement. 

Not only is failure to ensure the effective participation of rightsholders a rights violation in and of itself, but it will also likely mean that due diligence actions are ineffective.  

• Due diligence must address situations that have become particularly common in the context of indigenous peoples.

 One is that companies must take responsibility for addressing ongoing rights violations, even if they commenced prior to the company’s involvement in the value chain. A second is that companies must take special measures to protect and address harms to indigenous rights defenders.  

There can be no one-size-fits-all approach to human rights due diligence, and there can be no rigid rules for how due diligence must be conducted. However, resources such as FPP’s new guide - Stepping Up: Protecting collective land rights through corporate due diligence - can assist policymakers and businesses in ensuring that human rights due diligence is fit for purpose and will be effective at improving rights outcomes for indigenous peoples.  

By drawing upon the expertise of affected rightsholders themselves and the experiences of human rights experts, we can ensure that the next decade in business and human rights sees tangible, positive improvements in human rights outcomes.