Blog: Governments can help make business more diligent on human rights
In the last few months, a host of new initiatives and regulations have been announced around mandatory transparency and mandatory due diligence for companies
By virtue of the AUD$100 million threshold, the Australian Act will apply to fewer companies than the UK Modern Slavery Act, but it imposes more onerous and mandatory reporting requirements.
The statements must disclose the structure, operations and supply chain, exposure to risk and the effectiveness of measures taken to address the risk.
In June 2018, one chamber of the parliament adopted the text of a counter-proposal, which would include the due diligence obligation of the RBI, but it is narrower in scope: only companies of a certain size and those with particular human rights or environmental risks are subject to the requirement.
The process has led to a workable compromise that may well be brought into law in 2019.
On 5 December 2018, the EU Economic and Financial Affairs Council endorsed three measures requiring banks to disclose environmental, social, and governance (ESG) related financial risks.
Civil society has called on the European Commission to overhaul the reporting framework for corporate disclosure on human rights, environment, and anti-corruption issues to create a common standardised reporting framework and compulsory metrics.
This is a prerequisite for creating a sustainable and just economy, and allowing investors to fulfil their current and planned legal ESG obligations.
These initiatives are the latest in a series of regulatory developments around the world towards mandatory corporate human rights due diligence.These actions would seem to suggest that broadly liberal governments, at least in Europe, are being shaken from their timidity. This might be a response to the public backlash and collapse of public trust in global markets since the 2008 financial crash.The Edelman Trust Barometer shows that in the public mind, economic globalisation, far from being associated with a Golden Age of Progress, is associated with stagnant wages, precarious employment, inequality and environmental harm.Unscrupulous politicians are exploiting this growing public fear, anger, and sense of vulnerability to advance causes of chauvinist nationalisms, authoritarian demagoguery, and withdrawal from multilateralism.Demagogues use public fear of rootless corporations, with their lack of loyalty or sense of due diligence in their introduction of automation and out-sourcing, for instance.But, rather than focus on real solutions, such as putting human rights and climate security at the core of business, they deflect it onto the weakest: migrants, refugees, ethnic minorities, and the poor.There is no better time for responsible politicians to demonstrate their commitment to a new era of shared prosperity and shared security. And there are few better ways of demonstrating this, to an increasingly distrustful public, than to introduce mandatory due diligence and transparency legislation around the world.This article was originally published on
