L?ning - Human Rights and Responsible Business Monthly Briefing
L?ning – Human Rights & Responsible Business GmbH
We are an international management consultancy specialised in human rights.
I hope you’ve had a good start to the New Year.
Looking back on 2023, a year marked by conflict, rapid technological growth and the climate crisis, it ended with a significant development – the agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). This new regulation will place more responsibility on EU companies. Now, in 2024, the CSDDD will become a key player in shaping corporate accountability as global companies take on greater responsibility for respecting human rights. However, resistance from German business associations to this directive raises concerns. Let’s explore why their opposition may not be in the best interests of their member companies.??
The associations are pushing for a general exemption for all suppliers within the EU single market. The draft CSDDD allows for risk prioritisation by region. Yet, we’ve seen issues like the lorry drivers’ hunger strike in Germany, the challenges faced by women during the harvest in Spain and Italy, and abuses in the construction sector in all EU countries. Businesses can’t ignore these realities, and a black and white approach doesn’t help.??
Second, the associations want to keep due diligence obligations “manageableâ€, especially for SMEs, by setting thresholds based on purchase value. The CSDDD will be risk-based, meaning that only supply chains with a certain risk score will have to be considered. It explicitly calls for industry initiatives on data sharing, pooling of audits and common grievance mechanisms. Business organisations should be more active in this area, as it will help SMEs in particular to identify and mitigate human rights risks.?
Suggestions that SMEs can’t control entire supply chains are beside the point. Advances in technology and the use of Business and Human Rights (BHR) data are rapidly enabling supply chain transparency. These tools will be available to SMEs at competitive prices. In addition, EU legislation sets a global standard that companies in partner markets are eager to adopt to gain a competitive advantage.?
In conclusion, EU-wide due diligence legislation will make it easier to do business in the single market, meet the sustainability demands of consumers, investors, and customers, and promote sustainable development beyond the EU. Associations should support progress rather than defend outdated practices.
Feel free to contact me with your questions at?markus@loening.org
News from Team L?ning:
In this new white paper authored by our consultant Mariana Rezende Oliveira , we present the benefits of having a grievance mechanism and answer questions that businesses often have when establishing one. Read the white paper here.
Following the success of our October session, we're excited to announce our return with a new HRO training session scheduled for March 2024! This training is designed for current and aspiring human rights officers, as well as any professional implementing human rights due diligence within their organisations.?Participants will receive a certificate of completion that can be used for reporting. Register until 15 February to get an early bird discount here.
If you'd like to receive the detailed programme, send us an email: academy@loening.org
Forbes
In 2024, the responsibility for protecting human rights will increasingly fall on global companies as governments are unwilling or unable to do so. Key areas for business leaders to focus on include the EU human rights due diligence requirement, ESG investment reform, election security in an era of online disinformation and the protection of China’s Uighur population. Those who take this approach will be best placed to comply with the increasingly stringent regulatory framework now being shaped by European governments through the EU.
Thomson Reuters
In 2024, companies will prioritise environmental, social and governance (ESG) activities, cementing ESG as a permanent focus. Initially driven by compliance and risk management, this year is expected to see a fundamental overhaul of business structures. ESG considerations will move from an optional to an integral part of corporate strategy for long-term value creation.
Frankfurter Allgemeine
German industry is urging Chancellor Olaf Scholz not to support the proposed EU Supply Chain Act. In a letter, industry leaders express concern that companies will leave Europe and face unjustified lawsuits and hefty fines. They argue that the proposed directive would create legal uncertainty, red tape and unpredictable risks. The letter was signed by the presidents of the Federation of German Industries (BDI), the Confederation of German Employers’ Associations (BDA), the Association of German Chambers of Industry and Commerce (DIHK) and the German Confederation of Skilled Crafts (ZDH).
The New York Times
In 2019, a social compliance auditor visited a Walgreens meatpacking plant in Minnesota to ensure the plant was free of labour abuses. He found no major violations, but as night fell, another 150 workers showed up at the plant, including migrant children. The children were operating heavy machinery that could amputate fingers and crush bones. It took another four years for the Department of Labor to find the violations. Social compliance auditing has become an $80 billion global industry. When labour scandals erupt or advocacy groups call for boycotts, companies point to these inspections as proof that they have rooted out abuses in their supply chains. But a New York Times review of audits conducted by several major companies shows that they consistently miss child labour.
ECCHR
The French Supreme Court has upheld charges of complicity in crimes against humanity against the French cement company Lafarge, now part of the Holcim group. However, it dropped the charge of endangering the lives of its former Syrian employees. Between 2012 and 2014, Lafarge allegedly paid up to €13 million to armed groups in Syria, including the Islamic State, to keep its cement factory running during the Syrian civil war. Ten people, including several former top executives of the group, are also charged.
AP News
Yemen’s Iran-backed Houthi rebels attacking commercial ships in the Red Sea have disrupted the usual flow of trade through the vital corridor, causing delays and increased transport costs. Tesla recently announced a factory shutdown near Berlin due to supply chain delays, highlighting the impact. US-led air strikes targeting Houthi positions in Yemen are further complicating the situation. The affected waterway is a key route for oil, natural gas, grains and various goods heading to the Suez Canal, through which 12% of global trade typically passes.
Financial Times
In 2024, after a 27-year wait marked by setbacks, scandals and delays, Rio Tinto is set to launch the world’s biggest mining project, a $20bn iron ore development in West Africa. The Anglo-Australian miner, plagued by leadership changes, legal battles, corruption allegations and failed sales attempts, has a controversial history that includes allegations of human rights abuses, river pollution, workplace issues and underpayment of its Black migrant workers during South Africa’s apartheid era. Pending approval from Chinese partners, Rio Tinto wants to proceed with the project.?
Mongabay
After winning a historic legal battle, an indigenous community in Ecuador has finally obtained legal title to its ancestral Amazon homeland in a protected area – 80 years after being forcibly evicted. The ruling is historic because it’s the first time an indigenous community whose ancestral territory lies within a nationally protected area has been granted title to the land. According to experts, this new ruling could change the approach communities take in Ecuador to obtain their ancestral lands, and the country could see more communities filing similar lawsuits to obtain lands locked away for state conservation.
Le Monde
The Champagne vineyards have had a tragic year with four deaths during the grape harvest. All appeared to have died of cardiac arrest, and all endured hours of extreme temperatures in excess of 40°C. Investigations into the working conditions and pay of foreign grape pickers and concerns about accommodation have added to the challenges facing the sector. These incidents are drawing attention to the lesser-known world of seasonal workers in Champagne, where 120,000 people are employed each year to cut grapes by hand, a requirement unique to the region.
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Financial Times
The board of ice cream maker Ben & Jerry’s has called for a permanent ceasefire in Gaza, reaffirming the company’s commitment to peace as a core value. The move risks reigniting tensions with parent company Unilever, following a dispute over Ben & Jerry’s attempt to stop selling in the occupied Palestinian territories in 2021. Ben & Jerry’s is one of the few companies to take a public stance on the war between Israel and Hamas, or to support a permanent ceasefire. Several companies that have spoken out publicly have faced consumer backlash.
The Bureau of Investigative Journalism
The UK government may be violating international law by failing to investigate ‘clear indicators of forced labour’ in its seasonal worker scheme. UN’s special rapporteur on modern slavery, Tomoya Obokata, expressed concern over reports of intimidation, threats, sexual harassment and poor living conditions for workers on UK farms. The scheme, introduced in 2019 to address labour shortages, places significant power in the hands of private sector recruiters, creating a dependency relationship and potentially reducing workers’ ability to report abuse.
Reuters
A US consumer group has filed a lawsuit against Starbucks, accusing the coffee chain of falsely advertising its tea and coffee as “ethically sourcedâ€. The National Consumers League claims that Starbucks sources its products from farms in Kenya, Brazil and Guatemala that are plagued by human rights abuses, including child labour, forced labour and widespread sexual harassment. Starbucks said it would defend itself against the claims. The league claims that Starbucks continued to use suppliers after abuses were uncovered, even certifying them as ethical.
Harvard Business Review
Recent legal decisions, influenced by the US Supreme Court, have raised concerns about the future of diversity, equity and inclusion (DEI) initiatives. Despite legal hurdles, many institutions remain committed to the principles of DEI. Rather than giving “preference†to some groups, organisations can explore DEI policies that are identity-neutral but eliminate bias in the workplace. As AI reshapes the dynamics of work, it is also imperative for companies to incorporate DEI into their AI strategies. 3 ways to achieve this: 1) embedding DEI into the design of AI systems; 2) incorporating DEI into any AI-related upskilling programmes; and 3) using AI as an opportunity to boost DEI.
BAFA – Federal Office for Economic Affairs and Export Control
Since 1 January, the German Supply Chain Act (LKSG) applies to companies with more than 1,000 employees. The BAFA has published this document with the most important questions and answers regarding the LkSG and its extension. In a press release one year after the formal introduction of the LkSG, the BAFA presents a positive assessment for the year 2023. The obligated companies have largely succeeded in implementing the requirements and are actively contributing to improving human rights conditions in global supply chains.
Council of the European Union
The Council and the European Parliament have reached a provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). It aims to improve the protection of the environment and human rights in the EU and globally. The Directive will set out obligations for large companies in relation to the actual and potential adverse impacts on human rights and the environment of their own operations, those of their subsidiaries and those of their business partners. The agreement describes the scope of the directive, clarifies the responsibilities of companies and completes the list of rights and prohibitions that companies should respect.
Institute for Human Rights and Business
The 2024 Top 10 list delves into future considerations for business, exploring areas where action will be critical in the decades to come. Ranging from long-standing issues on the business and human rights agenda to emerging challenges, these factors will require innovative leadership and collective efforts to advance human rights in the years ahead. The topics focus on: farms, factories, offices, online, mines, oceans, space, cities, borders and the natural world.
WEF
The World Economic Forum’s Global Risks Report for 2023 reveals a world shaped by rapid technological growth and economic uncertainty, alongside the pressing issues of climate change and conflict. Reviewing the year, the report highlights polarising and overlooked events, from deadly conflicts in Sudan and Gaza to unprecedented environmental challenges such as heatwaves, droughts, wildfires and floods. Societal discontent is manifesting itself in polarisation, violent protests, riots and strikes that are attracting global attention. Notably, the erosion of human rights ranks 15th among the report’s short-term global risks.
The Danish Institute for Human Rights
At the end of 2023, the EU reached a provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD), which introduces new obligations for the largest companies in the EU. The law has the potential to be an important force for human rights and sustainability in business practices. However, the report also identifies critical omissions that could jeopardise the aim of the legislation, including the exclusion of the financial sector.
Global Business Initiative on Human Rights (GBI)
The report is designed to help companies integrate human rights considerations into their climate action initiatives. As global companies accelerate their efforts to reduce greenhouse gas emissions and adapt to climate change, the report provides insights and examples on mapping the intersections between climate action and human rights, integrating human rights into decision-making processes, building internal awareness and addressing human rights impacts.
Know the Chain
The global apparel and footwear industry, which generated over US$1.5 trillion in sales in 2022 and employs 60 million workers in Asia, has significant potential for human rights advancement. However, companies have been reactive to human rights violations, failing to provide and disclose remedies. This year’s KnowTheChain findings show a significant gap between the efforts of the average company and the highest-scoring company, with over 20% scoring just 5/100 or less. Companies benchmarked since 2016 performed significantly better on average. Recruitment is crucial for preventing and remedying risks to migrant workers.?
Oxfam?
The paper analyses the human rights impact assessments (HRIAs) published by Dutch, German, and UK supermarkets as part of the Behind the Barcodes campaign. It identifies best practices and points of improvement in these assessments over the past four years. Oxfam recommends that supermarkets and other food companies improve HRIA processes to protect and respect the rights of people making food. The paper calls for binding legislation to hold companies accountable and provide pathways for survivors of corporate abuse to get justice and urges consumers to demand that their daily supermarkets are free from abuse.