ITUC report sets out framework for legislation to protect workers across supply chains

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To ensure a resilient world economy that will sustain a Covid-19 recovery conducive to social progress, governments must now take decisive legislative action, according to a new ITUC report, “Towards mandatory due diligence in global supply chains”.

While all governments need to bring in mandatory human rights’ due diligence legislation, EU-wide legislation and a UN Treaty on Business and Human Rights are important steps to regulate the behaviour of companies with regard to their entire operations and activities globally.

“The Covid-19 pandemic has exposed the fragility of global supply chains and the enormous risks to human and labour rights in a highly interconnected global economy that is not governed by the rule of law.

“With the global drop in demand as a result of the pandemic, many companies resorted to abruptly ending the procurement of goods and services and even to defaulting on prior commitments with a disastrous impact for workers in global supply chains.

“As the coronavirus spread, years of voluntary corporate social responsibility vanished overnight. In the absence of an appropriate regulatory framework, global companies were able to evade responsibilities for the workers who produced the goods and provided the services that allowed them to generate enormous profits. This must never be allowed to happen again,” said Sharan Burrow, ITUC General Secretary.

In Bangladesh more than half of garment suppliers reported that they had their in-process or completed production cancelled, which led to massive job losses and workers getting furloughed. More than 98 per cent of buyers refused to contribute to the cost of paying the partial wages to furloughed workers required under national law. Seventy-two per cent of furloughed workers were sent home without pay.

“Mandatory due diligence legislation would, for the first time, give workers a legal framework to seek redress wherever their employer resides and prevent companies from evading their responsibilities to their workers, society and the planet,” said Sharan Burrow.

“Towards mandatory due diligence in global supply chains” makes eight recommendations for effective due diligence at the domestic level, based on an analysis of the strengths and weaknesses of existing legislation by Professor Oliver De Schutter for the ITUC.

  1. All companies covered: the obligation to conduct human rights due diligence should be imposed on all companies, regardless of their size, structure, or ownership.
  2. Obligations throughout corporate structures and business relationships: the obligation to practice human rights due diligence should extend to entities to which business enterprises are connected through investment and contractual relationships.
  3. Internationally recognised human and labour rights: the obligation to practice human rights due diligence should extend to all internationally recognised human rights, including labour rights, without distinction. Companies should also be expected to carry out due diligence with regard to their environmental impact, including climate impact.
  4. Workplace grievance and remedy mechanisms: business enterprises should be required to establish or participate in effective operational-level grievance mechanisms with a view to identify and remediate adverse human rights impacts.
  5. Monitoring and sanctions: enterprises’ human rights due diligence obligations should be monitored by a competent public body, and violations of such obligations should carry effective and dissuasive sanctions.
  6. Liability: the requirement to practice human rights due diligence and the requirement to remedy any harm resulting from human rights violations should be treated as separate and complementary obligations.
  7. Burden of proof: the burden should be on the company’s shoulders to prove that it could not have done more to avoid the causation of harm, once the victim has proven the damage inflicted and the connection to the business activities of the company.
  8. Role of trade unions: human rights due diligence should be informed by meaningful engagement with trade unions.

“Companies cannot make a positive contribution to achieving the 2030 SDGs if they continue to infringe human and labour rights with their business models and activities.

“National legislation as well as effective due diligence practices by companies are key to achieve the SDGs and for sustainable supply chains and trade.

“With the rule of law, we can ensure that the global economy, after the disruption of Covid-19, is resilient, conducive to social progress and puts people and planet first,” said Sharan Burrow.

The ITUC and ETUC are co-hosting an event with the European Parliament Responsible Business Conduct Working Group on 22 June 10:30 – 12:30 CET to discuss regulating responsible business conduct in Europe and in the world. Register for the event here.