Human Rights in the Supply Chain: A Shared Challenge

Authors

• Faris Natour

  Former Managing Director, Advisory Services, BSR

Faris Natour, Director, Human Rights, BSR

At BSR’s recent Human Rights Working Group meeting, 24 participants from 16 companies discussed successes, challenges, and best practices in implementing the Guiding Principles for Business and Human Rights.

After two days of rich discussions, it is clear that addressing supply chain human rights impacts is a shared challenge and priority across all sectors. Like all participants, I came away with a long to-do list and many insights from the discussions. Three stand out to me in particular:

Human rights impacts are not always where you suspect to find them. One member from the food, beverage, and agriculture sector described a recent audit of suppliers in Southeast Asia, where she was surprised to discover that the site she expected to perform best actually had the worst practices. While the factory’s management had never visited the migrant worker living quarters, auditors found substandard living conditions there. Following the audit, the company strengthened its responsible sourcing compliance and audit system, such as by including provisions protecting the rights of migrant workers in its code of conduct.

This story underscores the importance of robust risk-assessment and prioritization models as part of a supply chain compliance and audit framework. It also highlights the importance of spot-checking to verify whether managers’ assumptions about low-risk suppliers are true. In reality, poor working conditions in the supply chain are common, and this kind of systemic problem requires a solution that addresses not just symptoms but root causes.

The boundaries of responsibility for human rights in the supply chain remain unclear. Many human rights managers struggle to define the exact scope of their responsibility beyond human rights impacts their company may cause or contribute to. The Guiding Principles state that the corporate responsibility to respect human rights extends to impacts the company is “directly linked” to through its business relationships. But what constitutes a direct link? In practice, that question is not always relevant: Many of the issues companies are working on today, such as conflict minerals, are far removed from the company’s direct relationships. But companies must prioritize and address these issues nonetheless due to stakeholder expectations or regulation requirements.

New resources are available to help companies address supply chain human rights risks. We reviewed a number of new resources: The Center for Business and Human Rights at the NYU Stern School of Business’ report “Business as Usual Is Not Enough: Supply Chain and Sourcing after Rana Plaza” looks at business practices, governance, and infrastructure development as key elements of sustainability in the garment sector. Oxfam’s “Behind the Brands” campaign describes how the issue of land grabs is affecting the agricultural supply chain. And a new collaborative initiative led jointly by BSR and Pact is helping companies address broader human rights issues related to conflict minerals.

The BSR Human Rights Working Group will continue to collaborate to find cross-sector solutions to the shared human rights challenges in the supply chain and beyond. Our next meeting will focus on embedding human rights across the business through employee engagement, training, and other tools.