Business & Human Rights: New year
Closing 2022 ~ Litigation update ~ Progress ~ Key issues for 2023 ~ Getting ready for 2023 ~ And finally the To Do List
Dear new readers,
The aim of the BHR newsletter is to share news related to human rights, the environment and climate change in the business world. The scope of the newsletter is very broad, and lends itself to different approaches. As a lawyer and a consultant in Business & Human Rights, I offer you my perspective on these issues, trying to address both BHR experts and newcomers.
For this test version, the newsletter ‘BHR’ is translated into English. As the original version is in French, some sources will remain in French.
To kick off the new year, I would like to offer you a special edition with the latest news from 2022, a presentation of key 2023 human rights and climate change issues and new tools & resources that you can use to prevent and mitigate human rights and environmental impacts over the coming year.
Also, to keep the ball rolling, the BHR newsletter will now be delivered to your mailboxes on Wednesdays, every fortnight.
Do not hesitate to write to me by email or via the Substack chat if you wish to exchange/collaborate on the subject.
I wish you a happy 2023!
CLOSING 2022
Reinventing the business model. In its 2022 edition, the Observatory of Societal Transitions by the law firm De Gaulle Fleurance explains that European companies will have to "profoundly reinvent their business model" in the face of new national and European legislation. It includes: the future European duty of vigilance, the strengthening of European sustainability reporting, the multiplication of procedures (twice as many litigation procedures initiated in 2022 compared to 2021) and referrals to the OECD NCPs.
Global Wage Report. The International Labour Organisation has published the 2022-23 edition of its Global Wage Report, which analyses wage developments over the period of 2019-2022 in light of the COVID-19 crisis and the inflationary context. The report shows that, for the first time in the 21st century, wages have decreased in the first half of 2022. This finding reinforces the call for the introduction of living wages, beyond minimum wages which are not always sufficient to ensure a decent life.
Nature Benchmark. On the occasion of COP15, the “World Benchmarking Alliance” (WBA) has published its first nature-based assessment of nearly 400 companies in 8 key sectors. The aim is to highlight the actions of these companies to protect the environment and biodiversity. The findings are bitter: only 5% of companies have carried out a science-based assessment of how their operations and business models impact nature and biodiversity. Furthermore, most companies "fail to explicitly respect the rights and role of local communities and Indigenous Peoples in protecting nature”.
Progress & Victories. The French association Sherpa1 summarises its progress and victories in the fields of human rights and the environment in 2022.
Global Peace Index. The Institute for Economics & Peace 2022 index which measures “peace in a complex world” crowns Iceland and places Afghanistan in last place. Despite an overall deterioration compared to 2021, 90 countries improved their score. The five countries with the greatest deterioration are Ukraine, Guinea, Burkina Faso, Russia and Haiti. The five countries with the greatest improvements are Libya, Egypt, Saudi Arabia, the Philippines and Algeria.
LITIGATION UPDATE
Total case in Uganda. On February 28, 2023, a first judgment is to be handed down by the Paris judicial court in the TotalEnergies case in Uganda. This ruling should clarify the scope of the French duty of vigilance.
Fairwashing. In a decision dated December 16, 2022, the french judges2 confirmed the order of dismissal pronounced on May 12 in favor of the company Auchan. As a reminder, associations had filed a complaint for deceptive marketing practices, arguing that Auchan commercial strategies amounted to fairwashing. At issue were the labels of an Auchan brand found in the rubble of the Rana Plaza in Bangladesh, which were at odds with the company's public statements on respect for workers' rights in its value chain.
Deforestation in Amazonia. In the case opposing Casino to 11 organisations, the latter refused the mediation proposed by the judge last June. According to them, the responsibility of a company in the destruction of ecosystems and the violation of the rights of indigenous peoples deserves a public debate and a judicial decision. This contrasts with the mediation, which offered confidential negotiations.
“L’affaire du siècle”. In October 2021, the Administrative Court of Paris condemned the French State for climate inaction while ordering it to take "all necessary measures" to lower France's greenhouse gas emissions ... before December 31, 2021. While the French government should have doubled its GHG emissions reduction target in 2022 (a decrease of 4.7%), emissions stagnated for nine months and then decreased very slightly, by 0.3%. NGOs will certainly ask for a financial penalty in view of the insufficiency of the state measures.
Burmese workers versus Tesco. Tesco is facing legal action in the United Kingdom after 130 former Burmese workers at a Thai factory filed a complaint for alleged negligence and unjust enrichment. According to an investigation by the Guardian, the Burmese migrant workers were subjected to forced labor conditions by a former Tesco supplier in Thailand. This is reportedly the first case "in which a UK company has been threatened with litigation in the English courts over a foreign garment factory in its supply chain that it does not own". The complaint also concerns an insurance and certification company, accused of negligence "for failing to identify and/or report the unlawful working and housing conditions, causing injury to the workers”.
Compensation. In a January 2021 ruling, the Hague Court of Appeals ordered the Anglo-Dutch company Shell to compensate Nigerian farmers who were victims of oil spills between 2004 and 2007. The judgment was followed by compensation: Shell will pay 15 million euros to the communities affected following an agreement signed with an NGO.
PROGRESS
The EU faces deforestation. On December 6, a provisional agreement was reached between the European Parliament and the Council of the EU for a European regulation against deforestation. It will ban the import of several products into the EU (including cocoa, coffee, soy, palm oil, wood, beef or rubber) as well as some derived products (leather, chocolate, furniture, paper or wood charcoal) when they contribute to deforestation. Specifically, importing companies will be responsible for their supply chain and will have to prove the traceability of products through geolocation data and satellite photos.
Towards a harmonised non-financial reporting framework? The rise of ESG criteria requires a harmonisation of reporting standards. The problem is that several organisations are working on different sets of standards. What will be the reference standard? The 3 projects that can claim it are:
The "International Financial Reporting Standards on Sustainability" (IFRS-S) prepared by the International Sustainability Standards Board (ISSB) for the IASB.
The "European Sustainability Reporting Standards" (ESRS) of EFRAG, standards implemented within the framework of the EU's Corporate Sustainability Reporting Directive (CSRD).
“Rule on Climate-Related Disclosure” project by the Securities and Exchange Commission's (SEC)in the United States.
And let's not forget, on the British side, the FCA (Financial Conduct Authority) has launched the development of a code of conduct for ESG data and rating providers. This code aims to correct inconsistencies in ratings and the opacity of methodologies.
COP 15. The Kunming-Montreal agreement was concluded on December 19, 2022 at the end of the COP 15 on biodiversity. Signed by 195 countries and the EU, it recognizes the major role of indigenous peoples and local actors as custodians of biodiversity and sets 4 objectives and 23 measures to :
protect 30% of the planet by 2030,
restore 30% of ecosystems,
reduce the impact of pesticides,
increase funding for the protection of life.
KEY TOPICS FOR 2023
Ensuring a just transition. According to the ILO, a "just transition means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind". This concept will have to be progressively integrated by lawyers, companies and all stakeholders. To achieve this, a practical guide has been created by The Chancery Lane Project to promote just transition in legal documents and climate transition plans. In addition, the UN Global Compact has shared a business brief with 7 recommendations for companies to support a just transition.
An extended duty of vigilance. The Draft Directive is progressing, as in December 2022, the Council of the EU adopted its negotiating position ("the general approach"). In early 2023, negotiations will take place between the Council of the EU and the European Parliament to adopt a common position. At the end of the European legislative process, the Directive will be adopted and Member States will have to transpose it into their national law. It will then be necessary to adapt pre-existing vigilance laws: the French Duty of Vigilance of 2017, the Norwegian Transparency Act of 2021, the German Supply Chain Due Diligence Act of 2021, not to mention the draft laws underway in Spain (which seems to be on pause at the moment) and in the Netherlands, where the coalition government tabled its draft in Parliament at the beginning of November 2022. The challenge will be to harmonise the new due diligence obligations in the different European countries.
Vigilance on green funds. In November, an investigation published by Le Monde looked into "green funds", i.e. sustainable financial investments supposedly excluding the financing of fossil fuels and other polluting industries. However, many "carbon-intensive" assets are hidden among the funds classified as green on the basis of Article 9 of the SFDR regulation. The credibility of these financial products is therefore undermined and will have to be strengthened to satisfy the growing demand for sustainable investments.
Beyond standard social audits. In a report, Human Rights Watch highlighted the limitations of social audits in preventing labour and human rights abuses in supply chains. This document demonstrates the importance of proactive rather than simply reactive human rights due diligence measures.
The rise of climate litigation. Climate litigation is multiplying, whether against companies or states, by civil society or other states. The most vulnerable actors and those most impacted by the consequences of climate change are now turning to the courts to uphold their rights. For example, the coalition of 18 countries led by Vanuatu is seeking international justice to push governments to act on climate change.3 Or the communities in Puerto Rico, impacted by Hurricane Maria in 2017, who are launching a lawsuit against big oil companies for decades of deception about the impact of their activities on climate change. Or the case against FIFA for false climate promises.
Increased responsibility in conflicts. Whether or not to invest, whether or not to leave, the decisions companies make in conflict situations will become crucial and will engage their reputational and legal responsibility. In 2022, the UNDP published a guide on heightened due diligence in conflict-affected contexts.
Defending human rights defenders.Human rights and land defenders need protection: in 2021, 200 were killed, not to mention harassment, intimidation and violence. Companies have an increasing responsibility to protect human rights defenders and to facilitate their participation in negotiations and decisions that affect them. The Observatory for the Protection of Human Rights Defenders launched an updated website and a public database to share information on human rights defenders.
GETTING READY FOR 2023
Top 10. IHRB publishes its Top 10 Business & Human Rights challenges for 2023. The focus is on the role of private sector actors such as investors, legal advisors and management consultants in supporting companies to prevent or mitigate adverse human rights impacts.
The ILO Forced Labour Observatory. The ILO has established an Observatory on Forced Labour to gather up-to-date information on national and international legal and institutional frameworks relating to forced labour. The observatory compiles information on enforcement, prevention (including fair recruitment and due diligence) and protection, access to justice, remedies and cooperation. This 3 min video explains how it works.
OCDE Hub. The OECD is launching a DueDiligence Policy Hub which brings together technical papers, events and tools to help policy makers design responsible business conduct legislation.
Fair & Ethical Recruitment. This Fair and Ethical Recruitment Due Diligence Toolkit from the International Organization for Migration (IOM) is intended for companies wishing to assess their recruitment systems, particularly for migrant workers.
Violence & Harassment at work. The ILO has published a report on violence and harassment at work. This survey examines the extent of the problem worldwide and analyses the reasons why victims do not report these situations.
Sustainable batteries. The Global Battery Alliance (GBA) has published its Human Rights Index and Child Labour Index to measure and score the efforts of companies or their products in the battery value chain.
Law and Climate Atlas. This resource from the Centre for Climate Engagement at the University of Cambridge helps lawyers lead the transition to net zero. It highlights the links between climate change and different areas of law and the opportunities for lawyers to contribute to change.4
AND FINALLY, THE TO DO LIST
In each edition, the TO DO LIST offers you various activities related to business and human rights: videos, mooc & e-learning, conferences, photo contests and more.
1. Learn about the challenges surrounding human rights and climate change with a 3.5 hour course from UN CC. You can also test your "climate IQ".
2. Listen to the new podcast "The Business of Risk" launched by the Social Responsibility Alliance which aims to provide companies with tools to build socially responsible supply chains.
3. Follow the new e-learning on advancing decent work in business from the UN Global Compact Academy. Developed in collaboration with the ILO and its training center based in Turin, this course should help you progress on issues of occupational health and safety, forced labor, child labor, promotion of social dialogue, freedom of association and anti-discrimination.
4. Join the Justice ExPEERience community created by the ASF. This network of activists, lawyers, NGOs, academics and civil society actors aims to defend human rights and promote access to justice and the rule of law around the world.
5. Share the BHR newsletter with your network to spread the word about human rights and climate change issues in 2023 :) Thank you!