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26 Jul 2021

Evie Clarke, KnowTheChain, Business & Human Rights Resource Centre

Workers must be the foundation of any human rights due diligence approach

Due diligence and company performance

The need to level the playing field is regularly cited as an argument for mHREDD. This was once again emphasised in the latest KnowTheChain benchmark, which assessed the largest global companies in the apparel and footwear sector on their efforts to address forced labour risks in their supply chains. The research included 13 of Europe’s largest apparel and footwear companies and revealed an extremely broad spectrum of due diligence efforts – with scores ranging between three and 86, where 100 represented the highest score attainable.

Due diligence, by nature, relates to impact. Our benchmark revealed the vast gap between company policy and practice. With 97% of companies in the benchmark having a supplier code of conduct prohibiting forced labour and a process for monitoring suppliers, it was clear most companies’ first steps are centred on their policies and processes. Yet, since allegations of abuse are endemic and were identified in 54% of supply chains, this focus does not equate to effective prevention or mitigation, and providing remedy was even more of an isolated occurrence. Half the companies did not provide evidence that they had a remedy programme for workers in our latest benchmark and none could show that they provided remedy to the satisfaction of the workers involved.

Companies are recognising they need more than voluntary measures

Upcoming legislation on mHREDD in Europe will shape the human rights approaches of all large companies operating in the EU. Likely features will include requirements for companies to carry out a risk assessment of their supply chains and address social and environmental risks, as well as a liability regime to hold companies accountable for failing to do so.

A number of companies are expressing their support for mHREDD at EU level, desiring clarity and consistency in the approaches of companies across the board. Support for non-negotiable human rights standards is building amongst some of the largest global apparel and footwear companies - from Adidas and H&M, to Inditex and Primark.

Company support is driven, in part, by the desire to prevent unfair competition by those taking little or no action, but also to galvanise efforts to minimise risks to supply chain workers in the industry at large since social risks are integral to business. In some investors’ books, ESG concerns are now paramount and the link to financial materiality risks comes as a secondary issue.

Effective due diligence by companies can prevent harm before it happens. This crucial fact also lies behind the willingness of many companies to back the EU legislation. Amongst approaches, worker-driven due diligence has been shown to be the most effective. This includes worker-to-worker education to ensure that workers are aware of and engaged in the protection of their rights, involving workers in risk assessments, the design or operation of grievance mechanisms, and monitoring itself. Companies adopting this level of engagement will be best positioned to align their approaches with emerging laws.

Monitoring should be a lens, not a filter

Visibility into working conditions on the ground, reflecting the experiences of workers, also provides insight into how issues are best resolved. KnowTheChain’s most recent benchmark shows that these approaches must be scaled up: only six out of 37 companies disclosed involving workers in their risk assessment processes, and just four companies disclosed involving workers in the design and/or performance of grievance mechanisms.

Companies must be clear that social auditing is not a proxy for human rights due diligence. Social auditing by private bodies has, time and time again, failed to detect and prevent historic tragedies: from forced labour at rubber glove manufacturer, Top Glove, to the structural defects leading to the collapse of Rana Plaza.

Worker-driven monitoring is one alternative. The Worker-Driven Social Responsibility Network stands out as an example of an organisation advocating for the need to realign the power imbalances in favour of workers. Built on the approach of the Fair Food Program to monitor and address conditions from the perspectives of workers, is a programme to address gender-based violence and harassment in Lesotho garment factories. The programme is both binding and worker-led and brings together Lesotho unions and women’s rights groups to address these issues, including awareness trainings and an independent complaint mechanism and enforcement process.

If mHREDD is to be effective and drive meaningful change for those it seeks to assist, worker-driven approaches, which reflect working conditions on the ground and are responsive to workers’ needs, must be a primary focus of company efforts.

Towards Mandatory Human Rights Due Diligence


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