Setting human rights standards through intl. contracts can have incredible normative power, says lawyer

Author: Stéphane Brabant, Herbert Smith Freehills , Published on: 16 June 2016

"Supply Chain Management and Corporate Social responsibility: Incorporating Immaterial Standards in the CISG [UN Convention on Contracts for the International Sale of Goods]", May 2016

In 2016, corporations are facing ever-increasing pressure to ensure human rights are respected throughout their supply chains. And as global supply chains grow in length and complexity, the difficulties of doing so are significant.

One way businesses are responding to this pressure is by introducing provisions in their contracts requiring their commercial partners to respect human rights…

…[W]ith supply chains spread across the world, with varying levels of human rights protection between countries, we have also witnessed a race to the bottom…

…[The Rana Plaza example] underlines the legal, financial and reputational risks a company faces when it disregards internationally recognised human rights standards – or laws in its home country – in favour of lower standards in countries where local legislation is weak or not enforced…

…[H]uman rights clauses alone may not be sufficient to ensure human rights are respected in commercial transactions. But investigating how the CISG [UN Convention on Contracts for the International Sale of Goods] could be used to reinforce human rights compliance and offering guidance to parties to integrate human rights compliance into their transactions would be a positive step forward…

The cooperation with the UNCITRAL and the UN Working Group on Business and Human Rights has already started. This cooperation can pave the way to further integration of immaterial or social standards, particularly on human rights, into contracts for the international sale of goods. Setting human rights standards through international contracts can have an incredible normative power. Most importantly, the outcomes will be seen throughout the supply chain and on the factory floor…

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