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What does Human Rights Due Diligence for Business Relationships Really Look Like on the Ground?

In policy statements and public positions on human rights, multinational corporations have acknowledged a responsibility to do no harm, either in their operations or through their business relationships. A recent study by the law firm of Norton Rose Fulbright found that 50 per cent of surveyed companies had conducted some form of due diligence to evaluate their human rights impacts, 70 per cent of which identified issues with their business relationships. However, when those companies identified issues with business relationships, 77 per cent of the time they attempted to address them solely by changing contractual conditions. This approach is not in line with the UN Guiding Principles on Business and Human Rights (UNGPs), which requires the direct engagement with affected stakeholders. Contractual language that aims to increase protection for affected people frequently faces challenges in enforcement, and field-level due diligence often reveals conditions out of alignment with the documents signed. Economic infeasibility, technical incapacity and lack of incentive or repercussions are leading reasons why suppliers and other businesses fail to uphold the human rights standards in their contracts. Financial institutions or