Benn Hogan, GBI Director
It is a truism that business activities and relationships can impact human rights at all stages of the value chain.
In 2008, the late Professor John Ruggie’s "Protect, Respect and Remedy" Framework noted that the risk of a siloed approach to managing human rights risks within a company could lead to “inconsistent or contradictory actions”, including “product developers [who] may not consider human rights implications” and “sales or procurement teams [that] may not know the risks of entering into relationships with certain parties”.
It is clear then, that human rights risks from the production phase onwards to the point of sale and beyond are within the scope of a human rights management approach that aligns with the UN Guiding Principles on Business and Human Rights (UNGPs). Assessing and addressing so-called downstream human rights impacts on people is a responsibility that flows directly from international standards, and is independent of any legislative requirement.
Yet, in current policy debates at the EU and OECD, the scope of human rights due diligence obligations is being contested, with some favouring an approach that limits requirements to conduct downstream due diligence to a limited set of circumstances – or not at all.
Companies are already conducting due diligence in downstream contexts
Companies taking a risk-based approach to human rights due diligence may find that downstream human rights impacts are likely to be particularly severe for certain products, services and relationships. Many companies are already addressing such risks, as evidenced in a recent publication from the Danish Institute for Human Rights highlighting case studies on this topic. GBI member companies are among the businesses developing programmes and processes to identify, address and mitigate potential downstream impacts.
For example, GE’s 2021 Human Rights Report notes that Indigenous rights are “a critical concern for us in our downstream value chain because of the way our products are used in power projects across the globe. Some of those projects touch on land and customary rights of vulnerable communities.”
Intel includes product responsibility within the company’s Global Human Rights Principles, while Siemens has developed “ESG Radar”, a tool to “support [the company] in identifying and assessing potential adverse impacts and derive mitigation pathways based on the business activities risk profiles and our leverage potential” in customer relationships.
GBI peer learning on downstream human rights due diligence
Over the past three years, GBI member companies have been convening as part of our Member Peer Learning programme to exchange ideas and approaches to implementing human rights due diligence focused on actual and potential downstream impacts. This necessarily encompasses a wide range of considerations that affect a plethora of corporate functions, including research and development, sales and service. Downstream risks may also go to the heart of a company’s business model and strategy, and so the integration of a human rights lens company-wide remains important.
Downstream human rights impacts also present different, sometimes unique challenges. For example, the leverage that a company has with downstream business partners – such as customers – may be reduced as compared to relationships with suppliers.
Considerations for effective downstream human rights due diligence
Arising from our member peer learning conversations, we are pleased to share our new report Effective downstream human rights due diligence: Key questions for companies. The report shares lessons learned with a broader audience. It offers an overview of the expectations contained in international standards, and provides some initial questions for companies seeking to establish downstream human rights due diligence processes of their own.
The key questions cover the identification of risks from a company’s products, services and business model, as well as end-user, customer and other downstream business partner risks. They also offer initial insights on how companies can take action to prevent and mitigate downstream risks, and reinforce the importance of tracking effectiveness and communicating as part of the due diligence process.
These considerations represent the start – and not the whole – of the thinking companies should do when implementing downstream due diligence. We hope they will inspire discussion among business and human rights practitioners on how best to implement international standards to ensure respect for people affected by products, services and business relationships downstream in value chains.
Download our report 'Effective downstream human rights due diligence: Key questions for companies' here