Submission to the EU on the EU Regulation on Mandatory Human Rights and Environmental Due Diligence Made by the Professional Training for Lawyers & Barristers in the UN Guiding Principles in Business & Human Rights Working Group

 

I am delighted to pass along the "Submission to the EU on the EU Regulation on Mandatory Human Rights and Environmental Due Diligence" for the Professional Training for Lawyers & Barristers in the UN Guiding Principles in Business & Human Rights Working Group. We are grateful to Linda Wood for her leadership in the preparation and submission of this input.

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The submission emphasizes the importance of capacity building to any project of mandatory human rights and environmental due diligence.   While the West has cultivated a (self) conceit around its own capacity to robustly engage in human rights and environmental due diligence, the reality is that except for that small group of (mostly self selected) drivers of this project, the need for capacity building among members of the local legal establishments is as great in developed states as it may be in the "usual suspects" developing states. A greater challenge is the need to internalize the values  and principles around which due diligence is undertaken and the systems created for its implementation effectively used to measure compliance.  And the greatest challenge--to create a dynamic and well informed community clear in its driving principles but strong in its capacity to resist rigid and inflexible orthodoxy in pursuit of common goals centering around context based respect for the great principles of human rights and sustainability (including climate change) that have emerged in the first quarter of this century.

And that is where the hard work of implementation will begin. To move beyond the use of this regulatory project as something more than another contribution to fashionable virtue signalling--by states, international public and private organizations, enterprises, and individuals in academia, the bar and elsewhere--then sufficient resources will have to be devoted to internalizing the values represented by due diligence It will also require a sustained and coordinated program of teaching values and mechanics to its  gatekeepers, data collectors, code writers, analysts and modellers. The current generation of lawyers will require training not just on the mechanics of due diligence and its application to human rights and sustainability; it will require training in the values reflected in the due diligence, and ultimately, as envisioned in 2011 with the UN Guiding Principles for Business and Human Rights, with the incorporation of human rights and sustainability risks into the way in which economic actors price their activities and make choices among alternatives to the creation of wealth for humanity and the world that humans occupy. 

 

Submission to the EU on the EU Regulation on Mandatory Human Rights and Environmental Due Diligence for the Professional Training for Lawyers & Barristers in the UN Guiding Principles in Business & Human Rights Working Group   Members of the Professional Training for Lawyers & Barristers in the UN Guiding Principles in Business & Human Rights Working Group agree to work collaboratively to engage with (those) and positively influence the adoption and implementation of the United Nations “Protect, Respect and Remedy” Framework and the UN Guiding Principles into the education, training, practice, ethics and professional standards.   Respect for human rights is necessary for the implementation of the Sustainability Development Goals.  Therefore, where possible, this will also include the Sustainability Development Goals (SDG’S).  The Mission of the group is to train law students and legal practitioners on the UN Guiding Principles on business and human rights (BHRTs) on the implications of human rights in their legal practice, beyond litigation and how to defend and prosecute it, to ensure standards are met globally consistently with best practice in Ethics and Professional Standards.  The training will include courses in law, business and Business and Human Rights. The group has been working with 84 members in 26 countries on setting training standards globally. On 25 January 2020, John Sherman wrote.  Good lawyers advise on what the law is today.  The best lawyers advise on what they think it maybe tomorrow.      No one knew or thought in January 2020, that the world would change so dramatically.  The inequalities that already existed, are made worse with the catastrophic effects of COVID19 and some with devastating consequences.  Yet, this is just the beginning of this global pandemic.   We welcome the EU Regulation on Mandatory Human Rights and Environmental Due Diligence.  The legislation is a good way to begin to create a level playing field.   The EU Regulation cannot happen on its own without the support, training and preparation by those countries that currently and in the future will have businesses that are based, active and or domiciled in the EU.    Therefore, as part of the submission we respectively request as a matter of urgency, the EU Commissioner requests all countries to include mandatory training in the UNGP’s and Business and Human Rights in all Law degrees and Business degrees and Business & Human Rights degrees beginning in their Universities and Business Schools in all member states to be in place to begin as soon as possible.  A period of 12-18 months to implement such training is recommended. . It is also necessary to provide training in the UNGP’s and Business and Human Rights to all Lawyers, Barristers and Judges in all member states.  We recommend this commences as above as soon as possible. We know in the UK it was a couple of years before the Human Rights Act 1998 had sufficiently trained personnel.  This should not be a factor to the successful implementation of the European Framework on Mandatory HR and Environment Due Diligence and ensure the appropriate training.   The list of recommendations has been drawn up from Martijn Scheltema and Robert Mc Corquodale’s proposals from Core Elements of an EU Regulation on Mandatory Human Rights and Environmental Due Diligence by Martijn Scheltema and Robert Mc Corquodale.   Additions have been made by Linda Wood.

A list of key recommendations which should be included is below.

Justification and Scope

1. The EU Regulation should be consistent with and supportive of other EU Regulations and legislation and initiatives, as well as the OECD Guidelines, UNGP’s and ILO Declarations.

2. The legislation would benefit from, and affect, a global model on mandatory human rights and environmental due diligence.  Providing a level playing field for businesses.

3. The EU Regulation Framework should include the Human Rights referenced by the UNGP’s.  The EU Regulation based on the UNGP’s and existing legislation in each country together with the “smart mix” of norms, standards and private voluntary initiatives in place both at the national and the international levels.  Also, a broad definition of human rights, based on the European Convention on Human Rights and the European Social Charter, as well as customary international humanitarian and international criminal law, and should integrate a minorities, gender, and vulnerable group perspective.  The Sustainability Development Goals (SDGs) should also be included, as should IFC performance Standards that financial institutions must comply with.

4. The EU Regulation should include in its environmental due diligence framework a definition of the environmental damage which is aligned to the OECD guidelines.

5. The EU Regulation should cover all types of business entities regardless of their size, sector or type of incorporation, and should be based on their domicile. It should include all companies (including subsidiaries) operating in the EU, including financial institutions, international companies, providers of product and services.

6. State-owned and state-controlled companies, and all public bodies must comply with the EU Regulation.  The recommendation is that all government’s procurement starts engaging in Mandatory Human Rights and Environmental Due Diligence with immediate effect.  Additional Legislation or regulation is not required for governments to comply with this, political will is needed.

7. The EU Regulation should cover the activities of companies having transnational effects, including through their subsidiaries or business relationships outside the EU, that cause and/or contribute to human rights and/or have environmental impacts.

8. The EU Regulation should include all six steps of human rights due diligence as defined by the OECD Guidelines and the UNGP’s. It should focus on risks to rightsholders and should discourage ‘ticking the box’ exercises.   The six steps It needs to specifically stress the importance of stakeholder engagement and mandate it. 1. Embed responsible business conduct into policies and management systems. 2. Identify and assess actual and potential adverse impacts associated with the enterprise’s operations, products, or services. 3. Cease, prevent and mitigate adverse impacts. 4. Track implementation and results. 5. Communicate how impacts are addressed. 6. Provide for or cooperate in remediation when appropriate.

9. The EU Regulation should be implemented and should be accompanied together with a system of sanctions for non-compliance.

10.  The EU Regulation should address conflicts of interest and to ensure that politicians economic interest are strictly limited whilst they are in office.

Training

As a matter of urgency, the EU Commissioner needs to request all countries to include mandatory training in the UNGP’s and Business and Human Rights in all Law degrees; training should also be mandatory in Business degrees. Such mandatory training should be in place to begin as soon as possible in all Universities and Business Schools in all member states.  A period of 12-18 months to implement such training is recommended.

It is also necessary to provide training in the UNGP’s and Business and Human Rights to all Lawyers, Barristers and Judges in all member states.  The mandatory training should be in place to begin as soon as possible.  A period of 12-18 months to implement such training is recommended.

Obligation

11. ·       The EU Regulation should implement an obligation on companies to conduct human rights and environmental due diligence and make clear that not undertaking reasonable and appropriate human rights and environmental due diligence would trigger liability for harm caused by the absence of such HREDD mechanisms. ·       Penalties including criminal sanctions should be considered when the due diligence has not been implemented and/or complied with.  ·       The EU Regulation should consider a burden that once adverse human rights are taking place, the mechanisms require for the company to start to investigate.   A refusal by the company to act should be subjected to additional penalties.   Companies that have not adequately investigated a complaint of adverse human rights and/or environmental rights impacts, prior to the pursuance of legal action in the courts, should also be subjected to further penalties. ·       Should the company demonstrate that it has performed due diligence in accordance and in compliance with the legislation and still appeared to have caused human rights impact and/or environmental impacts, this conclusions of facts could be taken into consideration as a mitigating factor by the Court when issuing penalties and sanctions.

12. The EU Regulation like the OECD and UNGP’s should be interpreted as including a broad human rights and environmental due diligence requirement,  it should be allowed to be specific for different sectors, states, and issues, together with best practices assessed and enforced by a public supervisor.

13. The EU Regulation should include a stakeholder consultation process on the different steps of human rights and environmental due diligence which a company undertakes, taking into account in particular, gender dimensions, minorities, and vulnerable groups.

14. The EU Regulation should be clear and specifies that it goes beyond mere reporting.  The EU Regulation must use clear language when identifying the steps that are required for informing the due diligence process while leaving little space to interpretation.

15. The EU Regulation should create a regime of liability when a company does not undertake human rights and environmental due diligence.  A separate liability regime should only be created for Member States that do not adopt legislation providing for such triggering mechanisms in case of non-compliance.

17. The EU Regulation should provide for a defence against liability where a company has undertaken reasonable and appropriate human rights and environmental due diligence.

18. Consistent and comprehensive methodologies should be developed to measure human rights impact, which may be supported by new technologies, and an EU body should assess and approve such integrated measurement methodologies as is currently done in the EU Taxonomy on Sustainable Finance.

Monitoring and Enforcement

19. An EU body should supervise or at least coordinate supervision of compliance of the EU REG with proper representation from member states.

20. A civil regime of enforcement including private enforcement of human rights and environmental due diligence should be facilitated, including by individuals, NGOs and through collective action or mass claims.

21. The EU Regulation should provide for a regime of increased criminal sanctions to address gross human rights and environmental impacts, and to counter behaviour from company boards which repeatedly and wilfully disregard human rights and environmental due diligence.  Freezing and confiscating property and assets that have been acquired through a criminal offence, and gross human rights and environmental impacts.

22. The EU Regulation should create an administrative law regime to ensure public supervision, together with the necessary powers to monitor compliance and best practices related to human rights and environmental due diligence including all six steps of human rights and environmental due diligence, to support the development of best practices by offering training and reenforcing capacity building, such a regime would help ensure the EU Regulation was properly  enforced.

23. Monitoring and enforcement should, above all, incentivize companies to improve continuously and elicit positive changes in corporate behaviour.

24. The state have the duty to protect and the EU Regulation should be clear on what is expected of each member state to ensure it protects those at risks from human rights and/or environmental impacts.

Remedy

The EU Regulation needs to be clear, on who are the rightsholders and what rights they hold.

Effective access to remedy needs to be accessible, transparent, affordable and achievable.  Rightsholders should have access to clear information as to what achievable outcomes they can expect when taking legal action. Such information should include matters of compensation, restitution and rehabilitation.