More than ever, companies are scrutinized for corporate accountability failures and abuses according to the current business and human rights regulations.
Increasing pressure is coming from international courts, regulators, and States, who are also under the same obligations, as well as from civil society, humanitarian organizations, and the unforgiving public opinion, which, in the age of social media, can swiftly “cancel” or bury a business.
Under such a magnifying glass, there is no way out for professionals and senior executives but to urgently accept accountability and take a leadership role in protecting human rights, encouraging ethical and responsible practices, and exercising due diligence in their efforts to pave the way for sustainable economies and positively impact on our societies.
The Recurring News
Earlier this month, a new investigation on abuses involving the leading French sports retailer Decathlon brought the topic of human rights and business into the spotlight. The report by a French media outlet exposed documents and made serious allegations, linking the activities of the sports multinational and its manufacturing chain to child labor, deforestation in Brazil, and forced labor in Chinese factories in Xinjiang. Since 2017, the Chinese government-sponsored labor transfer programs in the region have been denounced for coercing Uyghurs and other Turkic Muslims to move to urban areas to work in factories, amounting to what Human Rights Watch considers crimes against humanity.
According to the article, the company’s leadership was reportedly aware of suspected forced labor in its supply chain but failed to take action and disengaged from its contractors. To make matters worse, the French government’s calls for Brussels, joined by Germany, to delay new European green guidelines for business have been seen by humanitarian agencies as a ploy to obstruct justice despite mounting evidence linking French companies to human rights and environmental abuses.
Business Impacts On Human Rights
Business activities generate wealth and create jobs, affecting millions of people’s lives worldwide, whether they are employees, consumers, contractors along the supply chain, and, often overlooked, the environment and communities where the company operates. Given this far-reaching influence, business and human rights have a deep and undeniable connection: even if states fail to comply with and protect these rights within their territory and jurisdiction, companies are expected to observe, respect, and safeguard human rights in all engagements, direct or otherwise, where their activities extend.
Speaking at the 13th UN Forum on Business and Human Rights in Geneva last November, Volker Türk, the United Nations High Commissioner for Human Rights, noted that all businesses and societies benefit from freedom, peace, just and stable institutions, sustainable economies, and a trustworthy and clean reputation, free from harmful practices that abuse human rights. “The world looks to business to play its part, more importantly than ever.”
As consumers become increasingly conscious and selective, it’s time for professionals and executives to play a more decisive role where states often fail, whether in legislating, monitoring, punishing, or remedying wrongdoings. Companies that understand and embrace the benefits of investing in ethical practices in their core values can avoid damaging their credibility, foster sustainable, long-term growth, and serve as role models of business conduct in these challenging times, with growing inequalities, chaotic climate changes, with devastating environmental consequences, and rising conflicts worldwide.
Even small businesses have global reach and influence today. This impact can be deeply profound, both positive and negative. Unfortunately, we still hear too often about the latter, whether it’s large companies refusing to take responsibility or take action, complicit in false and improperly obtained audits, or covering up forced or child labor contexts within their supply chains, which often result in human and/or environmental tragedies. For instance, just days after taking office in January, U.S. President Donald Trump issued executive orders to rid U.S. agencies of their diversity, equity, and inclusion (DEI) programs. His actions follow a trend of backsliding on DEI in recent years and are a troubling path for responsible business. Furthermore, as I wrote in this post, diversity in the workplace creates immeasurable opportunities for professional growth and project success.
Abuse And Negligence
It’s worth remembering the burst of the Brumadinho iron ore mine dam in the State of Minas Gerais, operated by Brazilian mining giant Vale, still fresh in everyone’s memories. In January 2019, the socio-environmental disaster led to 272 deaths and the evacuation of more than 20,000 people, including indigenous tribes. A torrent of toxic mud containing iron, manganese, aluminum, copper, and other minerals left a trail of destruction across more than 290 hectares, contaminating rivers and water reservoirs of regional cultural, economic, and biodiversity importance. Vale’s negligence and environmental and social governance (ESG) failure further aggravated the case: despite knowing about the risks and problems, the German consulting firm TÜV Süd certified the safety and stability of the Brumadinho dam. It authorized its operation even though it did not meet international safety standards, under pressure from the mining company, as a subsequent investigation by Brazilian lawmakers proved. Although shocking, it’s nothing new.
Just a few miles from Brumadinho, in November 2015, another mining dam, operated by Vale’s subsidiary Samarco, collapsed in the small town of Mariana. The disaster claimed 19 lives and devastated nearby villages, releasing tons of poisonous sludge into the Atlantic Ocean. Unsurprisingly, Vale has gone from being a national pride to the most hated company by its people. These sad episodes still affect the land and many lives today. They are clear examples of human rights violations by unethical business practices and are still far from being remedied. They also highlight the failures of the State, authorities, local institutions, and the companies themselves to commit to a comprehensive environmental compliance assessment to prevent loss of lives and destruction.
Inspiring Stories
However, tragedies like those unfolding in Brazil and many other areas of the world also offer an opportunity. While they shock and deeply move us, they also capture collective attention to the problems. Tightening rules and policies on corporate activities and governance can further engage society in the debate, demand greater government accountability, and drive the necessary changes.
Public data platforms like the first-of-its-kind Financial Exclusions Tracker, a website launched in October 2023 by an international coalition of NGOs, can put additional pressure on companies to change their practices. The site tracks which corporations are on investors’ and banks blocklists for sustainability, human rights abuses, and corruption reasons, among other issues, hoping that the media, civil society, shareholders, and governments use the list to identify companies with the highest ESG risks, as flagged by other investors. The 2024 report lists 5,589 companies and 67,420 exclusions. It will be interesting to see how businesses respond to this in time.
Other stories showcase how some companies have learned from their mistakes and reinvented themselves. These stories bring hope and optimism where sustainable, fair, and clean economies are built on best business practices and policies. With this goal, the Institute for Human Rights and Business (IHRB) launched in 2024 the JUST Stories initiative, a global quest to report on people working together to advance global transitions to net-zero emissions and share practical and actionable lessons.
The report on the small, coal-centered economy of the Australian community of Collie is inspiring, offering a promising “just transition” model for similar regions around the world struggling to decarbonize their economies by 2050 without devastating local communities. Reporting on the successful collaboration between stakeholders, including government, unions, community, and employees, Collie has raised significant investment to retrain and redeploy its coal industry workforce, revitalize its economy and tourism, and attract new green industries. It also showcases how policymakers, businesses, and communities can work together toward a brighter future. Most importantly, one that respects its workers’ human and labor rights.
Knowing The International Guidelines
In recent years, the urge and imperative need to encourage responsible businesses that respect and protect human rights have intensified. In this sense, the United Nations Guiding Principles on Business and Human Rights (UNGPs), published in 2011 and adopted internationally, have significantly advanced the conversation among states, businesses, civil society, and other relevant stakeholders. The UNGPs present a three-pillar framework: “Protect, Respect, and Remedy,” with a stronger focus lately on the “remedy” pillar.
Despite criticisms of an insufficient enforcement mechanism, the ineffectiveness of judicial remedies, or the inability of existing tools to deal with complex disputes involving large corporations, the truth is that the UNGPs have paved the way for a much broader debate, which goes beyond international law and the role of States, according to its Principle 25, in taking measures to ensure access to an effective remedy against abuses within their territory and/or jurisdiction, through judicial, administrative, legislative or other appropriate means.
It was fundamental in disseminating some core principles and a precursor of other regional or global initiatives, guidelines, and regulations, such as the aforementioned groundbreaking laws passed in the EU in 2024 addressing corporate complicity in abuses. Under the new rules, the Corporate Sustainability Due Diligence Directive (CSDDD) and the ban on imports of products from known sources of forced labor, to be implemented in 2027, large corporations will have an obligation to conduct human rights and environmental impact assessments within all spheres of their activities, including their chain of infrastructure and logistics, bringing business partners and contractors involved in the production, distribution, transportation, and storage of their products to scrutiny and, if necessary, accountability and remedy.
Another milestone is the Guidelines for Multinational Enterprises on Responsible Business Conduct, revised and updated in 2023 by the Organization for Economic Cooperation and Development (OECD). Initially published in 1976, the guidelines were the first international tool to explicitly include protecting human rights as a corporate responsibility and recommend incorporating risk-based due diligence assessment in all areas where business activities and operations intersect with society. The document provides practical support to transnational companies and encourages their positive contributions to economic, environmental, and social progress.
Looking Ahead
The challenges ahead are enormous, partly due to changing times and societies and gaps in regulatory and monitoring mechanisms that emerge over time. The international community often learns belatedly with each success and failure. The so-called “green rush” is a good example of the difficult balancing act of this equation.
As we brace ourselves for a 60% growth in renewable energy consumption by 2030, the demand for land to build clean energy infrastructure will increase, causing displacement and disruption of livelihoods in several areas worldwide. Demand for minerals used for renewable energy technology, such as cobalt and lithium, is expected to triple by the same year. Still, the massive production and processing of mineral resources can lead to serious environmental and social problems that, if poorly managed, can harm local communities.
What we have learned so far is that while international law and diplomatic norms continue to rely on the input of State actors, developing practical guidelines that shape areas related to global economic and environmental law that have a direct impact on corporations and civil society requires a different approach, with input and insights from these parties.
The key lessons here are, notably, the urgent role of non-state actors and the growing importance of soft law sources such as lobbying and support from the business community. The decisive changes will not happen unless professionals and executives take the lead and fully commit to ethical and responsible corporate conduct and ESG practices. If not from a place of moral imperative and conscience but from a strategic perspective. The future is at stake, not only for human rights but also for businesses themselves.