In the next few minutes I would like to offer perspectives from the State Department on due diligence and supply chain management in the context of our corporate social responsibility and business and human rights agendas. I would also like to give you some concrete examples on ways the United States Government is supporting multi-stakeholder partnerships and related efforts to foster economic growth and sustainable development through responsible supply chain management.
There is a strong nexus between economic prosperity through sustainable and socially responsible development, respect for human rights, and good governance. The State Department provides guidance and support for U.S companies to undertake and enhance their efforts to promote these objectives, including through our engagement with business, international organizations, trade unions, and other members of civil society. This engagement includes fostering public-private partnerships to achieve common objectives.
How businesses manage their supply chains has become a core issue in the ongoing dialogue among governments, multilateral organizations, businesses, and civil society regarding the impact of corporate activities on human rights.
As we know, human rights law generally imposes obligations on States to protect human rights. However, companies have an important role to play in the context of the exercise and enjoyment of human rights. The need for governments, business, and civil society to cooperate in addressing human rights concerns through supply chain management is grounded in the facts of our increasingly integrated world, where more than one-third of the 100 largest economic actors today are private companies, not countries.
The United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles), and the OECD Guidelines for Multinational Enterprises (OECD Guidelines), which contain a human rights chapter that draws upon the UN Guiding Principles, are internationally recognized tools to help businesses put in place integrated policies and procedures to ensure their operations conform to international best practices regarding respect for human rights.
Using the Three Pillar “Protect, Respect and Remedy” framework, the UN Guiding Principles, which is also reflected in the OECD Guidelines, provide guidance to governments, business, and stakeholders on understanding their respective roles regarding due diligence and supply chain management while respecting human rights. In the context of business, this means respecting human rights is an integral component of practicing corporate social responsibility. Under the UN Guiding Principles, this responsibility exists independently of a State’s abilities or willingness to fulfill its duties to protect the human rights of its people.
Just a few days ago, the United Nations Forum on Business and Human Rights in Geneva discussed the provisions in the UN Guiding Principles that deal with due diligence and supply chain management, including with regard to the impact of the activities of private sector and state sponsored financial institutions, and investment instruments on human rights.
The Department strongly supports the UN Guiding Principles and OECD Guidelines and partnered in the multi-stakeholder process that resulted in their formulation.
Our bureaus and embassies promote the use of these tools, as part of our economic diplomacy work, including for leveling the playing field for U.S. businesses, in our domestic and global outreach with other governments, the international community, businesses, civil society and the general public. We regularly encourage business to use these tools as a means for identifying where they may cause or contribute to adverse human rights impacts though their own activities or activities directly linked to their operations, products or services through a business relationship.
Now I’d like to provide some examples of how the U.S. Government is partnering with companies and other stakeholders to foster sustainable economic growth and development through responsible due diligence and supply chain management.
In line with the OECD Guidelines, the State Department has partnered with business and civil society to establish a Stakeholder Advisory Board. This Board provides recommendations regarding the activities of the U.S. National Contact Point for the OECD Guidelines. These activities are directed at furthering responsible business conduct through promotion, multi-stakeholder analysis and solution finding for emerging corporate social responsibility challenges, and conflict resolution, including in relation to respect for human rights in supply chain management.
Additionally, the Department has initiated specific programs directed at strengthening public-private coordination. We are funding a program that seeks to promote/support implementation of the Guiding Principles in the agriculture sector in Nicaragua, the garment manufacturing sector in Bangladesh, and the mining sector in Zimbabwe. Also, we are working with other parties to support multi-stakeholder efforts to facilitate fully traceable and conflict-free supply chains of minerals, including through the Public-Private Alliance for Responsible Minerals Trade.
The State Department and other U.S. Government agencies also support safe and rights-respecting workplaces globally, through our engagement with foreign governments, business, and civil society as well as through programmatic support for initiatives. These include the U.S. Department of Labor’s support for the International Labor Organization’s “Better Work” program. The U.S. Department of Labor has also created a “Reducing Child and Forced Labor Toolkit for Responsible Business,” to help companies combat child and forced labor in their global supply chains.
Likewise, the State Department’s Office to Monitor and Combat Trafficking in Persons leads the Department’s efforts to combat human trafficking, including through partnerships and engagement with business leaders, coalitions, and investor groups. We are collaborating with civil society organizations that focus on supply chain management to collect data on the areas at greatest risk to human trafficking in global supply chains and to develop tools for businesses to analyze potential trafficking in their own supply chains.
The Department engages with private sector leaders to raise awareness about trafficking in company and industry supply chains, advance implementation of guidelines and tools, and provide expertise for multi-stakeholder working groups. So that the United States might lead by example, last year President Obama issued an Executive Order to strengthen protections against trafficking in persons in federal contracts.
The State Department recognizes that identifying, understanding, and effectively managing the often diverse and opaque dimensions of one’s supply chains can be a difficult and seemingly overwhelming task. However, in our increasingly inter-connected global economy, information transmitted almost instantaneously via the internet can have major impacts on a business. With businesses’ involvement in social media, public expectations and perceptions about how businesses conduct themselves, particularly in communities where they operate, can enhance or jeopardize a company’s reputation, risk management and ratings, profitability, integrity, and identity.
As we have seen in the news, international attention about human rights problems in the supply chains of food and clothing production and other manufacturing, as well as the extractive industries, has become a major source of criticism and concern about companies for consumers and the global community in general. Responsible supply chain management can present challenges as well as opportunities for businesses, governments, civil society and other stakeholders. Through establishing trust, transparency, and effective partnering and other cooperation with stakeholders to achieve shared value and shared objectives, businesses can foster greater predictability, responsibility, positive brand image, and even support from the communities where they operate, governments and the public.
Thanks for your attention. I’ll be pleased to answer questions.