Deepanshu Nagar
Abstract
This chapter critically examines the international legal and policy framework governing Human Rights Due Diligence (HRDD) in the context of business and human rights. It traces the historical evolution of corporate responsibility from a traditional profit-oriented model to a modern framework that recognizes the obligation of businesses to respect human rights in their operations and supply chains. Earlier, human rights obligations were considered the exclusive responsibility of states, while corporations were viewed primarily as economic entities. However, globalization, the rise of multinational corporations, and the expansion of global supply chains exposed serious gaps in this state-centric approach. Industrial disasters, labour exploitation, environmental degradation, unsafe working conditions, and corporate negligence highlighted the significant impact of business activities on human rights and intensified international demands for corporate accountability. The chapter explains that initial responses to these concerns emerged through voluntary Corporate Social Responsibility (CSR) initiatives. Although CSR encouraged companies to consider social and environmental concerns, such initiatives lacked uniform standards, enforcement mechanisms, and accountability. Consequently, they proved insufficient to address systemic human rights abuses within global supply chains. This led to the gradual development of more structured international frameworks aimed at integrating human rights into corporate governance and business operations.
A major focus of the chapter is the development and significance of the United Nations Guiding Principles on Business and Human Rights (UNGPs), adopted in 2011 under the leadership of John Ruggie. The UNGPs established the globally accepted “Protect, Respect and Remedy” framework based on three foundational pillars: the duty of states to protect human rights, the corporate responsibility to respect human rights, and access to effective remedies for victims of human rights abuses. The dissertation emphasizes that the second pillar, concerning corporate responsibility to respect human rights, forms the core of Human Rights Due Diligence. The chapter explains that Human Rights Due Diligence under the UNGPs requires companies to proactively identify, assess, prevent, mitigate, and account for actual and potential human rights impacts linked to their operations, subsidiaries, suppliers, and broader supply chains. HRDD is described as a continuous and dynamic process involving four major stages: identifying human rights risks, integrating findings into internal management systems, taking preventive and corrective action, and monitoring the effectiveness of these measures. The study highlights that the UNGPs shifted corporate responsibility from a reactive and philanthropic approach toward a preventive, risk-based, and governance-oriented model. Stakeholder engagement, transparency, and accountability are identified as essential features of effective due diligence. The chapter further examines the role of the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises as another significant international framework promoting responsible business conduct. Originally adopted in 1976 and revised in 2011 to align with the UNGPs, the OECD Guidelines provide detailed recommendations relating to human rights, labour standards, environmental protection, anti-corruption, and consumer interests. The dissertation explains that the OECD framework strengthens HRDD implementation through practical mechanisms such as National Contact Points (NCPs), sector-specific due diligence guidance, and dispute resolution procedures. These mechanisms contribute to greater accountability and encourage businesses to integrate human rights standards into their operations.
A significant part of the chapter addresses Human Rights Due Diligence within global supply chains. The dissertation explains that modern supply chains involve complex networks of suppliers, subcontractors, and intermediaries operating across multiple jurisdictions, often in regions with weak regulatory oversight. This complexity increases the risk of labour exploitation, unsafe working conditions, environmental harm, and violations of community rights. HRDD therefore extends beyond direct corporate operations and requires businesses to assess and address human rights risks throughout their supply chains. Companies increasingly adopt supplier codes of conduct, contractual obligations, audits, and compliance monitoring mechanisms to ensure adherence to international standards. However, the chapter also critically examines the limitations of traditional audit-based compliance systems, including lack of transparency, superficial monitoring, and inability to detect hidden abuses.
The dissertation also undertakes a comparative analysis of evolving international practices relating to mandatory due diligence laws. It notes that several countries have gradually shifted from voluntary guidelines to legally binding due diligence obligations requiring corporations to identify and prevent human rights abuses within their operations and supply chains. This reflects the growing international consensus that corporate accountability is essential for sustainable development, ethical globalization, and protection of fundamental human rights.
The chapter concludes that international frameworks such as the UNGPs and OECD Guidelines have significantly transformed the understanding of corporate responsibility in relation to human rights. Human Rights Due Diligence has emerged as a central mechanism for promoting responsible business conduct, corporate accountability, and protection of vulnerable individuals and communities affected by business activities. Although many international standards remain soft-law instruments, they have strongly influenced domestic legislation, corporate governance practices, investment decisions, and global regulatory developments. The study ultimately argues that effective implementation of HRDD requires not only legal compliance but also institutional commitment, stakeholder participation, transparency, and integration of human rights considerations into the core structure of business decision-making.
Keywords: Human Rights Due Diligence (HRDD), Business and Human Rights, Corporate Accountability, Multinational Corporations, Global Supply Chains, Corporate Social Responsibility (CSR), United Nations Guiding Principles (UNGPs), Protect, Respect and Remedy Framework, Human Rights Compliance, OECD Guidelines for Multinational Enterprises, Stakeholder Engagement.
Introduction
The connection between human rights and business activities has developed over time. Traditionally, corporations were considered to be mainly economic agents whose primary goal was to maximize profits. The traditional human rights obligations were laid on the states whereas there were few expectations on private businesses. But the intensive growth of multinational companies and globalization of supply chains showed the weakness of this state-centric approach. A number of high-profile cases on environmental degradation, labour exploitation, and corporate negligence during the late twentieth century helped focus the world on the issue of the role of businesses in human rights abuses. Industrial accidents, poor workplace environments and exploitation within the third world showed that business operations might have far reaching social and human rights consequences. These changes culminated in the mounting pressure on businesses to be responsible and embrace ethical business conducts. The reaction to these concerns was in the beginning mainly voluntary. Corporate Social Responsibility (CSR) concepts appeared, as well as social and environmental impacts were taken into consideration by the companies in addition to financial performance. Nevertheless, CSR initiatives were usually not uniform, enforced, and accountable. Consequently, they were inadequate to deal with systemic problems in global supply chains. The beginning of the 2000s became a turning point in the discussion of business and human rights. The United Nations tried to adopt the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises that attempted to put direct human rights responsibility on the corporations. Even though these norms were not officially accepted, they formed the basis of future developments. In 2011, a more feasible and broader acceptable framework was adopted in the form of the United Nations Guiding Principles on Business and Human Rights (UNGPs). These principles created a harmonized stance in that the role of states in ensuring human rights and the role of businesses in ensuring that human rights are respected are realized. Human Rights Due Diligence (HRDD) came to the center of this framework as it focused more on an active and proactive strategy to dealing with human rights risks. The business and human rights framework has been further developing over the years, shifting on voluntary principles to legal binding. A growing consensus that corporate accountability is critical to sustainable development and ethical globalization has been reflected in legislation introduced in various countries which makes companies do due diligence in their supply chains.
1.2 United Nations Guiding Principles on Business and Human Rights (UNGPs)
The Guiding Principles on Business and Human Rights of the United Nations that was adopted by the UN Human Rights Council in 2011 is considered a ground-breaking step in the regulation of corporate behaviour. The UNGPs, which are the brainchild of John Ruggie, is a broad and internationally agreed platform of dealing with human rights concerns in business practices. The UNGPs rest on three pillars, which are: the duty of states to uphold human rights, the obligation of businesses to uphold human rights and the necessity of access to effective remedy of victims of human rights violations. Collectively, these pillars are what constitute the Protect, Respect and Remedy framework, which has become the staple of contemporary business and human rights.
The second pillar that deals with corporate responsibility to respect human rights is especially applicable to Human Rights Due Diligence. The UNGPs imply that businesses should not violate the human rights of others and that they should respond to negative effects to which they are linked. This is the responsibility irrespective of the capabilities or goodwill of states to meet their own human rights duties. The UNGPs have a number of steps in Human Rights Due Diligence. To begin with, businesses need to recognize and determine actual and potential human rights impacts that are linked to their operations. This will entail an in-depth knowledge of the risks involved in their operations and supply chains. Second, companies should use these findings to incorporate them into their operations and act accordingly in order to prevent or reduce damage. Third, businesses must monitor the success of their actions so that they can make sure that the actions are producing the desired effect. Lastly, companies are required to report their approach to human rights impacts and make this transparent and accountable. “Businesses have long been able to operate outside of regulatory oversight in many ways. However, in recent years there has been increasing recognition of the importance of holding businesses accountable for their actions. One way that this accountability is being pursued through the United Nations Guiding Principles on Business and Human Rights (UNGPs) which were adopted by the UN Human Rights Council in 2011. These principles, developed by John Ruggie and endorsed by the UN Human Rights Council, are the world’s first universal guiding principles on the role of business in respecting human rights. They are not legally binding; however, they hold a great deal of normative power, and have already become the international benchmark for what constitutes good practice in business and human rights.
The Protect, Respect and Remedy Framework represents the foundation of the UNGPs. The framework consists of three main pillars. Pillar one provides guidance to States on their obligation to protect human rights. To fulfill this obligation, States should create an environment that promotes corporate activity while ensuring that corporate activity does not interfere with human dignity. A State’s failure to create such an environment would violate their human rights obligations. States also have an obligation to take appropriate steps through laws, regulations, policies and adjudications to prevent, investigate, punish and redress human rights abuses committed by third parties, including private actors.
Pillar two provides guidance to private actors regarding their responsibilities towards protecting human rights. Private actors have a responsibility to respect human rights wherever they operate, regardless of their size, industry or location. This means that private actors must refrain from interfering with human rights and must act in response to any negative impacts on human rights associated with their activities. Additionally, this responsibility applies to all aspects of private actor’s activities including those related to their direct operations as well as those related to their indirect operations. Indirect operations refer to the operation of a private actor’s subsidiary, supplier or larger supply chain. As a result of globalization, private actors are increasingly interconnected, making it critical for them to recognize and respect their responsibility to protect human rights throughout their supply chains.
Pillar three emphasizes the right of victims of human rights abuses to obtain adequate remedy. While preventing abuses is an important goal of pillar one and two, it is impossible to eliminate the possibility of abuse completely. Therefore, both states and businesses have an obligation to provide avenues through which victims of abuses can pursue remedies. Remedies may include judicial and non-judicial remedies. Judicial remedies would be available through courts and tribunals. Non-judicial remedies could be provided at the company level through grievance procedures or mediation processes. Ultimately, the goal is to allow victims to pursue justice, compensation or other types of redress in a timely and efficient manner. Of the three pillars mentioned above, the responsibility of private actors to respect human rights is most directly connected to the concept of Human Rights Due Diligence (HRDD). According to the UNGPs, private actors must engage proactively in identifying and managing their human rights risks. The fact that companies can no longer wait until harm occurs before acting on it represents a major shift away from traditional approaches to corporate social responsibility. Traditional approaches often emphasized either voluntarism or philanthropy rather than a systematic risk-based framework.
Human Rights Due Diligence under the UNGPs entails a dynamic process composed of four distinct steps. The first step entails identifying and assessing actual and potential human rights impacts arising from private actor’s activities, products or services. When conducting this assessment, private actors should consider impacts on workers, local populations, consumers and other stakeholders. The effectiveness of this assessment will depend upon whether the impacted persons are consulted during the assessment process as well as the quality of expertise utilized to analyze the data collected.
The second step involves incorporating the results of these assessments into internal policies, management systems and operating practices. The integration of due diligence into internal systems is essential if due diligence is to be viewed as a central component of corporate governance rather than simply a discrete event.
The third step involves taking reasonable actions to reduce or eliminate identified risks. Reasonable actions may range from changing internal practices or procedures to requiring that suppliers implement changes to their own internal practices or procedures. If the risks posed by suppliers are severe enough, private actors may need to terminate their relationships with suppliers who present unacceptable levels of risk.
Finally, the fourth step involves monitoring whether actions taken have reduced or eliminated risks previously identified. Companies should track their progress utilizing indicators, audit reports or feedback mechanisms. Monitoring is essential so that companies can identify areas where additional actions may be required and modify their strategies accordingly. The critical point about the UNGPs is that it focuses on the engagement of stakeholders. The companies are advised to engage with the affected individuals and communities to get a better picture of the possible effects of their operations. This participatory method will improve the success of due diligence procedures and make sure that the views of vulnerable populations are considered. The UNGPs are not a legally binding measure, but they have become widely accepted and have impacted national and international regulatory frameworks. The principles have been integrated into the domestic policy of many countries and they are used as a benchmark in corporate governance, investment decision and supply chain management.
1.3 OECD Guidelines to Multinational Enterprises.
Another significant international framework to promote responsible business practices is the OECD Guidelines to Multinational Enterprises. The guidelines were initially adopted in 1976 and later revised to address emerging global issues and offer guideline to multinational enterprises which either operate or are based in adhering countries. The guidelines encompass a broad spectrum of problems such as human rights, labour standards, environmental protection, anti-corruption measures and consumer interests. In 2011, the OECD Guidelines were updated to correspond to the UNGPs with the introduction of human rights due diligence as one of the major elements of responsible business conduct.
Within the OECD model, due diligence is a process whereby enterprises recognize, prevent, and absorb actual and potential negative effects, and explain how these effects are handled. This definition is very similar to the one described in the UNGPs, which underlines the significance of consistency and coherence of international standards. The creation of National Contact Points (NCPs) is one of the peculiarities of the OECD Guidelines as these points are entrusted with the duty of popularizing the guidelines, as well as to respond to non-compliance complaints. NCPs offer dialogue and dispute resolution platform, which allow the affected parties to express their concerns about corporate behaviors. Even though, NCP decisions are not legally binding, they may have serious reputational effects on companies.
OECD has also come up with sector specific due diligence guidance in the industries like minerals, agriculture, garment and footwear and financial services. These standards offer tools and ideas to apply the due diligence in various areas with regard to the peculiarities and risks of each industry. The OECD Guidelines have been instrumental in the formation of international expectations as to the corporate behaviour and have helped in the formation of more robust due diligence frameworks. They supplement the UNGPs with specific instructions and practical mechanisms of implementation, which make them more effective.
1.4 Due Diligence Responsibilities in Global Supply Chains.
The complexity of global supply chains is defined by the presence of various levels of supplier, subcontractors and intermediaries in various jurisdictions. This complicates the process of monitoring and controlling of the human rights risks by the companies, especially in areas where the regulations are weak. Human Rights Due Diligence attempts to overcome these issues by not only focusing corporate responsibility on direct operations, but also covers the entire supply chain. Businesses are supposed to determine risks not only in their operations but also those of their business partners. This involves evaluation of labour conditions, environment practices as well as the possible effects on the local communities.
Application of due diligence within supply chains entails integration of internal policies, contractual requirements, and monitoring. Businesses will frequently have a code of conduct whereby expectations are outlined to suppliers such as adherence to labour requirements and human rights. Such codes are normally embedded in contractual agreements, which forms a ground of accountability. Along with contractual implementation, companies can perform audits and inspections to check compliance. Traditional audit-based methods have however been criticized to be limited such as not being transparent, short-term oriented and failure to identify concealed violations.
1.5 Comparative International Practices
The chapter has also looked at the international framework that addresses Human Rights Due Diligence and how this has over the years been developed as more of a voluntary corporate practice, rather than having a more structured and in some instances legally binding nature. The comparison of the UN Guiding Principles and the OECD Guidelines shows that there is an increasing agreement that due diligence is an increasingly important standard of responsible business conduct. The supply chain obligations and comparative international practices discussion emphasises the growing complexity and importance of HRDD in the global economy. With the ever growing development of countries and establishment of due diligence laws, businesses have to adjust to this evolving regulatory environment.
The second chapter will be the Indian legal framework, which will look at how domestic legal frameworks and policies take into consideration human rights issues in global supply chains and determine their compliance with international standards.
Conclusion
The international framework relating to Human Rights Due Diligence (HRDD) has evolved significantly in response to the growing impact of business activities on human rights across the world. Earlier, corporations were mainly viewed as economic institutions with limited responsibility toward human rights, while states were considered the primary duty-bearers under international law. However, globalization, expansion of multinational corporations, and increasingly complex global supply chains exposed serious gaps in this traditional approach. Incidents involving labour exploitation, environmental damage, unsafe working conditions, and corporate negligence demonstrated that business enterprises could directly affect the rights and dignity of individuals and communities.
The development of international standards such as the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises marked an important step toward establishing corporate accountability in relation to human rights. These frameworks introduced the concept of Human Rights Due Diligence as a continuous process through which businesses identify, prevent, mitigate, and address adverse human rights impacts arising from their operations and supply chains. HRDD shifted corporate responsibility from a voluntary and reactive approach to a more systematic, preventive, and governance-based framework.
The study highlights that the UNGPs, particularly the “Protect, Respect and Remedy” framework, have become the global standard for responsible business conduct. Businesses are now increasingly expected to integrate human rights considerations into internal policies, operational systems, supply chain management, and corporate decision-making processes. The OECD Guidelines further strengthened this framework by providing practical guidance, sector-specific standards, and mechanisms such as National Contact Points to encourage accountability and dispute resolution.
At the same time, significant challenges continue to affect the effective implementation of Human Rights Due Diligence. The complexity of global supply chains, weak enforcement mechanisms, lack of transparency, inadequate monitoring, and limited access to remedies for victims often reduce the effectiveness of due diligence practices. Many international standards remain non-binding, resulting in inconsistent implementation across jurisdictions. Nevertheless, the growing adoption of mandatory due diligence laws in different countries reflects increasing international recognition that voluntary compliance alone is insufficient to address corporate-related human rights abuses.
It concludes that Human Rights Due Diligence has become an essential element of modern corporate governance and international business regulation. Effective protection of human rights in business activities requires stronger legal frameworks, stakeholder participation, transparency, corporate accountability, and access to effective remedies for affected individuals and communities. Human Rights Due Diligence is therefore not merely a compliance mechanism but a vital tool for promoting ethical business practices, sustainable development, and protection of human dignity within the global economy.
References
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