Human Rights Disclosure and Due Diligence Laws: The Role of Regulatory Oversight in Ensuring Corporate Accountability

Abstract

In response to intense civil society pressure and the increasing public awareness of the appalling human rights impacts of businesses including working conditions amounting to slavery and forced labor, several governments have committed themselves to taking action to prevent human rights abuses by businesses and eradicate modern slavery in global supply chains. While the majority of the legislative movement in this area is focused on increasing transparency through corporate disclosures on human rights, we are also seeing a gradual move towards legislation introducing mandatory human rights due diligence (HRDD). HRDD laws can clearly address some of the design shortcomings of transparency focused laws. Yet, the question of robust implementation remains underexplored for both transparency and HRDD laws. In this paper, we focus on the oversight and enforcement features of both human rights reporting and due diligence laws as among the missing links to achieving the accountability objectives envisaged by such legislation. Based on an analysis of the most recent pieces of legislation focusing on transparency and/or HRDD, we observe and critique that the state has almost completely withdrawn itself from the oversight and enforcement roles and assigned these crucial accountability functions solely to consumers, civil society, and investors. Without a regulatory mechanism to ensure quality of human rights disclosures and due diligence processes and impose sanctions for failing to comply with the laws, not only may the disclosures and processes be inadequate, but there is a danger that misleading disclosures and flawed processes may mask harmful impacts and be detrimental to any hopes of improving rights of workers and communities in the global supply chain. We offer a new perspective on a more effective approach to oversight and enforcement in which the state should function as a key actor through which consumers, civil society, and investors can hold businesses accountable