|A Happy and Peaceful New Year from all at Ergon. This Update includes our analysis of the key trends and issues we see emerging in 2019 in our areas of work.
Tightening legislation on business and human rights
There will be continuing moves towards hard law on business and human rights (and the toughening of existing laws). A private member’s Bill was introduced in Canada in mid-December that would introduce company reporting on child labour and modern slavery along the lines of the UK and Australian Acts. It will need government support to pass.
The Australian Modern Slavery Act (passed in December 2018) will come into effect during 2019 with the first company statements expected in 2020. The Australian Act sets up a central registry for company statements that must have mandatory content.
Criticisms of the lack of enforcement mechanisms in the 2015 UK Modern Slavery Act partly contributed to the tougher Australian measure. The UK government has responded by setting up a review of the UK Act, including the transparency requirements, which is due to report by March 2019. Additionally, in an effort to boost compliance levels, the Home Office has already written to the chief executives of around 17,000 businesses, warning them it intends to publicly name non-compliant companies after March 2019. The UK government is also inviting businesses to voluntarily register on a central database. According to some estimates, only a half of eligible companies have made a modern slavery statement, and according to Ergon’s research, only around half of companies that have made a statement (in a sample of 150) had written a follow-up modern slavery statement within 18 months of the last one.
While modern slavery remains the touchstone human rights issue, other jurisdictions are looking at human rights in the round. Binding legislation on companies and human rights may be a step closer in Germany. More than 7,000 companies received a letter in December signed by five German ministers encouraging them to take part in the upcoming monitoring of the German National Action Plan (NAP) on Business and Human Rights. In 2019, the government will carry out the first of two representative surveys of German businesses with more than 500 staff to see whether they have met the expectations set out in the NAP – that is, implement and report on human rights due diligence. If it is found that by 2020 less than half of the companies have done so, the government has committed to considering legislation on business and human rights.
The Swiss Parliament is also considering a proposal that would require mandatory human rights and environmental due diligence by large companies and would impose liabilities for violations. The Parliamentary proposal is more restricted than a separate popular initiativeput forward by a coalition of Swiss non-governmental organisations (the Responsible Business Initiative – RBI). The RBI aims at modifying the Swiss Constitution by including a specific provision on the responsibility of companies to respect human rights and the environment. If the Parliamentary ‘counter-proposal’ is not passed the organisations behind the original initiative have underlined their intention to pursue a public vote on the issue. Either way, mandatory due diligence could be on the way in Switzerland. There is a good summary of this slightly complicated situation here.