[TLDR (too long didn’t read): If you are reading this, chances are you care about HR. Although a bit academic, this Reader sheds light on a very current, but neglected topic, namely the concept of due diligence. For a quick overview, just read the bolded text]. Note: You can easily translate the Readers to many languages. Use the app deepl.com and it is done instantaneously. It takes seconds to download the app into your computer or phone and translations are of high quality.
1. Due Diligence encompasses external risks brought about by development and/or investment undertakings that bring about poor working conditions, modern slavery, environmental damage and/or other harmful impacts on human life and nature; it includes those caused by parent or subsidiary companies; they are considered akin to corporate crimes. (https://www.stopcorporateimpunity.org/statement-2/)
2. Due diligence encompasses an investigation of a business prior to signing a contract, or engaging in an activity affecting a certain standard of care (i.e., the degree of prudence and caution required of an entity who is under a duty to others).
3. Companies are bound to identify and assess the risks of negative impacts on human rights (HR) based on the context in which they operate; they, therefore, must prevent HR violations resulting from their operations; they must adopt HR commitments, carry out impact evaluations of their activities, educate employees about the company’s HR policies, as well as analyze performance through monitoring and auditing processes.
4. Failure of due diligence occurs when all standards are voluntary and, in practice, allow violations to continue to occur. Why? Because voluntary systems fail to prevent HR violations or, at best, are limited to only identifying practices that are contrary to HR without acting accordingly. Voluntary Guiding Principles have already proven ineffective by public interest civil society that has already mobilized to make them binding instruments.
So far, due diligence does not adequately address access to justice and reparation for violations committed
5. The due diligence process is supposed to include: the adoption of HR policies, such as codes of conduct; impact analysis to avoid negative impacts on HR; the integration of HR policies in all company practices and not by ‘cherry-picking’; as well as monitoring and auditing to follow the development of the previous stages being carried out. (As said, it must be a legal obligation, but the term is, unfortunately, more often applied to voluntary investigations by the interested party).
6. The theory behind due diligence holds that performing this type of investigation contributes significantly to informed decision making by enhancing the amount and quality information available to decision makers and by ensuring that this information is systematically used to deliberate and take actions in a reflexive manner.
7. As part of a new definition, due diligence requires corporations be investigated by a third party for potential abuse of HR (prominently including the rights of nature) or other considerations. Due diligence is intended to ‘seek ways to prevent or mitigate adverse impacts that are directly linked to their business operations, products or services by a business even if they do not directly contribute to those impacts’. We are talking here about the degree of prudence and caution required of an entity who is under a duty of care (i.e., the legal obligation which is imposed on an entity requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action denouncing negligence. The claimant must make the case that a duty of care has been breached by the defendant. In turn, breaching a duty may subject an individual or entity to liability.*
*: Migration represents a case of due diligence of states. Migration is a continuous process that will not stop as long as structural inequalities persist. Under strict adherence to the HR approach, there must be a participatory integration of the migrant population regardless of their country of origin so as to ensure that barriers to access to migrant care are reduced. Dialogues of trust must be created. (Ignacio Silva).
Claudio Schuftan, Ho Chi Minh City
Your comments are welcome at schuftan@gmail.com
All Readers are available at www.claudioschuftan.com
Postscript/Marginalia
-In certain industries, the standard of care is determined by the standard that would be exercised by the reasonably prudent manufacturer of a product. Such a test is used to determine whether there is liability. The standard of care is important, because it determines the level of negligence required to state a valid cause of action. The requirements of the standard to be used are dependent on circumstances. Whether the standard of care has been breached is determined by the trier of fact **, and is usually phrased in terms of the reasonable person (a ‘family’ of hypothetical figures in law including: a ‘right-thinking member of society’, or a ‘fair-minded and informed observer’).
**: A trier of fact, or finder of fact, is a group of persons, who determines facts in a contested proceeding. To determine a fact is to decide, from the evidence, whether something exists or some adverse event is occurring or is likely to occur. The various aspects of a case that are in controversy are the ‘facts of the case’ and are determined by the agreement of the fact finders.