Due Diligence and Transparency Legislation

Forced labour and human rights abuses of workers are endemic across several sectors of the global economy. Recognising this, governments around the world have introduced legal frameworks designed to encourage corporations to take responsibility for tackling this abuse in global supply chains. → Transparency legislation, a dominant mode of regulation, is not working. Academic research has highlighted major weaknesses in the effectiveness of transparency legislation to influence corporate behaviour. Corporations can comply with transparency legislation without altering the commercial practices that lead to forced labour and exploitation. Fortunately, there are potential solutions. Transparency legislation should be reformed and strengthened. In addition, mandatory human rights due diligence legislation (mHRDD) should be passed requiring companies to address adverse human rights impacts, including forced labour, linked to their supply chains. mHRDD introduces a new duty on corporations to carry out robust human rights due diligence across their entire supply chains and it can be combined with strong sanctions such as civil liability and supervision by a public oversight body that can impose a fine on those not carrying out the duty. This brief sets out the problem, suggests solutions and makes recommendations for both governments and businesses.