As the BHR legal and non-legal landscape continues to evolve, businesses and business law lawyers should consider and manage BHR risks as they do any other legal, regulatory and operational risks.

This section emphasizes best practices that will enable lawyers and their clients to decide when business activities or relationships pose too high a risk to human rights, or when situations require mitigating measures.

The objective is not to provide examples of situations that cross any threshold. Those will be apparent if the right processes are in place and adhered to throughout an organization. Ultimately, businesses will have to decide for themselves when to seize or pass on an opportunity or relationship, and when to impose or augment safeguards to protect human rights.

The fundamentals of BHR compliance are derived from corporate governance and risk management practices already familiar to business law lawyers. The key components of effective management of BHR-related risks include:

Governance Structure. A BHR compliance system requires effective board level oversight of all BHR-related risks as a legal and strategic imperative. Mechanisms should be in place to escalate as necessary and mitigate BHR-related concerns.

Policies and Procedures. Businesses should establish and publicly communicate a high-level corporate commitment to respect human rights. Businesses should adopt and implement supporting operational-level policies and procedures that apply throughout their business, supply chains and other third parties consistent with the expectations of the UNGPs. 

Policy commitments should not be generic, vague or drawn directly from what other companies have in place. The responsibilities that the business undertakes should be clearly articulated in written policies, align with what the business is doing throughout its operations and reflect what can be realistically achieved. These responsibilities should be in accordance with the operational principles of the UNGPs.

Policy statements may give rise to an assumption of duty in law with associated litigation risk. Businesses should therefore ensure that the responsibilities they undertake can be efficiently and fully discharged with a focus on processes and systems that seek to identify, mitigate and prevent adverse human rights impacts, rather than to guarantee internal outcomes.

Human rights impact assessments and due diligence. Due diligence is the operational tool for businesses “to identify, prevent, mitigate and account” for adverse human rights impacts. Due diligence should not be approached in a transactional manner. The UNGPs mandate “continuous” due diligence that requires a business to regularly assess the effectiveness of its policies and procedures in mitigating adverse human rights impacts.

Many businesses are already familiar with and perform due diligence in relation to other issues, such as anti-bribery and corruption. A key component of human rights due diligence is that it is outward looking – seeking to ascertain how a particular activity or transaction will impact others, and not what the impact on the business will be.

UNGP 23(c) specifically addresses the management of the risk of causing or contributing to gross human rights abuses including slavery by mandating that businesses treat these risks as a legal compliance matter. A business should operate on the assumption that the organization and its directors, officers and employees, may be held legally liable for causing or contributing to human rights abuses.

Training. Organizations must offer training, including specialized training tailored to the responsibilities and job functions of employees, directors and officers, and business partners.

Third Parties – Business partners’ conduct. As highlighted in Section Business Partners' Conduct, businesses have both direct and indirect human rights obligations. Care should be taken when dealing with potential and actual business partners to ensure appropriate due diligence and oversight. Businesses should also ensure that they understand their contractual commitments. Reporting issuers, particularly those with global operations, are increasingly inserting flow-down contractual clauses in supply agreements. Businesses engaged in public procurement processes in Canada and elsewhere, are increasingly required by governments to certify that their supply chains are free of forced labour and child labour.

Disclosures and reporting. With a mix of mandatory, stakeholder (including investor) driven reporting requirements globally, businesses need to manage their BHR-related (and more broadly, ESG) disclosures. There are established reporting frameworks and standards for reporting sustainability performance which incorporate the UNGPs.

Grievance mechanisms. UNGP 29 requires businesses to establish grievance mechanisms at the operational level to provide a remedy where their operations have caused or contributed to human rights abuses. If there is a potential for litigation arising out of a claim for remedy, mechanisms should be in place to ensure legal review and oversight. Grievance mechanisms must be known and accessible to intended stakeholders. A hidden "contact us" button on a website in a language unknown to workers will not satisfy this requirement. UNGP 31 sets out criteria for an effective grievance mechanism, both State-based and non State-based. Grievance mechanisms must be legitimate, accessible, predictable, equitable, transparent, rights compatible, and a source of continuous learning.