ISSUE OF HUMAN RIGHTS LAW DUE DILIGENCE IN AUSTRALIAN BUSINESS

Part 1: ‘The only purpose of an Australian business is to make profit. Therefore, the law should not require Australian businesses to undertake human rights due diligence, or be accountable for any adverse human rights impacts’

Introduction:

Human Right is the most important and serious topic clearly which has been emphasised and prioritized in each society over time. Basically, all the people from different society deserve an equality in dignity and rights universally, irrespective of their religion, sexual orientation, gender identity, social stats, age or other characteristics within this core of legal and moral concepts. Since the human rights is evolved to the business daily operation significantly and being the major worldwide concern, protecting and promoting human rights is not just the primary duty for government, the businesses also have to consider and take their own distinct responsibility to protect the human rights, rather than just focusing on making profit. In this case, there is no doubt that the businesses in Australia should contribute to enhancing a human rights culture with a legal request on undertaking human rights due diligence and be accountable for any adverse human rights impacts.

Body:

Human rights due diligence is a risk assessment as a business practice which is an approach and aims at assisting the business to proactively identify, manage, prevent and mitigate the potential and actual adverse human rights impacts which they are involved (OFFICE OF UNIT NATIONS THE HIGH COMMISSIONER FOR HUMAN RIGHTS n.d.). According to Bijlmakers (2018), European Commission has launched the Guiding Principles on Business and Human Rights within the CSR Policy, businesses are expected to obligate the human rights due diligence, even though without a blinding law. There is no doubt that there is a strong relationship between human rights as a part of CSR and the business. CSR is a code of conduct for the business as an orientation for its operation which is applied by every single business globally. Obviously, the stakeholder perspective is the core value of the CSR that force business to consider and respect the stakeholders’ interests and human rights during processing any business activities. However, a large amount of business just desires an immediate gratification by scarifying the long-term sustainability development to maximise return to the shareholders, so they opposed to establish the law about the standard of meeting the human rights. Meanwhile, the human rights due diligence, which is a type of CSR and ethical activity, is conceived as a commercial expense by businesses, since the adoption of the human rights due diligence does not just require to establish a system and more human resources, it also increases the workload of business to drag the productivity down (RMIT 2019). At this point, according to R. Edward Freeman (RMIT 2019), who argues that once the business applied the human rights due diligence as a protective step, the business’ performance will be stimulated after those external stakeholders and the internal stakeholder would be benefitted. For instance, since the human rights due diligence can minizine the exploitation of their equality on treatment and obtaining own wellbeing, employees as internal stakeholder can work at a diversity workplace without discrimination and under well condition which contribute to increased organizational performance by increased employee loyalty and commitment (Yu et al. 2017).

Business are not be able to maximize their profits, unless they use the effective human rights due diligence to manage human rights violations which relates to labour standards, contracted security, environmental conditions at work, and forced resettlement as part of enterprise risk (Michael 2016). If business fail to prevent the human rights violation, their reputations will be damaged. Then, consumers would be more likely to bring their purchase intension toward the competitor, while the business partners would take a divestment. In this case, the business would get a significant loss (Bagińska 2016). It is clear that there is not any conflict between adopting shareholder and stakeholder simultaneously. Therefore, businesses in Australian should be posted a duty of care to exercise due diligence with regard to the potential human rights impacts of business activity.

Since international human rights treaties are soft law which just provide the standards of human rights and clarify the role and responsibility of business in the business and human rights sphere, businesses generally are not imposed direct legal obligations to execute (United Nations Human Rights, 2012). In this case, Australia government should take the legal liability to make up a domestic law, which require the businesses applying the human rights due diligence in their organizational operation to detect whether there are any activities that against the international human rights standards and give penalty if they did. According to the Justine (2018), Corporate Human Rights Benchmark reported that there was a low level of human rights due diligence, while Norton Rose Fulbright and the British Institute of International and Comparative Law have found out that after 7 years from adopting the UN Guiding Principles on Business and Human Rights, more than 50% companies had never adequately applied and conducting the human rights due diligence. The non-binding compliance and lack of civil penalties have partly contributed to the poor result of undertaking the human rights due diligence. For example, according to the Sydney Morning Herald (Baker & McKenzie 2014), ANZ had involved an activity about financing an illegal land grab which is against the human rights without any legal penalty. For the purpose of noticing the business about the importance of the human rights, placing legal coercive force on undertaking the human rights due diligence and inducing civil penalties on the substantial violations of human rights have been suggested by UK Joint Committee on Human Rights (HOUSE OF COMMONS JOINT COMMITTEE ON HUMAN RIGHT, 2017).

Businesses won’t comply with human rights and take charge on the adverse human rights impact, unless the human rights due diligence is compulsory and become a legal request (Björn &Geert 2013). Therefore, it is a loophole which Australian government should fix with setting up a legal law on compulsory of human rights protection. Briefly, the human rights should be blinded with CSR and business practice legally, as the committing to protection of stakeholders’ human rights is not only have positive effects on business, it also will turn result in the wealth of community.

In addition, the words used in the Guiding Principles on Business and Human Rights treaty have directly encouraged the state governments to set up a domestic law to enforce their businesses undertaking the human rights due diligence. According to UNITED NATIONS HUMAN RIGHTS (2012), three components of responsibility of business enterprises to respect human rights have been identified in principle 15, the one of the compulsory responsibilities is processing a human rights due diligence. It is clear that businesses have been expected to engage in a legal role to commit their responsibility on avoiding and detecting the adverse human rights impact by conducting the due diligence. At the same time, it also can solve the loophole which UN did not establish any specific consequence for the lack of compliance at an international or national level, even the states have been required to ensure victims having access to an effective remedy for human rights infringement by taking judicial, administrative and legislative under the principle 25 and 26 (Martin-Ortega, O, 2014). Therefore, Australian government should make up a law which put an enforcement on the adoption of the human rights due diligence with a clear domestic norm for introducing what the businesses would face after against the human rights as a consequence (the Cassel, D, 2016). That can help reducing the argument during holding the court. Apart from this, the principle 13 and 17 have been point out that the human rights due diligence is not only used to manage their own activities to mitigate those adverse human rights impacts, but also used to prevent and avoid the adverse human rights impacts by investigate the activities which ran by their business relationship, such as subsidiaries in foreign countries and the other businesses they have collaborated. In order to fulfil this responsibility, due diligence should be considered as a best regulation for businesses to ensure there is no any human rights abuses which also can reduce the ‘loophole’ of the rule. The businesses have to exercise the due diligence with regard to their international corporate activities. In this case, if the business failed to carry out the human rights due diligence and post adverse human right impacts which influence negatively the life of citizens of other countries, the parent company in Australia had no excuses to put the association aside (Martin-Ortega, O, 2014).

Conclusion:

Briefly, human rights due diligence is a driver of businesses’ orientation which provide businesses a clear multi-stakeholder codes of conduct and high-level corporate guidelines. The businesses cannot obtain a long-term success and generate more profits, unless they are willing to respect and protect human rights of different stakeholder by exercising the human rights due diligence. Furthermore, after setting up the law, there is an invisible enforcement and intimidation, the businesses are not allowed to destroy the human rights anymore under this situation. Even few businesses might break the rule, those victims can get their compensation and remedies efficiently which they deserve while the government will penalize the business seriously that can make sure the business would not do it again. On the other words, it will directly and indirectly contribute to the wellbeing of community, as the amount of anti-human rights activity would get a significant reduction. It is clear that there is an emerging consensus of conducting a law which require business to obligate the human rights due diligence and be accountable for the adverse human rights impacts.

Part 2: Annotated Bibliography

Cassel, D 2016, ‘Outlining the Case for a Common Law Duty of Care of Business to Exercise Human Rights Due Diligence’, Business and Human Rights Journal, vol. 1(2), pp. 179-202.

The article demonstrates the reason that national government should induce a law to require the businesses complying the human rights due diligence on their business activities as a risk assessment. It first clearly explains the international law as a soft law which defines the regulatory framework of business and human rights and guides corporate behaviour. The article points out that even though the EU Guiding Principles on Business and Human Rights has given a clear idea on what kind of role and responsibility of company should play and take in the the business and human rights sphere, businesses would not be accountability for the breach of duty of care for the adverse human rights impact and exercise human rights due diligence, unless there is a legal request and a serious civil penalty. Clearly, this article is useful and strongly relate to my topic, as Cassel find that the best way to solve the loophole which has mentioned above is harden the soft law to be blinded by applying the national requirements and standards. Meanwhile, it also examines the extent to which there are different consequences in terms of human rights impacts as to whether a company adopts a specific HRDD process or uses a process that is part of other processes.

UNIT NATIONS HUMAN RIGHTS 2012, THE CORPORATE RESPONSIBILITY TO RESPECT HUMAN RIGHTS, viewed 16 August 2019 <https://www.ohchr.org/Documents/Publications/HR.PUB.12.2_En.pdf>

References:

  • Justine, N 2018, “Hardening Soft Law: Are the emerging corporate social disclosure and due diligence laws capable of generating substantive compliance with human rights norms?”, Revista de Direito Internacional, vol. 15, no. 2, pp. 65-83.
  • Cassel, D 2016, ‘Outlining the Case for a Common Law Duty of Care of Business to Exercise Human Rights Due Diligence’, Business and Human Rights Journal, vol. 1(2), pp. 179-202.
  • HOUSE OF LORDS, HOUSE OF COMMONS JOINT COMMITTEE ON HUMAN RIGHTS. Human rights and business 2017, Promoting responsibility and ensuring accountability, viewed 16 August 2019 <https://www.publications.parliament.uk/pa/jt201617/jtselect/jtrights/443/443.pdf>
  • OFFICE OF UNIT NATIONS THE HIGH COMMISSIONER FOR HUMAN RIGHTS n.d.,
  • Introduction to the Guiding Principles on Business and Human Rights, viewed 16 August 2019 <https://www.ohchr.org/Documents/Issues/Business/ForumSession6/OHCHRIntroduction_UNGPs.pdf>
  • Michael, T 2015, “CSR and Transparency”, Canadian Mining Journal, vol. 136, no. 6, pp. 10.
  • Björn, F &Geert, D 2013, “Human Rights in the Void? Due Diligence in the UN Guiding Principles on Business and Human RightS”, Journal of Business Ethics, vol. 116, no. 4, pp. 799-814.
  • Martin-Ortega, O 2014, “Human Rights Due Diligence for Corporations: From Voluntary Standards to Hard Law at Last?”, Netherlands Quarterly of Human Rights, vo.l 32.1, pp. 44-74
  • UNIT NATIONS HUMAN RIGHTS 2012, THE CORPORATE RESPONSIBILITY TO RESPECT HUMAN RIGHTS, viewed 16 August 2019 <https://www.ohchr.org/Documents/Publications/HR.PUB.12.2_En.pdf>
  • Baker, R & McKenzie, N 2014, ‘ANZ ethics under scrutiny over Cambodian sugar plantation loan’, Sydney Morning Herald, 23 January, viewed 16 August 2019, <https://www.smh.com.au/business/banking-and-finance/anz-ethics-under-scrutiny-over-cambodian-sugar-plantation-loan-20140122-3196k.html>.
  • Yu, H, Kuo, L & Kao, M 2017, “The relationship between CSR disclosure and competitive advantage”, Sustainability Accounting, Management and Policy Journal, vol. 8, no. 5, pp. 547-570.
  • Michael, T 2016, “Human Rights violations can hurt a company’s reputation”, Canadian Mining Journal, vol. 137, no. 2, pp. 36
  • Bagińska, E 2016, “Damages for Violations of Human Rights”, vol. 9, pp. 443-478

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