Due Diligence on Human Rights? Consider Consulting Your FPCA Counsel.

Human rights due diligence requires many of the hallmarks of existing corporate compliance programs: clear policies; assessments of risk; and the integration of strong standards into corporate management systems. This provides companies with the opportunity to leverage the capacity of a variety of existing internal compliance programs in an effort to integrate consideration of human rights-related risks and impacts into the management of their operations.

Last month, we referenced a recent report by the Institute for Business and Human Rights and the Global Business Initiative for Human Rights, State of Play: The Corporate Responsibility to Respect Human Rights in Business Relationships. The report observed that companies are learning from the integration of anti-corruption concerns into their operations, and observed that “anti-bribery and corruption is a governance issue that [companies] track through business relationships.”

Companies seeking to integrate human rights-specific considerations into their due diligence on new investments and potential business partners may find that existing corporate compliance programs with regard to anti-bribery and corruption provide a strong platform on which to build. Due diligence on anti-bribery and corruption with regard to a potential business relationship may include consideration of:

  • The risks associated with the country or region;
  • The capacity of the local legal regime;
  • Known issues associated with the relevant industry;
  • Historical concerns regarding the potential partner’s operations;
  • Input from knowledgeable third parties; and
  • A thorough review of the potential partner’s management systems and operating standards.

These considerations are equally relevant to an evaluation of the human rights-related risks associated with new or existing business relationship.

Human rights due diligence does not require the establishment of new management systems if existing systems can be leveraged and augmented effectively in order to assess human rights-specific risks and impacts. In considering how best to incorporate human rights considerations into the management of their operations, companies may wish to consider bringing their FCPA counsel to the table.

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