It’s Friday and time for another overview of developments in the field of business and human rights that we’ve been monitoring.
This week’s post includes: developments on mandatory disclosure requirements in both the United States and Europe; a new report from Professor John Ruggie addressing the human rights responsibilities of FIFA; and an update from Oxfam on its “Behind the Brands” campaign.
- On April 14, Professor John Ruggie, former U.N. Special Representative on Business and Human Rights, published a report setting forth recommendations with regard to how the Fédération Internationale de Football Association (“FIFA”) can embed respect for human rights into the management of its global operations. The report, “For the Game, For the World” – FIFA & Human Rights, was requested by FIFA. Professor Ruggie’s recommendations include: the adoption of a clear and coherent human rights policy; the designation of a top management official to be accountable for the association’s human rights performance; the inclusion of human rights within the criteria that are considered when evaluating bids to host tournaments and the establishment of human rights as a substantive factor in host selection; and the establishment of explicit human rights requirements for local organizing committees in bidding documents for tournaments.
- On April 13, the Securities and Exchange Commission issued a concept release soliciting views on potential efforts to modernize business and financial disclosure requirements pursuant to Regulation S-K. Regulation S-K sets forth the reporting requirements for company’s annual 10-K filings as well as other key disclosures. In concept release, the SEC notes recent Congressional action to mandate disclosures on issues ranging from conflict minerals to mining safety. The release then states that “[w]e are interested in receiving feedback on the importance of sustainability and public policy matters to informed investment and voting decisions. In particular, we seek feedback on which, if any, sustainability and public policy disclosures are important to an understanding of a registrant’s business and financial condition and whether there are other considerations that make these disclosures important to investment and voting decisions.” The open comment period runs through July 21.
- The deadline to seek U.S. Supreme Court review of the D.C. Circuit’s decision in National Association of Manufacturers v. Securities and Exchange Commission passed on April 7. In its April 2014 decision, which was reaffirmed in August 2015, the Court found that companies cannot be required to state whether any of their products have “not been found to be ‘DRC conflict free.’” The Court thus found that portions of the SEC’s conflict minerals rule, issued pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act violate the First Amendment of the U.S. Constitution. In a March 2016 letter to the Speaker of the House, U.S. Attorney General Loretta Lynch stated that the Department of Justice would not seek Supreme Court review of the D.C. Circuit’s decision. She observed that the case has been remanded to the District Court and that the D.C. Circuit’s decision expressly recognized that its finding of unconstitutionality may apply only to the rule and not to the statute. She then stated that “[t]he decision not to seek Supreme Court review will allow the [SEC] or the district court” to determine whether an amended rule can be promulgated that both fulfills Congress’s mandate and comports with the D.C. Circuit’s ruling.
- On April 15, the European Commission closed its public consultation period with regard to the development of non-binding guidelines on the disclosure of non-financial information pursuant to Directive 2014/95/EU. Directive 2014/95/EU entered into force in December 2014 and will be enforced beginning in 2017. It requires all European companies with over 500 employees to publish an annual report regarding their environmental, social, employee, human rights, anti-corruption, and anti-bribery policies. Companies must explain their due diligence procedures pertaining to these matters and state the material risks that the company’s products, services, and business relationships pose in each of these areas. The mandatory disclosure requirements apply only to companies based in an E.U. member-state whose shares are publicly traded on a European stock exchange.
- Oxfam recently released a three-year update on its “Behind the Brands” campaign which has called on some of the world’s largest food and beverage companies to address social and environmental concerns in their supply chains. The campaign originally issued scorecards for ten companies, ranking them on seven different issues. In its new report, The Journey to Sustainable Food, Oxfam reviews the updated scorecards and notes that major improvements have been made over the past three years, especially with regard to the protection of land rights, the reduction of greenhouse gas emissions, and steps to address gender inequality. Looking ahead, Oxfam calls on companies to evaluate the business models that govern their sourcing in order to address fundamental inequalities. Specifically, Oxfam states that companies should prioritize suppliers that are owned by farmers and workers and should advocate for public policies that are protective of natural resources, human rights, and fair markets.