Five on Friday – Five Recent Developments that We’ve Been Watching Closely

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: a new venture fund intended to support companies trying to increase transparency with regard to labor conditions in corporate supply chains; the launch of new principles on responsible corporate tax policy; and litigation alleging that a company’s failure to disclose human rights-related risks in its supply chain in its packaging is deceptive to consumers.

  • On January 30, Humanity United announced the launch of a new venture fund to invest in companies seeking to develop innovative approaches to the challenge of increasing transparency with regard labor conditions in corporate supply chains. In launching the fund, named Working Capital, its Managing Director, Ed Marcum, observed that “[t]here is a growing market demand for more transparent and responsible corporate supply chains” and [w]e see an opportunity to invest in emerging solutions that will meet the demands of large multinational corporations while also benefiting millions of vulnerable workers at the bottom of the economic pyramid.” The fund has received initial financial support from the Walmart Foundation, the C&A Foundation, and the Walt Disney Company among others.
  • On February 8, Human Rights Watch released a report focused on human rights concerns in the supply chains of the jewelry industry. The report, The Hidden Cost of Jewelry: Human Rights in Supply Chains and the Responsibility of Jewelry Companiescalls on companies to develop more robust sourcing policies that incorporate human rights due diligence and third-party verification. The report also calls on companies to report annually on their human rights due diligence efforts and to be more transparent with regard to their suppliers. Of all companies, only Tiffany & Co. was ranked as having “strong” responsible sourcing policies, while Bulgari, Cartier, Pandora, and Signet were ranked as having “moderate” policies in place.
  • On February 9, the B Team, a non-profit initiative launched by business leaders including Richard Branson, Paul Polman, and Marc Benioff, released The Responsible Tax Principlesa new framework calling for responsible tax practice on the part of the business community. The Principles include commitments to be transparent about: the entities that individual companies own; engagements with tax authorities; and corporate tax strategies. The report launching the Principles observes that “tax is vital to fund the public services and infrastructure that are critical to societies” and that [t]o meet the expectations of stakeholders, build trust and contribute to informed public debate, we believe business must take a proactive approach to managing their tax affairs responsibly and explaining their tax practices and results.” The founding companies that supported the launch include Allianz, Repsol, Royal Dutch Shell, Unilever and Vodafone Group.
  • On February 12, plaintiffs in Massachusetts filed a putative class action lawsuit against Nestlé USA, alleging the company has failed to disclose the existence of child labor and forced labor in its cocoa supply chain. The lawsuit, Tomasella v. Nestlé USA, was filed pursuant to Chapter 93A of the Massachusetts Consumer Protection Act. Plaintiffs argue that Nestlé’s packaging is deceptive because it has omitted information regarding the risks of child labor and forced labor in the company’s supply chain and that plaintiffs would not have purchased the company’s products if they had known of the likelihood of the alleged abuses. Similar lawsuits were filed in California in 2016 against Nestlé, Mars, and Costco, but have all been dismissed. Notably, Nestlé was one of top ranked companies in Know the Chain’s recent report benchmarking food and beverage companies on their efforts to address forced labor in their supply chains.

Click here
to join the mailing list for quarterly digests of our “Five on Friday” posts.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please complete the following equation: *