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: the release of the third, and likely final, draft of the World Bank’s revised safeguard policies; guidance for management accountants on how to identify human rights-related risks and manage human rights performance; and developments in a major Alien Tort Statute case.
- On July 20, a committee of the World Bank’s Board of Executive Directors endorsed the third draft of a proposed Environmental and Social Framework intended to ensure that certain social and environmental standards are met in connection with projects financed by the Bank. The Framework, which encompasses the Bank’s safeguard policies, covers topics ranging from labor and working conditions to land acquisition. The Board of Executive Directors is expected to approve the draft safeguard policies when it meets on August 4. The draft, which was produced after four years of consultations with stakeholders around the world, has been criticized by many stakeholders for omitting an explicit commitment to respect human rights.
- In June, BankTrack, a non-governmental organization focused on the social and environmental performance of private sector banks, released the second edition of its Banking with Principles? report. The report benchmarks 45 of the world’s largest banks against 12 criteria derived from the U.N. Guiding Principles on Business and Human Rights. The report reflects increasing attention to the human rights responsibilities of banks, as well as a proliferation of benchmarking efforts intended to spur changes in corporate human rights performance.
- On July 21, the open comment period closed on the Securities and Exchange Commission’s concept release soliciting views on potential efforts to modernize business and financial disclosure requirements pursuant to Regulation S-K. The release called for feedback “on the importance of sustainability and public policy matters to informed investment and voting decisions” including on “which, if any, sustainability and public policy disclosures are important to an understanding of a registrant’s business and financial condition.” The comments that have been submitted, including from the Interfaith Center on Corporate Responsibility, the Sustainability Accounting Standards Board, and the U.S. Chamber of Commerce, are available here.
- On July 16, plaintiffs filed a second amended complaint in Doe v. Nestle USA, an Alien Tort Statute (“ATS”) case alleging that Nestle USA, Archer Daniels Midland, and Cargill aided and abetted child slavery in the Ivory Coast in connection with the sourcing of cocoa. A September 2014 ruling by the Ninth Circuit Court of Appeals ruled that plaintiffs should have an opportunity to amend their complaint in order to demonstrate that their claims sufficiently “touch and concern” the United States, in line with the standard established by the Supreme Court in its 2013 decision in Kiobel v. Royal Dutch Petroleum. In the amended complaint, plaintiffs allege that defendants made specific decisions in the United States regarding cocoa sourcing in the Ivory Coast while also conducting communications and advocacy campaigns in the United States regarding the standards applicable to such sourcing. The case has been closely watched by many observers, as it is one of the few ATS cases that, at least to date, has not been dismissed subsequent to the 2013 Kiobel decision.
- In June, the Chartered Institute of Management Accountants (“CIMA”), the American Institute of CPAs (“AICPA”) and the Global Compact Network UK published guidance intended to help management accountants and other finance professionals incorporate respect for human rights into the guidance that they provide companies. The guide, Business and Human Rights: Evolution and Acceptance, notes the “importance of understanding the value of intangible assets such as customer and employee relationships, engaging and collaborating with external stakeholders, and integrating insight from relevant material data into decision making” and states that “[i]dentifying, implementing and reviewing salient human rights risks and processes is an important aspect of all of these priorities.” The guide reflects the continued integration of the U.N. Guiding Principles into the express expectations applicable to business professionals.
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