Human rights due diligence in supply chains
All companies have the responsibility to respect human rights in their own operations and throughout their supply chains. Rights violations also risk operational disruption to automakers, as well as reputational damage: research demonstrates that opposition to projects and “the risk of human rights violations can have significant financial implications for investors and project development.”
Effective human rights due diligence is therefore one of the most important processes through which companies can meet their obligation to ensure respect for human rights across their supply chains whilst also reducing their exposure to risk.
For automakers, human rights due diligence entails proactively identifying, assessing and disclosing salient human rights risks in their supply chains, and then taking measures to prevent, mitigate, account for and remedy these human rights impacts. An essential component of human rights due diligence is meaningful engagement with impacted stakeholders, particularly rights-holders such as employees, community members, Indigenous Peoples, human rights defenders, supply chain workers.
What can automakers do?
- Proactively identify, assess and disclose salient human rights risks and high risk supplier categories in their supply chains.
- Assess and mitigate risks when entering into contracts with individual suppliers.
- Incorporate contractually binding standards governing human rights due diligence and environmental management in suppliers contracts.
- Monitor and audit compliance of suppliers with company supplier codes of conduct during contract periods
- Implement corrective measures in cases of non-conformance and track the effectiveness of these measures in order to assess that they are working
- Ensure meaningful engagement of rights-holders in due diligence processes
- Develop and implement effective grievance and remedy mechanisms