what is Due Diligence

The Office of the High Commissioner for Human Rights defined the term due diligence as follows:

“ The measure of prudence, activity or assiduity that can reasonably be expected, and with which it normally acts, a prudent and reasonable [person] in certain circumstances; it is not measured by an absolute norm, but depending on the relative facts of the case in question. ” In the context of the Guiding Principles, human rights due diligence constitutes a continuous management process that a prudent and reasonable company must carry out, in light of its circumstances (such as the sector in which it operates, the context in which it carries out its activity, its size and other factors) to face its responsibility to respect human rights ”.

In short, human rights due diligence is generally understood in relation to those tools or measures through which companies can identify, prevent, mitigate and account for the negative impacts on human rights of their activities or of those derived from its business relationships, which usually include the activities of its subsidiaries, subcontractors, suppliers and other series of actors with whom the company establishes economic transactions.

Some of those measures are:

  • Analysis of the activities, products and services of the company in order to identify possible risks for human rights. In other words, the company must assess whether its operations, of whatever type, pose a risk to human rights. This analysis will include not only direct activities (those carried out by the company itself) but also indirect activities (those carried out by others related to it).
  • Once these risks have been identified, the company must implement a series of measures to ensure that these risks do not materialize, for example, offering specific training in the field of human rights to those employees who are more capable of negatively influencing them, establishing analyzes the fulfillment of a series of social standards to suppliers prior to hiring, the imposition of certain behavioral obligations on employees and third parties.
  • Once these measures are implemented, the company must review and ensure compliance through evaluation processes such as audits, review of compliance with social contractual clauses, etc …
  • Based on the results of these reviews, the company must take measures to improve the processes and to eliminate the risks it has detected.
  • The company must have measures in place to repair any possible negative impacts on human rights that may occur, among them, and as a pre-repair measure, the company must establish operational mechanisms that allow anyone to channel a claim or a complaint about a certain business behavior that is causing a violation of your rights. These are specific mechanisms to channel human rights complaints or claims.

To better understand what kind of measures a company should implement, we can use the United Nations Guiding Principles for companies and human rights, but also the OECD Guidelines for multinational companies in Chapter IV or the recently published OECD Guide. on due diligence .

The implementation of these measures will vary from one company to another, depending on a whole series of circumstances, such as size, the sector to which it belongs, or its geographical presence, but the purpose of any due diligence process should always be to avoid violations of human rights.

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