Human Rights Due Diligence: Is It Too Risky?

Due diligence is a familiar business tool, designed to enable companies to manage risk and reduce liability. It requires companies to ask tough questions about the risks of major transactions, projects, and ongoing operations. The answers may reveal unwelcome facts, requiring the company to take action to avoid or mitigate risks previously unappreciated. Since few people like bad news, companies must often overcome a reluctance to ask questions, the answers to which they may not like, in order to perform the process effectively.

Due diligence can and should now be used to assess and reduce a business risk that was only explicitly recognized as a risk quite recently—corporate involvement in human rights abuse. This is the conclusion of a 2008 report to the UN Human Rights Council by Harvard Kennedy School Professor John Ruggie, the Special Representative of the UN Secretary-General for Business and Human Rights (SRSG).2 The report, entitled “Protect Respect, Remedy,” articulates an interdependent, three part framework that notes: (1) states have a duty to protect human rights, (2) business has a responsibility to respect human rights, and (3) there is a need for greater access to remedy for human rights violations.