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Due diligence in the agri-food supply chain

How to conduct human rights due diligence? What are practicals tools for SMEs in the agri-food sector?

Due diligence in the agri-food supply chain

Last week the HUMAN coalition (PwC, CNV Internationaal, VBDO and ICCO Cooperation) discussed these issues with investors, Netherlands-based multinational companies and SMEs in the agri-food sector and related organizations in a roundtable. What do  the different parties need from each other to successfully integrate human rights due diligence.

A licence to operate

Alexandra van Selm of the SER (Social and Economic Council of the Netherlands) opened the session with underlining that doing ‘due diligence on human rights’ by companies is an increasingly part of  a company’s licence to operate and a concept that is here to stay. “Although the UN Guiding Principles on Business and Human Rights are not binding, they are reflected in policies, international standards and currently in the Dutch sector covenants, such as the textile and banking covenant. Due diligence is an important element of the UNGPs, but there is not one-size-fits-all approach,” said Van Selm.

Despite different initiatives and companies CSR efforts, adverse human rights impacts do and can occur at all levels in the agri-food supply chain. From the first tier of direct or strategic suppliers, all the way down via multiple layers of sub-suppliers and subcontractors, to those providing the raw material inputs. ‘’Most salient human rights risks are poor working conditions leading to health and safety problems, absence of a decent wage, lack of access to land and water, forms of bounded labour, lack of freedom of association and child labour.  “According to the ILO 59% of all child labour worldwide takes place in the agri-food supply. We are talking about 98 million children in this sector!”, said Karen Bouwsma working for CNV Internationaal.

Vicky van Heck of VBDO presented the results of the first Corporate Human Rights Benchmark, focusing on the sectors agriculture products, apparel and extractives. Van Heck: “There is a cluster of companies taking a leadership position and driving forward corporate human rights performance. However, there are still plenty of challenges ahead, for example, only three of the 98 companies score more than 60% and the average score on all criteria is 28,7%.”

Doing Responsible Business-Tool

In the breakout session with SMEs in the agri-food sector the ‘Doing Responsible Business-Tool’ was presented which is currently under development by ICCO and FSAS. Femmy Bakker, ICCO: “This tool offers practical guidance in three steps for SMEs on how to respect human rights in the supply chain. We fully understand that this is time-consuming for SMEs and therefore we want to assist SMEs in doing their first assessments of human rights risks in their business operations and promote a step-by-step approach to take action.”

Investors and banks advise companies to talk about human rights at public events, board meetings and in investors calls. “Only when human rights become an integral part of the company’s strategy, real difference can be made and investors can call upon this responsibility of companies”, a participant said. Better and more thorough reporting on human rights, as part of integrated reporting, is essential for investors to make informed investment decisions taking into account human rights in their due diligence.

HUMAN Round Tables in 2017

In 2017 the HUMAN Coalition is organizing two Round Tables on pressing human rights topics. The next roundtable will take place at 5 October 2017 about ‘Reporting on Human Rights’.