Addressing Adverse Human Rights Impacts Connected to Product Misuse ADVANCED SUPPLY CHAIN COMPLIANCE SERIES

Transcription

1 Addressing Adverse Human Rights Impacts Connected to Product Misuse ADVANCED SUPPLY CHAIN COMPLIANCE SERIES September 13, 2017

2 Michael Littenberg Michael Littenberg is a partner in the securities & public companies practice group at Ropes & Gray. As part of his practice, for more than 25 years, Michael has been active in advising leading public and private companies on supply chain and corporate social responsibility matters, including relating to, among other areas, anti-human trafficking and conflict minerals and other commodities, and he is widely viewed as the leading practitioner in this emerging area. Michael R. Littenberg Partner T F Michael.Littenberg@ropesgray.com Michael advises a significant number of companies on compliance with the US Conflict Minerals Rule, the pending EU Conflict Minerals regulation, the California Transparency in Supply Chains Act, the UK Modern Slavery Act, the FAR antihuman trafficking rule, REACH, RoHS and other supply chain regulations. Michael advises clients on, among other things, disclosure and compliance with legal requirements, the construction and implementation of compliance programs, mitigating customer, litigation, NGO and socially responsible investor risk and in their interactions with these constituencies. Michael was previously a partner at Schulte Roth & Zabel.

3 Addressing Adverse Human Rights Impacts Connected to Product Misuse September 13, 2017 Ropes and Gray, Supply Chain and Corporate Social Responsibility Practice Webinar Series

4 Presentation Outline Definition & Examples Key Findings Business Responsibility The Business Case Identified Good Practice & Examples Conclusion Q&A UN Global Compact

5 Product Misuse the use of a product or service, in whole or in part, for a purpose other than its intended application, which could lead to human rights harm. dual-use items: applies to products, services or technology that can be used for both military and civilian purposes.

6 Examples

7 Product misuse is not defined as a human rights issue Key Findings Emerges and manifests in different ways across products, services and industries Business faces practical challenges when addressing product misuse No silver bullet or onesize-fits-all response

8 Guiding Principle 13(b) Business should seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts [emphasis added].

9 The Business Case Risks: Opportunities/Gains: Reputational risks Financial risks Legal risks (civil and criminal) Branding and marketing opportunities New business development

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11 Good Practice Good Practice: A. Taking a proactive approach to risk assessment and management B. Establishing oversight and accountability by leadership and senior management C. Using leverage to reduce risks of product misuse D. Implementing safeguards and controls within contracts and terms of sale E. Assessing human rights and product misuse in internal procedures for managing business relationships F. Removing the product or service from situations of misuse Emerging Practice: A. Designing safeguards into products or services to mitigate the risk of misuse B. Engaging in industry-wide collaboration to address product misuse C. Increasing direct engagement with civil society and human rights organizations

12 Proactive Risk Assessment Risk-based approach Integrate into business s existing human rights policies and due diligence Human Rights Impact Assessment Source: The Danish Institute for Human Rights, Human Rights Impact Assessment Guidance and Toolkit.

13 Proactive Risk Assessment

14 Good Practice Good Practice: A. Taking a proactive approach to risk assessment and management B. Establishing oversight and accountability by leadership and senior management C. Using leverage to reduce risks of product misuse D. Implementing safeguards and controls within contracts and terms of sale E. Assessing human rights and product misuse in internal procedures for managing business relationships F. Removing the product or service from situations of misuse Emerging Practice: A. Designing safeguards into products or services to mitigate the risk of misuse B. Engaging in industry-wide collaboration to address product misuse C. Increasing direct engagement with civil society and human rights organizations

15 Using Leverage Lacking oversight or control of products or services post-sale Facing challenging country context Facing human rights dilemma Source: Shift, Human Rights Due Diligence in High Risk Circumstances: Practical Strategies for Businesses, 2015.

16 Using Leverage Source: Shift, Using Leverage in Business Relationships to Reduce Human Rights Risks, 2013.

17 Good Practice Good Practice: A. Taking a proactive approach to risk assessment and management B. Establishing oversight and accountability by leadership and senior management C. Using leverage to reduce risks of product misuse D. Implementing safeguards and controls within contracts and terms of sale E. Assessing human rights and product misuse in internal procedures for managing business relationships F. Removing the product or service from situations of misuse Emerging Practice: A. Designing safeguards into products or services to mitigate the risk of misuse B. Engaging in industry-wide collaboration to address product misuse C. Increasing direct engagement with civil society and human rights organizations

18 Civil Society Engagement Building Culture of: Information sharing Trust Openness

19 Civil Society Engagement Example Source: Reprieve, Ending the Misuse of Medicines in US Executions, July 2015.

20 Civil Society Engagement Example Source: Reprieve, Ending the Misuse of Medicines in US Executions, July 2015.

21 Conclusion Calling for widespread recognition of product misuse as a human rights issue, paving the way for business to adequately address and combat product misuse on a global scale.

22 Questions? Meaghan Malloy Impact Director Glasswing International E:

23 QUESTIONS & ANSWERS