Five on Friday – Five Recent Developments that We’ve Been Watching Closely

It’s Friday iStock_000011057325XSmalland time for another overview of developments in the field of business and human rights that we’ve been monitoring.

This week’s post includes: the European Parliament’s adoption of a new conflict minerals regulation; the French Constitutional Council’s review of the proposed duty of vigilance legislation; the dismissal of the Doe v. Nestle litigation; and the release of a new Corporate Accountability Index by Ranking Digital Rights.

  • On March 23, the French Constitutional Council released a decision with regard to legislation defining a duty of vigilance for parent companies and their subcontractors. The legislation, which was adopted by the French National Assembly in February, was referred to the Council for constitutional review. The Council upheld the majority of the legislation, but struck down the proposed civil penalties for companies that fail to develop a diligence plan.
  • On March 16, the European Parliament formally adopted a new conflict minerals regulation.  The regulation, which will go into effect on January 1, 2021, requires European Union smelters, refiners, and direct importers of conflict minerals to conduct due diligence if they source gold, tin, tantulum, or gold from a non-exhaustive list of conflict-affected and high-risk areas. Unlike the U.S. conflict minerals rule, the European regulation does not impose direct obligations on companies that manufacture products containing conflict minerals.
  • On March 2, the District Court for the Central District of California dismissed plaintiffs’ claims in the Doe v. Nestle litigation. The Court did not grant leave to amend. The long running case involves claims that Nestle USA, Archer Daniels Midland, and Cargill aided and abetted child slavery in the Ivory Coast in connection with the sourcing of cocoa. The Court found that plaintiffs were unable to overcome the presumption against extraterritoriality that has applied to Alien Tort Statute cases since the U.S. Supreme Court’s 2013 decision in Kiobel v. Royal Dutch Petroleum. Specifically, the District Court found that none of the defendants’ U.S.-based conduct, as alleged by the plaintiffs, aided and abetted perpetrators of forced child labor.
  • On March 23, Ranking Digital Rights released its 2017 Corporate Accountability Index, evaluating 22 Internet, mobile, and telecommunications, companies on their policies and practices that affect users’ freedom of expression and privacy. The 2017 Index was based on a review of 35 indicators and includes companies based in 13 different countries. Companies that ranked highest in the Internet and mobile category include Google, Microsoft, and Yahoo. Companies that ranked highest in the telecommunications category include AT&T, Vodafone, and Telefónica. The Index relies on information that is publicly available through corporate websites.
  • On March 9, the NYU Stern Center for Business and Human Rights released a new report, Putting the ‘S’ in ESG: Measuring Human Rights Performance for Investors, which evaluates the capacity of existing sustainability measurement frameworks to assess corporate human rights performance. The report found that most frameworks focus on evaluations of corporate efforts, including the development of policies and procedures, without being able to meaningfully assess the effects of those efforts. The authors also found that few of the existing frameworks are tailored to the needs of investors.

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