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

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

This week’s post includes: new insights into the proposed Australia Modern Slavery Act; a new Withhold Release Order prohibiting the import of products produced with Turkmenistan cotton; and the launch of the Investor Alliance for Human Rights.

  • On May 9, the Government of Australia released a fact sheet with respect to its proposed Modern Slavery Act. The Government has announced that it will introduce the legislation to Parliament in mid-2018 and that the legislation, consistent with the U.K. Modern Slavery Act and the California Transparency in Supply Chains Act, will establish a reporting requirement for companies. The fact sheet states that the reporting requirement will: be applicable to a broad range of companies, including foreign companies doing business in Australia; and will have a reporting threshold of $100 million annual consolidated revenue. The reporting requirement will mandate that companies issue reports that cover the following: their structure, operations and supply chains; the potential modern slavery risks in connection with their operations; actions taken to address identified risks; and efforts to assess the effectiveness of their actions.
  • On May 18, U.S. Customs and Border Protection (“CBP”) issued a new Withhold Release Order pursuant to the prohibition on the importation of goods made in whole, or in part, with forced labor. The Order covered “all Turkmenistan cotton or products produced in whole or in part with Turkmenistan cotton.” CBP has not previously issued such a broadly applicable order. Previous detention orders have generally been specific products produced by particular manufacturers. Notably, the Turkmenistan cotton order was issued two years after several NGOs filed a petition stating that all cotton grown in Turkmenistan is made with forced labor and should not be allowed into the United States. This is the second Withhold Release Order issued by CBP in 2018.
  • On May 21, the U.S. Supreme Court issued its opinion in Epic Systems Corp. v. Lewis, a case that raised the question of whether employers can include class action waivers in the mandatory arbitration agreements that many employers require their employees to sign as a condition of employment. Such waivers require employees to arbitrate employment claims against the employer individually, rather than as a class action or other joint arbitration. The case considered whether such waivers violate employees’ rights to engage in “concerted activities” under the National Labor Relations Act, including the right to self-organization and to bargain collectively. In a 5-4 decision, he Court ruled that such agreements do not violate federal labor law and are enforceable.
  • May 24 was the launch date for the Investor Alliance for Human Rights, a new initiative intended to facilitate collective investor action on business and human rights. The Alliance will provide “investors with relevant standards, guidance and tools to help them not only maximize their leverage through informed collective action, but also their capacity to address human rights risks by integrating human rights criteria into investment decision-making and corporate engagements.” At the time of its launch, the Alliance had 101 institutional investor members, representing $2 trillion in assets
  • On May 31, the Organization for Economic Co-operation and Development (“OECD”) issued its Due Diligence Guidance for Responsible Business Conduct. The guidance is not sector specific and is intended to be a resource for all companies. Consistent with the expectations set forth in the UN Guiding Principles on Business and Human Rights, the OECD due diligence guidance outlines steps that companies can take in the following core areas: (1) embedding responsible business conduct in corporate policies and management systems; (2) identifying and assessing actual and potential adverse impacts associated with corporate operations; (3) the cessation, prevention, and/or mitigation of adverse impacts; (4) tracking implementation; (5) transparency and communication; and (6) providing, or cooperating in, remediation efforts.

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