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 guidance on compliance with North Korea-related sanctions laws; the release of the first annual report by the parties to the Dutch Banking Sector Agreement on International Responsible Business Conduct; and a new blog series on the “zero draft” of the proposed Treaty on Business and Human Rights.

  • On July 23, the U.S. Department of State, in partnership with the Department of the Treasury and the Department of Homeland Security, released a new Advisory on Sanctions Risks for Businesses with Supply Chain Links to North Korea. As noted in the Advisory, the primary sanctions risks to companies are: “(1) inadvertent sourcing of goods, services, or technology from North Korea, and (2) the presence of North Korean citizens or nationals in those supply chains, whose labor generates revenue for the North Korean government.” The Advisory provides guidance to business by highlighting sanctions evasion tactics used by North Korean entities. It also offers guidance on compliance with the requirements of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”), which created a presumption that goods made by North Korean citizens or nationals, anywhere in the world, are made with forced labor. Noting that North Korea exports large numbers of workers to China and Russia, the Advisory also lists 41 other countries that the U.S. Government believes hosted laborers working on behalf of the North Korean Government in 2017-2018.
  • On August 8, the parties to the Dutch Banking Sector Agreement on International Responsible Business Conduct released their first annual report. Parties to the Agreement, which was signed in October 2016, include eleven banks, the Dutch Banking Association, trade unions, civil society organizations, and the Dutch Government. Through the agreement, the signatory banks have agreed to operate with respect for human rights in a manner consistent with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. The first annual report focuses on achievements during the first full year of the Agreement, including the efforts of individual banks to improve grievance mechanisms and working group efforts to improve conditions in extended supply chains, with a focus on cocoa and palm oil.
  • On August 15, the Office of the UK Independent Anti-Slavery Commissioner and the University of Nottingham’s Rights Lab released a new report examining compliance with the UK Modern Slavery Act by companies in the agricultural sector. The report, Agriculture and Modern Slavery Act Reporting: Poor Performance Despite High Risks, found that only 50% of the agricultural sector companies that the authors believe are subject to the Modern Slavery Act’s reporting requirements have published a statement. The report also found that, of the statements that have been published, less than half are fully compliant with the Act. Notably, the report found that the low compliance rates in the agricultural sector are comparable to those of other high-risk sectors, including food processing and packaging, mining, and hotels.
  • On August 15, the Business & Human Rights Resource Center launched a “Zero Draft” blog series, which will feature commentary from a range of stakeholders on the recently released “zero draft” of the proposed Treaty on Business and Human Rights. As noted previously, the Government of Ecuador, as chair of the U.N. Open-Ended Intergovernmental Working Group tasked with working on the proposed Treaty, released the “zero draft” on July 16 in order to support discussions in advance, and at, the next meeting of the Working Group in October 2018.

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