Hiding in the Light: The Misuse of Disclosure to Advance the Business and Human Rights Agenda

Abstract

In June 2017, Waitrose, a top UK supermarket, pulled its cans of corned beef off the shelves after an investigation revealed that the meat might have been produced with slave labor. At the time of the recall, Waitrose was in compliance with the UK Modern Slavery Act, a 2015 law enacted to prevent human trafficking and modern-day slavery. Under the Modern Slavery Act, corporations are required to file annual reports disclosing what action they had taken to eradicate slavery and human trafficking in their supply chains. The Modern Slavery Act was a much-lauded law that is part of the growing trend of States to move the international business and human rights agenda forward. A key component of that agenda involves disseminating the U.N.’s Protect, Respect, and Remedy Framework and implementing the U.N. Guiding Principles, which have been praised by States around the world as a framing mechanism for assessing corporate accountability for negative human rights impacts caused by a corporation’s operations and relationships with its suppliers.

This article analyzes whether the business and human rights agenda (as embodied by the Three Pillar Framework and U.N. Guiding Principles) is well served by national laws that focus on disclosure. The article focuses primarily on rules being implemented in the United States at both the subnational and national level; however, it also discusses approaches being used in European jurisdictions such as the United Kingdom and France and the overall trend towards a transparency model for human rights protection made necessary by business activities. The increased use of disclosure-based regulation (and the resulting compliance efforts by corporations) seems to come, at least in part, as a result of the efforts by States to address the duties laid out for them in the U.N. Guiding Principles. As such, it is appropriate to undertake an analysis regarding whether these laws are in fact effectively implementing the Guiding Principles.

For decades now, disclosure has been held out as the ultimate curative for almost every corporate woe. The expansion of disclosure initiatives from mere investment-related issues to (increasingly) social-policy issues suggest that this trend will continue. Yet, as this article demonstrates, disclosure right now is at best a temporary stop gap measure that can lead to limited corporate change on the issue of business and human rights. At worst, disclosure is being used by corporations as a way to obtain a reputational advantage without actually making substantive changes – by simply hiding in the light.

Keywords: business and human rights, disclosure, securities regulation, international human rights

JEL Classification: K22, K33