Human rights in the supply chain: The need to comply to drive business success.

  • 4 May 2024
  • 4 Mins Read
  • 〜 by Brian Otieno


  • Understanding Human Rights

James Nickel defined human rights as:

basic moral guarantees that people in all countries and cultures allegedly have simply because they are people. Calling these guarantees “rights” suggests that they attach to individuals who can invoke them, that they are of high priority, and that compliance with them is mandatory rather than discretionary. Human rights are frequently held to be universal in the sense that all people have and should enjoy them, and to be independent in the sense that they exist and are available as standards of justification and criticism whether or not they are recognized and implemented by the legal system or officials of a country.

From this definition, human rights create a moral implication aimed at ensuring that every human being can lead at best a minimally good life. 

For a very long time, human rights were not considered as being applicable to corporates and businesses until 2008 when the UN tasked the late Prof. John Ruggie to look into finding a way of entrenching the three complementary and interdependent pillars: the state duty to protect against human rights abuses by third parties, including business; the corporate responsibility to respect human rights; and the need for greater access by victims to effective remedy, judicial and non-judicial.

Consequently, the UN adopted the UN Guiding Principles on Business and Human Rights. These guidelines, despite not having normative value, are greatly relevant in today’s commercial world.

  • Human Rights in the Supply Chain

Due to the global economy’s interconnectedness, human rights in the supply chain are receiving increased attention. Various stakeholders, including consumers, activists, and regulatory bodies, are now taking keen note of this.

The complex nature of modern supply chains, coupled with the pursuit of cost efficiency and profitability, often leads to ethical dilemmas and human rights abuses. Recent case studies highlight the persistent challenges faced by companies in ensuring respect for human rights throughout their supply chains. For corporates and businesses, human rights particularly in the supply chain, presents a thorny issue, as its mismanagement certainly poses both litigation and reputational risks.

The supply chain, the backbone of modern commerce, connotes interconnected entities involved in the production and distribution of goods and services. Turning raw materials, all the way from extraction to the final product involves an intricate web that could have cross-border implications. This web involves multiple tiers, including suppliers, subcontractors, and intermediaries.

With globalisation, economic growth and efficiency have grown in folds, but at the same time, vulnerabilities in the human rights space have also come to the fore. Issues such as labour exploitation, including forced labour, child labour, and unsafe working conditions have become prevalent.

Some entities remain keen on low production costs and quick turnaround times, thus opting to outsource production to regions with lax labour regulations and enforcement mechanisms. The garment industry, for instance, has been plagued by reports of sweatshops and exploitation in countries like Bangladesh and Cambodia, where workers endure long hours, meagre wages, and hazardous working environments. The 2013 Rana Plaza collapse in Bangladesh, claiming the lives of over 1,100 garment workers, exposed the deadly consequences of negligence and exploitation in the pursuit of fast fashion.

Other than labour rights related concerns, supply chains also intersect with other human rights issues, including environmental degradation, land rights violations, and indigenous peoples’ rights. Extraction of natural resources could potentially result in land grabbing, deforestation, and displacement of communities, more so in developing countries where governance structures are still not solid. As a result, there is increased scrutiny of businesses within such spaces, on their direct actions but also for their complicity in human rights abuses perpetrated by their suppliers and business partners.

Despite widespread outrage and calls for reform, similar incidents continue to occur, underscoring the urgent need for systemic change. This has resulted in players exploring different approaches to try and remedy the inadequacies, including legal action in both local and international courts.

  • The Nestlé Example

Nestlé, a leading food, and beverage company faced allegations of child labour in its cocoa supply chain in West Africa. Investigations revealed that children as young as six were involved in hazardous work on cocoa farms in Ivory Coast and Ghana, where Nestlé sources cocoa for its chocolate products.

The company faced legal action, including a US class-action lawsuit filed on behalf of former child slaves, and was forced to implement remediation measures and support community development initiatives to address the root causes of child labour in the cocoa sector.

As a case study, the Nestlé case underscores the complex interplay of economic, social, and environmental factors that shape human rights outcomes in supply chains. Companies operating in diverse industries face unique challenges and need to appreciate this and consequently adopt tailored approaches to identify, prevent, and mitigate human rights risks effectively.

  • Tackling Human Rights Issues in the Supply Chain

The issue of human rights in the supply chain is a complex and multifaceted challenge that requires a coordinated and proactive response from companies, governments, and civil society.

The Nestle case study underscores the urgent need for companies to prioritize human rights due diligence and risk management, not only to avoid litigation and reputational damage but also to uphold their ethical responsibilities and contribute to sustainable development.

By adopting a holistic approach that integrates transparency, engagement, assessment, remediation, collaboration, and accountability, companies can enhance their human rights performance and build resilient supply chains that respect the dignity and rights of all stakeholders.

As the global economy continues to evolve, companies that prioritize human rights and ethical conduct will mitigate risks and seize opportunities to create shared value, foster trust, and drive positive social change.