For those still wrapping their heads around new mandatory Human Rights Due Diligence (mHRDD) laws and related CBP enforcement trends and guidance, we thought it would be helpful to explain a couple of key concepts such as INFORMED COMPLIANCE, the importance and definition of REMEDY and DUE DILIGENCE SYSTEMS versus SOCIAL COMPLIANCE and CORRECTIVE ACTIONS. We’d also like to share where we see ourselves contributing and supporting brand efforts in this transition.
Due Diligence Systems vs. Social Compliance
mHRDD laws will push companies (brands and importers) to engage their supply chains in a new way. Most companies, as well as the broader social compliance industry, are not clear about how best to make this important transition. One major hurdle in this context is that too many brands interpret their responsibility to respect human rights as a private top-down compliance exercise. This approach seeks to limit brand risk exposure and responsibility – shifting primary responsibility to suppliers. It also heavily relies on commercial social auditing which has evolved into a process largely controlled by suppliers themselves. Therefore, it often falls short of independence, due diligence and integrity. Therefore, doubling down on status quo social compliance model is a misinterpretation of what mHRDD is all about. A summary of the difference between the social audit-centric approach and the Due Diligence Systems approach can be found here.
Traditional activities such as supplier tracing, independent auditing, and reporting are predictably central and must be greatly improved and expanded to meet the mHRDD compliance bar. However, beyond this, there is a renewed emphasis on setting up suppliers to succeed (informing compliance), and purposely supporting remediation and improvement from the start.
Informed Compliance defined
Informed Compliance is a concept used by U.S. Customs and Border Protection (CBP) that emphasizes the need for brands to clearly inform supply chain partners of their expectations in such a manner that promotes both comprehension and compliance. Sending out a generic code of conduct (code) does not meet the definition of Informed Compliance as it places the burden of researching and understanding all the applicable local laws (usually a few hundred) exclusively on suppliers. In most cases, brands don’t know what they are really asking of their suppliers, thus causing friction and conflicting expectations. This is vital when it comes to a brand’s capacity to support remediation and improvement. The Mosaic platform is a totally unique resource in that regard, as it was created and developed to support and guide informed compliance.
Remedy, Remediation and Corrective Action
The UN Guiding Principles on Business and Human Rights define the term ‘remediation’ as “the process or act of providing remedy”. It should not be confused with ‘remediation’ in the context of social audits, where the concept includes and typically focuses on forward-looking actions to prevent a non-compliance from recurring. Most brand and importer social audit programs have the latter and are commonly referred to as Corrective Action Processes (CAP). At its core, the concept of remedy aims to restore individuals or groups that have been harmed – in this case by a business’s activities – to the situation they would have been in had the impact not occurred. When this is option not possible, the alternative can involve compensation or other forms of remedy.
mHRDD laws require companies and importers to have systematic programs that accomplish both. They must provide victims with access to remedy and facilitate systematic improvements that prevent repetitive non-compliance or abuses. At present, very few companies’ social-audit centric programs do either – something which new laws seek to change and Mosaic hopes to help drive with uniquely localized improvement content and process support services.
Mosaic’s role in supporting mHRDD
Mosaic RSR is the first SaaS knowledge management platform built to accelerate and support supplier improvement. We help brands and suppliers build credibility with stakeholders and comply with new mandatory Human Rights Due Diligence laws.
We provide Informed Compliance and scalable remediation content and support to brands and suppliers. We do this by infusing brand Codes with updated, country-specific legal requirements and expert improvement guidance.
Harnessing the collective wisdom and experience of specialized local experts and using technology to cascade it to the many is a tried-and-true vehicle of change. By bringing a mosaic of localized expertise, content, programs, and partnerships into one platform we can scale support for both suppliers and buyers on their journey toward credible due diligence systems.