Responsible Business Conduct
This responsible business conduct module provides a framework for how best practices and resources for responsible business conduct can be incorporated within procurements. Responsible business conduct includes promoting workers’ rights and safe working conditions, preventing human trafficking, and addressing other human rights-related risks. It is especially important for contracts with a higher risk for adverse impacts on human rights (risk factors discussed below). This module will be updated as new best practices and tools are identified.
Pre-Award Procurement Best Practices
On procurements that entail sourcing products/services from a foreign country, recommend reviewing the below steps for practices to promote responsible business conduct. To understand how human rights have been addressed on previous procurements, visit the Responsible Business Case Studies page.Step 1: Identify Risk by Sector
Depending on the sector, certain human rights are at higher risk than others. The chart below identifies some U.S. government and non-U.S. government sources that can be consulted as resources to determine whether and what risks may exist in specific sectors for procurements. This chart is intended to be illustrative, not comprehensive or authoritative. This chart is not a substitute for market research specific to your procurement. The abbreviations used are spelled out below the chart.
|High Risk Sector||Trafficking in Persons (Includes Forced Labor)||Child Labor||Other Labor Issues (discrimination, wages and hours, safety and health)||Freedom of Association and Collective Bargaining||Land Tenure||Security||Privacy|
|Agriculture/Food (e.g., cattle, cocoa, coffee, cotton, fish, rice, sugarcane, tobacco, tropical fruit)||DOL & VERITE||DOL & VERITE||DIFI & IFC 2||ILO||IFC 5||ICoC|
|Construction Materials (e.g. bricks)||DOL & VERITE||DOL & VERITE||DIFI & ILO 2||ILO||IFC 5|
|Construction Services||VERITE||VERITE||IFC 2||ILO||ICoC|
|Electronics||DOL & VERITE||DOL & VERITE||DIFI||ILO & SOMO||IFC 5|
|Extractives (e.g. oil, gas, mining)||DOL & VERITE||DOL & VERITE||ILO & IFC 2||ILO||IFC 5||ICoC & VP|
|Fishing and Aquaculture||DOL & VERITE||DOL & VERITE||ILO & IFC 2||ILO||IFC 5|
|Forestry||DOL & VERITE||DOL & VERITE||ILO & IFC 2||ILO||IFC 5|
|Furniture||DOL||DOL||DIFI & IFC 2||ILO||IFC 5|
|Healthcare||VERITE||VERITE||DIFI & IFC 2||ILO||IFC 5|
|Hospitality||VERITE||VERITE||ILO & IFC 2||ILO||IFC 5|
|Housekeeping and Facilities Operations||VERITE||VERITE||ILO & IFC 2||ILO||IFC 5|
|Internet and Telecommunications||GNI|
|Security Services||VERITE||VERITE||ILO & IFC 2||ILO||IFC 5||BHR|
|Textiles (carpet, footwear, garments, workwear)||DOL & VERITE||DOL & VERITE||DIFI & IFC 2||ILO & SC||IFC 5|
Human rights risks vary not only by sector, but by country. When sourcing from a foreign country, the following resources can help you identify country specific risks.
- U.S. Department of State's Country Reports on Human Rights Practices
- U.S. Department of State’s Annual Trafficking in Persons Report
- U.S. Department of Labor's Findings on the Worst Forms of Child Labor
If there is a high risk for adverse impacts on human rights, consider using the solicitation to alert contractors to potential human rights impacts related to their supply of goods or services. Also, consider using the solicitation to encourage the contractor to publicly disclose policies and procedures that minimize adverse impacts on human rights. A useful tool that assists companies in developing such disclosures is the United Nations Guiding Principles on Business and Human Rights Reporting Framework. Informing the contractor about these risks and encouraging transparent reporting will help minimize risks to your organization from these practices and let contractors know you are interested in avoiding these impacts.Step 4: Consider Contract Requirements
Depending on the risks your market research reveals and dollar value and complexity of the procurement, consider requiring contractors to implement one or more of the following practices. Such requirements should be narrowly tailored to address the specific risks you have identified.
- Organization publicly discloses the names and locations of the factories, farms, mines, and/or other suppliers from which it and/or its suppliers source.
- Publicly disclose human rights policies and procedures using the United Nations Guiding Principles on Business and Human Rights Reporting Framework, or other tools (for example, on company’s website).
- Comply with a code of conduct that includes International Labor Organization core labor standards and domestic law on wages, hours of work and safe working conditions.
- Notify subcontractors and vendors of human rights risks related to the supply of goods or services, and demonstrate this notification to the contracting officer.
- Be a member of and/or implement principles in a relevant initiative, guideline, or standard. For a sample list of international principles, guidelines, tools, and global initiatives related to business and human rights, see Responsible Business Initiatives, Guidelines, and Standards
- Implement a risk-mitigation plan to prevent human rights abuses.
- Provide a grievance process and remedies for workers or communities if human rights violations occur.
- Cooperate with credible auditing or monitoring programs that incorporate feedback from affected workers and communities.
SAMPLE CONTRACT LANGUAGE
This section provides sample contract language to address common risks for specific procurement types as well as provide general language that can be used with different procurements. This sample solicitation/contract language may be used as a starting point for addressing risks associated with responsible business conduct. While the sample language represents one potential approach, other language or equivalent certifications may be used to address these risks. It is important to tailor the goals and requirements to each individual acquisition.
For questions on procurements with a high risk for adverse impacts on human rights or labor rights, you may contact: HRProcurement@state.gov.
Post-Award Procurement Best Practices
Validate that the contractor complies with any responsible business requirements in the contract.
- Verification Resources: Resources outlined above, along with appropriate geographically or sectorally specific guidance can assist with validating contractor compliance. For a sample list of international principles, guidelines, tools, and global initiatives related to business and human rights, see the Responsible Business Initiatives, Guidelines, and Standards page.
- Verification Practices:
- If the contract requires contractor disclosure or submission of certain documents/items, verify that disclosure or submission is made.
- If the contract requires membership/certification from a particular organization or compliance with a particular organization’s Code, request confirmation of membership/certification from the contractor.
- Joining an independent monitoring organization can assist with verifying whether contract requirements are being properly implemented. Two examples are Electronics Watchand Workers Rights Consortium.
- Take reasonable steps to validate that the contractor complies with other responsible business contract requirements (for example, Federal Acquisition Regulation Clause 52.222-50, Combating Trafficking in Persons and 52.222-19, Child Labor—Cooperation with Authorities and Remedies on U.S. governments procurements).
- For examples of other verification practices that can be used across sectors, see Guidelines For A Better Construction Industry In The GCC.
- Remedy Identified Deficiencies:
- Alert contractor to identified deficiency and follow-up with contactor to ensure deficiency is corrected.
- Work with similar organizations to identify if deficiency is part of a systemic problem and use combined purchasing power to increase leverage for correcting problem.
- Encourage transparency about any deficiency and corrective actions taken so similar purchasing organizations and contractors can avoid that deficiency.
- Sharing Resources with Contractor: Share appropriate resources or tools with the contractor that may assist them with conducting business responsibly and developing their organizational policies. Examples include:
- International Guidelines: The OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights assists contractors with aligning their organizational policies with international guidelines.
- Identifying Organizational Risks:
- Human Rights Compliance Assessment Quick Check: This tool is designed to assist organizations with identifying potential human rights violations.
- International Trade Centre Standards Map provides information on standards, codes of conduct, audit protocols addressing hotspots in global supply chains.
- International Trade Centre Partners webpage lists databases and resources available to help contractors identify and address hotspots.
- Responsible Sourcing Tool: This tool assists contractors with understanding the risks of human trafficking in supply chains and implement effective management systems to detect, prevent, and combat trafficking.
- Improving Organizational Performance:
- Social Compliance System: This U.S. Department of Labor online resource provides step-by-step guidance to businesses that seek to develop and improve social compliance systems to address child labor and forced labor in supply chains.
- Business and Human Rights Resource Centre: This website provides comprehensive information on global business and human rights.
- OECD Good Practice Guidance on Internal Controls, Ethics, and Compliance: This international publication is designed to assist firms in complying with anti-corruption laws.
- Investment Climate Statements: This U.S. Department of State website provides annual country reports on investment climate, including labor rights and corporate social responsibility.
- Purchasers Guide for Addressing Labor and Human Rights Impacts in IT Procurements: This guidance assists purchasers with addressing labor and human rights impacts on IT procurements.
- Benchmarking Organizational Performance:
- Global Reporting Initiative: This international organization assists businesses, governments, and organizations with understanding and communicating issues such as human rights.
- UL SPOT: This database allows users to search for products meeting environmental criteria and supplied by organizations having practices in place to prevent and address corporate social responsibility concerns.
- United Nations Guiding Principles on Business and Human Rights Reporting Framework: This framework enables companies to report on their human rights performance.
- United Nations Guiding Principles Reporting Database: This database shows what companies are saying about how they implement the UN Guiding Principles.
- Multi-Stakeholder Initiatives: Company membership in a relevant Multi-Stakeholder Initiative assists in publicly demonstrating implementation of the applicable principles.
|Agriculture||Fair Food Standards Council|
|Apparel||Sustainable Apparel Coalition (SAC)|
|Electronics||Electronic Industry Citizenship Coalition|
|Extractives (oil, gas, and mining)||Voluntary Principles on Security and Human Rights (VPs)
Extractives Industry Transparency Initiative (EITI)
|Internet and Telecommunications||Global Network Initiative (GNI)|
|Security Services||International Code of Conduct for Private Security Service Providers (ICoCA)|
|Seafood||Marine Stewardship Council|
|Supply Chain Related Products (e.g., food, electronics, footwear, apparel)||Fair Labor Association (FLA)|