Human Rights Due Diligence By Corporates
I. Meaning of Human Rights Due Diligence (HRDD)
Human Rights Due Diligence (HRDD) is the process by which corporates:
Identify, prevent, mitigate, and account for adverse human rights impacts
Across their operations, subsidiaries, contractors, and supply chains
In line with international human rights standards
HRDD is not a one-time audit; it is a continuous, risk-based governance obligation.
II. International Normative Framework (Foundational to HRDD)
Although not treaties, courts increasingly treat these as authoritative standards of care:
UN Guiding Principles on Business and Human Rights (UNGPs)
Corporate responsibility to respect human rights
HRDD as a core obligation
OECD Guidelines for Multinational Enterprises
Supply-chain responsibility
Remedy and grievance mechanisms
ILO Core Labour Standards
Forced labour, child labour, discrimination
III. Indian Legal Framework Supporting HRDD
India does not yet have a standalone HRDD statute, but HRDD duties arise indirectly through multiple laws:
1. Companies Act, 2013
Section 134: Board responsibility statements
Section 166: Director duties (good faith, due care)
Section 135: CSR (human rights-adjacent obligations)
2. SEBI Framework
BRSR requires disclosure on:
Human rights policy
Supply-chain risks
Grievance redressal
3. Labour and Human Rights Laws
Bonded Labour System (Abolition) Act
Child Labour (Prohibition and Regulation) Act
Factories Act
Sexual Harassment of Women at Workplace Act
IV. What HRDD Covers in Practice
Risk identification
Child labour, forced labour
Unsafe working conditions
Discrimination and harassment
Supply-chain due diligence
Impact assessments
Preventive controls and mitigation
Grievance mechanisms
Public disclosure and reporting
V. Legal Theories Used Against Corporates for HRDD Failures
Negligence / failure of duty of care
Vicarious liability
Aiding and abetting human rights violations
Misrepresentation in ESG disclosures
Breach of fiduciary duty by directors
Public law violations in state-linked enterprises
VI. Key Case Laws on Human Rights Due Diligence
1. Vedanta Resources Plc v. Lungowe (UK Supreme Court, 2019)
Issue:
Whether a parent company owes a duty of care for human rights violations by a subsidiary.
Held:
Parent companies may owe a direct duty of care
Liability depends on degree of control and supervision
Significance:
Cornerstone case establishing corporate HRDD obligations across group structures.
2. Okpabi v. Royal Dutch Shell Plc (UK Supreme Court, 2021)
Issue:
Environmental and human rights harm caused by Nigerian subsidiary.
Held:
Detailed group-wide policies can create a duty of care
Formal separation does not automatically shield parent companies
Relevance:
HRDD failures can pierce corporate veils in practice.
3. Kiobel v. Royal Dutch Petroleum Co. (US Supreme Court)
Issue:
Corporate liability for overseas human rights abuses.
Held:
Extraterritorial jurisdiction limited
But acknowledged corporate exposure to human rights litigation
Significance:
Shaped corporate HRDD strategies to manage transnational risk.
4. Rana Plaza Litigation (Global Apparel Supply Chain Cases)
Issue:
Human rights violations in supply chains of multinational brands.
Held / Outcome:
Brands faced liability and settlements due to failure of supply-chain due diligence
Significance:
Established expectation of deep supply-chain HRDD, not superficial audits.
5. Sanjit Roy v. State of Rajasthan (Supreme Court of India)
Issue:
Forced labour and minimum wage violations.
Held:
Payment below minimum wage amounts to forced labour
Fundamental rights apply even in economic contexts
Relevance:
Indian courts recognize corporate responsibility in labour practices, forming HRDD foundation.
6. People’s Union for Democratic Rights v. Union of India (Asiad Workers Case)
Issue:
Labour rights violations by contractors.
Held:
Principal employers cannot evade responsibility through contractors
Constitutional obligations extend through supply chains
Significance:
Core Indian precedent for supply-chain human rights liability.
7. Lafarge Umiam Mining Pvt. Ltd. v. Union of India (Supreme Court of India)
Issue:
Impact of mining operations on indigenous communities.
Held:
Corporate projects must respect tribal and community rights
Due diligence includes social and human rights impact assessments
Relevance:
Judicial recognition of human rights impact due diligence in India.
VII. Liability of Directors and Senior Management
Directors may be liable where:
HRDD failures were foreseeable
Policies existed but were not implemented
Independent directors generally protected absent knowledge or negligence
ESG, compliance, and HR heads face increasing scrutiny
VIII. Defences Available to Corporates
Robust HRDD framework and documentation
Demonstrable mitigation steps
Effective grievance redressal
Lack of control over third parties (limited defence)
Prompt remediation upon discovery
IX. Remedies for HRDD Violations
Injunctions and corrective orders
Civil damages
Regulatory sanctions
Contractual termination
Public interest litigation
Reputational harm and investor action
X. Emerging Global and Indian Trend
Shift from voluntary CSR to mandatory HRDD
Parent-company liability becoming mainstream
Supply-chain transparency laws expanding
HRDD integrated into ESG and disclosure obligations
XI. Conclusion
Human Rights Due Diligence has become a core governance obligation, not merely a CSR exercise. Courts increasingly hold that:
Where human rights risks are foreseeable, failure to exercise due diligence can itself constitute a legal wrong.
Indian corporates—especially those with global operations or export-oriented supply chains—must treat HRDD as a legal risk-management function, embedded at the board and operational levels.
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