Human Rights Due Diligence (HRDD) requirements have become a legal obligation for businesses in multiple countries. The nexus of corruption and workers’ rights breaches is well documented and prevalent. As a result, Third Party Risk Management (TPRM) functions are often tasked with managing the business impact on local communities and environments directly and through their complex supply chains. The established anti-bribery and anti-corruption (ABAC) frameworks can be a good starting point, given that Integrity Enhanced Due Diligence (EDD) and HRDD overlap in many parts. However, understanding the distinctions between them is critical for the integrity and efficiency of the process. Here’s what you need to know about the effective human rights due diligence. The below insights are based on the GTI Webinar, featuring Nate Lankford (Miller and Chevalier Chartered), Katie Frodsham (National Security News) and Amritha Edachery (Ground Truth Intelligence).
Different Drivers, Different Stakes
Traditional integrity due diligence primarily addresses anti-bribery and corruption (ABAC) compliance, driven by specific legal frameworks and financial risks. In simple terms – the company wants to do business with another party and wants to ensure there are no hidden risks in doing so.
In contrast, HRDD goes beyond financial risks, examining how business operations affect individuals and communities. The key distinction lies in the stakeholder approach: while integrity DD prioritises shareholders and regulators, HRDD must consider “rights-holders” – the people directly impacted by business activities.
Investigation Methodology: A Refined Approach
The key investigative best practices apply to both types of due diligence. These include: independence, promptness, and proportionality. However, for HRDD, there are however additional specific considerations:
- Severity Assessment: Investigations must evaluate the scale, scope, and irremediable nature of human rights impacts, often requiring different expertise from traditional financial crime investigations.
- Enhanced Transparency: HRDD requires greater transparency and stakeholder engagement, while maintaining appropriate confidentiality measures.
- Victim-Centric Focus: HRDD should recognise that real people may be experiencing adverse impacts, and the overall process objective remains to remedy those impacts sustainably.
Data Challenges and Solutions
The data landscape for HRDD differs significantly from traditional integrity due diligence. ABAC investigations can rely on standardised and easily accessible structured databases, such as sanctions and risk data, aggregated corporate registry records, and adverse media. HRDD often requires a more diverse range of sources. Some of the sources most useful for this type of research include:
- Open Sources Intelligence (OSINT) material found through NGO databases and reports, country and sector-specific indices and modern slavery registries. Given the hidden nature of human rights breaches, however, an effective HRDD must combine OSINT with Human Intelligence (HUMINT). Those will include stakeholder interviews, local expert insights, discreet intelligence gathering, and in some cases proportionate covert investigations.
Internal vs. External Investigations – The power of both.
The most effective approach combines internal and external resources, leveraging each team’s strengths while ensuring proper coordination, communication and knowledge sharing. The extent to which an investigation should be internal or external, or a combination of both depends greatly on the nature of the allegations. In all cases, however, it is crucial to manage confidentiality responsibly, in a way that doesn’t impede stakeholder engagement. The rights-holder focus means that the investigation generally requires engagement with the people who are allegedly suffering adverse impacts, so it is critical to ensure this engagement works.
According to the experts, the key considerations for investigation playbook are:
- Appropriate resourcing
- Specialised expertise
- Independent information gathering and verification
- Transparency
- Local expertise to contextualised nuanced situation
Best Practices for Human Rights Investigations
Several key elements contribute to effective HRDD investigations:
- Comprehensive Planning: Develop investigation workplans that account for both direct and indirect human rights impacts.
- Multi-Source Intelligence: Combine public records, NGO information, and ground-level intelligence gathering, ensuring all methods are proportional and legal.
- Local Expertise: Engage local experts who understand the cultural context and can build trust with affected communities.
- Rights-Holder Engagement: Maintain appropriate communication with affected individuals or communities while managing confidentiality concerns.
- Clear Reporting: Produce reports that clearly document findings, severity assessments, and recommended actions.
Preparing for What’s Next
As regulatory frameworks around human rights due diligence continue to evolve, companies must adapt their investigation approaches. The key to effective human rights due diligence lies in recognising that while traditional investigation skills remain valuable, they must be adapted and enhanced to address the unique challenges of human rights impacts. Companies that understand and embrace these differences will be better positioned to identify and address human rights risks effectively.
By prioritising a rights-holder focused approach and combining rigorous investigation methods with specialised human rights expertise, organisations can build more effective due diligence processes that protect their operations and those affected by them.
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FAQs
What is the difference between Human Rights Due Diligence (HRDD) and Integrity Enhanced Due Diligence (EDD)?
HRDD focuses on how business operations impact individuals and communities, while Integrity EDD primarily addresses anti-bribery and anti-corruption (ABAC) risks. HRDD takes a rights-holder approach, assessing human rights impacts, whereas EDD is more centred on shareholder and regulatory compliance.
Why is Human Rights Due Diligence becoming a legal requirement?
Governments are introducing mandatory HRDD laws to hold companies accountable for the human rights impacts of their supply chains. This regulatory shift means organisations must proactively identify, prevent, and remedy potential abuses or risk penalties and reputational harm.
How should companies investigate human rights risks in their supply chains?
Effective HRDD investigations require combining structured data (e.g., sanctions lists, registries, adverse media) with human intelligence, such as local expert insights and stakeholder engagement. This approach ensures that hidden risks like forced labour or modern slavery are properly identified. Learn more about GTI’s due diligence solutions.
What role does stakeholder engagement play in HRDD?
Stakeholder engagement is central to HRDD because it prioritises the rights and experiences of those directly affected. Companies should communicate appropriately with impacted communities while maintaining confidentiality, ensuring investigations are victim-centred and credible.
How can businesses integrate HRDD into existing third-party risk management programmes?
HRDD and Integrity EDD share investigative best practices, such as independence and proportionality, but HRDD requires a broader lens. Organisations can integrate HRDD by expanding their due diligence frameworks to include human rights assessments alongside ABAC checks. See our insights on third-party risk management.
What are the best practices for human rights investigations?
Best practices include comprehensive planning, using multi-source intelligence, engaging local expertise, and maintaining transparent reporting. Businesses should also adopt a rights-holder focus to ensure investigations drive meaningful remedies, not just regulatory compliance.