Human rights due diligence

9 February 2023

A recent webinar explored the human rights due diligence requirements of ASI’s 2022 Performance Standard for certifying Entities in both Production and Transformation and Industrial User ASI membership classes.

Various tools and approaches to map supply chains and evaluate human rights risks are included in ASI’s Performance Standard Guidance and in educationAL resources.  We encourage ASI Entities to access these, in particular small and medium enterprises and those engaged in downstream supply chain activities who may be undertaking formal due diligence processes in the context of ASI Standards for the first time.

The webinar also addressed some of the emerging regulatory requirements for businesses to demonstrate that:

• human rights due diligence has been undertaken,
• actual or potential adverse impacts have been identified, prevented and mitigated and/or remedied.

These supply chain-oriented rules are increasingly manifested as border-enforced prohibition of imports of goods and articles.

ASI is increasingly asked whether ASI Certification is sufficient to meet the needs of such rules.  While implementation of ASI Standards provides an important contribution to due diligence processes, ASI Certification alone is not sufficient.  While ASI Performance Standard Certification provides assurance that an Entity has adequate systems in place to conduct HRDD to meet ASI Standards, it is not designed to verify the specific risks and mitigation activities identified (or not) by Entities within a given Certification period.  The regulatory responsibility remains with companies to conduct their own due diligence, to verify actual or potential adverse impacts as part of an ongoing proactive and reactive process, and to demonstrate legal compliance to competent authorities.  ASI can help Entities improve their processes, and conformance with ASI’s standards gives assurance that such processes are in place, but certification is not a replacement for ongoing corporate due diligence activities.

Some of your questions from the webinar, answered:

Are there human rights issues that are salient for the aluminium industry as a whole and require a collective response?

• Businesses will and should respond individually to the specific risks identified in their supply chains.  ASI’s role is to develop, support the implementation of and allow common assurance against a set of global standards.  ASI is here to support businesses and entities individually as they conduct Human Rights Due Diligence, but ASI’s Governance structure (and legal duty) precludes collective action.

• The ASI Standards Committee will be exploring the development of outcomes-based criteria for the next Standards Revision in 2027. If you are interested to know more and/or contribute, Members are encouraged to participate in Working Group discussions on key topics including Human Rights.

How can human rights due diligence help us with UFLPA compliance?

• From the https://www.cbp.gov/trade/forced-labor/UFLPA:
  • “The Uyghur Forced Labor Prevention Act (UFLPA) was signed into law by President Biden on December 23, 2021. It establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States. The presumption applies unless the Commissioner of U.S. Customs and Border Protection (CBP) determines that the importer of record has complied with specified conditions and, by clear and convincing evidence, that the goods, wares, articles, or merchandise were not produced using forced labor.”

• It is the responsibility of each individual importer (and not ASI) to rebut the presumption and show that they have fully complied with the UFLPA Strategy and any implementing regulations with respect to due diligence, effective supply chain tracing and supply chain management; completely and substantively responded to all CBP inquiries; and established by clear and convincing evidence that imports are not the product of forced labour.

• Human Rights Due Diligence (HRDD), including the mapping of supply chains, identification of priority risks and demonstration of risk mitigation, is likely to be required as a minimum for the importer to demonstrate a rebuttal to refusal of entry.  ASI Performance Certification gives assurance that the Entity has a HRDD system in place (and Chain of Custody Certification of suppliers would too – albeit using a mass balance approach), but this would not be sufficient meet the UFLPA evidence requirements.

ASI CoC is a wonderful tool to mitigate risks. Is ASI working to develop its CoC Standard to meet the needs of companies to demonstrate regulatory compliance?

• ASI Standards are reviewed at least every 5 years, and the most recent update was in 2022. For the Chain of Custody (CoC) Standard, the Standards Committee will be exploring beyond mass balance approaches for CoC for the 2027 revision).  However it is unlikely that assurance against any ASI standard would meet the needs of such regulations and their application to the (importing or producing) Business, its activities and decisions.

Is there another role for ASI – other than certification & CoC?

• Learning and capacity building is a core element of ASI’s work, both related to implementation and auditing of its standards, but also wider sustainability issues, including ‘beyond certification’ work with Indigenous peoples.  We have online resources available including on our educationAL website, in our regular webinar series and in the Standards Guidance, which will be updated on a regular (6-12 monthly) basis.

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