Priorities for the U.S. National Action Plan on Responsible Business Conduct
The Biden administration’s 2022 National Security Strategy places a global political order built on respect for universal human rights, and a global economy that provides opportunity for all, as fundamental to U.S. national security interests. The forthcoming U.S. National Action Plan (NAP) on Responsible Business Conduct provides an opportunity for the U.S. government to lay out its vision and strategy for engagement with business on these priorities. Releasing the NAP—or its key components—at the upcoming second Summit for Democracy would provide a particularly powerful message on this topic; U.S. companies are often the face of the United States abroad, and their human rights practices have both a symbolic and a practical impact on the U.S. government’s ability to meet its foreign policy objectives. The NAP can be valuable for both business and civil society by
- laying out clear expectations for companies,
- leveraging the influence of U.S. government financial resources,
- committing to robust enforcement of U.S. law,
- improving communication with external stakeholders, and
- strengthening communication and coordination on this issue within the U.S. government.
This white paper provides recommendations for the Biden administration how to incorporate these five priorities into the NAP.
To mark the 10th anniversary of the UN Guiding Principles on Business and Human Rights on June 16, 2021, Secretary of State Antony Blinken announced that the United States would develop a new National Action Plan (NAP) on Responsible Business Conduct. The NAP provides an opportunity for the U.S. government to lead with its values by laying out its vision and strategy for engagement with the private sector to prevent, mitigate, and remedy human rights abuses associated with business activity.
Such abuses run starkly counter to the principles laid out in the Biden administration’s 2022 National Security Strategy, which places a global political order built on respect for universal human rights, and a global economy that provides opportunity for all, as fundamental to U.S. national security interests. The strategy casts the private sector as a central player in multiple lines of effort, from developing resilient global supply chains for critical technologies to exposing disinformation campaigns by adversaries. The ultimate measure of success, however, will not be whether U.S. companies engage in these global efforts, but how they do so—including whether they adopt policies and practices that consider the social impact of their work. U.S. companies are often the face of the United States abroad, and their human rights practices have both a symbolic and a practical impact on the U.S. government’s ability to meet its foreign policy objectives.
“Across our development work, we will continue to employ best practices that distinguish the United States and our partners from our competitors: transparency and accountability; high environmental, social, labor, and inclusion standards; respect for human rights; and local partnerships supported by foreign assistance and sound, sustainable financing.”
U.S. officials describe the performance of U.S. companies overseas as a strategic advantage compared to investment by China and others. This is often the case: U.S. companies tend to deliver a strong long-term value proposition, seek to provide local employment, and rarely engage in bribery. This likely explains why they are more trusted globally—by a wide margin—than Chinese companies, for example. On human rights, however, U.S. companies have room for improvement. A 2022 assessment of social performance by the World Benchmarking Alliance found that 84 percent of the U.S. companies reviewed scored zero points on efforts to carry out human rights due diligence (by comparison, 59 percent of companies from other G7 countries scored zero). As calculated by the author, the average score for U.S. companies across human rights components of the assessment was just 4.78 out of 20. In 2022, some U.S. companies were accused of sourcing products—from palm oil to car parts—from suppliers responsible for egregious human rights abuses. U.S. companies have themselves been subject to allegations of trafficking and labor abuse, violations of privacy, and bringing lawsuits to silence human rights activists, among others.
Although governments bear the ultimate responsibility to protect human rights under international law, the UN Guiding Principles framework—endorsed unanimously by UN Human Rights Council members, including the United States—holds companies responsible for respecting human rights throughout their business operations and supply chains. They do so by carrying out effective human rights due diligence to assess and address any potential human rights impacts. While many companies now do this voluntarily, only governments have the authority to mandate company action in this area.
Some jurisdictions, including the United Kingdom and Australia, have taken incremental steps in this direction, such as requiring public company reporting on steps to prevent the most egregious forms of abuses, like forced labor and human trafficking. But several major economies, including France, Germany, and Norway, have adopted legislation requiring companies to carry out human rights due diligence or risk legal consequences for their failure. By 2026, more than 17,000 multinational companies based in or doing significant business in the European Union will be subject to similar requirements.
Congressional action to mandate additional corporate due diligence on human rights is unlikely in the short term, and the NAP is not a vehicle to push that agenda. There are, however, myriad steps the executive branch could take using existing authorities to keep pace with other advanced economies on developing a more comprehensive approach to engagement with companies on human rights impacts. The NAP is an opportunity to identify these steps and carry them forward.
The United States has taken significant action in this area already. It has issued guidance for companies on what effective corporate due diligence looks like in a number of high-risk contexts, including for companies that develop surveillance technology and those who may be sourcing from the Uyghur region of China. In 2015, the U.S. government expanded federal procurement regulations prohibiting contractors from using forced labor. U.S. Customs and Border Protection (CBP) has begun robustly enforcing an import ban on goods produced with forced labor—since FY 2018, over one billion dollars’ worth of goods have been stopped at the U.S. border on suspicion of being made with forced labor. On the margins of the first Summit for Democracy, the Department of Labor announced a $122 million initiative to support freedom of association for workers in global supply chains.
These efforts all reflect a desire to mitigate human rights harms by business and are broadly consistent with President Biden’s “worker-centric” trade policies. Many, however, have been reactive to external events or opportunities, or have been sporadically enforced. Despite the central role of the private sector in the National Security Strategy, the administration has not developed a clear statement of policy on its expectations of business conduct. The NAP is therefore a critical opportunity to bring greater coherence and attention to robust ongoing efforts to engage companies, while also laying out a forward-looking vision for future expectations of private sector performance.
With this goal in mind, CSIS hosted a high-level convening in February 2022 with experts from the U.S. government, civil society, and academia to discuss priority areas for the NAP. Throughout 2022, CSIS hosted a regular expert-level meeting to expand upon the ideas presented at the roundtable and to encourage the U.S government to maintain momentum on the NAP process. CSIS staff also participated in half a dozen thematic roundtables hosted by external groups on specific NAP-related topics. These discussions were invaluable in identifying the most significant and realistic potential commitments the NAP could contain, and the recommendations contained in this white paper were significantly informed by these discussions. However, the views expressed here are the author’s alone.
Summary of Recommendations
Setting Expectations for Business
- Issue a detailed statement of policy on expectations for business from the White House, including a request that each department and agency designate a senior official to lead its work on this topic, and set a regular schedule for public and private reporting on implementation.
- Develop and disseminate an online repository of resources for businesses to identify U.S. government guidance on responsible business conduct.
Leveraging U.S. Finance
- Announce, via the NAP, a comprehensive review and reconciliation of corporate human rights due diligence standards across U.S. government initiatives that finance or support the private sector.
- Improve the implementation of procurement regulations on human rights.
Enforcing the Rules of the Road
- Broaden enforcement beyond import controls, and beyond China.
- Disclose more information about enforcement.
- Leverage enforcement tools to create holistic policy solutions.
Improving Communication with External Stakeholders
- Stand up a federal advisory committee on the role of the private sector in the administration’s human rights and democracy agenda.
Strengthening Interagency Communication and Coordination
- Invest in diplomatic and engagement resources to match newly robust funding for technical assistance and law enforcement.
The plan to develop a new NAP was announced just five months into the Biden administration, in the hopes that releasing it early (in contrast to the Obama administration’s NAP) would allow the administration ample time for implementation and follow up. Instead, as a result of competing priorities and a commendable but protracted effort to engage a wide range of external stakeholders, the NAP will be released in the second half of the administration.
This does not diminish the value of the NAP, which can bring greater coherence and attention to the efforts undertaken across the U.S. government on responsible business conduct over the last two years. However, for it to have impact, it is critical that the NAP be released with sufficient time for implementation, and well before the 2024 election cycle begins in earnest.
The 2023 Summit for Democracy, scheduled for March 29 to 30, 2023, provides an ideal backdrop for the release of the NAP, or at least its key components. The summit process is President Biden’s flagship initiative to reassert U.S. leadership among democratic nations and to inspire allies to both reinforce their own democratic systems and help support democracy abroad. On February 3, the administration issued a strong call to businesses to participate in the summit process by making their own commitments to support sustainable democracy. Announcing the administration’s NAP commitments is a natural complement to these company-driven actions. And although time is short, a small number of strategic, impactful initiatives such as those described in this white paper can result in an effective and impactful NAP.
The First U.S. NAP on Responsible Business Conduct
The first U.S. NAP was published at the conclusion of the Obama administration in December 2016 after a two-year process involving at least 16 U.S. departments and agencies, including the Departments of State, Labor, Commerce, and the Treasury; the U.S. Agency for International Development; the Office of the U.S. Trade Representative; and the Environmental Protection Agency. Given its timing, the first NAP was largely a compendium of previous actions taken by the Obama administration, with few ambitious new commitments. Under the Trump administration, some components of the NAP, such as the pledge by CBP to enforce the Tariff Act’s prohibition on entry of goods made with forced labor, continued to be implemented. Momentum around the monitoring and implementation of the NAP as a whole, however, was not a policy priority.
While the NAP will take stock of existing efforts by the U.S. government to address the impacts of business on human rights, the more consequential component of the NAP will be its forward-looking commitments. The potential scope of the NAP is wide, encompassing the portfolios of dozens of U.S. government departments and agencies, but a small number of strategically impactful initiatives could generate a large return on investment, especially in the limited time now remaining to release the NAP.
Setting Expectations for Business
Expert guidance for companies on how to effectively carry out their responsibility to respect human rights in their operations and supply chains already exists. Companies are more routinely hiring lawyers and consultants to provide advice on how to structure their business operations in a rights-respecting manner, as well as how to effectively comply with the growing number of laws and regulations on this topic around the world. As noted earlier, there is little momentum in Congress to adopt legislation that would mirror efforts underway in Europe to define and mandate by law human rights due diligence by companies. That does not mean, however, that the U.S. government needs to be silent on this issue. The views of a nation’s executive branch on effective human rights due diligence carry enormous weight. Japan’s recent Guidelines on Respect for Human Rights in Responsible Supply Chains is one such example.
The U.S. government has already weighed in on what effective due diligence looks like in several specific situations. An early example was the 2013 Burma Responsible Investment Reporting Requirements, an effort by the State Department to address concerns about allowing U.S. companies to invest in Myanmar for the first time in more than two decades. In 2017, the Department of Labor launched its Comply Chain app, an effort to help businesses identify child labor and forced labor risks in their supply chains. In 2020, the Department of State’s Bureau of Democracy, Human Rights, and Labor issued guidance on human rights considerations for the export of surveillance technology. Sanctions and export control regimes managed by the Departments of the Treasury and Commerce respectively also provide critical instruction for companies on business restrictions based on human rights grounds.
The egregious human rights situation in the Uyghur region of China and the mixed reactions by companies to it led to the first whole-of-government efforts to provide advice on human rights due diligence via the 2020 and 2021 Xinjiang business advisories. The 2020 advisory was a game changer in alerting companies to the risks of doing business in or sourcing from the region, while the 2021 version provided a more thorough overview of relevant human rights risks, applicable U.S. law, and recommendations for companies when considering their due diligence strategies with respect to potential operations and sourcing in the region. Since then, human rights–related business advisories have been issued for Hong Kong, Myanmar, and Sudan, and additional sector-specific guidance is forthcoming.
In response to a congressional mandate, in June 2022 the Department of Homeland Security issued its Strategy to Prevent the Import of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China. This strategy lays out for the first time an overview of the U.S. government’s view of effective human rights due diligence by companies, relevant not only to China but globally. This includes seven steps: (1) assess risks and impacts, (2) develop a code of conduct, (3) communicate and train across supply chains, (4) monitor compliance, (5) remediate violations, (6) ensure independent review, and (7) report performance and engagement.
This robust collection of information and guidance on responsible business conduct draws on the expertise of multiple departments and agencies. However, there is no single statement of policy that outlines the administration’s position and priorities with respect to the private sector on human rights issues globally and directs departments and agencies to adopt specific policies that implement the administration’s views. There is also no single place business can go to find this information; instead, it is scattered across nearly a dozen government websites. Through the NAP, the U.S. government therefore should consider the following actions:
- Issue a detailed statement of policy from the White House and launch a process to implement it. Here lessons can be learned from the National Action Plan to Combat Human Trafficking (in this paper, “the trafficking plan”), which lays out both the administration’s policy as well as objectives and dozens of specific priority actions to end trafficking in persons. While the NAP need not contain the same level of detail as the trafficking plan, it should match its clarity of approach, as well as adopt its accountability mechanisms. There are two potential approaches to this for the NAP. The first is a statement of policy from the White House in the form of a national security memorandum or national strategy (similar to the June 2022 National Security Memorandum on Combating Illegal, Unreported, and Unregulated Fishing and Associated Labor Abuses or the October 2021 National Strategy on Gender Equity and Equality) that incorporates and endorses the NAP by reference. The second is to issue the NAP directly from the White House. Either approach would give the administration’s policy positions on due diligence more weight with the private sector, not to mention be an improvement over the 2016 process, which saw an NAP issued by the secretary of state and accompanied by a White House press release.
The statement of policy should request that each relevant department and agency designate a senior responsible business lead accountable for engaging in the NAP follow-up and implementation process, as well as for internal efforts to build human rights into their agency’s business engagement. Borrowing a page from the trafficking plan and the congressionally mandated President’s Interagency Task Force to Monitor and Combat Trafficking in Persons (PITF), leads should meet at least twice per year and provide a public update on implementation of the NAP, while their designees should participate in an ongoing Interagency Policy Committee process led by the NSC.
Note that the trafficking plan’s Priority Action 1.3.1 requires agencies to designate their assistant secretary for management or the equivalent as responsible for ensuring effective coordination between that agency’s procurement and human rights experts; moving forward, if the NAP adopts this recommendation, this responsibility could transfer to the senior responsible business lead for that agency.
- Develop an online repository of resources for businesses to identify U.S. government guidance on responsible business conduct. This should hold existing U.S. government guidelines and compliance information and be updated regularly as new guidance is issued. It should be hosted by a business-facing component of the U.S. government, such as the Department of Commerce or Department of Labor, where it can be easily found by companies seeking relevant resources. Additional resources should be identified for socialization both internally across the U.S. government and externally to relevant stakeholders. This effort would also help implement—and give leverage to—the trafficking plan’s requirement that relevant agencies provide additional information to the private sector on forced labor risks in supply chains and enhance communication with companies on high-risk sectors.
Leveraging U.S. Finance
A clear statement of administration position on responsible business conduct, including effective human rights due diligence, would allow the U.S. government to better incorporate this expectation in all arenas where it engages the private sector—particularly where it provides direct financial support to companies. While dozens of agencies engage with the private sector on a regular basis, the most salient relationships for the purposes of the NAP are the financial relationships. This takes place largely in two contexts: where the U.S. government is making decisions about project or company financing for work overseas, and where the U.S. government is procuring goods or services for itself. To leverage these relationships, through the NAP the U.S. government should therefore consider the following actions:
- Announce a comprehensive review and reconciliation of corporate human rights due diligence standards across U.S. government initiatives that finance or support the private sector. The objective of this review would be to improve consistency across standards—including among the finance agencies, procurement officials, and U.S. CBP—as well as ensure adequate transparency in decisionmaking. Transparency and consistency in applying standards benefits both the private sector and project beneficiaries on the ground.
The United States provides financial support to companies in order to achieve its trade promotion and development goals. It does this via concessional financing, risk insurance, loan guarantees, and, as of 2020, equity investment. In its capacity as a board member, the U.S. government also makes policy decisions about whether to support financing for projects by the World Bank and the International Finance Corporation. Agencies also join with companies in public-private partnerships that may not result in financial support but do result in U.S. government endorsement. Each department and agency responsible for these vehicles applies human rights criteria to its decisionmaking in some way. The Development Finance Corporation and the Export-Import Bank base their assessments on the International Finance Corporation’s Environmental and Social Performance Standards, but they also add their own additional criteria. For example, USAID’s policy on private sector engagement references the UN Guiding Principles and OECD Guidelines on Multinational Enterprises. The U.S. Trade and Development Agency often solicits firms to conduct environmental and social impact assessments, but it does not appear to publish on its website either human rights criteria for company selection or a framework for social impact assessments to be conducted by bidders. Agencies that provide diplomatic support for trade promotion activities, such as the Departments of Commerce and State, have their own guidelines for which companies and projects they will support.
Within the framework of the UN Guiding Principles, there will still naturally be differences among agencies in terms of the depth and scope of human rights due diligence expected of private sector partners, in accordance with the type of project and U.S. government relationship. But there is value to each agency starting from the same foundational principles, and this consistency benefits both the U.S. government and the private sector. Policies also need to be updated to reflect the assumptions embedded in the Uyghur Forced Labor Prevention Act (UFLPA) about goods produced in the Uyghur region, as well as the withhold release orders (WROs) issued by CBP, following the process the DFC has already gone through with regard to solar panels. Products that cannot be imported into the United States due to forced labor concerns should play no role in U.S.-funded projects overseas.
- Improve the implementation of procurement regulations on human rights. According to the White House, the U.S. federal government is the largest consumer in the world, spending $600 billion per year in goods and services. A significant portion of this spending is in sectors at high risk for human rights and labor rights abuses. The Department of Defense, for example—which accounts for nearly two-thirds of government procurement—has in recent years spent more than $1.5 billion annually in clothing purchases. Agencies spend hundreds of millions of dollars on seafood, while fruits and vegetables are regularly among the top five items procured by civilian U.S. government agencies. This spending gives the U.S. government a powerful tool to influence the human rights performance of companies seeking federal contracts, as well as wider market practices. The current Federal Acquisition Regulations (FAR) prohibit federal contractors, subcontractors, and employees from engaging in human trafficking or forced labor. Certain companies are required to draft compliance plans and certify that these requirements have been met—including that, to their knowledge, covered parties have not engaged in human trafficking or forced labor, or have adequately addressed it if they have. However, there are important limitations on the scope of these requirements, as well as on how they have been enforced, that the NAP could address. As outlined in an NYU Stern Center for Business and Human Rights paper, agencies lack human rights expertise that would allow them to identify high-risk acquisitions and to effectively review contractors’ compliance plans. The paper proposes creating a central hub for such expertise, upon which all procurement officials could draw for assistance in their daily work. Such an office could also develop more comprehensive guidance for implementation of the FAR, as well as proposals for addressing gaps in law or policy. It also proposes requiring that prospective contractors, in order to be deemed “responsible” under the FAR (and therefore eligible to receive U.S. contracts), have a satisfactory record of compliance with international human and labor rights standards—a proposal which would help broaden the scope of the FAR’s reach beyond forced labor to other egregious forms of human rights abuse carried out by companies.
Enforcing the Rules of the Road
Best practice guidance and leading by example through procurement and investment behavior are powerful “soft law” tools that the U.S. government can use to influence company performance on human rights. However, the NAP also provides an opportunity to better leverage the growing suite of “hard law” tools available to the U.S. government to require companies to take steps to address human rights violations in their operations and supply chains. To make these tools more effective, the U.S. government should consider the following actions:
- Broaden enforcement beyond import controls, and beyond China. Since 2016, there has been a dramatic expansion in the tools available to the U.S. government to hold corporate violators of human rights accountable for their actions, particularly with regard to forced labor. The lifting of the “consumptive demand” loophole in the 1930 Tariff Act jump-started an unprecedented enforcement effort by the Department of Homeland Security to prevent goods made with forced labor from entering the United States. In FY 2022, CBP detained nearly 2,400 shipments suspected of being produced with forced labor, up from 1,500 in 2021 and just 12 in 2019.
The Tariff Act and the UFLPA—which has been interpreted by the Department of Homeland Security to effectively mandate that companies seeking to import high-risk products must carry out detailed supply chain mapping, down to raw materials, or face potential denial of import—are potential game changers in preventing human rights abuses in supply chains. They have been compared to the Foreign Corrupt Practices Act in terms of the attention corporate officers should be paying to its implementation. In 2018, the Department of Justice gained the ability to prosecute U.S. companies for some forced labor crimes that occur outside the United States even if the companies did not carry out the conduct themselves but relied on suppliers that did. Since 2019, the Department of Commerce has interpreted its export control authorities to include human rights abuses as a national security concern, adding nearly 50 companies to its Entity List as a result. Finally, the Global Magnitsky Act authorizes the U.S. government to sanction individuals and companies responsible for human rights abuses, and it was used for the first time in December 2022 against companies utilizing forced labor.
Many of these “sticks” have been underutilized, however—with enforcement efforts largely focused on abuses by China or Chinese companies, or in some cases, not taking place at all. There have been no cases brought by the Department of Justice under its Trafficking Victims Protection Reauthorization Act (TVPRA) authorities to date against companies for abuses in their supply chains, though the trafficking plan commits the Department of Justice to doing so. The December 2022 issuance of Global Magnitsky sanctions for forced labor was a critical milestone, not only for the use of the Global Magnitsky Act in this way, but for the work done by the Treasury Department to use beneficial ownership information to identify additional offshore holding companies subject to sanctions. However, it too was China-focused, and it targeted two companies already subject to other U.S. sanctions.
The Department of Commerce has likewise only used its export controls to respond to the situation in China. Even before the UFLPA, CBP issued more WROs for China than any other country. Since the UFLPA went into effect in June 2022, UFLPA-related seizures accounted for approximately two-thirds of total forced labor seizures. The November 2022 WRO issued against sugar produced in the Dominican Republic was a significant move in the other direction, however, and this diversity of geographic targeting should continue. The NAP provides an opportunity to provide policy guidance for agencies to prioritize the use of these tools as a critical component of an overall strategy to end forced labor and other egregious human rights abuses by companies.
- Disclose more information about enforcement. CBP currently publishes limited statistics on its enforcement of the Tariff Act and UFLPA, including the total number of shipments detained and total value of goods seized per quarter. Due to concerns about commercially sensitive information, it generally does not publish the names of companies whose shipments are detained, although companies frequently share this information themselves. The DHS has indicated that it plans to share additional information, but it has not specified what it will disclose. While the trafficking plan calls on the DHS to publish more information on the WRO process itself, the NAP should go further, committing the DHS to publish the full scope of information it is legally permitted to—including, to the extent possible, a breakdown of shipments targeted by sector and by geographic origin (especially for products whose components are made with forced labor) and information about the ultimate disposition of those targets (whether the goods were ultimately admitted, seized, or turned around).
- Leverage enforcement tools to create holistic policy solutions, including for prevention and remedy. The potency of enforcement tools can easily result in an “enforcement first” approach to addressing many situations of egregious human rights abuse. Robust enforcement is appropriate, but it should not become an “enforcement only” approach—particularly when the majority of enforcement actions undertaken under the Tariff Act and Global Magnitsky Act are the result of submissions by nongovernmental organizations. Instead, the identification of companies or goods that subject to sanction should trigger—or better, be accompanied up front—by an interagency process to develop a strategy to address and remedy the situation. This process would be facilitated by an expansion of CBP’s work to identify and publicize criteria for the lifting of WROs, building on expertise at the Departments of Labor and State on effective remedy. It will also be easier to carry out as the focus of enforcement expands beyond China. Finally, embassies, USAID missions, and U.S. government experts should be aware of and tracking high-risk industries and projects and developing prevention strategies to avoid egregious abuse, as well effective remedy approaches to respond.
Improving Communication with External Stakeholders
Just as there is no central repository for U.S. government policies on responsible business conduct, there is no designated point of contact within the U.S. government for companies to engage on human rights and related issues. The absence of a strong private sector role in the first Summit for Democracy is one example of this gap. Outside the NAP process itself—which is by definition temporary—there is no formal mechanism for either the private sector or other relevant stakeholders, such as labor and human rights groups, to weigh in on U.S. policies or approaches with respect to responsible business conduct. The U.S. government should therefore consider the following action:
- Stand up a federal advisory committee on the role of the private sector in the administration’s human rights and democracy agenda. Currently, agencies with the strongest private sector relationships, such as the Departments of Commerce and Energy, do not have individuals or offices specializing in human rights, while agencies with a strong human rights focus, such as the Departments of State and Labor and USAID, engage with business more sporadically or only cover a subset of business and human rights issues. Engagement on specific country or sector situations takes place on an ad hoc basis as situations arise, with little opportunity for long-term planning.
Advisory committees are a common approach adopted by dozens of U.S. departments and agencies to solicit regular public input into the policymaking process while ensuring transparency in government decisionmaking. This advisory committee, which could be called the President’s Advisory Council on Responsible Business Conduct (PAC-RBC), should include both private sector representatives and other relevant stakeholders, including human rights and labor groups that represent those impacted by business operations. It should be hosted by a business-focused agency such as the Department of Commerce, with strong participation by other U.S. government stakeholders, including the National Security Council, much like the President’s Advisory Council on Doing Business in Africa. The PAC-RBC should provide information, analysis, and recommendations to the president in order to address, among other potential topics, (1) steps the U.S. government can take to support responsible human rights practices by companies operating in the United States, as well as U.S. (or U.S.-listed) companies operating abroad; (2) opportunities for coordination and public-private partnerships between the U.S. government and the private sector to advance U.S. human rights and democracy policy objectives; and (3) alignment between U.S. law and policy and the laws and policies of key partners and allies on issues relating to responsible business conduct.
Strengthening Interagency Communication and Coordination
The NAP process has revealed limitations in U.S. government efforts on business and human rights–related issues. While some topics, like forced labor and human trafficking, are being tackled through congressionally mandated interagency processes, others are siloed in single offices within agencies or have no obvious lead. Higher-level and more consistent engagement across agencies on business and human rights–related issues is necessary in order to carry out the administration’s objectives in this space. The U.S. government should therefore consider the following actions to strengthen this communication:
- Invest in diplomatic and engagement resources to match newly robust funding for technical assistance and law enforcement. Congress and two successive administrations have made unprecedented investments to support engagement on business and human rights issues, most notably forced labor and human trafficking. The vast majority of these investments have gone to the Department of Labor’s International Labor Affairs Bureau (ILAB), which carries responsibility for implementing the labor provisions of the United States-Mexico-Canada Agreement (USMCA) and for capacity building on labor issues for foreign governments, unions, and nongovernmental organizations, as well as the DHS, which implements the Tariff Act and UFLPA. These much-needed investments have been game changers for those agencies’ ability to engage on labor issues. The president’s FY 2023 budget request asked for an additional $70 million, including 150 new personnel, for UFLPA implementation for CBP, while recently signed legislation increased ILAB’s budget by $10 million and institutionalized the DHS Center for Countering Human Trafficking within Immigration and Customs Enforcement’s Homeland Security Investigation division with an additional $14 million and at least 35 staff.
In order to implement the NAP fully, however, additional resources will be needed for diplomacy and corporate engagement, especially for the Departments of State and Commerce, as well as the Office of the U.S. Trade Representative, which has a growing role as discussions on enforceable labor provisions have expanded in the context of trade negotiations. As noted above, no one at the Department of Commerce is designated to engage on these issues, despite multiple equities in this space and several upcoming opportunities for impact. Efforts to support resilience in global supply chains, for example, should explicitly include a human rights component, while the Commerce Department’s Commercial Law Development Program could develop a practice area on business and human rights, supporting best practices in line with the UN Guiding Principles and OECD Guidelines on Multinational Enterprises. Two years into the administration, the State Department’s Bureau of Democracy, Human Rights, and Labor still lacks a confirmed assistant secretary, and its business and human rights team remains miniscule in comparison to the growing staffs at the Departments of Labor and Homeland Security. The U.S. national contact point for the OECD Guidelines for Multinational Enterprises, housed in the State Department’s Bureau of Economic and Business Affairs, plays a unique role in mediating disputes between business and civil society over company compliance with the OECD guidelines, but its staffing and funding is uncertain from administration to administration and could be more firmly embedded institutionally.
Finally, financial and personnel resources should be aimed not just at Washington-based agencies but also at U.S. embassies overseas. The Department of Labor is helpfully expanding its presence in these areas, but the Department of State and USAID should be equally present in order to engage in efforts to better align government norms on responsible business conduct bilaterally and multilaterally.
The release of a U.S. National Action Plan on Responsible Business Conduct is an important opportunity for the United States to lead with its values and advance the implementation of core components of the Biden administration’s National Security Strategy. Releasing the NAP, or its core components, in conjunction with the upcoming Summit for Democracy provides the best opportunity for alignment and amplification of these priorities, as well as sufficient time for this administration to implement its NAP commitments. A strategic, focused NAP—one that includes strong policy commitments, more effective external stakeholder engagement, and more robust coordination within the U.S. government—is realistic in this time frame and represents critical steps for the administration to take in support of its global human rights and democracy agenda.
Marti Flacks is the Khosravi Chair in Principled Internationalism and director of the Human Rights Initiative at the Center for Strategic and International Studies in Washington, D.C.
Support for this report was provided by the International Corporate Accountability Roundtable (ICAR), a project of the Tides Center, and Humanity United. The opinions expressed are those of the author and do not necessarily reflect the views of ICAR or Humanity United.