Updates on the Release of the U.S. National Action Plan on Responsible Business Conduct

On March 20, 2024, the Biden administration released its updated National Action Plan on Responsible Business Conduct (NAP). Secretary of State Antony Blinken had promised the update in a statement on June 16, 2021, the 10th anniversary of the adoption of the UN Guiding Principles on Business and Human Rights (UNGPs). The NAP is a framework for how the government, private sector companies, and other stakeholders can promote responsible business conduct (RBC), positively impact the communities in which they operate, and work with other stakeholders to support business practices that are transparent and accountable, respect human rights, and promote good governance. This updated version of the NAP is the culmination of numerous rounds of consultations with experts, inputs provided in response to a Federal Register Notice, and coordination across multiple government agencies.

Q1: What is a NAP, and how does it work?

A1: The UN Working Group on Business and Human Rights defines a NAP as an “evolving policy strategy developed by a State to protect against adverse human rights impacts by business enterprises in conformity with the UN Guiding Principles on Business and Human Rights.” Today, 26 countries have NAPs related to the UNGPs in place, showing a growing consensus around the importance of a clear business and human rights strategy. In addition to the UNGPs, the United States has incorporated into its NAP commitments relating to the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD Guidelines), which are “recommendations jointly addressed by governments to multinational enterprises to enhance the business contribution to sustainable development and address adverse impacts associated with business activities on people, planet, and society.” Among other things, those guidelines call for corporate action to address corruption and promote protection of the environment.

As the name suggests, NAPs are not laws or regulations in themselves. Rather, NAPs present a roadmap that governments can use to announce commitments to develop laws, regulations, or guidance or undertake other efforts to enhance respect for human rights by the private sector and promote RBC. Germany, for example, committed in its 2016 NAP to explore the possibility of mandatory due diligence guidelines and followed up on that commitment by conducting a thorough assessment of how many German companies were undertaking due diligence efforts on their own. After the assessment determined that fewer than a quarter of German companies were doing so voluntarily, the German parliament adopted mandatory due diligence legislation in 2021.

The first U.S. NAP was released just weeks ahead of the end of the Obama administration in December 2016 and was largely made up of actions that U.S. agencies were already taking to advance RBC. While the Trump administration continued to take action on some of these commitments, such as the one by U.S. Customs and Border Protection (CBP) to enforce the prohibition on entry of goods made with forced labor, it basically ignored the NAP, meaning virtually all other NAP commitments were deprioritized.

Q2: How was the development of this NAP different from the Obama administration’s?

A2: The Obama administration’s NAP received mixed reviews on both process and substance. While supporters, for instance, praised the NAP’s commitment to increase enforcement of import prohibitions on goods made with forced labor, critics highlighted the lack of transparency in its development, its failure to go beyond preexisting policies and practices, and the “low bar” that it set by focusing on voluntary efforts by companies rather than proposing robust government requirements.

When Blinken announced that the Biden administration would revise and update the NAP in 2021, the process was intentionally designed to be more inclusive from the start. A Federal Register notice was issued to formally solicit input from the public, which generated 275 distinct policy recommendations. To develop those recommendations, outside organizations—including the CSIS Human Rights Initiative—held numerous roundtable discussions with businesses, civil society organizations, academics, and other experts on specific areas of interest, resulting in robust discussions intended to help shape recommendations that were both reasonable and ambitious.

Q3: What is in the Biden administration’s NAP?

A3: Importantly, the Biden administration’s NAP articulates the general U.S. government expectation that businesses—regardless of their size, sector, operational context, ownership, or structure—conduct human rights due diligence (HRDD) in assessing the human rights–related risks in their operations and supply chains in line with the standards in the UNGPs, the OECD Guidelines, and the International Labor Organization’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy. The NAP emphasizes that these standards should be treated as a floor, not a ceiling, and that HRDD “should be an integral part of decision-making and embedded into existing risk management systems with support from the highest levels of the business.” It also describes some elements of HRDD, including metrics to assess and address risks; ongoing assessment, monitoring, and evaluation; consistent stakeholder engagement; public communication; a grievance mechanism; and alignment with human rights instruments, although it does not expressly indicate that these are required or even recommended HRDD characteristics. In this regard, the NAP reflects the general voluntary approach that the U.S. government takes on HRDD, as compared to the mandatory approaches adopted in Germany and France and under consideration in the European Union

The NAP identifies four priority areas for action: (1) establishing a Federal Advisory Committee on Responsible Business Conduct; (2) strengthening respect for human rights in federal procurement policies and processes; (3) strengthening access to remedy; and (4) providing resources to businesses. In each of these areas, the NAP lists specific commitments by relevant U.S. agencies. The NAP also includes commitments under the themes of technology; workers’ rights; environment, climate, just transitions; and anti-corruption, which reflect the broader character of the issues addressed in the OECD Guidelines.

Some of the NAP commitments describe concrete actions while others are more exploratory in nature without definite outcomes. The more concrete commitments include, for instance, the establishment of the RBC Federal Advisory Committee, which provides an ongoing, official forum for civil society, business, academics, and affected communities to raise concerns and make recommendations with relevant government officials. On procurement, the Department of State promises to develop a new human trafficking risk mapping process for high-risk and high-volume contracts to assist the acquisition workforce as well as federal contractors in conducting greater due diligence. (That said, some civil society advocates have expressed disappointment that the procurement commitments do not extend beyond the anti-trafficking restrictions in current law.) CBP, meanwhile, commits to drafting guidance to direct the proactive consideration of suspension and debarment whenever CBP issues a penalty under laws designed to prevent the importation of goods made with forced labor—a welcome addition to the penalties that might be imposed against those who try to import such goods. To strengthen access to remedy, the State Department commits to significant reforms to the National Contact Point process established under the OECD Guidelines, which is designed to provide aggrieved parties a vehicle to file complaints against companies allegedly responsible for acts contrary to those guidelines and then help to resolve those complaints. The Department of the Treasury also commits to advocate for effective remedy systems at multilateral development banks, while the U.S. International Development Finance Corporation promises to strengthen protections against reprisals for groups and individuals who raise concerns about DFC programs, and the U.S. Export-Import Bank commits to strengthening its remedy procedures—all of which will be important outcomes if they are achieved. And in providing resources to businesses, the Department of Labor commits to creating an RBC and Labor Rights Information Hub, a potentially useful online repository of all relevant U.S. government guidelines and information that businesses and others can turn to to get the information they need to conform their behavior to U.S law and policy.

Those NAP commitments with less clear outcomes include a State Department commitment to evaluate and assess the impact of potential approaches to implementing RBC Reporting Requirements. In the area of procurement, the Department of Defense (DOD) promises to conduct a review to evaluate the value of encouraging or requiring membership in the International Code of Conduct Association for Private Security Providers’ Association for its private security company vendors, a recommendation by advocates that has been pending for over a decade. And the Department of Labor commits to exploring the effects of the digitalization of the labor market on workers’ rights and identifying best practices for companies to address negative impacts—a worthy goal but with an uncertain result.

Q4: What impact is the NAP likely to have?

A4: Insofar as the Trump administration ignored the first NAP, the impact of the Biden administration’s NAP will hinge on whether President Biden remains in office for a second term. While some of this NAP’s commitments announce significant actions already taken or about to be taken, others will take time to carry out, especially those that entail reviews, consultations, or further internal U.S. government deliberations. Thus, as was the case with the Obama NAP, it is unfortunate that this updated NAP is being issued so late in the administration. That said, the updated NAP demonstrates the Biden administration’s commitment to bringing its policies and procedures regarding the private sector in line with international standards, which will help to reinforce those standards both domestically and abroad. While many of the updated NAP’s commitments, if carried out, would call only for voluntary action by companies (unlike the mandatory due diligence frameworks in Europe), they usefully supplement existing binding law and make clear what is expected of companies while allowing them to forge their own paths in enhancing their respect for human rights and RBC.

Scott Busby is a senior associate (non-resident) with the Human Rights Initiative at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Lauren Burke is senior program manager with the CSIS Human Rights Initiative.

Image
Scott Busby
Senior Associate (Non-resident), Human Rights Initiative
Image
Lauren Burke
Senior Program Manager, Human Rights Initiative