The concept of business and human rights (BHR) rests on a broadly accepted consensus that companies should take appropriate and effective measures to understand their impact on people and avoid causing harm. But what constitutes harm and how that harm should be addressed are questions that are increasingly becoming entangled with geopolitical competition, economic security and industrial policy.
The result is that BHR is no longer just a matter of ethics, sustainability, reputation management and legal compliance. To operate effectively in the global economy, companies considering their BHR footprint also need to consider questions of market access, supply chain resilience, resource nationalism and a highly fragmented global economy. In short, the geopolitical era of BHR has arrived.
The return of ideological competition
Since the end of the Second World War, there has been a broad, if at times shallow and imperfect, agreement on what we mean by ‘human rights’. Rooted in the liberal internationalist understanding of civil, political and labour rights that is found in the Universal Declaration of Human Rights, the modern BHR framework is articulated through the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidance for Multinational Enterprises (OECD Guidelines). These documents underpin much of the mandatory due diligence legislation emerging in Europe and elsewhere.
However, this consensus is under strain, with an alternative communitarian, authoritarian model is asserting itself. China and a growing number of aligned states place greater emphasis on economic development, collective prosperity, stability, state sovereignty and security. Poverty reduction, employment creation and economic growth are presented as primary human rights achievements.
As such, The assumption that there is a single, universally accepted understanding of responsible business conduct, rooted in a common understanding of universal human rights principles, is becoming contested. For multinationals, this gap presents a growing challenge. They must now navigate competing political, economic and normative systems, each with different expectations of transparency, labour rights, stakeholder engagement and corporate accountability. This has made the business of human rights a broader contest over the future of the international economic order.
When BHR becomes geopolitics
The clearest example of how human rights have become embedded within trade policy can be found in forced labour regulations. Across the US, EU and other major markets, these concerns have been used to justify import restrictions, supply chain tracing requirements and product bans, making BHR a potentially existential legal and commercial question.
Developments like this have complicated BHR in several ways:
- Human rights enforcement is becoming inseparable from geopolitical competition. While the UNGPs and OECD Guidelines aim to prevent harm, these measures increasingly intersect with concerns around economic security, industrial policy and strategic dependency.
- Trade-based enforcement appears to be driving corporate behaviour in ways voluntary commitments and mandatory due diligence did not. Companies are responding with greater urgency when threatened with product seizures, customs detentions, regulatory investigations or loss of access to critical markets, rather than reputation damage or modest fines.
- BHR is no longer confined to sustainability teams, it has moved into legal departments, procurement functions, supply chain operations and board-level strategic decision-making.
- Strict liability laws cut across core BHR messaging on due diligence, when any forced labour taint, however minimal or deep in the supply chain, can prevent market access irrespective of how much effort the company has put into its responsible business conduct, it incentivises a culture of secrecy and/or irresponsible divestment.
Navigating the new conflict of laws and jurisdictional risk
The clearest threat to BHR from geopolitics is the rise of direct conflicts between legal regimes. Historically, differing regulatory expectations were a challenge. Now companies face situations where compliance with one system may create exposure under another.
Labour rights due diligence is a perfect case study. Western governments have adopted measures requiring companies to investigate supply chains, identify potential forced labour exposure (especially state-linked), collect traceability information and demonstrate the effectiveness of risk management systems. Failure to do so may result in enforcement, product seizures, import restrictions or exclusion from key markets. Importantly, these laws require specific outcomes, not effort. As such, even the most comprehensive due diligence programmes may not be sufficient if there is found to be credible evidence relating to forced labour deep in raw material supply chains.
Governments targeted by these measures, notably China, view these measures through the lens of strategic competition and national sovereignty. Supply chain tracing, certain forms of auditing, information-sharing or engagement with external assurance providers may be perceived as politically sensitive or inconsistent with domestic laws. Indeed, in some cases these actions are directly and firmly criminalised.
Control Risks is increasingly called on to advise multinational clients with no obvious path to compliance. They are managing irreconcilable legal, commercial and political demands, which is taking up ever more headspace in the C-Suite.
Rather than focusing on a multinational's impact on people, these conflicts require companies to assess:
- Which legal requirements take precedence;
- Which market is most strategically important;
- Which risks are legal versus reputational;
- Which obligations can be satisfied simultaneously, and which cannot;
- What level of residual risk is commercially acceptable.
With the focus turning to jurisdictional risks, boards may find themselves deciding which legal regime to accommodate, rather than if a particular human rights expectation is reasonable.
As clients navigate this challenging terrain, Control Risks’ BHR team is regularly brought into strategic conversations across firms, focused on security, intelligence, trade, resilience, technology and business integrity. Some larger firms are still able to exert influence, but many others find themselves subject to a nationalist governments’ electoral or stakeholder interests, often at odds with long term prosperity.
The limits and benefits of hard law
The growth of human rights due diligence legislation is a remarkable BHR achievement. Law, however, demands certainty. While the principles-based UNGPs aim for an iterative improvement model, retaining some flexibility for context, formalised compliance processes can turnambitious principles into standardised, baseline requirements with tiresome documentation and reporting. What was once a continuous focus on understanding people and impacts becomes a set of thresholds for regulators, evidence for lawyers and standards for a court to enforce.
For organisations, the danger is mistaking compliance for performance. A company may adhere to regulations, while failing to understand emerging human rights risks. Equally, organisations with sophisticated impact management approaches may struggle to fit complex realities into increasingly prescriptive legal frameworks.
Trade bans, like the UFLPA and EU Forced Labour Regulations, have further highlighted outcomes, rather than the procedure of due diligence. Entities importing a product must now demonstrate an absence of labour abuses across the supply chain. This is sailing close to a ‘failure to prevent’ obligation, without the ‘safe harbour’ of a ‘reasonable measures’ defence. This is a great deal more onerous than many companies currently realise, requiring a step-change in the visibility and control of upstream suppliers and meaningful actions to prevent or avoid forced labour harms. While it’s unclear how rigorous enforcement will be, these outcomes focused regulations are rapidly changing the game.
BHR’s next challenge will be ensuring that the growth of hard law strengthens, rather than replaces, their purpose. The ‘black letter’ approach to HRDD laws was always going to be a challenge when overlaid on aspirational principles, but it may be more suited to trade bans and forced labour regulations, which could have a seismic effect on operations and supply chains the world over.
The emergence of BHR as a resilience function
Paradoxically, companies sticking closer to the original spirit of the UNGPs are best positioned to navigate this evolving landscape. The most effective human rights programmes go beyond supporting compliance to create visibility. Understanding risks to workers, communities and other stakeholders increases an organisation’s capabilities to see risks faced by the business itself. This visibility is critical to resilience.
Human rights due diligence systems help organisations:
- Understand supply chain dependencies;
- Identify vulnerabilities in labour sourcing and recruitment;
- Detect operational risks before they become crises;
- Anticipate regulatory change and enforcement activity;
- Understand geopolitical exposure and market access risks;
- Strengthen stakeholder trust during periods of disruption.
Given this granular visibility, BHR is moving beyond a compliance function to become a strategic resilience capability. The supply chain mapping that identifies labour rights risks can reveal sanctions exposure. The grievance mechanisms that surface worker concerns can provide early warning of operational disruption. The stakeholder engagement processes protecting social licence can strengthen resilience during political instability or conflict.
The third generation of business and human rights
The first generation of business and human rights was about ethics and ambition. The second brought emerging legal compliance. The third generation will focus on resilience.
BHR remains fundamentally about protecting people from adverse business impacts. The growth of regulation, trade restrictions and geopolitical competition shouldn’t overshadow that purpose. But the operating environment has changed. Organisations now face competing visions, intensifying trade tensions, fragmented regulatory regimes and growing pressure to demonstrate supply chain transparency. Human rights concerns increasingly influence where companies source, invest and sell.
As the age of geopolitical BHR begins, organisations can no longer treat human rights as a niche sustainability issue. Today, these concerns sit at the intersection of geopolitics, trade, supply chains, regulatory compliance and corporate strategy. The companies that recognise this shift early will be best positioned to protect people, maintain market access, navigate geopolitical fragmentation and build resilient businesses for an uncertain decade ahead.
In the geopolitical era of business and human rights, success depends on understanding the connections between people, markets and power. Control Risks helps organisations identify these risks early, navigate competing demands and build resilient, responsible businesses that can thrive amid increasing uncertainty.