New US government guidance promotes human rights due diligence by contractors in federal supply chains

The US government recently issued its National Action Plan on Responsible Business Conduct (National Action Plan), which the US Department of State described as setting forth the government’s “commitment to strengthen responsible business conduct through multi-stakeholder coordination, convenings, economic incentives, regulation, and other activities.”

The National Action Plan addresses a “full range of responsible business conduct” issues for US businesses, including sustainable procurement, climate change, anti-corruption, and human rights. Importantly for federal contractors, the National Action Plan emphasizes the need to address these issues in federal procurement policies. Although the National Action Plan does not create immediate requirements for government contractors, it indicates a trend towards greater accountability for existing standards regarding human rights, and potentially the creation of new requirements.

US government expectations for federal contractors

The National Action Plan states that the US government “commits to strengthen implementation of the existing regulations that prohibit human trafficking, trafficking-related activity, and forced or indentured child labor.” According to the National Action Plan, the government “expects” contractors to proactively conduct human rights due diligence “throughout their value chains in line with internationally recognized standards” and to “treat these standards and principles as a floor rather than a ceiling for implementing responsible business practices while incorporating lessons learned and striving for continuous improvement.” The referenced internationally recognized standards include the UN Guiding Principles for Business and Human Rights, the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises on Responsible Business Conduct, and the International Labor Organization’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy.

Additionally, the National Action Plan directs the Federal Acquisition Regulatory (FAR) Council and federal agencies to take actions designed to increase oversight relating to human trafficking, child labor, and other human rights matters throughout the federal supply chain. Those actions range from implementing more robust processes for reporting human rights violations that occur in the federal supply chain, to drafting new guidance regarding suspension and debarment of contractors that violate human rights protections. The agencies addressed in the National Action Plan include, among others, the Department of State, Department of Defense, Department of Homeland Security, Department of Labor, Department of Treasury, and Department of Health and Human Services.

Next steps for federal contractors

The National Action Plan indicates that agencies will begin to more closely scrutinize the human rights due diligence that contractors are performing, which may result in new compliance obligations for federal contractors. Contractors, therefore, may benefit from a review of their existing human rights due diligence policies, procedures, and training programs, including compliance with internationally recognized standards, as well as existing FAR requirements, such as FAR 52.222-50, “Combating Trafficking in Persons,” and FAR 52.203-13, “Contractor Code of Business Ethics and Conduct.” Contractors may also consider whether, in addition to flowing down requirements to subcontractors, further scrutiny of subcontractor operations is necessary.

We are closely monitoring developments relating to the government’s initiatives regarding human rights, federal supply chains, and sustainable procurement. If you have any questions or are interested in learning more, please contact the authors.