Human rights and supply chain due diligence

A company can treat its own staff well and still profit from abuse further down its supply chain: a garment made in an unsafe factory, cotton picked by forced labour, or parts made by children. Global rules now expect companies to find and deal with these risks, not just to say that suppliers must obey the law.

The core idea is due diligence. A company should know where its biggest human rights risks are, act to prevent or reduce them, check whether that works and report on it honestly. For Indian companies, this matters twice over: as buyers with their own supply chains, and as suppliers to European and American brands that now face legal duties of their own.

The UN Guiding Principles on Business and Human Rights (UNGPs)

Endorsed by the UN Human Rights Council on 16 June 2011, the UNGPs rest on three pillars:

1. Protect: states must protect people against human rights abuse by third parties, including businesses.
2. Respect: businesses should respect human rights, avoiding harm and addressing harm they are involved in.
3. Remedy: people harmed by business activity should have access to effective remedy.

The four steps of human rights due diligence

1. Identify and assess actual and potential harms, drawing on expert advice and talking to affected groups.
2. Integrate and act by building the findings into decisions and taking steps to prevent or reduce harm.
3. Track whether the response works, using indicators and feedback.
4. Communicate publicly how harms are being addressed.

Other global references

• OECD Guidelines for Multinational Enterprises: updated in 2023, with due diligence expectations across human rights, labour and environment.
• ILO fundamental principles: freedom of association, no forced labour, no child labour, no discrimination, and, since 2022, a safe and healthy working environment.

The Indian framework

• Laws: the Child and Adolescent Labour Act and the Bonded Labour System (Abolition) Act ban child and bonded labour; the labour codes set wages, safety and social security rules.
• NGRBC and BRSR: Principle 5 of the NGRBC covers human rights. The BRSR asks about human rights training, minimum wages, complaints on harassment, discrimination and child labour, and, as leadership indicators, the share of value chain partners assessed on human rights.

The EU Corporate Sustainability Due Diligence Directive (CSDDD) after Omnibus I

The EU's Omnibus I package, in force from 18 March 2026, narrowed the CSDDD:

• It now covers EU companies with more than 5,000 employees and net worldwide turnover above €1.5 billion, and non-EU companies with EU turnover above €1.5 billion.
• Member states must turn it into national law by 26 July 2028, and it applies from 26 July 2029.

Even Indian companies outside its scope will feel it, because large European customers must check their suppliers.

High-risk areas for Indian supply chains

• Garments and textiles (unsafe factories, excessive hours, wages).
• Agriculture inputs such as cotton, tea, spices and seafood (child and forced labour).
• Brick kilns, construction and mining (bonded labour, safety).
• Electronics and solar supply chains (minerals sourcing and labour conditions abroad).