This year’s National Action Plan is a missed opportunity to stand up for workers

In today’s globalized economy, multinational corporations play an increasingly important role in determining the treatment of workers. Secretary of State Antony Blinken recognized this when he announced that the Biden administration would prepare policy in 2021. National Action Plan for Responsible Business Conduct It addresses the need for businesses to protect workers by “raising local wages, improving working conditions, building trust with local communities, and operating sustainably.”

unfortunately, action plan The US government’s announcement in late March did not propose specific requirements needed to improve the lives of workers.

The National Action Plan rightly recognizes that many companies make positive contributions to the communities in which they operate in the United States and around the world. They create jobs, economic growth and innovation. They provide resources to address societal challenges by increasing access to clean energy sources, improved health care, and new technologies to enhance educational opportunities.

But as businesses are driven by constant pressure to maximize short-term profits, Washington must use its regulatory, purchasing, and enforcement powers to better prioritize worker protections. National action plans fail to utilize this lever. Instead, it reaffirms existing efforts, including the important work already undertaken by the Departments of Labor and State to combat human trafficking. However, it does not include new binding commitments requiring companies to improve their human rights performance.

The National Action Plan fails in several ways. First, it refuses to bring the United States into line with mandatory human rights due diligence requirements implemented by European governments. The European Union will soon require all 27 member states to introduce mandatory national due diligence laws.. The EU is also developing legislation targeting specific industries such as social media, artificial intelligence and mining.

The United States rejects this regulatory model and simply I’m looking forward to it Companies need to conduct due diligence throughout their supply chain. The plan does not say how the government will promote this “expectation” or what it will do if companies refuse. In effect, the administration is ceding regulatory responsibility in this area to the EU.

Second, the National Action Plan has not made meaningful progress on federal procurement reform. The United States is the world’s single largest purchasing nation.Last year, the people $700 billion in goods and services; For many companies, the United States is their largest customer. This market power gives governments powerful potential leverage to demand that contractors and subcontractors ensure meaningful human and labor rights compliance throughout their supply chains.

The United States could therefore offer a model for responsible purchasing to other governments and companies with global supply chains. On the other hand, the National Action Plan To tell Although it states that “enhancing respect for human rights in federal procurement policies and processes” is a priority, it does not articulate a specific commitment to broadly use procurement processes to promote human rights.

Third, and more generally, most of the National Action Plan’s commitments require federal agencies to: consider Rather than taking substantive, concrete new steps that require corporate commitments, we need to address issues of business conduct.

For example, various federal agencies evaluate, evaluationor review Under the public reporting mechanism, the Export-Import Bank demand The U.S. Agency for International Development is soliciting public input on ways to strengthen its grievance mechanism. Promote The Public-Private Alliance for Responsible Minerals Trade and the Department of State engage Work with the Freedom Online Coalition and internet service providers to review best practices to reduce the risk of internet shutdowns. While these are all welcome measures, they do not impose new obligations on businesses.

The National Action Plan should have forced businesses to make the necessary changes. The United States has done so in similar situations in the past.

In the 1970s, we were the first in the world to Foreign Corrupt Practices Act (FCPA). The law was adopted with bipartisan support following a Securities and Exchange Commission investigation that found hundreds of U.S. companies bribed foreign government officials. The FCPA prohibited such conduct and imposed civil and criminal penalties on companies that failed to comply.

For more than 40 years, the Foreign Corrupt Practices Act and its strong federal regulatory system have played a critical role in the global fight against corruption. Companies doing business in the United States are taking the law seriously and changing their behavior. Because we know that if we don’t, we could pay a high price.

Similarly, the US government has recently taken decisive action to address forced labor. Uyghur Forced Labor Prevention Law (UFLPA). This law creates a rebuttable presumption that the goods were mined, produced, or manufactured, in whole or in part, in China’s Xinjiang region, or by entities in the newly created region. Established. UFLPA entity list, made with forced labor.under Customs Act of 1930U.S. Customs and Border Protection may hold goods at the border until they are determined not to have been produced using forced labor.

According to CBP, Since UFLPA took effect in June 2022, 7,566 shipments worth a total of $2.87 billion have been inspected, of which approximately 50% have been refused entry. The law requires companies to map and document their supply chains and move elements out of Xinjiang to ensure forced labor is eliminated, using the threat of import refusals. Like the Foreign Corrupt Practices Act, it represents the bold action needed by the U.S. government to ensure that companies operate responsibly.

There is nothing in the National Action Plan that even remotely resembles this type of government leadership. The United States is missing an important opportunity to shape a wave of regulations in Europe and elsewhere that require companies to operate more responsibly and make significant improvements for workers around the world.

The Biden administration should explore other ways to reassert U.S. leadership in this critical area.

Director Michael Posner is Business and Human Rights Center at New York University Stern School of Business. Posner previously served as assistant secretary of state for democracy, human rights, and labor in the Obama administration..