Accountability of NGOs: The Potential of Business and Human Rights Frameworks for NGO Due Diligence

1. INTRODUCTION

Non-Governmental Organizations (NGOs) play an increasingly important role in a variety of areas, including development cooperation, humanitarian assistance, or the protection of human rights and the environment.¹ They represent the voice of civil society at the grassroots level;² they bring its claims to governmental authorities at the domestic level,³ and they raise that voice at the international level, through their participation in discussions and procedures at international organisations such as the United Nations.⁴ They deliver services on the ground,⁵ and they participate in law-⁶ and policy-making processes,⁷ gathering evidence and providing input to a variety of bodies and institutions. Their increasing power and presence in public institutionalised life have inevitably led to discussions and research on accountability, shaping notions such as upward and downward accountability, reputational accountability, mission-based accountability, or strategy-driven accountability.⁸ It has also inspired efforts to establish accountability mechanisms, mainly through institutionalised self-regulation, providing a scattered set of voluntary rules which show parallels with the trends observed in business and human rights frameworks.

This article explores whether it is possible to apply business and human rights legal frameworks to NGOs and whether this could contribute to a better approach to the accountability of NGOs, focusing on due diligence rules. Whilst the differing nature of companies and NGOs needs to be acknowledged, some commonalities and potential synergies between the two types of entities and the vague definition of companies in the business and human rights frameworks justify such exploration at a legal level. The article tests the hypothesis that some of the due diligence efforts advanced under the institutionalised self-regulation of the NGO sector could be strengthened by applying the business and human rights angle, as has already occurred in some cases.

To do this, the article proceeds in three parts. First, it explores self-regulation efforts to ensure accountability of NGOs, including the International NGO (INGO) Charter, the Conservation Initiative on Human Rights, the IFC's Environmental and Social Performance Standards, and the UN Global Compact, identifying the positive features of this approach which could be strengthened with existing business and human rights frameworks, as well as the weaknesses that those frameworks could help overcome, focusing on due diligence as a dimension of accountability. Second, it explores the applicability and potential of the business and human rights frameworks to NGOs (i.e. UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises, domestic legislation), relying on existing literature, analysis of international and national legislation, and relevant case law. Third, it reflects on what the transition from the UN Guiding Principles on Business and Human Rights (2010) to the currently debated European Union proposed Directive on Corporate Sustainability Due Diligence could mean for NGOs.

2. INSTITUTIONALISED SELF-REGULATION: VOLUNTARY FORMS OF EXTERNAL ACCOUNTABILITY

NGO accountability is ensured mainly through institutionalised self-regulation. In 2016, the One World Trust database profiled over 350 civil society self-regulatory initiatives, 56 of which are transnational codes of conduct and standard-setting programmes for NGOs.⁹ Self-regulation is directly associated with how NGO accountability may be regulated (or unregulated) at the national level.¹⁰ It has, in some cases, been the result of insufficient national or international frameworks, as NGOs identified a need to promote ‘higher standards for internal governance and external accountability’.¹¹ In other cases, self-regulation has been the result of domestic regulatory change.¹² A third group of cases is one where self-regulation is scarce, due to the strong regulation at the domestic level, as ‘there is little room left for self-regulation.’¹³ This strong national regulation is rather problematic, and is not a feasible route to NGO accountability, since it carries the risk of restrictive actions promoted by governments that wish to silence NGOs for political reasons,¹⁴ leading to paralysis in civil society organisations.¹⁵ National measures may include restrictive registration requirements, onerous administrative measures, arbitrary inspections or criminal prosecutions.¹⁶ These measures and the associated chilling effect can prevent NGOs from working on politically sensitive matters, exclude them from policy processes, ‘reduce citizens’ political participation […] and enable government human rights abuses by reducing the ability of [NGOs] to monitor and expose such behaviour’.¹⁷

Against this background, the most common approach is to rely on voluntary codes of conduct for NGOs,¹⁸ with a preference for more ‘institutionalised’ forms of self-regulation, to overcome the risk of a ‘patchy and inconsistent implementation’ of a scattered set of frameworks.¹⁹ Examples of institutionalised self-regulation, such as the INGO Accountability Charter (also known as ‘Accountable Now’) or HAP-International,²⁰ involve a membership-based organisation, usually a network of NGOs, or an international institution, which monitors and supports self-regulation efforts. The idea behind this form of accountability mechanism is to articulate external accountability processes or fora, through so-called Global Accountability Communities (GACs),²¹ engaging stakeholders in that process.

The INGO Accountability Charter is one of the most universal and comprehensive accountability initiatives, created by a group of INGOs in 2003 by the initiative of ActionAid International, Amnesty International, the Catholic Agency for Overseas Development (CAFOD), Greenpeace International, Oxfam International, Save the Children, and WWF International, in collaboration with the International Federation of Red Cross and Red Crescent Societies (IFRC). It does not have a formal monitoring mechanism but relies on annual reporting assessed by an Independent Review Panel to promote transparency and encourage INGOs to take responsibility for their performance. Developed in response to a growing demand for accountability, following NGO scandals uncovered over the years,²² the Charter is endorsed by over 100 INGOs around the world, and has become an important reference point for accountability in the sector.²³

HAP International is a self-regulatory, membership-based organisation for NGOs working in the humanitarian sector, which established a set of principles on the political and civil rights that aid beneficiaries can claim against NGOs.²⁴ HAP International is representative of an alternate trend in accountability, which seeks to incorporate a wider array of stakeholders than non-institutionalised self-regulation and thus address the ethical and societal dimensions of INGO practice more holistically.²⁵

Some forms of institutionalised self-regulation use conditionality as an incentive, establishing international frameworks which, although still voluntary, may be a requirement for NGOs to access certain benefits. That is the case of the IFC's Environmental and Social Performance Standards, a set of guidelines and requirements that IFC clients must follow to receive IFC financing, as a way to help ensure that IFC-supported projects have a positive impact on the environment and do not harm people or the environment.

Many of these institutionalised self-regulation initiatives are sector-specific, which means that not all NGOs can apply them. An example of a sector-specific framework is the Conservation and Human Rights Framework, set in 2009 by the Conservation Initiative on Human Rights. It is a set of guidelines and principles aimed at promoting the integration of human rights considerations into conservation practices, prioritising the perspectives and needs of local communities.²⁶ This sectoral approach allows for more tailor-made rules for each sector, although it contributes to a scattered set of rules which may hamper accountability and create confusion, as different standards may define environmental and human rights issues in a slightly different way,²⁷ or use ambiguous language which is difficult to interpret. That may be the case, for example, of the ICRC Code of Conduct, where certain terminology used has been seen as very ambiguous, making it difficult for NGOs to follow.²⁸ The sectoral approach may also be problematic in that, sometimes, NGOs whose focus goes beyond the scope of a specific framework may have signed up to a sector-specific framework, and the standards imposed by it may be opposing their overarching goals.²⁹

This set of institutionalised self-regulation initiatives has advanced NGOs’ efforts towards systems which engage more with stakeholders, creating some sort of external accountability community where transparency and due diligence are becoming more common. However, compared with the accountability mechanisms available for other non-state actors, they present limitations that would need to be complemented with more enforceable frameworks. These limitations are partly explained by two drivers: first, as mentioned above, public regulation can lead to restrictive measures hampering the work of NGOs and is therefore not the most suitable avenue for accountability; second, the still state-centric international human rights law system does not set human rights responsibilities for NGOs.³⁰ Another key point to consider, and perhaps even a third driver for limitations in NGO accountability, is the so called ‘myth of their own innocence’.³¹ Since NGOs’ work is about ‘doing good’, ‘activities that undermine these assumptions are fiercely resisted’.³²

The NGO sector's reliance on voluntary standards (e.g. codes of conduct, accreditation schemes, peer-assessment tools) leads to weak accountability systems where third-party verification is not always included,³³ and where the abovementioned ‘patchy and inconsistent implementation’ is observed.³⁴ Institutionalised self-regulation has incorporated an external accountability dimension since NGOs respond to peers,³⁵ a board or an independent commission. However, these measures may not be sufficient for tackling issues engrained in the culture of the organisation.³⁶

An example illustrating the lack of enforcement is the limited accountability response to the major scandal of sexual exploitation of refugee children by aid workers across several camps in Liberia, Guinea and Sierra Leone. The allegations of sexual exploitation implicated aid workers from NGOs as perpetrators. Whilst the policy response was quite strong, in the end, no sanctions were imposed on those perpetrators. The investigation has been criticised as inadequate, as management was not considered accountable in any way, and the victims did not achieve redress.³⁷ A similar pattern can be observed in the Oxfam and Save the Children-UK scandals: many high-level policy initiatives, but less of a focus on the grassroots and operational levels, and ultimately on the affected populations.³⁸ It has been argued that this trend of taking ‘futile and ineffectual paths’ that do not actually address the situation on the ground are partly the consequence of the resistance of these organisations ‘to external scrutiny and the complicity of donors in allowing them to be unaccountable, presumably because other common interests take precedence’.³⁹

The current ‘practice of analysing human rights risks and impacts is very heterogenous’,⁴⁰ and more structured and systematic approaches to accountability should be envisaged.⁴¹ Accountability frameworks for other non-state actors have evolved from voluntary standards and self-regulation to more enforceable mechanisms, and the business and human rights angle could offer complementary ways in which to enrich the existing institutional self-regulatory approach.

3. IS THE BUSINESS AND HUMAN RIGHTS ANGLE THE RIGHT ONE FOR NGO DUE DILIGENCE?

One of the dimensions of accountability of NGOs which has gathered increased attention is due diligence. The Norwegian Refugee Council (2015) defines due diligence as

(…) assessing the ability of an organization to conduct its work, assessing the robustness of its systems and tracking how its activities and relationships, for example with local partners, sub-contractors and vendors, could affect its humanitarian activities.⁴²

Similarly, the Financial Action Task Force (FATF) defines due diligence as

(…) the range of practical steps that need to be taken by NPOs (Non-profit organisations) so that they are reasonably assured of the provenance of the funds given to the NPO; confident that they know the people and organizations the NPO works with; and able to identify and manage associated risks.⁴³

Identified in the business and human rights context by John Ruggie as ‘one component of a more complex system’,⁴⁴ human rights due diligence has taken different forms from the UN Guiding Principles to domestic legislation such as the French Duty of Vigilance Law.⁴⁵ Although the risks of ‘cosmetic’ due diligence have been flagged,⁴⁶ legislators around the world are increasingly setting up frameworks that make human rights due diligence processes mandatory for companies. This creates obligations to set up processes to evaluate and mitigate human rights or environmental risks, as has been the case of the California Transparency in Supply Chains Act, the UK Modern Slavery Act, the Dutch Child Labour Due Diligence Law, the abovementioned French Duty of Vigilance Law or the German Act on Corporate Due Diligence in Supply Chains. This trend, inspired to a great extent by the UN Guiding Principles on Business and Human Rights (UNGPs), has resulted at the supranational level in a proposed European Union Directive on supply chain due diligence, currently being debated.⁴⁷

Those domestic legislative frameworks establishing mandatory human rights due diligence for companies define their scope in a way that in some cases leaves room for applying those rules to NGOs as well: the UK Modern Slavery Act⁴⁸ and the Australian Slavery Act⁴⁹ are two examples of legislation that could be applied to NGOs. In legislative frameworks in Germany,⁵⁰ Switzerland,⁵¹ the Netherlands,⁵² Norway⁵³ and Belgium⁵⁴ the wording defining the scope of the Act renders possible the inclusion of NGOs, although it is less obvious. Finally, the French Duty of Vigilance Law, or the Californian Transparency in Supply Chains Act are even less clear about the possible inclusion of NGOs in their scope. As many NGOs operate transnationally, this variety of approaches to the inclusion of NGOs in the scope of domestic legislation on mandatory human rights due diligence makes pertinent an analysis of the international business and human rights frameworks and their applicability to NGOs.

3.1. A Scope with Room for NGOs and Increasing Practice

Some of the frameworks mentioned in section 1 as applying to NGOs were designed initially for other types of entities but are also open to them, either as partners of those entities (e.g. IFC's environmental and social performance standards)⁵⁵ or independently. An example of the latter is the UN Global Compact, which from its inception accepted nonprofits as participants, ‘equating them with other organizational actors that could champion global compact principles’.⁵⁶ Beyond those frameworks, scholars have explored the applicability of frameworks envisaged for companies as suitable for NGOs. In the early 2000s, Ebrahim explored the potential of social audit frameworks for NGOs,⁵⁷ and Walsh and Lenihan did it with ISO 9000, exploring its potential for downwards accountability.⁵⁸ More recently, developments in the business and human rights sphere have led some scholars to explore the applicability of its most relevant frameworks to NGOs, mainly the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises (OECD Guidelines).

There is a strong case for including NGOs under the scope of the UNGPs, which promote due diligence as a process that business enterprises should carry out to assess actual and potential adverse human rights and environmental impacts, ‘integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed’.⁵⁹ Under General Principle 14, the framework applies to ‘all enterprises regardless of their size, sector, operational context, ownership and structure’. Looking at NGOs’ structure, ownership, and activity, it is common practice that NGOs ‘engage in typical business activities’, hiring personnel, renting office spaces, purchasing products, or undertaking investment to fulfil their functions.⁶⁰ On this basis, Carolei and Bernaz have proposed the use of the UNGPs for NGO human rights accountability, especially when they conduct business-like activities.⁶¹ As can be observed through the analysis of the work of NGOs, although they are not aimed primarily at generating profits, they may carry out commercial activities as part of their non-profit action. Some of them even take a business-oriented approach which allows them to better serve their non-profit purposes.⁶²

For Carolei and Bernaz, ‘these standards are versatile enough and appropriate to regulate NGO operations, thus representing a complementary accountability route to traditional NGO accountability instruments’.⁶³ Along similar lines, Wynne and Navarro note the UNGPs broad definition of ‘business enterprise’, and contend that it should be ‘understood as applying to any private sector legal entity’.⁶⁴ Citing a statement from a former UN High Commissioner for Human Rights, they write that, ‘the UNGPs should not be restricted to the corporate world but must be seen more as a global standard for preventing and addressing the risk of adverse human rights impact linked to business activities’,⁶⁵ particularly as they engage in business activities, ‘such as having employees, renting offices, purchasing products for internal operations at their headquarters or setting up investment strategies for the grants and donations they receive and distribute’.⁶⁶ Following John Ruggie's definition of what the ‘do no harm’ principle entails, Apodaca has even suggested that NGOs are required ‘to do their due diligence before organizing a naming and shaming campaign’.⁶⁷

Makagon has reflected on the applicability of the UNGPs to NGOs based on societal expectations, as they ‘rely perhaps more than any other entity upon their social license for operational legitimacy’.⁶⁸ He identifies a connection between the rationale for accountability of businesses under the UNGPs and how NGOs operate: UNGPs are grounded in recognition of the ‘role of business enterprises as specialised organs of society performing special functions, required to comply with all applicable laws and to respect human rights’,⁶⁹ and NGOs reflect even more that idea of special functions, as they are assumed to represent the public good ‘against the power-driven interests of the state and the profit-driven interest of the economy’.⁷⁰ They are capable through their actions of profoundly affecting human rights and they owe a duty of care to society.⁷¹ In line with this rationale, the practice of NGOs is moving towards complying with and accepting the UNGPs as applicable to them. That is the case of Fédération Internationale de Football Association (FIFA), which has adopted several reforms to incorporate the UNGPs into its organisational practices,⁷² as has the Union of European Football Association (UEFA)⁷³ or the International Olympic Committee (IOC).⁷⁴ The Council of Europe expert body on NGOs has also observed that NGOs ‘should be put on equal footing with private businesses’.⁷⁵

The case is also strong for the OECD Guidelines for Multinational Corporations.⁷⁶ Their scope includes enterprises operating in all sectors of the economy, and that ownership may be private, public, or mixed, and the OECD Secretariat has recommended taking a ‘flexible interpretation of the notion of enterprise’. On this basis, the Swiss National Contact Point (NCP) for the OECD Guidelines has applied them to FIFA, World-Wide Fund for Nature (WWF), or the Roundtable for Sustainable Palm Oil. Its key test for including them in the scope of the OECD Guidelines was whether the entity was ‘involved in commercial activities, independently of its legal form, its sector of activity or its purpose (profit or non-profit)’. Except for a case in Norway, where a business nexus was required,⁷⁷ the trend has been toward accepting NGOs within the scope of this framework.

The OECD Guidelines were also applied in a case against FIFA brought by the Building and Wood Workers’ International, a global union federation, for violations of the OECD Guidelines in their choice of Qatar as the host State for the FIFA 2022 World Cup, given the violations of the rights of migrant workers which had been broadly reported. In assessing the applicability of the Guidelines to the organisation, which is registered as an association under the Swiss Civil Code, the Swiss NCP emphasised that the Guidelines apply to ‘multinational enterprises’ operating ‘in all sectors of the economy’, and put the focus not as much in the type of entity but rather in ‘whether an entity is involved in commercial activities’.⁷⁸ The commercial activity test should be decided, said the Swiss NCP, ‘by the competent NCP through a case-by-case analysis based on the concrete circumstances’.⁷⁹ The case concluded recognising the applicability of the guidelines to FIFA in this case, but the outcome was different in a subsequent case, in 2016, where the Swiss NCP considered that FIFA's activities relevant to the case were not commercial.⁸⁰ This does not provide clear guidance on when an activity of an NGO is to be considered commercial for the purposes of applicability of the OECD Guidelines, but it acknowledges that the terminology used to establish the scope of the guidelines does not exclude NGOs by nature.

The submission against WWF was initiated by Survival International (SI), interestingly another NGO, concerning allegations that WWF had facilitated the use of violence against Baka ‘Pygmies’ in Cameroon to displace them and free up for a national reserve.⁸¹ In that case, the determinant factor was that WWF's approach to conservation was market-based.⁸² The submission against the Roundtable on Sustainable Palm Oil, initiated by Transformation for Justice Indonesia, is interesting as it focuses on a multi-stakeholder initiative, although taking the form of an association under Swiss law.⁸³ The case was considered admissible. A similar case has also been heard by the UK NCP, where Bonsucro, a multi-stakeholder NGO, had allegedly failed to prevent land grabs by one of its participating companies in Cambodia. The rationale in the UK NCP decision focused on the multinational nature of Bonsucro's operations.⁸⁴

In June 2023, an update to the 2011 OECD Guidelines entered into force, which maintains the broad and flexible approach to identifying which enterprises may be considered multinational under the Guidelines, with the international and commercial nature of an enterprise as determinant factors.⁸⁵ This approach confirms the assessment presented above, which advocates for the applicability of the Guidelines to NGOs.

Despite the case-by-case approach taken, this practice shows an openness of NGOs and national authorities to accept the applicability of this framework to NGOs, and helps build a strong case supporting the arguments presented at the beginning of this section in favour of the applicability of business and human rights frameworks to NGOs.

3.2. What the Business and Human Rights Perspective Can Bring

Having seen that the UNGPs and the OECD Guidelines can be applicable to NGOs, the remaining question is whether that is at all convenient or beneficial for NGO accountability. As explored in section 1, the currently used NGO accountability frameworks provide a good basis to respond to sector-specific challenges and have started to create a culture of external accountability, with independent expert panels assessing the efforts of NGOs. Those sector-specific or NGO-specific codes of conduct or international guidelines are still best placed to grasp the particularities of NGOs. However, the accountability system for NGOs could be strengthened in several ways, and the business and human rights frameworks seem to have a lot to offer in some of those respects. The business and human rights angle should not be seen as an alternative to institutionalised self-regulation but as ‘a complementary accountability route to traditional NGO accountability instruments.’⁸⁶ Business and human rights frameworks, applied in conjunction with institutionalised self-regulation, would have the potential of supporting NGOs’ efforts in various ways.

Developments in business and human rights since the adoption of the UNGPs in 2010 have shifted companies’ narrative on due diligence substantially. In 2021, the UN Working Group on Business and Human Rights published ‘UNGPs 10+: A Roadmap for the Next Decade of Business and Human Rights’, which aims at raising the ambition and increasing the pace of implementation of the UNGPs, to improve coherence and create greater impact.⁸⁷ To do so, it has identified eight action areas, and established goals within each of those areas. Many of them point towards elements where the synergy between NGO self-regulation and the business and human rights angle could impact NGOs’ approach to due diligence, bringing positive change. The June 2023 update to the OECD Guidelines is likely to contribute to that shift in companies’ narrative on due diligence. It includes amendments which strengthen the authority of National Contact Points,⁸⁸ and incorporates some elements which could be particularly relevant for NGOs. It includes enhanced due diligence in conflict contexts and when particularly vulnerable groups or individuals are affected,⁸⁹ a scenario where many NGOs work. It also expands the definition of corruption to include ‘embezzlement and misuse of sponsorship and charitable donations’,⁹⁰ which has been reported in cases involving NGOs.

Extending the applicability of the UNGPs or the OECD Guidelines to NGOs could help the NGO sector consolidate the external accountability culture they are pursuing through institutionalised self-regulation. The UNGPs or the OECD Guidelines are clear and less scattered sets of rules, with a growing body of case law clarifying the rules.⁹¹ Under its Goal 1.4, the UNGPs 10+ Roadmap acknowledges the importance of ‘preserving alignment between the UNGPs and standards that already integrate them, such as the OECD Guidelines for Multinational Enterprises, and ensuring coherence and alignment in further standards developments’.⁹² This coherence could contribute to overcoming the problems of the scattered set of self-regulations, overcoming also the weaknesses of an excessively sectoral approach.⁹³ In line with Roadmap Goals, NGOs could combine mandatory human rights due diligence with voluntary frameworks in a ‘smart mix’ fostering human rights responsible action,⁹⁴ embedding human rights due diligence in their business model.⁹⁵

The business and human rights frameworks could also assist NGOs in ensuring that their due diligence processes are designed with an even stronger stakeholder engagement. While the engagement with different stakeholders in the design and implementation of due diligence processes for NGOs has been characteristic of some self-regulation initiatives, this component is particularly strong in business and human rights frameworks. This could strengthen NGOs’ incentives to consult all stakeholders in the process of design of their human rights due diligence strategy and to communicate progress on the Human Rights Due diligence strategy to all those stakeholders.⁹⁶ This is aligned with Goal 5 of the Roadmap, which focuses on ensuring meaningful stakeholder engagement, as key to realise legitimate and effective responses in addressing human rights risks and impacts in a business context. The challenge here could be expected from donors and some NGOs’ members of staff (particularly senior management), who may find the communication obligations as potentially hampering NGOs’ reputation, fearing possible negative consequences. However, a transparent and committed human rights due diligence strategy will contribute to higher levels of NGO legitimacy, credibility, and eventually also access to more funds and projects. As Crack recommends to NGOs under the INGO Accountability Charter,

NGOs should explain to their stakeholders that owning up to failure can actually improve accountability, as long as lessons are learned and shared with peers. The willingness to disclose evidence of under-performance should be considered as a sign of credibility as long as the club facilitates dialogue about the best practice.⁹⁷

The business and human rights frameworks could also assist NGOs in tackling the issue of NGO paralysis by excessive national regulation, mentioned in section 1. By recognising the obligations of States to establish the necessary legal frameworks for businesses (and NGOs) to create human rights due diligence strategies, business and human rights frameworks are likely to avoid the risk of overregulation or contribute mechanisms to tackle it. Action area 2 of the Roadmap focuses on the State duty to protect, which requires domestic laws and policies that govern the creation and ongoing operation of business enterprises, such as corporate laws, to be leveraged to shape more responsible business conduct.⁹⁸ Business and Human Rights frameworks create obligations for States which could limit their power to avoid shrinking spaces for civil society. Having experienced the shrinking civil society space phenomenon during Covid times,⁹⁹ the fact that business and human rights rules are not NGO specific but apply to various entities of different kinds and with different purposes could also contribute to such mitigation, ensuring that excessive national regulation does not lead to civil society inaction.

Finally, another possible contribution of business and human rights frameworks to NGOs’ due diligence efforts could come from their embracing the notion of ‘value chain’ for accountability purposes. Business and human rights frameworks encourage due diligence processes to be applied in all branches of the entity, and down the value or supply chain of the company. As Goal 1.1 of the Roadmap emphasises, ‘respecting people and the planet, by preventing and addressing adverse impacts across business activities and value chains, is the most significant contribution most businesses can make toward sustainable development’. NGOs often rely on local partners to develop their work, and those partnerships would benefit from due diligence processes and risk mitigation measures. In line with Goal 7.2, NGOs could also improve their assessment of their own ‘value chain’ by improving their tracking of progress and gathering of data. In addition, business and human rights frameworks emphasise the relevance of making remedies more accessible for victims of human rights violations. This is an aspect that has not been strongly incorporated in self-regulation and could be strengthened through the business and human rights angle, in line with Goal 4 of the Roadmap, which calls for a combination of ‘State-based non-judicial grievance mechanisms, and non-State-based grievance mechanisms to ensure the best possible outcomes for rightsholders’. The Roadmap acknowledges that ‘meaningful progress for this core component of the UNGPs is a major and urgent priority for the next decade’,¹⁰⁰ a priority that NGOs and their beneficiaries could benefit from greatly as well.

4. NEW HORIZONS: FROM THE UNGPs TO A NEW EU DIRECTIVE – WHAT FUTURE FOR NGOs?

As explored in section 2, since the UNGPs were adopted in 2010, many national parliaments have passed domestic legislation establishing mandatory human rights due diligence. Some of those frameworks could apply to NGOs as well, as the definition of the entities falling within their scope includes some of the legal forms that NGOs adopt. That was the main legislative development on the business and human rights front for years, one that the UNGPs 10+ Roadmap has taken stock from, designing a plan for the next decade.¹⁰¹ But the legal landscape may be about to change significantly again soon, with the adoption of a European Union Directive on Corporate Sustainability Due Diligence, expected for 2024.¹⁰²

The European Union and its member states are negotiating what could be a game-changing piece of legislation. Building on the UNGPs and the OECD Guidelines, the proposed Directive sets out reporting, monitoring, and compliance duties for entities falling within its scope.¹⁰³ Those obligations include the implementation of human rights due diligence processes and policies, and the adoption of measures to prevent, mitigate and terminate the adverse human rights and environmental impact of their action.¹⁰⁴

A key component of the regime established in the proposed Directive are elements ensuring compliance and enforcement. The Directive envisages administrative oversight by public bodies,¹⁰⁵ including powers to investigate and impose sanctions, and provides for civil remedies for victims,¹⁰⁶ ensuring a system with stronger enforcement mechanisms than the UNGPs. It also envisages support to companies having to comply with the Directive, including provisions on voluntary model contractual clauses, and public support by Member States. The proposed Directive incorporates an extraterritorial element, which would entail that both EU and non-EU companies may be subject to its requirements.¹⁰⁷ This has been seen as an opportunity to ensure the accountability of companies in regions where human rights mechanisms are rather weak in enforcement potential.¹⁰⁸

The characteristics of the EU legislative framework have determined to a great extent the content and scope of the Directive which, as all other instruments of this kind, will be transposed by EU Member States to be incorporated as directly applicable at the national level and with direct effect, to be applied directly by domestic courts.¹⁰⁹ One of the practical implications of such direct effect is that the proposed text defines the scope of the Directive in a very narrow and specific way, which has been criticised as contrary to the UNGPs and the OECD Guidelines.¹¹⁰

The definition of ‘company’ given in Article 3 is key to establishing whether NGOs may fall within the scope of the EU proposed Directive. It includes legal persons constituted in a variety of legal forms, as listed in specific annexes to Directive 2013/34/EU or in a comparable form. This should not be an obstacle to its applicability to NGOs, as NGOs operate taking various legal forms,¹¹¹ some of which are included in the scope of the Directive.¹¹² Examples of legal forms included in those Annexes which NGOs may adopt are the Belgian ‘société coopérative à responsabilité limitée/de coöperatieve vennootschap met beperkte aansprakelijkheid’ (cooperative company with limited liability), the German ‘die Aktiengesellschaft, die Kommanditgesellschaft auf Aktien, die Gesellschaft mit beschränkter Haftung’, the Irish ‘company limited by guarantee’, the British ‘private companies limited by guarantee’,¹¹³ and the Spanish ‘sociedad anónima’ and ‘sociedad de responsabilidad limitada’ (limited liability company), used by some NGOs carrying out an economic activity.¹¹⁴

However, the proposed Directive also requires a certain size or threshold for entities to be included in its scope, which would rarely be reached by NGOs. Article 2 provides that the Directive will apply to European companies with more than 500 employees on average and a net annual worldwide turnover exceeding EUR 150 million; or with more than 250 employees on average and a net annual worldwide turnover exceeding EUR 40 million, provided at least 50% of this turnover was generated in one or more ‘high impact’ sectors. It will also apply to non-European companies that generate a net annual turnover in the EU of more than EUR 150 million; or with a net annual turnover in the EU exceeding EUR 40 million, provided at least 50% of this turnover was generated in one or more of the sectors identified as ‘high impact’.

As part of the legislative process within the EU, the rapporteur of the Legal Affairs Committee of the European Parliament, Lara Wolters, proposed reducing the size and turnover thresholds for companies and expanding the definition of ‘high impact sectors’ to also include energy, construction, financial services, and information technologies.¹¹⁵ The Council of the EU has also established its position for upcoming negotiations on the proposed Directive, taking a different approach to that of Rapporteur Wolters and proposing a phased approach to the scope, where three years after entry into force, the Directive should take effect for EU companies with more than 1,000 employees and a net worldwide turnover of more than EUR 300 million; and non-EU companies with a net EU turnover of more than EUR 300 million. The Council envisages expanding the scope in years 4¹¹⁶ and in year 5,¹¹⁷ to smaller companies.

On 1 June 2023, the European Parliament adopted its amendments to the Commission proposed Directive, taking a progressive approach to those issues.¹¹⁸ Given the very different approaches proposed by the EU institutions involved in the legislative process, negotiations will be challenging on this and other fronts, including for example the applicability of the Directive to financial institutions, which has been rather controversial,¹¹⁹ and also part of the amendments proposed by the European Parliament.¹²⁰ It is, however, interesting to observe that some of the proposed figures could make the Directive applicable to NGOs. The European Parliament's amendments propose applying the Directive to companies with more than 250 employees with a turnover exceeding €40 million,¹²¹ and to third-country companies which generated a net turnover of at least €40 million (no employee figure required for them).¹²² The €40 million figure is close to the £36 million figure used as a threshold by the UK Modern Slavery Act, which as indicated above many NGOs comply with.¹²³

NGOs have been quite involved in discussions around the expansion of the scope to smaller entities and on how the EU Directive may affect or apply to Small and Medium Enterprises (SMEs), which may also be relevant to the question of its applicability to NGOs. NGOs have called to expand the scope of the Directive to include smaller entities.¹²⁴ Anti-Slavery International criticises the exclusionary approach of the Directive, as not in line with the UNGPs and the OECD Guidelines, arguing that it goes against the ‘level playing field’ rationale that underpins the Directive.¹²⁵ Along similar lines, the International Federation for Human Rights flags that ‘human and environmental negative impacts do not primarily depend on the size of the enterprise, but rather depend on the conduct of the operations and the precautionary measures taken’.¹²⁶ Interestingly, if their call was followed, including smaller entities in the scope of the Directive could also facilitate the inclusion of NGOs, although that has not been the aim of those claims. As to discussions on SMEs, they have focused on the impact or burden that the Directive may impose on SMEs as part of the ‘value chain’ of bigger corporations falling within its scope.¹²⁷ The proposed Directive of the European Commission recognises the impact on SMEs and the need for support from Member States, mainly financially (Art. 14.1-2).¹²⁸ Rapporteur Wolters has proposed indicating more in detail the measures that could be used to support SMEs (due diligence training, financial and other support, etc).¹²⁹ Such measures, also reflected in the European Parliament amendments,¹³⁰ could take into consideration NGOs as well and be an avenue to provide support to NGOs which could be affected by the Directive.

As negotiations are developing, it is difficult to see a change in the scope to include NGOs explicitly, but including smaller enterprises in the scope of the Directive could have a similar effect, resulting in at least some NGOs falling within the scope of the Directive. This could have a very relevant impact on NGO accountability, as the Directive is the first transnational mechanism envisaging sanctions and civil liability, together with mechanisms for support of entities falling within its scope. All this could contribute to a culture of accountability that may permeate the NGO sector in the future and complement the existing NGO-specific mechanisms and frameworks.

5. CONCLUDING REMARKS

NGOs are aware of the relevance of their contribution to society and of the importance of establishing accountability systems that allow them to show to their beneficiaries, their donors, and society in general as respecting certain ethical, human rights, or environmental standards. NGOs have developed self-regulated accountability systems which are increasingly more institutionalised, acknowledging the need for external accountability and for engagement with stakeholders in that process. A look at existing business and human rights frameworks, designed to apply to business entities, has inspired research on whether these frameworks have anything to contribute to that process. As this article has explored, two questions arise in that analysis: first, whether NGOs could fit within the scope of those frameworks, drafted specifically for business entities; second, whether what those frameworks offer could be of any assistance to complement NGOs’ accountability efforts through institutional self-regulation.

Concerning the first question, this article has explored business and human rights frameworks establishing mandatory human rights due diligence at the national level, concluding that the wording of some of those pieces of legislation would allow for the inclusion of NGOs in their scope, while for others the answer is not that clear. It has also explored the UNGPs and the OECD Guidelines as the two main international business and human rights frameworks, concluding that there is a strong argument to be made in favour of the inclusion of NGOs in their scope, based on research and practice. Finally, it has explored the currently under discussion EU Directive on Corporate Sustainability Due Diligence, which is shaping a new and more specific horizon for business and human rights, where the definition of the scope of application is much more restricted and less likely to sustain the inclusion of NGOs, at least for now.

Concerning the second question, the article has highlighted several forms in which applying the business and human rights frameworks to NGOs could contribute to stronger due diligence processes in the NGO sector, in line with the UNGPs 10+ Roadmap. These include the consolidation of an external accountability culture, the establishment of stronger stakeholder engagement in the design of due diligence processes, and the enhancement of the notion of ‘value chain’ for NGOs. The EU proposed Directive, which has the potential to enhance enforcement and accountability, could be the horizon to tend towards, also for NGOs.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author(s).

Notes

1 Civicus, 2022 State of Civil Society Report, <https://www.civicus.org/documents/reports-and-publications/SOCS/2022/CIVICUS2022SOCSReport.pdf> accessed 23 April 2023.

2 Antonio Nicolini and Kurveena Pyneeandy, ‘The Role of Civil Society. A Look at the Organisations Behind the Work of the Human Rights Council’ (UNtoday, 1 March 2023) <https://untoday.org/the-role-of-civil-society/> accessed 23 April 2023.

3 Kersty McCourt, ‘Four Steps to Build Dialogue Between Government and Civil Society’ (Open Government Partnership, 24 January 2023) <https://www.opengovpartnership.org/stories/four-steps-to-build-dialogue-between-government-and-civil-society/> accessed 23 April 2023.

4 Alexander Jr. Ross, ‘Growing Role of NGOs and the UN’ (Beyond the Horizon, June 2017) <https://behorizon.org/ngos-and-the-un/> accessed 23 April 2023. See also UNGA Res. 60/251, Human Rights Council, UN Doc. A/RES/60/251, 3 April 2006.

5 Jeremy Springman, ‘The Political Economy of NGO Service Delivery: Evidence from an Ancillary Field Experiment’ (16 March 2020) <https://sites.duke.edu/jeremyspringman/files/2020/11/afe_draft.pdf> accessed 23 April 2023.

6 Expert Council on NGO Law, ‘Non-Governmental Organisations: Review of Developments in Standards, Mechanisms and Case Law 2017-2019’, Review Prepared by Mr Jeremy McBride on Behalf of the Expert Council on NGO Law of the Conference of INGOs of the Council of Europe (February 2020) <https://rm.coe.int/expert-council-conf-exp-2020-1-ngos-developments-in-standards-mechanis/16809ccd3a> accessed 23 April 2023.

7 Adam Jagiello-Rusilowski, ‘NGOs’ Impact and Sphere of Influence on Different Governments’ Policymaking around the World’ [2021] 16(3) Daena: International Journal of Good Conscience <http://www.spentamexico.org/v16-n3/A11.16(3)1-13.pdf> accessed 23 April 2023.

8 Marcel Kaba, ‘NGO Accountability: A Conceptual Review across the Engaged Disciplines’ [2021] 23 International Studies Review 958, 961-962; Focusright, ‘Human Rights Due Diligence for Non-Governmental Organisations: Why it is Needed and How it is Done’ (Working Paper, May 2022) <https://static1.squarespace.com/static/5a6ede6f268b96417e62cba6/t/62b2b9daef9ba32836f84514/1655880156266/focusright+working+paper+HRDD+for+NGOs+May+2022.pdf> accessed 3 November 2022; Diana Hortsch, ‘The Paradox of Partnership: Amnesty International, Responsible Advocacy, and NGO Accountability’ [2010] 42 Columbia Human Rights Law Review 119.

9 Maryam Zarnegar Deloffre, ‘Global Accountability Communities: NGO Self-Regulation in the Humanitarian Sector’ [2016] 42 Review of International Studies 725.

10 Financial dependence is also another influencing factor. AbouAssi finds a ‘moderate correlation between self-regulation and resource dependence’. (Khaldoun AbouAssi, ‘Testing Resource Dependency as a Motivator for NGO Self-Regulation’ [2014] 44 Nonprofit and Voluntary Sector Quarterly 1269).

11 Robert Lloyd, ‘The Role of NGO Self-Regulation in Increasing Stakeholder Accountability’ [2005] One World Trust 5-6.

12 Oonagh B. Breen and others, ‘Shifting Patterns of State Regulation and NGO Self-Regulation in Sub-Saharan Africa’, Regulatory Waves: Comparative Perspectives on State Regulation and Self-regulation Policies in the Nonprofit Sector (Cambridge University Press 2017) 72.

13 Oonagh B. Breen and others, ‘Waves of Nonprofit Regulation and Self-Regulation in Latin America’, Regulatory Waves: Comparative Perspectives on State Regulation and Self-regulation Policies in the Nonprofit Sector (Cambridge University Press 2017) 161. For other regional trends, see Angela L. Bies, ‘Evolution of Nonprofit Self-Regulation in Europe’ [2010] 39 Nonprofit and Voluntary Sector Quarterly 1057-1086. See also Shana Warren and Robert Lloyd, ‘Civil Society Self-Regulation’ [2009] One World Trust 1-17, and supra note 12.

14 Domenico Carolei and Nadia Bernaz, ‘Accountability for Human Rights: Applying Business and Human Rights Instruments to Non-Governmental Organizations’ (2021) 13 Journal of Human Rights Practice 507, 508.

15 Amnesty International, ‘Laws Designed to Silence: The Global Crackdown on Civil Society Organizations’ (Index Number: ACT 30/9647/2019, Amnesty International 2019).

16 Nils Muižnieks, ‘The Shrinking Space for Human Rights Organisations’ (Council of Europe, 4 April 2017) <https://www.coe.int/en/web/commissioner/-/the-shrinking-space-for-human-rights-organisations> accessed 25 May 2023. Some of those measures target foreign funded NGOs only (Darin Christensen and Jeremy M Weinstein, ‘Defunding Dissent: Restrictions on Aid to NGOs’ (2013) 24 Journal of Democracy 77, 79-80).

17 Kendra Dupuy, Luc Fransen and Aseem Prakash, ‘Restricting NGOs: From Pushback to Accommodation’ (2021) 12(S5) Global Policy 5, 8.

18 Oonagh B. Breen and others, ‘Shifting Patterns of State Regulation and NGO Self-Regulation in Sub-Saharan Africa’, Regulatory Waves: Comparative Perspectives on State Regulation and Self-regulation Policies in the Nonprofit Sector (Cambridge University Press 2017) 72. Examples of self-regulation are, among many others, the ‘Standards for Excellence’ Ethics and Accountability Code for the Non-profit Sector, by the Maryland Association of Non-profit Organizations’, which over 2000 non-profit organisations across the US have followed to achieve accreditation (ttps://standardsforexcellence.org/Home-2/code), or the ‘Principles and Practices for Non-profit Excellence, by the Minnesota Council of Non-profits (https://www.minnesotanonprofits.org/docs/default-source/publications/principles-and-practices---full-publication.pdf?sfvrsn = 93531894_4), the BOCONGO Code of Conduct, developed in 2007 by the Botswana Council of NGOs, in collaboration with various stakeholders, including NGOs, government agencies and donors, applied at least to 100 NGOs in Botswana (https://www.gdrc.org/ngo/codesofconduct/botswana-ngocode.html#:∼:text = their%20commitment%20to%3A-,i.,organisations%20or%20self%2Dgenerated%20activities. See also, Karla W. Simon, 'South Africa Update' (2005) 3 Int'l J Civ Soc'y L 111), or the Standards of Good Governance & Professional Practices (GPP) for NGOs in Cambodia (https://www.ccccambodia.org/backend/uploads/content/images/GPP%20Standards%20in%20English.pdf).

19 Carolei and Bernaz, supra note 508. See also Albert Anton Traxler, Dorothea Greiling, and Hannah Hebesberger, ‘GRI Sustainability Reporting by INGOs: A Way Forward for Improving Accountability?’ [2020] 31 Voluntas: International Journal of Voluntary and Nonprofit Organizations 1294-310.

20 Other relevant examples are the World Association of NGOs (WANGO) code of ethics and conduct for NGOs (https://www.wango.org/codeofethics/COEEnglish.pdf), the Red Cross Code of Conduct (https://www.ifrc.org/sites/default/files/2021-07/code-of-conduct-movement-ngos-english.pdf).

21 GACs are groups of organisations for which accountability is a practice ‘defined by community members through social learning processes that create shared social identities, build trust, and foster mutual accountability’ (Maryam Zarnegar Deloffre, ‘Global Accountability Communities: NGO Self-Regulation in the Humanitarian Sector’ [2016] 42 Review of International Studies 725).

22 In the early 2000s, a number of NGO scandals were revealed, mostly related to the misuse of funds. Those included fraud, mismanagement and misappropriation of funds by US organisations such as Freeport Day Care Centre (NY), Operation Smile or the Baptist Foundation of Arizona (Margaret Gibelman and Sheldon R Gelman, ‘Very Public Scandals: Nongovernmental Organizations in Trouble’ (2001) 12 Voluntas: International Journal of Voluntary and Nonprofit Organizations 49, 56), questionable financial practices by the environmental INGO Nature Conservatory, or alleged embezzlement at the International Helsinki Federation for Human Rights (Angela M Crack, ‘INGO Accountability Deficits: The Imperatives for Further Reform’ (2013) 10 Globalizations 293, 296). More recently, there have been high-profile human rights scandals in the NGO sector, including allegations against Oxfam for sexual abuse in Haiti; WWF for financing, arming, and training violent anti-poaching units in African and Asian national parks; Save the Children UK for sexual harassment and mishandling of complaints (Focusright supra note). These recent scandals in particular illustrate the need for a more effective approach to NGO accountability.

23 Angela M. Crack, ‘The Regulation of International NGOs: Assessing the Effectiveness of the Ingo Accountability Charter’ [2017] 29 Voluntas: International Journal of Voluntary and Nonprofit Organizations 419-29; Albert Anton Traxler, Dorothea Greiling and Hannah Hebesberger, ‘GRI Sustainability Reporting by Ingos: A Way Forward for Improving Accountability?’ [2020] 31 Voluntas: International Journal of Voluntary and Nonprofit Organizations 1294-310; Angela M. Crack, ‘INGO Accountability Deficits: The Imperatives for Further Reform’ [2013] 10 Globalizations 293-308; Alexandre Fontenelle-Weber, ‘International Human Rights Law and the Accountability of Civil Society Organizations: the Case of the INGO Accountability Charter/Accountable Now’ [2019] 8 Brazilian Journal of International Relations 215-35.

24 Maryam Zarnegar Deloffre, ‘Global Accountability Communities: NGO Self-Regulation in the Humanitarian Sector’ [2016] 42 Review of International Studies 725.

25 Denis Kennedy, ‘The Inherently Contested Nature of Nongovernmental Accountability: The Case of Hap International’ [2019] 30 Voluntas: International Journal of Voluntary and Nonprofit Organizations 1393.

26 Conservation and Human Rights Framework, Conservation Initiative on Human Rights (2010) <https://wwfint.awsassets.panda.org/downloads/cihrframeworkfeb2010.pdf> accessed 23 April 2023. The framework has been endorsed by several international organizations and networks, including the World Wildlife Fund (WWF), BirdLife International, the International Union for Conservation of Nature (IUCN), and the United Nations Development Programme (UNDP). Other examples are the Code of Conduct for the International Red Cross and Red Crescent Movement and NGOs in disaster relief (https://www.ifrc.org/our-promise/do-good/code-conduct-movement-ngos); the IFC Environmental and Social Performance Standards, oriented to the development finance sector and considered the leading environmental and social standards in this sector; or the Humanitarian Accountability Partnership-International (HAP, ‘The 2010 HAP Standard in Accountability and Quality Management’ <https://pseataskforce.org/uploads/tools/the2010hapstandardinaccountabilityandqualitymanagement_hapinternational_english.pdf> accessed 23 April 2023, 3).

27 Michael Windfuhr, ‘Safeguarding Human Rights in Land Related Investments: Comparison of the Voluntary Guidelines Land with the IFC Performance Standards and the World Bank Environmental and Social Safeguard Framework’ (German Institute for Human Rights 2017).

28 Dorothea Hilhorst, ‘Dead Letter or Living Document? Ten Years of the Code of Conduct for Disaster Relief’ [2005] 29 Disasters 351; see also Ana Borovecki and others, ‘20 Years of the ICRC Code of Conduct for Disaster Relief: What Do We Need to Improve?’ [2015] 385 The Lancet 1391.

29 Dorothea Hilhorst, ‘Dead Letter or Living Document? Ten Years of the Code of Conduct for Disaster Relief’ [2005] 29 Disasters 351.

30 Carolei and Bernaz supra note, 508-509, citing Lindblom 2005 and Ben-Ari 2013.

31 Tosca Bruno-van Vijfeijken, ‘“Culture Is What You See When Compliance Is Not in the Room”: Organizational Culture as an Explanatory Factor in Analyzing Recent INGO Scandals’ (2019) 10(4) Nonprofit Policy Forum 1, 5.

32 Ibid, p. 6.

33 Ibid, p. 6.

34 Carolei and Bernaz supra note 508, citing Traxle et al. 2018; Crack 2016; Hammad and Morton 2011. The UK House of Commons International Development Committee has called the NGO sector to move beyond self-regulation, which had failed to ensure that safeguarding and accountability standards were being upheld by NGOs (UK House of Commons, International Development Committee, Follow-up: Sexual Exploitation and Abuse in the Aid Sector. First Report Session 2019-20).

35 Angela M Crack, ‘Reversing the Telescope: Evaluating NGO Peer Regulation Initiatives’ (2016) 28 Journal of International Development 40.

36 Ibid, 50-52, Tosca supra note 6-7.

37 Asmita Naik, ‘Tackling Sexual Exploitation and Abuse by Aid Workers: What Has Changed 20 Years On?’ (2021) 81 Humanitarian Exchange Magazine 20.

38 Ibid, 21-22.

39 Ibid, 22-23.

40 Focus Rightsupra note 15.

41 Nada Abdelmagid and others, ‘Defining, Measuring and Interpreting the Appropriateness of Humanitarian Assistance’ [2019] 4 Journal of International Humanitarian Action 1.

42 Norwegian Refugee Council, 2015, cited in Shukri Muhomed, Jerome Puri, Helen Stickler and Divya Sugand ‘NGO's Due Diligence and Risk Mitigation: A Holistic Approach’ (March 2021) <https://charityandsecurity.org/wp-content/uploads/2021/04/NGOs-Due-Diligence-and-Risk-Mitigation.pdf> accessed 23 April 2023, p 26.

43 Shukri Muhomed, Jerome Puri, Helen Stickler and Divya Sugand, ‘NGO's Due Diligence and Risk Mitigation: A Holistic Approach’ (March 2021) <https://charityandsecurity.org/wp-content/uploads/2021/04/NGOs-Due-Diligence-and-Risk-Mitigation.pdf> accessed 23 April 2023, p 26.

44 John Gerard Ruggie and John F. Sherman, III, ‘The Concept of ‘Due Diligence’ in the UN Guiding Principles on Business and Human Rights: A Reply to Jonathan Bonnitcha and Robert McCorquodale’ [2017] 28(3) EJIL 921 p 923.

45 Claire Bright, ‘Creating a Legislative Level Playing Field in Business and Human Rights at the European Level: Is the French Law on the Duty of Vigilance the Way Forward?’ (2020) EUI Working Paper MWP 2020/01, p 13.

46 Gabriela Quijano and Carlos Lopez, ‘Rise of Mandatory Human Rights Due Diligence: A Beacon of Hope or a Double-Edged Sword?’ [2021] 6 BHRJ 241.

47 Charlotte Villiers, ‘New Directions in the European Union's Regulatory Framework for Corporate Reporting, Due Diligence and Accountability: The Challenge of Complexity’ [2022] 13 EJRR.

48 Organisations pursuing charitable aims do fall under section 54 of the UK Modern Slavery Act if they engage in ‘commercial activities and [have] a total turnover of £36m – irrespective of the purpose for which profits are made’. NGOs, charities, and think tanks are complying with it, including Amnesty International, Oxfam BG, Save the Children, or WWF UK.

49 The guidance for reporting entities from the Home Affairs department establishes that. The Act applies to a wide range of entity types, including individuals, partnerships, associations, and legal entities such as companies, trusts, superannuation funds, and other types of investment organisations. This includes both commercial entities and not-for-profit entities, such as charities.’ Again, examples of NGOs complying are the Australian Red Cross, Save the Children Australia or the Salvation Army Australia.

50 German Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz – LkSG).

51 Amendments to the Swiss Code of Obligations (and Swiss Criminal Code) and Ordinance.

52 The Netherlands Bill for Responsible and Sustainable International Business Conduct defines its scope using the expression ‘regardless of its legal form’.

53 Norwegian Act relating to enterprises’ transparency and work on fundamental human rights and decent working conditions (Transparency Act).

54 Belgian Bill establishing a duty of vigilance and a duty of responsibility for companies throughout their value chains.

55 Edward T. Bristol-Alagbariya, ‘IFC Environmental & Social Performance Standards: Soft Law Project & Company Financing Partnerships towards Good Environmental Governance, Business Sustainability and Sustainable Development in Developing Countries’ [2020] 81 International Affairs and Global Strategy.

56 Alwyn Lim, ‘Nonprofits as Socially Responsible Actors: Neoliberalism, Institutional Structures, and Empowerment in the United Nations Global Compact’ [2021] 70 Current Sociology 463.

57 Alnoor Ebrahim, ‘Accountability in Practice: Mechanisms for NGOs’ [2003] 31(5) World Development 813.

58 Eoghan Walsh, Helena Lenihan, ‘Accountability and Effectiveness of NGOs: Adapting Business Tools Successfully’ [2006] 16(5) Development in Practice 412, p.412.

59 UNGP 17.

60 Julie Wynne and Tomás Navarro Blakemore, ‘The UN guiding principles on business and human rights and their role for non-profit organisations’ [2017] 15 Philanthropy Impact Magazine <https://www.philanthropy-impact.org/sites/default/files/user-uploads/pi_magazine_15_final_wynn_blakemore.pdf> accessed 23April 2023.

61 Domenico Carolei and Nadia Bernaz, ‘Accountability for Human Rights: Applying Business and Human Rights Instruments to Non-Governmental Organizations’ [2021] 13(3) JHRP 507, p 508.

62 Ibid.

63 Ibid, p 523. See also John Morrison, (2018) ‘Charities Should Be Held to the Same Human Rights Standards as Business’ <http://www.ethicalcorp.com/charities-should-be-held-same-human-rights-standards-business> accessed 23 April 2023, supporting the applicability of UNGPs to NGOs.

64 See supra Wynne and Navarro, p. 14.

65 Ibid.

66 Ibid.

67 Claire Apodaca, ‘The Human Rights Costs of NGOs’ Naming and Shaming Campaigns’ in Alison Byrsk and Michael Stohl (ed), Contracting Human Rights Crisis, Accountability and Opportunity (1st edition, Elgar, 2018) p 83.

68 Jael E. Makagon, Harry Jonas and Dilys Roe, Human Rights Standards for Conservation (IIED 2014), p 29.

69 Ibid.

70 Ibid.

71 Ibid, p 30.

72 FIFA (Federation International de Football Association), FIFA's Human Rights Policy, 2017.

73 UEFA (Union of European Football Association), Football and Social Responsibility <https://www.uefa.com/insideuefa/social-responsibility/overview/> accessed 23 April 2023.

74 IOC (International Olympic Committee), ‘IOC Continues Working on Human Rights and Takes First Steps on a Strategy’ <https://www.olympic.org/news/ioc-continues-working-on-human-rights-and-takes-first-steps-on-a-strategy> accessed 23 April 2023.

75 Council of Europe, ‘Expert Council on NGOs Law of the Conference of INGOs. Review of Developments in Standards, Mechanisms and Case Law Related to NGOs 2017-2019’ (2020).

76 Domenico Carolei, ‘Survival International v World-Wide Fund for Nature: Using the OECD Guidelines for Multinational Enterprises as a Means of Ensuring NGO Accountability’ [2018] 18 Human Rights Law Review 371.

77 National Contact Point Norway (2011) ‘Initial Assessment and Final Conclusion. Roma in Kosovo v. Norwegian Church Aid (NCA)’.

78 National Contact Point of Switzerland (2015) ‘Initial Assessment, Specific Instance regarding the Federation Internationale de Football Association (FIFA) submitted by the Building and Wood Workers’ International (BWI)’.

79 Ibid.

80 National Contact Point of Switzerland (2016) ‘Initial Assessment, Specific Instance regarding the Federation Internationale de Football Association (FIFA) submitted by Americans for Democracy and Human Rights in Bahrain (ADHRB)’.

81 National Contact Point of Switzerland (2016) ‘Initial Assessment, Specific Instance regarding the World-Wide Fund for Nature International (WWF) submitted by Survival International Charitable Trust (SI)’.

82 Carolei and Bernaz, supra note, p 11.

83 National Contact Point of Switzerland (2018) ‘Initial Assessment, Specific Instance regarding the Roundtable for Sustainable Palm Oil (RSPO) submitted by Transformation for Justice (TuK)’.

84 National Contact Point of United Kingdom (2019) ‘Initial Assessment by the UK National Contact Point for the OECD Guidelines for Multinational Enterprises: Complaint from IDI, EC and LICADHO against Bonsucro Ltd’.

85 OECD Guidelines, 2023 update, p 12.

86 Carolei and Bernaz, supra note, 523.

87 UN Working Group on Business and Human Rights, ‘Raising the Ambition – Increasing the Pace, UNGPs 10+: A Roadmap for the Next Decade of Business and Human Rights’ (2021) <https://www.ohchr.org/sites/default/files/2021-12/ungps10plusroadmap.pdf> accessed 23 April 2023.

88 OECD Guidelines, 2023 update, p 60.

89 Ibid, pp 25-7.

90 Ibid, p 40-2.

91 The Business and Human Rights Resource Centre provides regular updates on relevant business and human rights cases, as well as on law and policy developments: https://www.business-humanrights.org/en/big-issues/.

92 UNPGs 10+, Goal 1.4.

93 Human Rights Council, Panel Discussion on the Tenth Anniversary of the Guiding Principles on Business and Human Rights, UN Doc. A/HRC/49/CRP.3, 10 February 2022, <https://www.ohchr.org/sites/default/files/2022-02/report-panel-10th-anniversary-ungps.pdf> accessed 23 April 2023.

94 Goal 2.2.

95 Goal 3.2.

96 UNGPs 20, 21.

97 Angela M. Crack, ‘The Regulation of International NGOs: Assessing the Effectiveness of the Ingo Accountability Charter’ [2017] 29 Voluntas: International Journal of Voluntary and Non-profit Organizations 419-29.

98 Goal 2.1.

99 Carnegie Endowment for International Peace, ‘Civil Society and the Global Pandemic: Building Back Different?, Carnegie Civic Research Network, 30 September 2021, <https://carnegieendowment.org/2021/09/30/civil-society-and-global-pandemic-building-back-different-pub-85446> accessed 23 April 2023; Ágnes Kövér, ‘The Relationship between Government and Civil Society in the Era of Covid-19’ [2021] Nonprofit Policy Forum <https://www.degruyter.com/document/doi/10.1515/npf-2021-0007/html> accessed 23 April 2023; Dupuy, Fransen and Prakash supra note 9.

100 Goal 4.

101 Roadmap, supra note.

102 Proposal of the European Commission for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937, COM/2022/71 final, 23 February 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri = CELEX%3A52022PC0071.

103 Clare Bright and Lise Smit, ‘The New European Directive on Corporate Sustainability Due Diligence’, British Institute of International and Comparative Law, NOVA School of Law (2022) <https://www.biicl.org/documents/11164_ec_directive_briefing_bright_and_smit_1_march_update.pdf> accessed 23 April 2023; Christopher Patz, ‘The EU's Draft Corporate Sustainability Due Diligence Directive: A First Assessment’, [2022] 7(2) Business and Human Rights Journal 291-7.

104 See Articles 5-11 of the proposed Directive.

105 Article 17 of the proposed Directive.

106 Article 22 of the proposed Directive.

107 Luca Enriques, ‘The Extraterritorial Impact of the Proposed EU Directive on Corporate Sustainability Due Diligence: Why Corporate America Should Pay Attention’, Oxford Business Law Blog, 21 April 2022, <https://blogs.law.ox.ac.uk/business-law-blog/blog/2022/04/extraterritorial-impact-proposed-eu-directive-corporate> accessed 23 April 2023.

108 Anggraeni and Partners, ‘The Extraterritorial Application of European Commission's Draft Directive on Corporate Sustainability Due Diligence: What Does it Mean to Indonesian Companies?’, Lexology, 2 March 2023, <https://www.lexology.com/library/detail.aspx?g = 96ae88a2-6eb5-4093-8bdc-a2fba531094b> accessed 23 April 2023.

109 Michael Littenberg, Samantha Elliott, Austin Bohn, ‘A Q&A on the European Commission's Proposed Corporate Sustainability Due Diligence Directive’, Oxford Business Law Blog, 10 May 2022, <https://blogs.law.ox.ac.uk/business-law-blog/blog/2022/05/qa-european-commissions-proposed-corporate-sustainability-due> accessed 23 April 2023.

110 Anti-Slavery International, Analysis of the European Commission Proposal for a Directive on Corporate Sustainability Due Diligence, May 2022 <https://www.antislavery.org/wp-content/uploads/2022/05/ASI_CS3D_.pdf> accessed 23 April 2023, p 5.

111 Carolei and Bernaz, p. 510.

112 For more information about the legal forms NGOs usually adopt in various countries, see Advocates for International Development, EU registration options for NGOs. Preparing UK-based NGOs for Brexit. A guide to establishing NGOs in Europe (2017) <https://www.a4id.org/wp-content/uploads/2017/02/EU-registration-options-for-UK-NGOs-post-Brexit-FINAL-PDF-1.pdf> accessed 23 April 2023.

113 Examples of this can be found by looking at the Companies House Register for Oxfam (https://find-and-update.company-information.service.gov.uk/company/00612172) and Amnesty International (https://find-and-update.company-information.service.gov.uk/company/01606776). For more information on the various forms that non-profits can take in England & Wales, see here (https://cof.org/country-notes/nonprofit-law-england-wales).

114 Advocates for International Development (2017).

115 DRAFT REPORT on the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937 (COM(2022)0071 – C9-0050/2022 - 2022/0051(COD)), Committee on Legal Affairs, Rapporteur: Lara Wolters, 7 November 2022, <https://www.europarl.europa.eu/doceo/document/JURI-PR-738450_EN.html>.

116 To companies with more than 500 employees and a net worldwide turnover of more than EUR 150 million; and non-EU companies with a net EU turnover of more than EUR 150 million.

117 To companies with more than 250 employees and a net worldwide turnover of more than EUR 40 million and non-EU companies with a net EU turnover of more than EUR 40 million, provided at least 50% of their worldwide turnover was generated in a ‘high impact’ sector (https://data.consilium.europa.eu/doc/document/ST-15024-2022-REV-1/en/pdf).

118 Amendments adopted by the European Parliament on 1 June 2023 on the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937 (COM(2022)0071 – C9-0050/2022–2022/0051(COD).

119 Begum Kilimcioğlu, ‘How Does the Financial Sector Relate to the European Commission's Proposal For a Corporate Sustainability Due Diligence Directive?’ (EJIL: Talk!, 22 February 2023) <https://www.ejiltalk.org/how-does-the-financial-sector-relate-to-the-european-commissions-proposal-for-a-corporate-sustainability-due-diligence-directive/?utm_source = mailpoet&utm_medium = email&utm_campaign = ejil-talk-newsletter-post-title_2> accessed 23 April 2023.

120 Amendments adopted by the European Parliament supra note, Amendment 26.

121 Ibid., Amendment 25.

122 Ibid., Amendment 27.

123 Examples of NGOs complying with the UK Modern Slavery Act, which also operate in the EU, include Oxfam (See pages 5-6 of Oxfam's Modern Slavery Statement 2022: https://www.oxfam.org.uk/documents/610/Modern_Slavery_Statement_2022.pdf); Amnesty International (See p. 2 of its Modern Slavery Statement, 2021: https://www.amnesty.org/en/documents/org20/5700/2022/en/); and Save the Children International: See its Modern Slavery Statement, 2021: https://www.savethechildren.net/modern-slavery-statement-2021).

124 See OHCHR, Feedback on the Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence, 23 May 2022 <https://www.ohchr.org/sites/default/files/2022-05/eu-csddd-feedback-ohchr.pdf> accessed 23 April 2023; PRI, EUROSIF, Investor Alliance for Human Rights, Investor Statement of Support for an Ambitious and Effective European Direcive on Corporate Sustainability Due Diligence, 24 November 2022 <https://www.eurosif.org/wp-content/uploads/2022/11/INVEST1-2.pdf> accessed 23 April 2023; Civil society statement on the proposed EU Corporate Sustainability Due Diligence Directive, May 2022 <https://www.care-international.org/sites/default/files/2022-05/CSO_statement_CSDDD_EN.pdf> accessed 23 April 2023. German institute for Human Rights, Statement on the European Commission's Proposal on Corporate Sustainability Due Diligence, 23 May 2022 <https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12548-Sustainable-corporate-governance/F3263285_en> accessed 23 April 2023.

125 Anti-Slavery International, Analysis of the European Commission Proposal for a Directive on Corporate Sustainability Due Diligence, May 2022 <https://www.antislavery.org/wp-content/uploads/2022/05/ASI_CS3D_.pdf> accessed 23 April 2023, p. 5. The analysis also indicates that Art. 2 thresholds are not in line with the threshold of the Corporate Sustainability Reporting Directive (CSRD).

126 ‘Europe Can Do Better – How EU Policy Makers Can Strengthen the Corporate Sustainability Due Diligence Directive’ <https://www.fidh.org/IMG/pdf/duediligence.pdf> accessed 23 April 2023, pp 3-5.

127 Luc Hendrickx, ‘Due Diligence Directive has to be Feasible for SMEs’ (SME United, 13 October 2022) <https://www.smeunited.eu/news/due-diligence-directive-has-to-be-feasible-for-smes> accessed 23 April 2023; Gian Domenico Mosco, Raffaele Felicetti, ‘The EU's Corporate Sustainability Due Diligence Directive: An Excessively Diligent Proposal’, (Oxford Business Law Blog, 7 September 2022) <https://blogs.law.ox.ac.uk/blog-post/2022/09/eus-corporate-sustainability-due-diligence-directive-excessively-diligent> accessed 23 April 2023.

128 See also paras. 45-48 of the preamble.

129 Amendments 161, 163.

130 Amendments adopted by the European Parliament supra note, Amendment 234-40.