Human Rights in the Void? Due Diligence in the UN Guiding Principles on Business and Human Rights

Conflict Minerals and Supply Chain Due Diligence: An Exploratory Study of Multi-tier Supply Chains

“…This approach appeared to be adequate for the following four reasons: (1) To our knowledge, research on both, due diligence outside of financial contexts and conflict minerals is in its early stages (cp. Sarfaty, 2015) with only few published articles (e.g., Fasterling and Demuijnck, 2013;Muchlinski, 2012;Rotter et al, 2014;Sarfaty, 2015); (2) SCDD on conflict minerals requires investigating multiple actors along various tiers of the supply chain. Therefore, the issue at hand constitutes a complex research problem rendering it to naturalistic inquiry in which insights are induced by interpretative means (Lincoln and Guba, 1985); (3) Case study research is well-suited to study complex phenomena from different angles and to compare various organizational situations (Eisenhardt, 1989;Yin, 1981;; (4) The triangulation of data from multiple sources allows for mitigation of the social desirability bias which is inherent in the topic at stake (Crane, 1999).…”

“…Hence, the potential set of measures for the management of social problems in mineral supply chains is diminished down to few viable processes linked to risk identification that are prevalent among firms: certification schemes, chains of custody, traceability, and due diligence processes (Bouslah et al, 2010;Doorey, 2011;Epstein and Yuthas, 2011;Fasterling and Demuijnck, 2013;Jaffee, 2010;Morali and Searcy, 2013). Table 1 provides an overview of these concepts and illustrates their main features for risk identification.…”

“…Yet, more and more the concept is also applied to implement regulatory frameworks, such as, the UNHCR Guiding Principles on Business and Human Rights (Fasterling and Demuijnck, 2013) or the Dodd-Frank Act. The latter is particularly important in the context of SCDD as it sets a new landmark: The Dodd-Frank Act provides an obligation for firms that file reports with the United States Securities and Exchange Commission (SEC) to screen their extended supply chains for conflict minerals.…”

“…**** Please insert Table 10 about here **** External tools and support systems enable standardized information exchange between firms which is a central tenet of SCDD (Fasterling and Demuijnck, 2013;New, 2010;Pagell and Wu, 2009). In particular, tools and programs developed by the Conflict Free Sourcing Initiative (CFSI) are facilitating the development of governance systems and information exchange between upstream and downstream actors.…”

“…Furthermore, implementing SCDD could be very costly depending on a firm's supplier portfolio (Fasterling and Demuijnck, 2013). Especially in the upstream supply chain, substantial investments are required to establish fundamental mechanisms.…”