Human Rights Due Diligence: Why It Matters for Australian Businesses in 2025

What is Human Rights Due Diligence and Why Does it Matter?

Human Rights Due Diligence (HRDD) is a structured framework that enables businesses to identify, assess, and address human rights risks across their operations and supply chains. At its core, HRDD is about ensuring that organisations respect human rights and prevent harm to people, while also protecting their own reputation and resilience.

The concept is rooted in the UN Guiding Principles on Business and Human Rights (UNGPs), endorsed by the UN Human Rights Council in 2011. These principles establish the global standard for businesses to:

• Make a public commitment to respect human rights
• Implement human rights due diligence
• Provide access to remedy when harm occurs

Although the UNGPs are not legally binding, they have shaped global legislation, corporate governance, and reporting requirements. Today, investors, regulators, and customers expect companies to demonstrate real action on human rights, not just promises.

The Connection Between Human Rights Due Diligence and Modern Slavery

In Australia, the Modern Slavery Act 2018 (Cth) requires large businesses and entities to publish annual statements on how they are addressing modern slavery risks. These include human trafficking, forced labour, debt bondage, child labour, and other severe human rights abuses.

While HRDD is not yet a legal requirement under the Act, the government has made it clear that effective reporting must include human rights due diligence practices. This ensures companies are not just “ticking a box” but actively managing risks within their supply chains.

Globally, we are also seeing a stronger push for mandatory HRDD:

• European Union Corporate Sustainability Due Diligence Directive (2024)
• German Supply Chain Due Diligence Act
• French Duty of Vigilance Law
• Proposed HRDD laws in South Korea and Thailand

Australian businesses that adopt HRDD now will be better prepared to meet these evolving international standards and remain competitive in global markets.

Business Involvement in Human Rights Impacts

Under the UNGPs, a business can be involved in human rights impacts in three main ways:

• Cause – e.g., unsafe working conditions leading to injury.
• Contribute – e.g., procurement practices that drive suppliers to exploit workers.
• Directly Linked – e.g., sourcing products made with forced labour in the supply chain.

The appropriate response depends on the involvement. A company may need to stop harmful practices, remediate impacts, or use its leverage with partners to mitigate risks.

Why Businesses Undertake Human Rights Due Diligence

Companies across Australia and beyond are integrating HRDD because it delivers both compliance and competitive advantage.

• Regulatory Compliance – Anticipating and adapting to mandatory due diligence laws worldwide.
• Reputation & Trust – Investors, customers, and employees increasingly demand transparency on human rights practices.
• Commercial Resilience – Strengthening supply chains and reducing disruptions caused by unethical practices.
• Litigation Protection – Reducing exposure to lawsuits related to human rights or climate-related claims.
• Values & ESG Commitments – Aligning with sustainability strategies and demonstrating genuine ethical leadership.

In short, HRDD is not just about avoiding harm – it’s about building a stronger, more responsible, and more resilient business.

How to Implement Human Rights Due Diligence in Your Business

Implementing HRDD into business practices is not a one-off task – it involves embedding a structured approach for managing human rights risks across operations and supply chains. Here’s how businesses can get started.

Step 1 – Develop and Human Rights Policy

• Clearly state the organisation’s commitment to respect human rights and to ensure that its associated suppliers and operations do the same.
• Engage with peers and industry leaders to learn best practices

Step 2 – Evaluate the Risks

Rather than trying to address every possible issue, adopt a risk-based approach, focus on the most severe risks first.

• Review existing risk management frameworks
• Identify sector-specific risks and high-risk geographies
• Evaluate risks across operations, supply chains and services

These are assessed by:

• Scale – How harmful is the impact?
• Scope – How many people are affected?
• Remediation – Can the harm be fixed or mitigated?

Step 3 – Engage Stakeholders Meaningfully

Engagement should not be a box-ticking exercise. Companies must listen to workers, communities, and NGOs – especially vulnerable groups such as women, migrants, and children – to understand real-world impacts.

Step 4 – Review Business Models and Practices

Review risk management frameworks

Examine sourcing, purchasing and investment decisions

Step 5 – Establish Grievance Mechanisms

Provide accessible channels for individuals to raise concerns ensuring legitimacy and transparency.

Step 6 – Monitor and Improve Continuously

1. Integrate & Take Action – Update policies, train staff, revise procurement practices
2. Track & Measure – Collect data, audit performance, and monitor progress
3. Communicate Transparently – Report openly via modern slavery statements, sustainability reports, and investor briefings.

Building Responsible and Resilient Businesses

Modern slavery and broader human rights abuses remain a material risk for many companies, especially those operating in high-risk industries or sourcing from complex supply chains.

Human Rights Due Diligence provides a roadmap for businesses to act responsibly, meet regulatory expectations, and build stakeholder trust. By embedding Human Rights Due Diligence (HRDD) into risk management and sustainability strategies, organisations can protect people, enhance resilience, and future-proof their operations.

Modern slavery is not only a profound human rights violation but also a serious business risk with legal, financial, reputational, and commercial consequences. As Commissioner Evans highlights, human rights due diligence provides a globally recognised framework to identify, assess, and address these risks across operations and supply chains.

The Australian Government is now consulting on strengthening the Modern Slavery Act with a due diligence requirement. This signals an urgent shift: regulatory expectations in Australia and globally are evolving rapidly, and businesses that act now will be better positioned to comply, compete, and lead.

Our HRDD workshop is your opportunity to:

• Understand what practical due diligence looks like in line with international best practice.
• Explore how due diligence supports stronger risk management, stakeholder trust, and resilient supply chains.
• Prepare your organisation for upcoming reforms, ensuring you stay ahead of legal obligations and market expectations.
• Now is the time for Australian businesses to move beyond reporting and embed human rights due diligence as a strategic practice that protects people, builds trust, and secures long-term commercial resilience.