A/HRC/35/32
child labour, establish fair working hours, strengthen monitoring fair work and pay and
provide multiple training and consultation programmes for suppliers and new employees.
35.
One survey on small and medium-sized enterprises showed some of the ways they
are connected to large businesses. There may be connections through formal supply chain
relationships, as well as more informal or general links with larger business enterprises. A
large proportion of such enterprises (77 per cent) who responded to the survey considered
that they were part of a supply chain, with the largest supply relationship contributing
between one quarter and one half of the their total turnover in 30 per cent of cases. 48 Their
role in the supply chain tended to harness their ability to provide a niche product or service
that larger businesses were unable to provide themselves or could not provide as cheaply.
Of the businesses who considered that they were part of a supply chain, two thirds provided
a standardized product or service, half provided a bespoke product service and one in five
provided some form of research and development.
36.
Almost half of small and medium-sized enterprises form non-supply chain
relationships with larger business enterprises, primarily to become more established in their
marketplace and with the hope of gaining additional business. This networking is crucial
for such enterprises in sectors dominated by large businesses, which can spur on smaller
enterprises in the supply chain to improve technological and human capital. 49 In the abovementioned survey, one quarter of small and medium-sized enterprises were involved in
research and development partnerships with larger business enterprises, while 15 per cent
were in more formal joint ventures with large enterprises. A further 15 per cent received
some mentoring from a larger business as the latter sought to enhance productivity through
their supply chain. Links with larger businesses may provide opportunities for small and
medium-sized enterprises to alleviate some of the problems that their resource poverty may
cause for the business and human rights agenda. With existing supply-chain relationships
already in place, and a culture of mentoring and advice-giving, it is possible to see how
human rights due diligence can be implemented through a partnership between smaller and
larger businesses and how the latter can both set standards that dictate conditions to the
former and support capacity-building to enhance due diligence procedures.50
37.
Human rights criteria may be a precondition in calls for tender or a factor when
choosing suppliers. This seems to work in practice, at least in some instances, and it has
been claimed that supply chain pressures are proving to be a more powerful force for social
and environmental change than local regulation. 51
38.
In practice, contractual clauses on “respect for human rights” raise a number of
questions and challenges. In using such formal business-to-business measures to incentivize
alignment with the Guiding Principles, one fundamental challenge is the fact that a typical
business contract involving immediate parties may not be able to take account of actors
throughout a long supply chain. However, this is primarily a challenge for larger business
enterprises with multi-tiered supply chains that, in line with the Guiding Principles, are
expected to exercise human rights due diligence across all tiers, beginning with the areas
where the risk of adverse human rights impacts is the most significant. For business
enterprises with large supply chains, the use of contractual clauses to incentivize suppliers
to meet their responsibility to respect human rights can thus potentially provide a useful
tool for managing risks throughout extensive networks. There is a risk, however that small
and medium-sized enterprises could simply avoid such demands by marketing their
products to other competitors that do not utilize contractual clauses and do not prioritize
48
49
50
51
D. Jamieson et al, Large Businesses and SMEs: Exploring how SMEs interact with large businesses
(ORC International, 2012). Available from
www.gov.uk/government/uploads/system/uploads/attachment_data/file/34639/12-1196-exploringhow-smes-interact-with-large-businesses.pdf.
See “Small business: a global agenda”, p. 22 (footnote 28 above).
See L. Spence, “CSR and Small Business in a European Policy Context: The Five ‘C’s of CSR and
Small Business Research Agenda 2007”, Business and Society Review, Vol. 112, Iss. 4 (December
2007), p. 533.
See G. Starcher, “Responsible Entrepreneurship: Engaging SMEs in Socially and Environmentally
Responsible Practices” (European Bahá’í Business Forum, 2005) p. 23.
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