{"id":10405,"date":"2025-10-18T07:23:58","date_gmt":"2025-10-18T07:23:58","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=10405"},"modified":"2025-10-19T11:00:35","modified_gmt":"2025-10-19T11:00:35","slug":"at-the-crossroads-of-enterprise-and-ethics","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/","title":{"rendered":"At the Crossroads of Enterprise and Ethics"},"content":{"rendered":"<blockquote><p>\u201cWe need to choose between a global market driven only by calculations of short-term profit, and one that has a human face.\u201d<\/p>\n<p><strong>&#8211; Kofi Annan<\/strong><br \/>\n(Former UN Secretary-General)<\/p><\/blockquote>\n<h2 id=\"introduction\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Businesses worldwide are run by humans and for humans. But do they have a human face? A question that has created contradictions for years now requires a structured answer. A relatively new term <strong>\u201cBusiness Human Rights\u201d (BHR)<\/strong> has emerged lately with the sole purpose of answering these unanswered questions.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Introduction\" >Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Definitions_and_Components\" >Definitions and Components<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Human_Rights_in_India\" >Human Rights in India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Landmark_Judgments_on_Human_Rights\" >Landmark Judgments on Human Rights<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Business_and_Ethics_A_Contradiction\" >Business and Ethics: A Contradiction?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Scope_of_Business_Human_Rights\" >Scope of Business Human Rights<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Friedmans_Theory_vs_Human_Rights_Approach\" >Friedman\u2019s Theory vs. Human Rights Approach<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Corporate_Social_Responsibility_CSR_vs_Business_Human_Rights_BHR\" >Corporate Social Responsibility (CSR) vs. Business Human Rights (BHR)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#CSR_Under_Indian_Law\" >CSR Under Indian Law<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Responsible_Business_Conduct_RBC\" >Responsible Business Conduct (RBC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#The_Concept_Of_BHR\" >The Concept Of BHR<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#The_United_Nations_Process\" >The United Nations Process<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Soft_International_Standards\" >Soft International Standards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#The_Global_Compact\" >The Global Compact<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Historical_Evolution_of_BHR\" >Historical Evolution of BHR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Following_Soft_Standards\" >Following Soft Standards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Hard_Binding_Standards\" >Hard Binding Standards<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Hard_Binding_Standards-2\" >Hard Binding Standards<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#1_Mandatory_Human_Rights_Due_Diligence_mHRDD\" >1. Mandatory Human Rights Due Diligence (mHRDD)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#2_Corporate_Sustainability_Due_Diligence_Directive_CSDDD\" >2. Corporate Sustainability Due Diligence Directive (CSDDD)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#3_Import_Ban\" >3. Import Ban<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#4_Tort_Law_Foundations\" >4. Tort Law Foundations<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Need_for_Transparency_and_Accountability\" >Need for Transparency and Accountability<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Human_Rights_and_Socio-Political_Audit\" >Human Rights and Socio-Political Audit<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/at-the-crossroads-of-enterprise-and-ethics\/#Conclusion-2\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>The term \u201cBusiness Human Rights\u201d sounds like a right which might involve both the concepts of business laws as well as human rights. It is an interdisciplinary concept that tries to strike a perfect balance between the commercial world and the humanitarian side of that commercial world.<\/p>\n<h2 id=\"definitions\"><span class=\"ez-toc-section\" id=\"Definitions_and_Components\"><\/span>Definitions and Components<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Business Human Rights consists of three individual words which basically serve as its ingredients. Let us first see the denotative definition of each of them.<\/p>\n<ul>\n<li><strong>Business:<\/strong> According to Merriam-Webster Dictionary, \u201ca usually commercial or mercantile activity engaged in as a means of livelihood.\u201d<\/li>\n<li><strong>Human Rights:<\/strong> \u201cA basic right (such as the right to be treated well or the right to vote) that many societies believe every person should have.\u201d<\/li>\n<li><strong>Legal Definition:<\/strong> As per Section 2(13) of the Income Tax Act, 1961, &#8216;business&#8217; includes any trade, commerce, manufacture, or any adventure in the nature of trade, commerce, or manufacture.<\/li>\n<li><strong>UN Definition:<\/strong> Human Rights are \u201cthe rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status.\u201d<\/li>\n<\/ul>\n<h2 id=\"human-rights-in-india\"><span class=\"ez-toc-section\" id=\"Human_Rights_in_India\"><\/span>Human Rights in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Human Rights are like an ocean \u2014 vast and nourishing, touching every shore without discrimination. Article 21 of the Indian Constitution is the cornerstone of human rights law in India. Several landmark cases have expanded its scope.<\/p>\n<h3 id=\"landmark-cases\"><span class=\"ez-toc-section\" id=\"Landmark_Judgments_on_Human_Rights\"><\/span>Landmark Judgments on Human Rights<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>Olga Tellis v. Bombay Municipal Corporation (1985):<\/strong> Right to livelihood as part of the Right to Life under Article 21.<\/li>\n<li><strong>Vaman Rao v. State of Maharashtra (1981):<\/strong> Limited amendment of fundamental rights under the Basic Structure Doctrine.<\/li>\n<li><strong>State of Madras v. Champakam Dorairajan (1951):<\/strong> Right to equality and prohibition of caste-based discrimination under Article 15.<\/li>\n<li><strong>Minerva Mills Ltd. v. Union of India (1980):<\/strong> Protection of fundamental rights and judicial review as part of the Basic Structure.<\/li>\n<li><strong>I.C. Golaknath v. State of Punjab (1967):<\/strong> Fundamental rights cannot be abridged by constitutional amendment.<\/li>\n<li><strong>Sunil Batra v. Delhi Administration (1978):<\/strong> Prisoners have human rights, including protection from torture and inhuman treatment.<\/li>\n<li><strong>Francis Coralie Mullin v. Administrator, Delhi (1981):<\/strong> Expanded Article 21 to include the right to live with human dignity.<\/li>\n<li><strong>Unni Krishnan v. State of Andhra Pradesh (1993):<\/strong> Recognized right to education as part of Article 21.<\/li>\n<li><strong>Justice K.S. Puttaswamy v. Union of India (2017):<\/strong> Right to privacy is intrinsic to Article 21.<\/li>\n<li><strong>Bandhua Mukti Morcha v. Union of India (1984):<\/strong> Linked right against exploitation to a dignified life.<\/li>\n<\/ul>\n<h2 id=\"business-and-ethics\"><span class=\"ez-toc-section\" id=\"Business_and_Ethics_A_Contradiction\"><\/span>Business and Ethics: A Contradiction?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The worlds of enterprise and ethics might seem contradictory. Since the sole purpose of a business house is to make profit, it might seem impossible to merge the idea of protecting human rights with business profitability. But that is precisely what Business Human Rights (BHR) seeks to address.<\/p>\n<p>BHR caters to the need for businesses to have independent responsibilities to respect human rights. The key question: Is this a moral responsibility or a legally binding obligation?<\/p>\n<h3 id=\"scope\"><span class=\"ez-toc-section\" id=\"Scope_of_Business_Human_Rights\"><\/span>Scope of Business Human Rights<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The scope of BHR is vast and includes:<\/p>\n<ul>\n<li><strong>Organized Businesses:<\/strong> e.g., Companies<\/li>\n<li><strong>Non-organized Businesses:<\/strong> e.g., a tea seller, a farmer<\/li>\n<li><strong>Profit-Making Organizations:<\/strong> e.g., a partnership firm, a company<\/li>\n<li><strong>Non-Profit Organizations:<\/strong> e.g., NGOs<\/li>\n<\/ul>\n<p>Therefore, any institution that is not part of the government but has the potential to breach human rights falls under the ambit of Business Human Rights.<\/p>\n<h2 id=\"friedman-theory\"><span class=\"ez-toc-section\" id=\"Friedmans_Theory_vs_Human_Rights_Approach\"><\/span>Friedman\u2019s Theory vs. Human Rights Approach<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The concept of BHR contradicts the economic ideology of Milton Friedman. In his 1970 essay <em>\u201cA Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits\u201d<\/em>, Friedman argued that a company\u2019s only responsibility is to its shareholders. He believed business exists solely to make profit.<\/p>\n<p>However, the global narrative gradually shifted from a profit-centric enterprise to an ethically sound enterprise. This evolution passed through three distinct phases:<\/p>\n<ol>\n<li><strong>Business or Human Rights:<\/strong> A belief that the two cannot coexist; businesses must choose one over the other.<\/li>\n<li><strong>Business of Human Rights:<\/strong> A critique highlighting how even human rights fields have become commercialized (e.g., CSR consultancies).<\/li>\n<li><strong>Business and Human Rights:<\/strong> The modern interdisciplinary field promoting the coexistence of ethics and enterprise.<\/li>\n<\/ol>\n<h2 id=\"csr-vs-bhr\"><span class=\"ez-toc-section\" id=\"Corporate_Social_Responsibility_CSR_vs_Business_Human_Rights_BHR\"><\/span>Corporate Social Responsibility (CSR) vs. Business Human Rights (BHR)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Though similar in intent, CSR and BHR differ fundamentally in approach. Below is a comparison:<\/p>\n<table border=\"1\" cellspacing=\"0\" cellpadding=\"8\">\n<thead>\n<tr>\n<th>Aspect<\/th>\n<th>Corporate Social Responsibility (CSR)<\/th>\n<th>Business Human Rights (BHR)<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Nature<\/td>\n<td>Older concept focusing on charity and reputation<\/td>\n<td>Emerging concept focusing on rights and ethics<\/td>\n<\/tr>\n<tr>\n<td>Objective<\/td>\n<td>How profits are spent<\/td>\n<td>How profits are made<\/td>\n<\/tr>\n<tr>\n<td>Approach<\/td>\n<td>Voluntary; may act as a whitewash for violations<\/td>\n<td>Mandatory respect for human rights during operations<\/td>\n<\/tr>\n<tr>\n<td>Legal Backing<\/td>\n<td>Statutorily mandated under Section 135 of the Companies Act, 2013<\/td>\n<td>No statutory mandate, but evolving globally through UN Guiding Principles<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3 id=\"csr-law\"><span class=\"ez-toc-section\" id=\"CSR_Under_Indian_Law\"><\/span>CSR Under Indian Law<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>India is the only country that has statutorily mandated compliance with CSR. According to <strong>Section 135 of The Companies Act, 2013<\/strong>:<\/p>\n<ul>\n<li>Companies with an annual turnover of \u20b91000 crore, or<\/li>\n<li>Net worth of \u20b9500 crore, or<\/li>\n<li>Net profit of \u20b95 crore<\/li>\n<\/ul>\n<p>&#8230;must allocate 2% of their average net profits from the preceding three years for CSR activities.<\/p>\n<h2 id=\"rbc\"><span class=\"ez-toc-section\" id=\"Responsible_Business_Conduct_RBC\"><\/span>Responsible Business Conduct (RBC)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Responsible Business Conduct (RBC) is closely related but broader in scope. It is guided by the <strong>OECD Guidelines for Multinational Enterprises<\/strong> and includes:<\/p>\n<ul>\n<li>Human rights<\/li>\n<li>Consumer rights<\/li>\n<li>Anti-competitive behavior<\/li>\n<li>Anti-corruption laws<\/li>\n<li>Tax compliance<\/li>\n<\/ul>\n<p>Since India is not a member of the OECD, it is not under a legal obligation to follow RBC, though the principles are increasingly influencing Indian business ethics.<\/p>\n<h2 id=\"conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>After delving into BHR and its parallel concepts, it can be concluded that <strong>Business Human Rights is not just a field \u2014 it is a lens<\/strong> through which businesses can analyze and interpret their role in society. It redefines the purpose of enterprise: not just to make profit, but to make profit responsibly and ethically.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Concept_Of_BHR\"><\/span>The Concept Of BHR<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The concept of BHR is still an emerging concept in the world of corporate law. It&#8217;s historical evolution dates back to early 1970s. The main three Organisations that primarily dealt with this issue are &#8211;<\/p>\n<ul>\n<li>The United Nations (UN)<\/li>\n<li>International Labour Organisation (ILO)<\/li>\n<li>Organisation for Economic Co-operation and Development (OECD)<\/li>\n<\/ul>\n<h3 id=\"united-nations-process\"><span class=\"ez-toc-section\" id=\"The_United_Nations_Process\"><\/span>The United Nations Process<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The United Nations started the process but couldn&#8217;t adopt anything material, as UN intended to adopt something which would be a binding code of conduct.<\/p>\n<h3 id=\"soft-standards\"><span class=\"ez-toc-section\" id=\"Soft_International_Standards\"><\/span>Soft International Standards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Fortunately, two soft international standards were adopted :<\/p>\n<ul>\n<li>OECD Guidelines for Multi-National Enterprises, 1976<\/li>\n<li>ILO Declaration, 1977<\/li>\n<\/ul>\n<h3 id=\"global-compact\"><span class=\"ez-toc-section\" id=\"The_Global_Compact\"><\/span>The Global Compact<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In the year 1999 the Global Compact was achieved which included 9 principles relating to labourer, human rights, environment and later on one more principle relating to anti-corruption got added. More than 20,000 participants in the world joined this Global Compact which included countries, universities and other bodies as well. The United Nations Development Program (UNDP), 1966 is the Bible .<\/p>\n<h3 id=\"bhr-evolution\"><span class=\"ez-toc-section\" id=\"Historical_Evolution_of_BHR\"><\/span>Historical Evolution of BHR<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In the historical evolution of BHR, there has been a continuing cycle of high and low tide.<\/p>\n<table>\n<thead>\n<tr>\n<th>Phase<\/th>\n<th>Description<\/th>\n<th>Example<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>High Tide Phase<\/td>\n<td>The High Tide phase is when countries are trying to adopt something which is legally binding.<\/td>\n<td>For eg. &#8211; the 1990 code of conduct<\/td>\n<\/tr>\n<tr>\n<td>Low Tide Phase<\/td>\n<td>The Low Tide phase is when countries are trying to adopt something which is a soft standard ie. Something which is not legally binding or enforceable.<\/td>\n<td>For eg. &#8211; the Global Compact of 1999, the ILO, the OECD guielines<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3 id=\"soft-standards-following\"><span class=\"ez-toc-section\" id=\"Following_Soft_Standards\"><\/span>Following Soft Standards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Now, these soft standards inspite of not being enforceable still needs to be followed by countries who are doing their business in any OECD complied country or have allowed any OECD complied country based business house to run their business in any non-OECD country. Hence, India in spite of not being a member of the OECD still shall follow the OECD guidelines under certain circumstances.<\/p>\n<h3 id=\"hard-binding-standards\"><span class=\"ez-toc-section\" id=\"Hard_Binding_Standards\"><\/span>Hard Binding Standards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After this comprehensive analysis of the soft standards, it&#8217;s time that the hard binding standards are to be discussed.<\/p>\n<h2 id=\"hard-binding-standards\"><span class=\"ez-toc-section\" id=\"Hard_Binding_Standards-2\"><\/span>Hard Binding Standards<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The hard binding standards are basically the legally binding standards. These hard binding standards are given as follows:<\/p>\n<h3 id=\"mandatory-human-rights-due-diligence\"><span class=\"ez-toc-section\" id=\"1_Mandatory_Human_Rights_Due_Diligence_mHRDD\"><\/span>1. Mandatory Human Rights Due Diligence (mHRDD)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>It was first adopted by France, followed by Germany, Norway, and Switzerland.<\/p>\n<h3 id=\"corporate-sustainability-due-diligence\"><span class=\"ez-toc-section\" id=\"2_Corporate_Sustainability_Due_Diligence_Directive_CSDDD\"><\/span>2. Corporate Sustainability Due Diligence Directive (CSDDD)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This was adopted by the European Union. It applies to all the 27 member countries of the European Union. It applies to India indirectly (in the same way as OECD guidelines are applied indirectly to India).<\/p>\n<p>In spite of immense backlash that it faced, it is expected to come into force on and from 2026.<\/p>\n<h3 id=\"import-ban\"><span class=\"ez-toc-section\" id=\"3_Import_Ban\"><\/span>3. Import Ban<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Various countries follow various regulations and principles which may lead to import bans at times.<\/p>\n<p>For example, if a country makes a regulation that goods manufactured by forced labour or child labour cannot be imported, then those goods are prohibited from entering that country. Hence, this regulation might create an import ban.<\/p>\n<h3 id=\"tort-law-foundations\"><span class=\"ez-toc-section\" id=\"4_Tort_Law_Foundations\"><\/span>4. Tort Law Foundations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are various tort law cases which work as the foundation of the Business and Human Rights (BHR) law.<\/p>\n<ul>\n<li>The landmark case of <em>Donoghue v. Stevenson<\/em> if studied from a different lens, shall serve as a Business Human Rights case. It is not just a case of mere negligence, but also a violation of a basic human right.<\/li>\n<li>The famous UK Supreme Court judgment in <em>Vedanta Resources Plc and Another v. Lungowe and Others (2019)<\/em> may also work as a guideline to the law of Business Human Rights (BHR). It stated that if the subsidiary company commits any human rights violation, then the parent company (even if located in another country, such as England) shall be held liable.<\/li>\n<\/ul>\n<h2 id=\"need-for-transparency\"><span class=\"ez-toc-section\" id=\"Need_for_Transparency_and_Accountability\"><\/span>Need for Transparency and Accountability<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Post the comprehensive exploration of how business and human rights interact, critics might question the measurement and standardization of Human Rights in Business or Business Human Rights.<\/p>\n<p>What can be considered a breach of BHR, and to what extent a breach can lead to legal liability for business houses, may become controversial in the absence of a transparent socio-political audit.<\/p>\n<h3 id=\"human-rights-audit\"><span class=\"ez-toc-section\" id=\"Human_Rights_and_Socio-Political_Audit\"><\/span>Human Rights and Socio-Political Audit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Hence, a transparent account of the Human Rights Audit or the Socio-Political Audit is the need of the hour to strike the perfect balance between business goals and human rights goals.<\/p>\n<p>Balancing enterprise with human rights is no longer optional\u2014it is imperative. By embedding ethical principles into corporate practices, companies build lasting trust.<\/p>\n<h2 id=\"conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion-2\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It can be concluded that the true measure of progress is not only profit, but also positive human impact. Businesses today are not just economic actors but stewards of human rights.<\/p>\n<p>Therefore, at the crossroads of enterprise and ethics lies a profound responsibility.<\/p>\n\n\n<br><br>\n<blockquote>\n  <p>\n    <strong>Award-Winning Article Written By: Ms.Swagata Biswas<\/strong>\n  <\/p>\n  <figure>\n    <img decoding=\"async\" \n      src=\"https:\/\/www.legalserviceindia.com\/images\/ae-1.png\" \n      alt=\"Certificate of Excellence awarded by Legal Service India\" \n      style=\"border: 0; width: auto; height: auto;\">\n    <figcaption>\n      Authentication No: OT565755374271-18-1025\n    <\/figcaption>\n  <\/figure>\n<\/blockquote>\n<\/p>","protected":false},"excerpt":{"rendered":"<p>\u201cWe need to choose between a global market driven only by calculations of short-term profit, and one that has a human face.\u201d &#8211; Kofi Annan (Former UN Secretary-General) Introduction Businesses worldwide are run by humans and for humans. But do they have a human face? A question that has created contradictions for years now requires<\/p>\n","protected":false},"author":517,"featured_media":8921,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"two_page_speed":[],"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[20],"tags":[992,2474],"class_list":{"0":"post-10405","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-company-law","8":"tag-business-law","9":"tag-human-rights-law"},"jetpack_featured_media_url":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-content\/uploads\/2025\/09\/u49-WAQF-2025.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/10405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/users\/517"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/comments?post=10405"}],"version-history":[{"count":0,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/10405\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/media\/8921"}],"wp:attachment":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/media?parent=10405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/categories?post=10405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/tags?post=10405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}