Beyond Borders: Exploring The Role of Arbitration in Enforcing Mandatory Human Rights Due Diligence Across Global Supply Chains

Despite the recent global shift towards hard law regulation of corporate social responsibility, human rights violations continue to persist across global supply chains; businesses are rarely held accountable for their harmful practices. This Article examines two key instruments that regulate corporate responsibility with respect to human rights, with a particular focus on their enforcement and liability mechanisms. The first is international soft law instruments, specifically the United Nations Guiding Principles on Business and Human Rights, as well as the Organization for Economic Co-operation and Development guidelines. The second is regional and domestic hard laws, including the Corporate Sustainability Due Diligence Directive (EU), the Corporate Duty of Vigilance Law (France), and the Supply Chain Due Diligence Act (Germany). Through an examination of both soft and hard law instruments, this Article concludes that while international soft law mechanisms establish global standards for due diligence, the absence of legal liability for non-compliance renders them ineffective in addressing corporate human rights abuses in global supply chains. Furthermore, although recently enacted human rights due diligence (“HRDD”) laws hold significant potential to make a meaningful change, their effectiveness is constrained by the limitations inherent in existing enforcement and liability mechanisms. To end corporate impunity, this Article endorses a hard law approach to HRDD; it further puts forward a bold proposal: while effective judicial mechanisms remain paramount in safeguarding human rights in global supply chains, arbitration, particularly mandatory arbitration, could serve as a pivotal tool in enhancing corporate accountability and liability. Mandatory arbitration, though not commonly used in practice, aligns with the emerging legislative trend towards mandatory HRDD. By providing a structured yet flexible forum for resolving complex cross-border HRDD issues, mandatory arbitration complements existing judicial mechanisms, specifically in situations where these mechanisms are unavailable or inaccessible. Nevertheless, it is important to note that the design and implementation of mandatory arbitration under HRDD laws presents significant challenges. Substantial efforts are required to end corporate impunity across global supply chains and ensure victims’ access to remedy and justice.