international regulatory enforcement
Integrating Human Rights and ESG into International Regulatory Compliance: Training and Education
At the end of 2020, we published the first in a planned series of posts discussing how emerging business and human rights and ESG responsibilities have led companies to either create standalone human rights/ESG management systems or integrate human rights/ESG into existing compliance programs. That initial post identified six key components of human rights/ESG compliance programs, which are found in effective international regulatory compliance programs more generally and can help operationalize the UN Guiding Principles on Business and Human Rights (“UNGPs”). We pledged to provide subsequent posts focusing on each of those six compliance program elements, talking about their key features, and how businesses can leverage anti-corruption and other compliance programs to enhance their human rights/ESG approach.
This is the third post in our series, following posts on Governance and Policies and Procedures, and it will focus on spreading awareness through Training and Education. Providing effective training and education to employees, officers, directors, relevant third parties and others is instrumental to the success of any compliance program or management system. While the specific content of training and education efforts necessarily will differ among sectors, companies, and operations, anti-corruption training platforms and best practices can be leveraged and used to help drive efficient, effective, and memorable human rights/ESG trainings.
Training & Education: The Basics
Educating relevant company personnel and third parties on company values, requirements, and expectations is a fundamental aspect of any compliance program or management system. Training is mentioned expressly by the U.S. Federal Sentencing Guidelines, the foundation of modern legal compliance programs, which states that an effective program should “take reasonable steps to communicate … its standards and procedures, and other aspects of the compliance and ethics program,” to directors, officers, employees and, as appropriate, third parties. The Guidelines further note that the programs should be “effective” and otherwise disseminate information “appropriate” to trainees’ “respective roles and responsibilities.” U.S. Sentencing Guidelines (“USSG”) §8B2.1(b)(4)(A)-(B). The U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) FCPA Resource Guide (“FCPA Resource Guide”) elaborates:
Compliance policies cannot work unless effectively communicated throughout a company. Accordingly, DOJ and SEC will evaluate whether a company has taken steps to ensure that relevant policies and procedures have been communicated throughout the organization…. Such training typically covers company policies and procedures, instruction on applicable laws, practical advice to address real-life scenarios, and case studies. Regardless of how a company chooses to conduct its training … the information should be presented in a manner appropriate for the targeted audience, including providing training and training materials in the local language.
As these authorities and others make clear, sound practices associated with training and education include: (1) developing comprehensive training plans that are updated periodically, and consider education at all levels of organizations and among relevant third parties, beginning at induction and onboarding and with further trainings and reminders offered regularly thereafter; (2) providing training through a mix of formats, including live tailored sessions (particularly for individuals in positions of heightened risk or gatekeeping functions), online e-training, small group roundtables, “just-in-time” reminders associated with specific anticipated events and other behavioral prompts, as well as short “tool-box” updates or refreshers at the outset of meetings; (3) incorporating company values, using scenarios, hypotheticals, case studies, and lessons learned to help embed the company ethos, better enable application of key principles to situations that arise, and avoid recurrence of policy violations; (4) providing targeted training for managers and supervisors in light of their positions in the company; (5) employing methods to evaluate the effectiveness of training after it is provided; and (6) training in the local language of the audiences to facilitate comprehension. See DOJ, Evaluation of Corporate Compliance Programs (“ECCP”), at 5-6. Finally, in addition to training and education, authorities note that good programs will include mechanisms to provide guidance and advice, including in real-time, on complying with the company’s policies. See Resource Guide, at 61.
Sound anti-corruption and other international regulatory and compliance programs follow these principles, though with COVID-19 most companies have relied more heavily on online and remote trainings, with additional modifications that could be followed longer term. Further, for many companies, anti-corruption education platforms are mature and well-developed, offering sophisticated and engaging training throughout an organization and among key third parties. These same principles can be helpfully used, and the same platforms can be leveraged, for human rights/ESG trainings.
Learning from Anti-Corruption for Effective Training and Education for Human Rights/ESG
The UNGPs specifically contemplate that, to embed a responsibility to respect human rights, business enterprises should create a human rights policy commitment that “is publicly available and communicated internally and externally to all personnel, business partners and other relevant parties.” UNGP 16(d). As the Office of the High Commissioner has expressed in its Interpretive Guide to the UNGPs, “‘Embedding’ is the macro process of ensuring that all personnel are aware of the enterprise’s human rights policy commitment, understand its implications for how they conduct their work, are trained, empowered and incentivized to act in ways that support the commitment, and regard it as intrinsic to the core values of the workplace.” Office of the High Commissioner for Human Rights, The Corporate Responsibility to Respect Human Rights: An Interpretive Guide (“UNGPs Interpretive Guide”), at 46-47; id. at 78 (“the more an enterprise has embedded respect for human rights into its values and the more it has prepared its personnel for ethical dilemmas, through training, scenarios, lessons learned, decision trees and similar processes, the more likely it will be able to identify appropriate and timely responses.”). As with other compliance programs and management systems, it is no surprise that training also is key for human rights/ESG.
Like other international regulatory and compliance programs, effective human rights/ESG training also:
- Is thoughtfully planned. Human rights/ESG training should be included in a company’s more comprehensive training plan, potentially in conjunction with other areas of international regulatory and compliance trainings. As part of that plan, developing clear goals with each training – essentially, what is the training trying to achieve and accomplish with that particular education session – will help create an organized, coherent and tailored approach. Ideally, as with other compliance areas, human rights/ESG training will begin for company-affiliated personnel, including employees, officers, directors and relevant third parties, when they begin their relationships with the company, and regularly thereafter. Likewise, human rights/ESG training – as with good practice for anti-corruption and other international regulatory and compliance areas – includes a mapping of relevant personnel who should receive tailored, live and/or enhanced training, to ensure that those with the highest risk of being connected to negative impacts have the greatest understanding of their role, responsibilities, and how to avoid causing, contributing to, or being directly linked to harms.
- Is practical and tailored. There can be a tendency to focus on theoretical aspects of human rights/ESG during training and education sessions, delving into concepts of how a human right arises, or the key international instruments that memorialize them. It is almost always more effective to focus on the practical aspects of human rights/ESG as applied to the company, its operations, and its stakeholders. Indeed, some companies refer to “human rights” or “ESG” as little as possible in human rights/ESG training, preferring instead to focus on company values and how relevant principles apply to it, to maximize its practical understanding and acceptance. For many audiences, directly translating the concepts of human rights and ESG into tangible steps that the company takes, and how to avoid and detect negative impacts, is often a worthwhile goal. In addition, understanding how the company can impact human rights/ESG issues, and how individuals may contribute to those impacts, generally leads to training sessions that are followed, understood and incorporated into operational performance. As with anti-corruption and other compliance areas, including realistic hypothetical scenarios related to human rights/ESG impacts, presenting human rights/ESG dilemmas and walking the audience through a decision-making process, and discussing lessons learned from past incidents in the sector or field all can be effective approaches. Finally, similar to the anti-corruption context, supplemental training for managers and supervisors around their specific human rights/ESG responsibilities can help further adherence to company policies and approaches.
- Is engaging. While this may seem obvious, human rights/ESG training can borrow from effective techniques used in other international regulatory and compliance trainings to engage audiences. This is particularly relevant after personnel begin receiving second and third rounds of human rights/ESG training, and tedium can arise. Among the techniques that have been effective for other compliance trainings include role playing, quizzes, game show formats, and various participatory strategies. The strategic use of photographs also can be particularly effective. Especially for human rights/ESG, impacts on stakeholders can be significant, and providing visual depictions of those effects alongside key principles and messages can help underscore critical points that are recalled long after the training concludes. Finally, keeping trainings at a manageable length – optimally less than one hour – assists in maintaining focus and comprehension. Four sessions of 30 minute trainings and discussions may be more effective than two hours of training in one sitting, where participants can fatigue and lose focus.
- Is persuasive, and presented by individuals with both substantive knowledge and credibility. Live training provided by individuals who lack an understanding of the relevant disciplines, and thus cannot fluidly respond to factual questions or participate in the challenging ethical discussions that often arise in human rights/ESG training, can quickly lose an audience. Training is often most effective when given by personnel perceived as peers by recipients – such as current company employees or industry veterans – who are perceived to have a strong sense of the relevant operational approaches and on-the-ground challenges. As with other areas of international regulatory compliance, human rights/ESG training should be conducted in local languages to maximize comprehension.
- Is offered strategically through different formats. Trainings through different delivery devices, as with other areas of international regulatory compliance, help emphasize key points being made. In addition, people learn in different ways. Thus, live training may be more effective for some recipients than others, and roundtables more effective than lecture style. Further, companies increasingly have used “just-in-time” trainings in the context of human rights/ESG training programs. For instance, these might include a short reminder of the company’s sexual harassment policy before holiday parties, or the company’s discrimination requirements ahead of recruitment drives. In addition, companies increasingly have been using “nudges” to support their human rights/ESG trainings and drive behaviors, such as visual reminders about worker safety as employees leave company cafeterias before heading to factory floors.
- Is effective. As with all other areas of international regulatory compliance, measuring the effectiveness of human rights/ESG training is important. Testing effectiveness in this context generally has an immediate component, in terms of checking comprehension of the information provided through quizzes or tests. It also has a longer term component of whether participants are applying the learnings after the training concludes, which can be assessed during investigations and audits, and in root cause analyses in connection with human rights/ESG-related incidents.
Leveraging Anti-Corruption Training and Education Platforms for Human Rights/ESG
Beyond just learning from effective training principles for anti-corruption and other international regulatory programs, a company’s more mature platforms can be leveraged and expanded to include human rights/ESG. In fact, to help avoid “training fatigue,” current anti-corruption and international regulatory training can be adjusted to include human rights/ESG, providing substantive benefits and obvious efficiencies. That includes live trainings, e-trainings, and workshops, and encompass induction trainings, annual Code of Conduct training and refreshers, or annual in-person trainings. Including human rights/ESG content — such as in company policies and procedures, or guidance on identifying human rights red flags — is straightforward. The same is true for annual certifications: just as companies regularly ask employees to certify annually that they are unaware of any potential corruption concerns that have not been reported, those certifications can easily include human rights/ESG concerns as well.
Integrating human rights/ESG in anti-corruption and other international regulatory trainings also can be substantively beneficial. It can help recipients identify and consider the causal connections between the two areas, and spot and escalate relevant red flags – particularly as human rights/ESG is increasingly being integrated into sanctions regulations (through Global Magnitsky laws, for instance), AML enforcement (in connection with human trafficking, in particular), export controls (related to Xinjiang, as an example), and anti-corruption matters. As that integration reflects, human rights/ESG impacts often create other regulatory risks. For instance, corruption concerns may arise where authorities investigate reported subpar working conditions at a factory, or human health risks associated with pollutants. The converse is equally true: corruption and other international regulatory impacts can create human rights/ESG risks. For instance, an improper payment to a building inspector can create safety risks, or a corrupt border agent can lead to human trafficking risks. Being able to identify the red flags in one area can lead to spotting red flags for others, and thus it is natural for trainings to include all potential risk factors. While incorporating human rights/ESG within other international regulatory trainings should not dilute the substance and content of either, thinking about compliance risks holistically, with human rights/ESG as part of that process, is important in developing a deeper understanding around root causes and capacities to identify red flags when they arise.
To be clear, the kind of in-depth and tailored training that authorities recognize as appropriate for anti-corruption gatekeepers and other key personnel is typically best done separately. That might focus on employees and third parties who – because of their job function, or personal or professional histories – may have enhanced risks of negative impacts, require a deeper understanding of relevant risks, or warrant a more in-depth understanding of their responsibilities and the company’s expectations.
Human rights/ESG training approaches will naturally differ between companies, and often within business units or at operations within a company. However, leveraging the experience from anti-corruption and other international regulatory and compliance programs, as well as the infrastructure and content to create substantive and efficient training approaches, can help a company create effective education approaches and drive desired human rights/ESG behaviors.