Overview
Human rights due diligence demands for defense companies are rapidly expanding. Those demands come from regulations regarding defense and dual use articles, and increasingly autonomous weaponry, along with broad human rights laws and accountability measures that compel or incentivize due diligence. The breadth of these demands requires comprehensive programmatic responses, covering upstream suppliers and downstream customers and end- users, encompassing risk identification and mitigation, monitoring the use of company products, and global grievance mechanisms.
Defense Regulations
A variety of domestic regulations compel human rights considerations for defense sales. In the US for instance, the Foreign Assistance Act of 1961 (FAA) establishes provisions governing foreign military sales and direct commercial sales to foreign consumers, including foreign governments. Section 502B(a)(1) of the FAA states that a "principal goal" of US foreign policy is to "promote the increased observance of internationally recognized human rights by all countries, and section 502B(a)(2) prohibits the sale of defense articles or military assistance, and restricts crime control-related licenses, for "any country the government of which engages in a consistent pattern of gross violations of internationally recognized human rights." In addition, although the Trump Administration revoked the Biden Administration's 2023 Conventional Arms Transfer Policy, a subsequent executive order instructed the Secretaries of State and Defense to reinstate the prior Trump Administration policy. According to that policy, arms transfer decisions must take into consideration several factors, including "human rights and international humanitarian law" (IHL), and the risk that an arms transfer would contribute to abuses of human rights. Other governments have similar and even more restrictive requirements, with export control laws commonly including human rights-related provisions, compelling human rights and IHL evaluations by companies of potential customer usages of technologies and defense articles. Notably, there have been a bevy of recent cases against defense companies and governments under these domestic export requirements, and Nicaragua even filed a recent lawsuit against Germany before the International Court of Justice.
Autonomous Weaponry
Domestic regulation also is evolving to encompass Lethal Autonomous Weapon Systems (LAWS). In the US, the Department of War amended DoD Directive 3000.09 to include human rights due diligence associated with autonomous weapons systems, requiring that legal reviews of system acquisitions include consistency with applicable international law and IHL, and that operational reviews include a focus on unintended bias, transparent and auditable methodologies, and avoiding unintended consequences. The UK likewise integrates ethical and IHL principles into the development and use of autonomous weaponry systems. While many, including the UN Secretary General, have called for a ban on autonomous weapons at least until an international treaty can be adopted, human rights and IHL due diligence associated with autonomous weaponry is posed to grow exponentially.
Human Rights Regulations
Beyond regulations focusing on defense articles and transfers, a proliferation of laws mandate or incentivize human rights due diligence. These include laws requiring that companies identify and mitigate relevant human rights and environmental risks and impacts in their operations and supply chains, and develop global grievance mechanisms. They include the EU Corporate Sustainability Due Diligence Directive (CSDDD), along with a range of similar propels in domestic markets, including South Korea, Switzerland, Thailand, Indonesia, Taiwan and multiple LATAM countries. They also include certain issue-specific laws, such as the EU Batteries Regulation, requiring human rights due diligence associated with the sale or import of products with batteries on the EU market. These laws will compel defense companies to take steps to identify and address their human rights risks at every step of the supply chain, back to mineral extraction in some instances, where forced labor and conflict mineral risks may be most acute.
A variety of other laws incentivize human rights due diligence. Public procurement laws exist around the world, prohibiting government purchases of goods or services tainted by modern slavery and other human rights violations in supply chains, and pressing defense companies to conduct due diligence of their supply chains to enable product sales. Forced labor import bans, such as in the US and EU, play a similar role, as defense companies only can import products and goods in those markets if they are free from the taint of forced labor. Laws allowing civil and criminal actions, like the US Trafficking Victims Protection Reauthorization Act regarding forced or trafficked labor, or permitting the government to confiscate proceeds from gross human rights violations, likewise incentivize due diligence to identify potential human rights risks.
Accountability
In a similar vein, there have been numerous recent legal actions associated with defense sales, including cases filed against defense companies for selling munitions and equipment later used against civilians. Other lawsuits have been filed against shipping companies and entities connected to manufacturing defense materials. As these cases make clear, even absent regulation, due diligence is critical to identifying and mitigating potential legal exposure.
Steps Companies Can Take
Companies can streamline human rights compliance by integrating key actions into existing ABAC, KYC, sanctions, QSE, and ATF frameworks. Core steps include:
- Supply chain due diligence. Particularly in light of mandatory due diligence laws, import bans, procurement rules, and potential civil or criminal liability, including conflict minerals and forced labour.
- Pre-sale due diligence. Assess inherent product-related human rights risks, potential resale or diversion, customer human rights record and policies, and the geographies where it will be sold and used.
- Controls. Train sales teams, and where possible strengthen contract terms to reflect domestic legal requirements, international commitments, and human rights and humanitarian law standards.
- Post-sale monitoring. Track product use through customer engagement, media and open-source monitoring, site visits where possible, stakeholder input, and effective grievance mechanisms.
