Highlighting businesses’ responsibility to undertake their own, ongoing due diligence to prevent, identify and manage any adverse human rights impacts, the AusNCP concluded that Saab had failed to do so as required by the standards set out in the OECD Guidelines.
The complaint arose from the discovery of the remnants of an RBS70 missile in January 2021 at Lake Hart West Aboriginal heritage site, located in the Woomera Prohibited Area, near artefacts and other items of cultural significance. It was discovered by Andrew and Robert Starkney, Traditional Owners and members of the Kokatha People. The Woomera Test Range, used by the Australian government to test and evaluate long-range weapons and other capabilities, is also located in this area. Saab had supplied the missile to Australia between approximately the mid-1980s to early 1990s. While the missile had not damaged cultural and heritage features, the AusNCP found that its presence inhibited the Kokatha People from undertaking cultural practices on their land and thereby adversely impacted their right to enjoy culture and take part in cultural life, maintain and strengthen their distinctive spiritual relationship with their traditional lands and to uphold their responsibilities to future generations.
When making its findings, the AusNCP reaffirmed five key principles, central to (arms) companies’ obligation to respect human rights in their downstream supply chains:
- Arms manufacturers may be found to contribute to adverse human rights impacts, even when not directly involved in the use of the weaponry.
While in the case at hand, the AusNCP did not find Saab to have caused or contributed to the adverse human rights impacts, it noted that arms production and trade is an activity that may have “extremely grave impacts on human rights” and that, in some cases, arms manufacturers and/or suppliers may be found to contribute to such impacts, even without being directly involved in the weapons’ use. Making such a determination requires consideration of the full context, including “the extent to which a business enabled, encouraged, or motivated human rights harm by another; the extent to which it could or should have known about such harm; and the quality of any mitigating steps it has taken to address it”. - Even if a company has not caused or contributed to an adverse human rights impact, it can be directly linked through its business relationships.
As noted above, the AusNCP concluded that Saab did not cause or contribute to the impact the missile had on the human rights of the Kokatha People. Yet, it did find Saab to be directly linked to these impacts, through its business relationships. The AusNCP recalled that the OECD Guidelines clearly state that direct linkage can occur even when the entity causing the impact is a state entity, and that businesses have a responsibility to conduct due diligence to identify, prevent, and mitigate such impacts. - Arms manufacturers have an independent responsibility to conduct ongoing human rights due diligence. In other words: they cannot solely rely on compliance with government export controls.
In its analysis, the AusNCP noted that Saab’s human rights due diligence focused on compliance with Swedish export control processes. Here, it reaffirmed that “[w]hile government export controls represent an important element in the control of arms, and consideration of such export controls may be an important part of human rights due diligence, there remains an expectation on enterprises under the OECD Guidelines that they will carry out their own human rights due diligence”. It added that, even where serious human rights violations could arise from arms supplies, the Swedish government may still grant permission if there are significant national defense or security policy interests for foreign cooperation. The AusNCP moreover noted that, while Saab had made improvements to its downstream human rights due diligence, these strengthened commitments appeared to apply to new business relationships only. It stated that “[p]articularly in circumstances where weaponry would have a failure rate that could lead to unexploded ordnances posing a threat to civilians, appropriate human rights due diligence of a weapons manufacturer would be expected to assess the human rights risks associated with the past production and supply of its weaponry and of existing business relationships, not just new business relationships”. Based on the foregoing, the AusNCP concluded Saab failed to conduct human rights due diligence in a manner consistent with the standards set out in the OECD Guidelines. - Companies directly linked to adverse human rights impacts should use their leverage “to influence the entity causing the adverse impact to prevent, mitigate or remediate that impact.”
The AusNCP considered that as a “multi-billion-dollar enterprise that has had a long-standing business relationship with Defence and continues to secure contracts with the Australian Government worth tens, if not hundreds, of millions of dollars”, Saab’s ability to exercise leverage “should not be understated”. It noted that Saab appropriately exercised its leverage when notifying defense about the missile for its removal and recommend that Saab further use its leverage to encourage the Australian government to provide remediation to Andrew and Robert Starkney and other affected Traditional Owners. - Conducting appropriate human rights due diligence must involve meaningful consultation with stakeholders.
Under the OECD Guidelines, meaningful stakeholder dialogue is a key component of human rights due diligence. In this context, stakeholders are “persons or groups, or their legitimate representatives, who have rights or interests related to the matters covered by the Guidelines that are or could be affected by adverse impacts associated with the enterprise’s operations, products or services”. As such, the AusNCP recommends that, in order to prevent and mitigate the risks posed by its products to human rights in the Woomera Prohibited Area, Saab undertake meaningful engagement with First Nations people with rights and interests in said area.
While not legally binding, the AusNCP’s findings make clear that arms manufacturer’s failure to conduct adequate human rights due diligence may result in being linked, or even found as causing or contributing to human rights violations through their downstream activities. Interestingly, the NCP indicates here that arms producers’ human rights due diligence should also encompass their past sales of weapons. Its clear reaffirmation that the existence of export licenses cannot replace the sector’s own responsibility to prevent, identify, and mitigate any human rights harms sends an important message to arms companies worldwide who, more often than not, continue to hide behind state export controls to satisfy their due diligence responsibilities.
