EDITORIAL DUE DILIGENCE
Opportunities and challenges for African businesses
Mandatory HRDD presents African businesses with several key opportunities beyond improved corporate governance:
• Enhanced global market access: Compliance with HRDD frameworks in major export markets such as the EU positions African businesses as preferred partners for global buyers, investors, and financial institutions that value strong human rights and environmental safeguards.
• Improved risk management: Systematic identification and mitigation of human rights risks can reduce legal and reputational exposure, strengthen stakeholder relationships and contribute to overall operational resilience.
• Attracting responsible investment: Development finance and impact investors increasingly assess companies based on HRDD performance. Proactive African businesses might secure partnerships and funding more easily by demonstrating a clear commitment to responsible business conduct.
• Alignment with continental and regional frameworks: HRDD aligns conceptually with the African Charter on Human and Peoples’ Rights and various other regional initiatives. National BHR( Business and Human Rights) action plans have already been adopted in Kenya, Uganda, Nigeria and Liberia, with others expected to follow. Harmonising these frameworks can promote consistent, context-sensitive implementation of HRDD across the continent. At the same time, African businesses might face several challenges in meeting emerging HRDD standards.
• Fragmented regulatory environments: Many African jurisdictions have yet to enact detailed HRDD legislation. Businesses must navigate a patchwork of laws, voluntary guidelines, and novel contractual obligations, some of which impose HRDD in the absence of legislative mandates. Bridging the gap between stringent external expectations and less comprehensive local frameworks can be both difficult and resource-intensive.
• Capacity constraints: Implementing robust HRDD requires detailed supply chain mapping, nuanced stakeholder engagement, and people-centred risk assessments. These tasks can be challenging for businesses lacking appropriate technical expertise, reliable data, or dedicated HRDD resources. Small and medium-sized enterprises( SMEs), in particular, might find these requirements onerous and costly.
• Limited local enforcement: Even where human rights protections exist in national laws, enforcement might be inconsistent. Businesses aiming to follow international best practice often face weak enforcement of the local rules. This misalignment can cause confusion around compliance benchmarks and result in duplicative efforts.
• Potential tensions with local realities: In some contexts, global expectations on labour rights, environmental safeguards, or community engagement might not align seamlessly with local laws, business practices or socio-economic conditions. Friction might arise when implementing comprehensive HRDD measures in settings where fundamental rights protections are still evolving.
• Supply chain complexity: As global supply and value chains grow more complex, businesses might struggle to meet overlapping, sometimes even divergent HRDD requirements across jurisdictions. Companies should note that the scope of HRDD extends beyond their operational footprint to their entire value chain. A business might fall under HRDD laws based on where it operates, or because it is a customer of, or supplier to, an in-scope company with cascading compliance obligations.
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