49 BOX 6 “Leverage” over an entity (business, governmental or non-governmental) in this context may reflect one or more factors, such as: (a) Whether there is a degree of direct control by the enterprise over the entity; (b) The terms of contract between the enterprise and the entity; (c) The proportion of business the enterprise represents for the entity; (d) The ability of the enterprise to incentivize the entity to improve human rights performance in terms of future business, reputational advantage, capacitybuilding assistance, etc.; (e) The benefits of working with the enterprise to the entity’s reputation and the harm to its reputation if that relationship is withdrawn; (f) The ability of the enterprise to incentivize other enterprises or organizations to improve their own human rights performance, including through business associations and multi-stakeholder initiatives; (g) The ability of the enterprise to engage local or central government in requiring improved human rights performance by the entity through the implementation of regulations, monitoring, sanctions, etc. It arises, for example, if a supplier acts contrary to the terms of its contract and uses child or bonded labour to manufacture a product for the enterprise, without any intended or unintended pressure from the enterprise to do so; or if an agribusiness enterprise gains a concession from a Government to develop land, and the Government then contracts another company to clear that land of individuals who have traditionally used it, without due consultation or compensation, and contrary to the clear understanding that no such action would be necessary. As in these examples, it is often the occurrence of an actual abuse that highlights the risk of its continuation or recurrence. The commentary to Guiding Principle 19 sets out the issues that need to be considered in responding appropriately to this situation. These can be represented, in general terms, in the following decision matrix:

Select target paragraph3

Connect to a paragraph
Connect to an entity
Disable highlights
Add to table of contents