Due Dilligence

Author: Luca Belli

In several legal fields, both in international law and in domestic legislation, the concept of due diligence corresponds to what a responsible entity – be it a state or a business enterprise – ought to do under normal conditions in a situation with its best practicable and available means, with a view to behave responsibly and fulfill its obligations (Dupuy 1977:13)¹. In this perspective, due diligence refers to a level of judgment, care, prudence, and determination that an entity is reasonably expected to undertake under specific circumstances.

In some contexts, due diligence refers also to the process by which an entity interested in a specific activity entailing potential risks, such as a purchase or an investment, identifies, analyses, and defines how to manage such risks before entering into an agreement or transaction.

Hence, due diligence entails a range of analyses and considerations before performing given activities and/or during the performance, in order to prevent and mitigate risks that could determine harm.

In the field of Environmental Law, for example, due diligence signifies the conduct to be expected from a responsible stakeholder, in order to effectively protect other stakeholders and the global environment (Dupuy 1977:3)². Failure to exercise due diligence, therefore, means incapacity to fulfill the standard of conduct expected from a responsible stakeholder in the specific situation.

The International Law Commission considers due diligence as a primary environmental obligation of States. In Articles 3-7 of the Convention on the Prevention of Transboundary Harm from Hazardous Activities, for instance, four features of due diligence can be distinguished and applied, by analogy, to other fields:

• taking all appropriate measures to prevent and minimize the risk;
• cooperating with other stakeholders;
• implementing obligations through all necessary regulatory actions, including monitoring mechanisms;
• a prior assessment of the possible external harm should be done before giving authorization for an activity or a major change.

The Recommendations on Terms of Service and Human Rights developed by the IGF Coalition on Platform Responsibility attempt to define “due diligence” standards for online platforms with regard to three essential components: privacy, freedom of expression, and due process. The existence of a responsibility of private sector actors to respect human rights was affirmed in the UN Guiding Principles on Business and Human Rights, from which the Recommendations derive their inspiration and the core elements applied to the platform responsibility domain. The Recommendations aim to provide a benchmark for respect of human rights, both in the relation of a platform’s own conduct as well as with regard to the scrutiny of governmental requests that they receive. As part of their responsibility, platforms should:

• make a policy commitment to the respect of human rights;
• adopt a human rights due-diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights; and
• have in place processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute.

References

1. Dupuy, P. M. (1977). Due diligence in the international law of liability. Legal Aspects of Transfrontier Pollution, 369.
2. Ibid