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Comply with legal requirements and embrace normative human rights standards.
Where there are national or regional legal requirements for businesses to take action to mitigate against human rights violations, you may face punitive measures if you fail to comply. Even where non-mandatory guidelines and principles exist you may weaken your credibility with investors and consumers and lose your competitive edge if you don’t take them seriously. They should form the basis of all in-house initiatives to reduce human rights risk.
By complying with all relevant legislation and guidance businesses can present themselves as ethically-attractive, secure investments. See below for a list of legislation and voluntary frameworks that may be applicable to your business:
- Universal Declaration of Human Rights (1948)
- International Labour Organization (ILO) Fundamental Principles at Work
- The UN Guiding Principles on Business and Human Rights (2011)
- Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (2008)
- The EU Non-Financial Reporting Directive (2014)
- The UK Human Rights Act (1998)
- The Companies Act (2006) [link practice note re human rights mandatory reporting]
- The UK Modern Slavery Act (2015) [link practice note re ‘does section 54 of the MSA apply to my business]
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Embed respect for human rights across company culture.
Embedding respect for human rights within company culture is the foundation of a successful business approach to human rights. This includes publishing a public statement and human rights policy clarifying the company’s stance on human rights issues ,and creating a coherent narrative for all stakeholders across operations.
Appointing a business and human rights expert on the board of directors, ensuring a victim-oriented perspective to the human rights policy and maintaining transparency at all stages of policy implementation are crucial for maintaining investor, consumer and employee confidence.
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Conduct due diligence
Human rights due diligence is a risk management process designed to identify, prevent, mitigate and account for how business is addressing adverse human rights impacts throughout its value chain. A thorough human rights due diligence process will form the bedrock of a successful human rights risk management process, providing a framework for working through risk areas so that businesses can address rights violations they may be associated with both directly and indirectly.
The company should integrate due diligence processes within current company policy and processes, integrating any findings from impact assessments across the relevant operations. To account for the measures they are taking to address human rights risk, businesses should monitor the effectiveness of their due diligence, evaluate success and communicate progress publicly. This is important for improving supply chain transparency and efficiency, and increasing stakeholder confidence.
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Carry out human rights risk mapping to identify the most salient human rights risks.
Human rights risk mapping is an essential part of any due diligence process and enables businesses to pinpoint specific areas of risk across business operations and direct resources most efficiently. It may involve analysing how a range of factors influence the risk of human rights violations occurring, including the business model, employer-employee relationship, nature of work, geographical and socio-economic contexts of operation, and material goods produced or service offered.
The depth to which risk mapping is carried out will vary between organisations but each should start by researching the known risk areas for their own industry. Businesses may wish to conduct risk mapping exercises internally or employ the expertise of a human rights and business expert.
Human rights impact assessments are useful for identifying the most salient rights risks. They should be carried out ahead of any significant business activity or expansion to anticipate and mitigate any human rights issues that may arise [link to Practice note: Assessing Human Rights Impact] and identify all affected stakeholders including the employees and local community.
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Implement grievance and remedy mechanisms
Implementing policies mandating grievance and remedy mechanisms is essential to ensure that those adversely affected by business activity can access redress and reparation for abuses done to them. This is encapsulated in the Access to Remedy principles, the third pillar of the UN Guiding Principles framework.
It is important that affected individuals and communities are able to file complaints relating to a range of abusive and negative behaviours to ensure that the company is able to identify warning signs of problems areas before issues escalate. Remedy processes must be neutral and impartial, free from any political influence. They must be open, transparent and accessible to encourage stakeholder confidence and credibility with consumers. It may be the case that companies need only expand or elaborate on existing grievance and remedy processes such as whistle-blower and ethics communication channels, consumer complaints or trade union mechanisms.
What is human rights risk mapping?
Human rights mapping is an essential part of any due diligence process and enables business to identify where resources should be directed to resolve human rights issues most efficiently. It is a holistic process and businesses should accept that it will take time and resources to conduct a mapping exercise thoroughly. It’s therefore important for you to prioritise focus areas.
You should research known risk areas for human rights in your sector, whether geographically-specific or arising from risk inherent to the business model or nature of the material goods or service provided. This includes known risk areas for human rights, including internal and external factors. Internal factors may include weaknesses in the business management structure, recruitment process and employer-employee relationship within the business. External factors may include the operating context, geography and security in countries where subsidiaries, suppliers and partners operate.
As well as identifying risk it’s important to place the human rights of affected stakeholders first and foremost at all times. Mapping local stakeholders should identify affected populations including workers, their families and local communities. Your business should maintain a culturally sensitive approach at all times and engage with cultural mediators and community leaders to build trust and credibility with the local population.
Corporate human rights impact assessments (HRIAs) may be a useful way to identify and avoid the most serious adverse human rights impacts. They should identify issues caused through direct corporate activity, or indirectly actions of partners, suppliers and subsidiaries. HRIAs should be carried out before any significant business activity or venture and made publicly available.
When risks are identified they can be prioritised by considering three main factors:
- how grave the impact is (e.g.. does it impair the right to life or to freedom of expression);
- how imminent it is and how widespread the impact (e.g.. how many people would be affected by the human rights violation); and,
- how hard it would be to remedy the damage done.
This will also help your company assess whether they will be able to remedy the wrong itself. If necessary, business’ leverage with suppliers, subsidiaries and partners in remedying the violation can be useful.
The next post of this series will explore what human rights remedy and grievance mechanisms companies should have in place.
To learn more, you might like to attend our NEW Business and Human Rights- Online Training and Support Programme
This online training and support programme will provide you with the information you need to understand human rights and business issues and gives you a practical guide on how to be compliant with the relevant laws and guidelines, including adherence to the UNGPs and reference to relevant international law.
We are also able to offer this workshop on a bespoke basis to companies. If you are interested in discussing this option, please contact us at hello@ardeainternational.com.
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