Key steps to conducting an effective human rights impact assessment
Businesses are under increasing pressure to show they have identified and addressed any negative impacts resulting from their business activities on the human rights of their various stakeholders. This applies not just to their own operations, but throughout their subsidiaries and value chains.
This focus on human rights impacts has been rising up the agenda since the publication of the United Nations Guiding Principles (UNGPs) in 2011. This publication was the conclusion of a detailed study by Professor John Ruggie who was tasked by the United Nations, amid growing concerns of the global nature and high impact of corporate activities, to determine the duties of both countries and companies to protect and respect human rights.
Ruggie concluded that while states have a fundamental duty to protect the human rights of their citizens, businesses have a corporate responsibility to respect human rights and victims must have access to remedy for any harms resulting from business-related activities.
Initially known as the Ruggie Principles, the UNGPs have received the full backing of the UN Human Rights Council and have been endorsed by governments from all regions of the world. As such, it is understood that for corporates to fulfil their duty to respect human rights under the UNGPs, they must avoid infringing the human rights of others and address any adverse impacts that result from their activities and business relationships.
To get this right, businesses need to understand the human rights impacts on potentially affected stakeholders and what must be done to ensure these are adequately addressed. For many organisations, particularly those with complex and high-risk value chains, a human rights impact assessment (HRIA) is the essential part of the process.
What is a human rights impact assessment?
Human rights impact assessments are the most advanced form of on-the-ground human rights due diligence. They are regarded as the most robust process by which an organisation can identify, assess, and understand any adverse effects on people resulting from their business operations.
An HRIA is used in higher-risk operations to identify not just actual, current harms, but all the potential adverse human rights impacts a business might cause. This requires expertise and as such, many organisations employ specialist human rights practitioners to ensure the potential, as well as actual impacts, are properly identified and that stakeholders are comfortable in sharing their views. It is also important to ensure that these impacts are not considered from the business’ perspective, but from the perspective of rightsholders such as workers and community members.
Once actual and potential harms have been identified, an HRIA will determine all the measures needed to address these impacts and provide a roadmap for building adequate procedures to prevent them from occurring and for remediation to be provided. This will involve substantial engagement with businesses, rightsholders and other relevant parties, including non-governmental organisations (NGOs), civil society organisations (CSOs) and other human rights actors who may have expertise on the topics in question.
It should also include guidance and mechanisms for capacity building to ensure solutions are sustainable. This might involve training different entities connected with the operation, educating stakeholders on their rights and responsibilities, and building partnerships with third parties that can use their leverage to effect change.
Above all, an HRIA should be forward-looking to ensure that it can be used to provide long-term, lasting solutions.
When should an HRIA be conducted?
In line with best practice, GoodCorporation recommends carrying out HRIAs in those value chains where the risks are higher. This could be due to the nature of the activities, the sector in which the business operates or the established practices in the jurisdictions where operations are located.
Certain sectors are known to be high-risk for human rights abuses, including:
- Agriculture and fishing
- Construction
- Apparel and fashion
- Electronics manufacturing
- Mining and extractives
- Hospitality
As such, those businesses with some or all of their activities in these sectors, should prioritise an HRIA as part of any human rights management strategy.
An HRIA is also advisable in response to an alert being raised, when a new operation is starting or following any major change in the company’s operations and value chain such as a new high-risk project, a new facility or a new stakeholder or partner.
Monitoring human rights risks by jurisdiction is also important as these risks can change considerably and swiftly, often for reasons beyond the organisation’s control. In a rapidly changing geo-political world, a company can find that some of its operations are suddenly in a conflict-affected zone with the obvious enhanced human rights risks that this presents. Businesses therefore need to be especially vigilant to changing geopolitical circumstances and conduct enhanced human rights due diligence when operating in a conflict-affected area. Understanding that human rights risks such as forced or bonded labour, child labour, or dangerous working conditions are often more prevalent in certain locations is also important, and companies with a global operation need to be aware of these risks and understand the mitigation measures needed to protect rightsholders, prevent harm and avoid reputational damage.
Evaluating and mitigating human rights impacts is a complex exercise, and it is vital that organisations understand that an impact assessment is not a one-off exercise. As the UNGPs recommend, human rights assessments need to be repeated at regular intervals and routinely if operations change or geo-political development alter the situation on the ground.
Developing an effective human rights impact assessment methodology
At GoodCorporation we place stakeholder engagement at the heart of our HRIAs. We conduct confidential interviews and focus groups with rightsholders to help identify impacts and root causes. Through this consultation process, we obtain direct feedback on how rights may be impacted and provide opportunities for rightsholders to suggest possible solutions. This should be an extensive process and will usually involve extensive engagement with significant numbers of rightsholders during a field visit of approximately two weeks.
When compiling our list of stakeholders, we look to meet members of the community and their representatives, workers and worker representatives (if they exist), and any rightsholders that are members of independent trade unions.
We also include NGOs and other CSOs to understand the context and scale of the issues in-scope, as well as obtain informed insights into the root causes. Engagement with NGOs and CSOs also enables us to identify potential local implementation partners who would work with the organisation over the longer term to help address issues locally as part of the implementation stage.
Our consultation process will also involve engagement with management to understand the systems and processes that should be in place to mitigate and manage any human rights risks.
If third parties such as intermediaries and brokers form part of the value chain, they too should be included in the stakeholder engagement as their systems and processes may contribute to the human rights impacts of the business.
Moreover, we also engage with relevant governmental, regional or local authorities, who can provide important contextual information. National human rights committees or councils can be particularly helpful in this regard where they exist.
Key steps to an effective human rights impact assessment
Step one: Scoping a human rights impact assessment
The first step in any HRIA is to scope all relevant actual and potential human rights impacts and to narrow down the scope of the HRIA based on the context. This will include analysing the supply chain to identify all the key businesses involved and the risks they might bring. This process is necessary to decide which issues to include in the field visit and ensuring that all relevant rightsholders are part of the stakeholder engagement process.
Where agricultural products feature in the supply chain, it will be important to analyse information relating to the sourcing areas and whether farms are company-owned or family farms.
Step 2: Human rights data collection
To obtain a baseline, all the organisation’s documentation, policies and procedures relating to human right violations should be collected and reviewed. This should include relevant records used to manage the human rights aspects of operations and the relations with stakeholders across the organisation. Experienced human rights practitioners should analyse the data collected alongside publicly available information on any known and relevant human rights risks. This will provide clear insight into how the organisation operates, how it sets out to manage any human rights risks and whether the systems in place are effective.
Step 3: Human rights field visit
Engaging with rightsholders on the ground is a critical element of an effective human rights impact assessment. This usually involves a number of human rights practitioners working on the ground for a two-week period (longer if necessary) engaging with a significant number of rightsholders and relevant stakeholders. This process should involve consultation with workers, management, community groups, trade unions, NGOs and CSOs as well as regional and local authority representatives.
Care must be taken to ensure the process is inclusive, gender responsive and considers the needs of any individuals at risk. Specific attention should be given to any groups vulnerable to adverse impacts such as women, migrant workers, LGBTQI+ communities, or religious minorities.
This process should be as transparent as possible, taking care to engage rightsholders without causing any security risks either to the rightsholders themselves or any others involved. Care should also be taken when selecting stakeholders for consultation to ensure they have not been pre-selected by an interested party and will provide independent and impartial insights into the issues being assessed.
Step 4: Analysis of findings
Following the field visit, the consultation findings are consolidated and analysed in detail. This should provide comprehensive insights into all the identified human rights impacts which might result from the organisation’s activities and will take into account ways in which the organisation is contributing to the impacts due to its own internal processes and gaps in its human rights programme. These findings are analysed with internationally recognised human rights standards in mind to encourage best practice.
Step 5: Reporting and recommendations
Reporting and recommendations should draw on the feedback obtained from the stakeholder engagement, the analysis of the local context, and the identification of any policy gaps at company level. It should also include an evaluation of the root causes of the issues in-scope to ensure that appropriate and context specific recommendations are provided.
When making recommendations, GoodCorporation will always take into consideration the severity of potential impact and the nature of the consequences. This helps direct resources according to need, rather than the ease with which the issues can be addressed. We will also recommend that an appropriate grievance mechanism is put in place and that any legal obligations in the different locations are fully understood.
Human rights impact assessments as an essential tool
Legislators, investors and civil society are all placing pressure on companies to account for and address the human rights impacts of their business activities, in all areas of their operation. Reporting obligations such as the EU Corporate Sustainability Reporting Directive and the forthcoming EU Corporate Sustainability Due Diligence Directive place obligations on companies to demonstrate how their potential and actual human rights impacts are being identified and managed.
It is also becoming increasingly clear, that businesses can no longer make pledges in their statements of company values that they protect and respect human rights, while taking little or no action to do so.
For the many organisations that take their human rights responsibilities seriously, a carefully conducted HRIA is an invaluable tool that will help identify the most severe human rights impacts, their context and root causes and importantly, determine the mitigation and remediation measures needed to reduce harm and protect individuals. For more information on our Human Rights Impact Assessments, contact our human rights team.