Human Rights Impact Assessments: What, Why and How?

Anna Triponel

27 November 2017

 

What are human rights impact assessments (“HRIAs”), why are companies conducting them and how would a company go about conducting one?

I recently worked on a palm oil HRIA in Liberia. The executive summary of the HRIA report has been publicly released (here) and I have excerpted relevant information below in response to these questions.

WHAT?  

Key components of a human rights impact assessment process

A human rights impact assessment assists companies in meeting their responsibility to respect human rights under the UN Guiding Principles on Business and Human Rights (the “Guiding Principles”). An HRIA process seeks to identify where a company could negatively impact, or has already negatively impacted, human rights. This process enables companies to avoid harming people as they conduct their day-to-day business, as well as to minimise the likelihood that harm takes place in the future. The process typically results in a number of recommended actions, including changes to a company’s policies and processes as well as recommendations for remedy where there are impacts that a company may have caused or contributed to.

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The Guiding Principles provide guidance on the key components of an HRIA process:

  • The scope of an HRIA is the company’s own activities, as well as the activities of its business partners, where those activities are related to the company’s operations, products or services;
  • Actual or potential impacts during an HRIA process are viewed from the perspective of the person actually or potentially impacted. This explains why thoughtfully-structured in-person consultations, conversations and focus groups with rights-holders themselves are so important to an HRIA process. Particular attention in an HRIA process is to be paid to groups who are already vulnerable and/or who may be made more vulnerable as a result of a company’s presence, as well as those may have little influence over a company;
  • The reference point for HRIA work is the core internationally recognised human rights, namely, the human rights contained in the Universal Declaration of Human Rights; the International Covenant on Civil and Political Rights; the International Covenant on Economic, Social and Cultural Rights; and the principles concerning fundamental rights in the eight ILO core conventions set out in the Declaration on Fundamental Principles and Rights at Work. To help this assessment work, the Guiding Principles recommend that the process draw on internal and/or independent external human rights expertise; and
  • HRIAs place particular importance on transparency as well as continuous dialogue and engagement with stakeholders. This explains why an increasing number of companies are publishing their HRIAs.

By its very nature, an HRIA process focuses on risks to people resulting from a company’s business. It is not intended to capture a company’s positive impacts. The primary reason is so that companies are not tempted to view their positive impacts as ‘cancelling out’ their negative impacts. This being said, a company’s positive impacts can provide relevant contextual information for an HRIA.

WHY?

Reasons for conducting a human rights impact assessment

Companies conduct HRIAs for a range of reasons. The primary reason is a desire to increase knowledge of human rights risks so that they can be better addressed. The process also helps strengthen cross-functional work in a company and build trust with a company’s stakeholders, including workers and neighbouring communities. Preventing human rights impacts upfront can save companies a considerable amount of money and time by preventing worker strikes, community protests and negative media attention. Further, knowledge of where a company’s human rights risks lie is increasingly expected by investors, purchasers and governments. When operating in complex environments, HRIAs can help convey the kinds of challenges faced by the company, and help in the identification of holistic solutions with other stakeholders which seek to tackle the root cause. Where there is an expectation of remedy from the company, an HRIA helps determine what that remedy should look like.

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Within each sector, there will be specific additional reasons for companies to initiate an HRIA process. By way of example, in the palm oil sector, companies recognise the limitations to RSPO certification and want to know whether their business is being conducted in a human rights-compatible way. Governments have recently increased their expectations of palm oil companies, including with regard to human rights transparency. The media and civil society have increased their scrutiny of the human rights conduct of palm oil companies. Financial institutions, such as banks and investors, have their own responsibility to respect human rights under the Guiding Principles and increasingly require evidence of human rights respect by palm oil companies. Finally, consumers are increasingly aware that the products they purchase could have a detrimental effect on people or the planet and are starting to demand evidence of human rights respect from companies that use palm oil in their products.

HOW?

Methodology and Process

In an HRIA, company activities are assessed against internationally recognised human rights (as described above). In addition, a number of sector-specific guidance documents exist which are helpful for HRIAs. For instance, in the palm oil sector, these include the Free and Fair Labor in Palm Oil Production Principles and its Implementation Guidance, the verification indicators developed by the Palm Oil Innovation Group and human rights criteria elaborated for RSPO NEXT. A range of other documents can be relevant, in particular when it comes to community rights.

A focus on potentially impacted stakeholders lies at the very heart of an HRIA process. Impacts on people are best identified by the people themselves. Therefore, an HRIA process should seek to engage with as many rights-holders of the company as feasible, in a thoughtful and rights-compatible manner (e.g., open and honest dialogue, inclusion of voices of those harder to reach and more vulnerable to impacts) and with a recognition of the limitations to the approach taken (e.g., perceived lack of independence of the assessor from the company, possible fear of retaliation for speaking up).

It is helpful for these conversations to be semi-structured, which enables individuals interviewed to express all of the issues on their minds, while ensuring that important issues in light of the context are covered in the conversations. To achieve this, it is imperative for the HRIA assessor to have in-depth knowledge of the company’s business and forward-looking business plans, the human rights-related context in which the company is operating, human rights challenges faced by other companies in the sector as well as relevant actions taken by peer companies.

Finally, in order for an HRIA process to provide the most value over the longer-term, the business functions who will be taking the resulting actions need to be involved and engaged and ultimately possess ownership over the process. To do this, it is particularly helpful for the various business functions to build on their understanding of the Guiding Principles as well as to play an active role in the determination of the mitigation measures that they will be leading. Inherent limitations to a company-commissioned HRIA process which is often conducted in a short period of time should be discussed in advance between the assessor and the Company, and measures should be put in place to seek to respond to these limitations.

An HRIA process can follow a 6-step process.

Step 1 — What the company does, including through its business partners

The scope of an HRIA includes both a company’s own operations as well as impacts directly linked to its operations, products and services through its business relationships. Accordingly, in this exercise, we are looking at the full array of business relationships the company relies upon for its business. In addition, we are also looking at where the business is going — any activities the company will be undertaking in the near future and business partners the company anticipates having. This step of the process results in a mapping of the company’s business, including through its business relationships.

Step 2 — Rights-holders to consider in a company’s HRIA process

An HRIA process assesses impacts from the individual’s perspective, i.e., from the perspective of the person who could be harmed. A wide range of individuals could potentially be harmed by a company’s activities as well as by the activities of the business partners the company relies upon for its business. Particular attention is to be paid to groups who are already vulnerable and/or who may be made more vulnerable as a result of the company’s presence. This step of the process results in a mapping of people who have been or could be harmed by the company’s business.

Step 3 — Identification of human rights impacts

An HRIA process assesses negative impacts on human rights that may have occurred as well as those that may occur in the future, i.e., it looks at both actual and potential human rights impacts. Perception that a human rights impact is occurring is given importance in an HRIA. This part of the HRIA describes (i) how impacts are perceived by relevant stakeholders, (ii) relevant information from the company and its existing processes and (iii) applicable human rights and human rights-related guidelines to consider for the impact in question.

Step 4 — Prioritisation of human rights impacts for action

An HRIA process prioritises the findings for action based on where the harm to people is, or could be, the highest. The likelihood of an impact occurring counts, but less than the assessment of severity. This part of an HRIA assesses the severity of each identified impact (i.e., how many people does this finding affect, are vulnerable groups involved, how could people be harmed and can the harm be remediated) and the likelihood of the impact occurring (i.e., reviewing the impact in light of the context as well as the company’s past experience, business partners and existing processes). This results in the identification of a number of human rights impacts, and their prioritisation.

An HRIA process is not intended to be static. Assessments of severity and likelihood can change over time as further views are gathered from people, and the likelihood (and, at times, the severity) of impacts should change over time as the company takes action. Nonetheless, human rights risk heat maps can provide a helpful way of depicting the prioritisation of impacts at a particular point in time. The human rights risk heat map developed by Shift and the CEO Water Mandate, an initiative of the UN Secretary-General and the UN Global Compact, can be used as a basis.

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See Respect in Practice, 3. Prioritize Impacts for Attention, http://ceowatermandate.org/humanrights/respect-in-practice/assessing-impacts/b/three/. It is subject to copyright of the UN Global Compact.

Step 5 — Recommended actions

An HRIA process seeks to identify actions a company can take to stop harming people and to avoid harming people in the future. This part of the HRIA provides recommended actions for each identified human rights impact.

Recommended actions typically seek to:

  • Address actual impacts that have occurred, prevent human rights impacts from occurring and strengthen the company’s processes to anticipate and address impacts moving forward;
  • Build on the company’s existing policies and processes as well as those provided for in the Guiding Principles;
  • Build on mitigation measures identified in conversations by potentially impacted stakeholders as well as company executives;
  • Build on good practice in this area from other companies in the sector as well as other companies implementing the Guiding Principles;
  • Consider the different actions expected of the company depending on whether it could be seen to have caused or contributed to an impact, or whether the impact is directly linked to it through its operations, products or services;
  • Consider other stakeholders the company can involve in the mitigation measures so as to increase its leverage over the impact in question;
  • Provide guidance on the timeframes for each recommended action by specifying whether the action should be taken in the short-term, medium-term or the longer-term; and
  • Provide guidance on the functions that would own each action.

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Step 6 — Further engagement and communication

Transparency and continuous stakeholder engagement are paramount to an HRIA process. A number of actions can be taken to communicate publicly and engage stakeholders on the company’s human rights work. (These are in addition to the recommendations related to stakeholder engagement for specific impacts.) By way of example, the company can seek to prepare a human rights briefing paper which uses the overarching questions of the UN Guiding Principles Reporting Framework — the reference for companies when it comes to human rights disclosure — as a way of further communicating the company’s approach to human rights.

 

For further information on the findings of an HRIA in the palm oil sector in Liberia, see the executive summary of the report “Assessing Human Rights Impacts at EPO’s Liberian Operations” delivered by Triponel Consulting Ltd to Equatorial Palm Oil plc on July 26, 2017.

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