Creating an assessment tool to evaluate the human rights impact of businesses

The Danish Institute for Human Rights (DIHR) has developed the Human Rights Compliance Assessment (HRCA), a tool that comprises a concrete and tangible list of factors which businesses should consider when assessing the impact of their operations on those affected by it, whether as employees or as inhabitants of the local area. The aim of the HRCA is to provide companies with a tool to audit their practices, to identify areas where violations are likely so that these areas can be monitored, and to facilitate action to mitigate existing breaches and prevent future ones.

Over the last 50 years, companies have increasingly expanded their operations beyond the country where they may be headquartered. This means companies may sell their products in markets located in several different nations, but the products they sell may be made in another country several thousands of miles away. Every day businesses must juggle their customers’ economic demands against the human needs of their employees and the local community, while remaining competitive in a fierce global market. They need mechanisms subtle enough to function in a complex system, yet simple enough to be used by managers with no human rights experience. The problem a business faces is simply identifying where its areas of responsibility lie, as distinct from those of the government. Governments have a responsibility to respect, protect, promote and fulfill human rights in society. Businesses, on the other hand, are not political, and their human rights responsibility is confined to the narrower sphere of their business undertakings. There are essentially three areas in which human rights issues are raised in relation to business: employee rights, societal rights, and political rights.

The Human Rights Compliance Assessment (HRCA) is modelled on the Environmental Impact Assessment and has been under development since the Human Rights and Business Project’s inception in 1999. It constitutes the first comprehensive human rights impact assessment for companies and is intended to help companies assess the impact of their operations on the rights of people affected by it, whether as employees or as inhabitants of the local area. The tool runs on a database containing over 300 questions and 1000 human rights indicators, developed from the Universal Declaration of Human Rights, the Dual Covenants of 1966, and the ILO Core Conventions.

Ten Danish companies, representing a range of industrial sectors with operations covering diverse parts of the world, willingly participated in the research to begin development of the tool. DIHR conducted a series of interviews with each company to establish and clarify the human rights issues businesses face in different political, economic and social environments abroad. The Danish business community, like all business communities, is extremely diverse. Therefore, another challenge was formatting the human rights tool to fit a typical business structure. For example, a small apparel company employing only a few local workers will be most concerned with a handful of employee rights issues. Business associations and companies dealing with investments in, or undertaking joint ventures with, governments will focus on a broader spectrum of political and social rights issues, and how their operations may affect the local community.

Those companies that have been part of pilot tests have immediately realized the breadth of human rights issues, and how many of their existing policies were at odds with international law. They were also very appreciative to better understand that while human rights often come under the misconceived heading of ‘all things good for human beings’, this was a misconception.

DIHR then conducted mini-consultations with companies and NGOs to educate them on the tool, and provide them an arena to look at the tool in non-confrontational manner.

The aim of the HRCA tool is to promote corporate social responsibility by providing companies with practical information on how to avoid violating the human rights of employees, local inhabitants, and others affected by business operations. The preparatory phase involves experts on 'vulnerable groups' to ensure that the HRCA standards contain sufficient protection of these groups in a business context. Company and human rights representatives are identified and paired in groups to constitute review teams. In the main event each team is allocated one right. The participants first review these individually before meeting to discuss any suggested amendments. A representative from the Human Rights and Business Project will be present to review the findings of the participants, assist in the dialogue, record suggested changes, and answer any questions. Once completed, a follow-up phase is introduced where a commission consisting of human rights and business representatives will resolve any disagreements.

The third and final stage is to put the resulting standards in an interactive web-based HRCA computer programme, designed to allow companies and other organizations to select and modify the information in the database to suit their type of business and area of operations. According to this information the programme will generate concrete indications on areas of non-compliance.

This tool is designed to help a company or organization understand international human rights law, which helps a company address human rights without feeling lost in different cultural settings or confusing legislative landscape. Furthermore, it is flexible enough to navigate through various customs and procedures set out by a particular society.

The HRCA was tested on Shell South Africa in September/October the fall of 2001. A summary of the pilot test appears in Shell’s annual report 2001. The second test is being conducted on Shell Oman and is almost complete. Currently, there are over 200 companies, a majority of them in EU, that have advocated their desire to change their management to meet better human right goals.


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