Company led Human Rights Impact Assessments (HRIAs)

How should they be carried out?

To assess the quality of HRIA, Oxfam developed a Human Rights Impact Assessment Framework clarifying the  key criteria (both process and content) needed to ensure the HRIA is robust. The framework also provides guidance and best practices. The key criteria cover the following categories: 

  • The research team: Experience, skills and qualities
  • Scope of the HRIA: Representativeness and relevance of the selected target (choice of suppliers, commodity, country)
  • Meaningfulness of engagement: The how – data collection and conditions under which engagement is carried out; The who; and The what 
  • Strength of the human rights analytical framework
  • Robustness of the assessment of the company’s human rights impacts 
  • Appropriateness of the recommendations 
  • Include a time-bound action plan

Given the commitments to conduct HRIAs made by several retailers in the food sector (including several in the seafood sector), Oxfam undertook an analysis of the HRIAs and published a report, Towards Meaningful Human Rights Impact Assessments, identifying best practice efforts and points of improvements based on the HRIA Assessment Framework.   The key recommendations include:

  • Focus on high-risk suppliers where salient risks have been identified. HRIAs should be primarily focused on the risks for rightsholders in terms of saliency and severity of (potential) rights violations. 
  • Invest in internal engagement to enhance effectiveness, including the engagement of higher management and buying departments, as well as other relevant internal stakeholders, particularly those involved in implementing mitigation measures.
  • HRIAs should not start from a pre-selected list of relevant rights or salient issues but take a broad approach to identifying all risks to internationally recognized human rights.
  • Conduct meaningful engagement with rightsholders. This should involve the people directly affected by the company’s activities, be timely and ongoing, inclusive and gender sensitive, and use the most appropriate approaches given specific contexts. 
  • Address root causes and the company’s own contribution to impacts, including purchasing practices. This includes structural drivers of human rights abuses and the company’s impact on those drivers.
  • Embed the creation of timebound action plan in the HRIA process. Rather than decoupling the two processes, taking action should be a core purpose of the HRIA and therefore integrated into the process, including by drawing on expertise from the research team and engaged stakeholders. 
  • Be transparent about the HRIA and the action plan. Companies should publish HRIAs and action plans (while protecting the anonymity of rightsholders) and actively share and socialize findings and planned actions with stakeholders.

Why businesses should carry out HRIAs

As mandatory HREDD legislation becomes more prevalent, there are increasingly legal reasons to carry out HRIAs. However, there are additionally clear benefits to businesses as well. As Oxfam notes, ‘By documenting the identified impacts and corresponding actions taken to address them, an HRIA enhances businesses’ accountability. It provides a transparent record of the steps taken to mitigate adverse effects and demonstrates the company’s commitment to respecting human rights. HRIAs also encourage the formation of partnerships between businesses and other stakeholders to develop joint actions to address cumulative impacts or legacy issues that require collective efforts. The knowledge and insights gained from the assessment can also inform and improve HREDD processes, purchasing practices and other activities.’ 

Specific benefits to businesses include:

    • Transparency and early detection of impacts reduce risk, and increase a company’s capacity to prevent human rights violations
    • The costs of conducting HRIA and ensuring deep engagement with different stakeholders are low compared to the significant costs that companies bear when their operations violate human rights; these include operational, reputational, and legal risks.
    • In depth engagement helps decrease the risks of conflicts.
    • It helps to identify potential hotspots that might not have been on their radar previously.
    • Implementing HRDD measures such as HRIAs reduces longterm risk to companies and shareholders. 
    • Operations that respect human rights increase brand value and enhance company image.
  • Engaging rightsholders in an HRIA process can identify efficiencies.

Different approaches to HRIAs

While standard HRIAs are the tools most commonly used to conduct indepth assessments of human rights impacts, a number of companies have explored other approaches. 

Joint HRIAs: Many companies share supply chains and/or sourcing regions, making joint HRIAs a promising strategy. By pooling resources and expertise, two or more companies can share the costs and collaborate on solutions to address human rights issues. While joint HRIAs may vary in form, their content and methodology do not differ significantly from a standard HRIA. The key distinction lies in the shared responsibility and coordination, and the pooling of resources. In addition, by proposing joint actions, companies can significantly enhance their leverage for effective solutions. However, it is important to remember that a joint HRIA must still include an analysis of each company’s individual impacts.

Sector-wide impact assessment: Another scenario in which companies can collaborate is through a sector-wide impact assessment (SWIA). As with a joint HRIA, this approach allows multiple companies to join forces and assess the impacts of their sector on a broad scale. A SWIA typically emphasizes the collective responsibility of all industry actors, and encourages broad-based solutions. However, since SWIAs generally do not provide a company specific analysis of its policies and practices, they do not offer tailored recommendations. In such cases, companies should also distill their individual contributions to the identified impact, and adapt the sector-level conclusions and recommendations to their own specific circumstances

Rapid assessments: Given that a standard HRIA can take up to a year to complete, some companies are turning to rapid assessment as a faster alternative. These are particularly useful in situations requiring immediate information or when there is already a well-documented understanding of human rights issues in a specific supply chain or region. The emphasis should be on validating and prioritizing the most critical issues and taking decisive action. From there, companies should allocate resources to implement an action plan that effectively addresses these known issues.

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