June 16, 2022
Moving Beyond Token Participation
Centering Rights-Holders in Human Rights Due Diligence Legislation
This article was originally published on Verfassungsblog. It is co-authored by Tina Asgharian, Bettina Braun, and Allison Miller.
“Human rights due diligence is about people. (…) Hence, the key to human rights due diligence is the need to understand the perspective of potentially affected individuals and groups.”1) This quote from the Office of the High Commissioner for Human Rights reflects the importance of rights-holder engagement in the human rights due diligence process as presented in the UN Guiding Principles on Business and Human Rights (UNGPs). The concept of human rights due diligence was developed over the past decade as a way for companies to grapple with adverse human rights violations and impacts connected to their business practice, including within their value chains. In the past few years, several countries have enacted legislation or started legislative processes to make such due diligence mandatory, and in February of this year, the European Commission published a proposal (Proposal)2) for European Union-wide mandatory human rights due diligence (MHREDD) for companies that fall under its scope.
Despite the many developments around due diligence, however, consistently centering the perspectives of those who are meant to benefit most from the legislation – the rights-holders – has remained somewhat elusive. This post therefore explores how MHREDD-legislation and specifically the Proposal could more systematically center and prioritize rights-holders along with their perspectives and contributions, which would increase the effectiveness of due diligence efforts. In these reflections, the authors draw on experiences of the Fourth Pillar initiative, which for the better part of the past decade has explored how to better center communities and rights-holders in the field of business and human rights.3)
A regulatory scheme that centers communities and rights-holders would allow them to exercise their agency, address the power imbalances that allow states and businesses to all-too-often ignore community perspectives, and shape economic activity to advance rights. This post argues that changes to the Proposal, including to requirements regarding consultations, remedy, and community governance, would support these aims.
Consultations in due diligence steps
A key step in the due diligence process is to engage with those whose rights are (potentially) impacted by the company’s activities in order to identify and address issues such as forced labor, child labor and other exploitative labor practices in a company’s supply chain, unlawful taking of land in extractive industries, or pollution of air or water through business activity leading to severe health impacts of surrounding communities. While the Proposal does mention consultations with stakeholders, several changes could help ensure inclusion of rights-holders and deepen the consultation’s impact. Currently, the Proposal states that companies as part of a step to identify adverse impacts should “where relevant” conduct consultations with “potentially affected groups including workers and other relevant stakeholders.”4) Consultations also appear at the step of preventing adverse impacts: companies should “where relevant” develop a prevention action plan, to be developed in consultations with “affected stakeholders.”5) Notably, consultations are not mentioned as part of a company’s monitoring of their due diligence, nor as a necessary part of providing remedies (see below for further discussion on remedy).
To effectively center rights-holder perspectives, consultations with the rights-holders need to be required, and not only when the company deems it “relevant.” Such consultations are key to informing how to effectively address business-related human rights concerns since rights-holders possess first-hand experience with impacts of corporate decision-making and activities and are able to articulate their specific needs. Indeed, rights-holders are uniquely equipped to prioritize the rights concerns that they most want addressed.
Further, centering rights-holders requires consultation of rights-holders throughout the life of the business activity: at the risk identification stage (Art. 6), when making corrective action plans to address existing risks (Art. 7), and when bringing actual adverse impacts to an end (Art. 8), as well as the monitoring of the effectiveness (Art. 10). An initial consultation cannot fully reveal rights-holder perspectives regarding all eventualities that will emerge over time as the business activity proceeds. The different steps will also likely require different types of consultations. For example, the identification of adverse impacts in the business practice aims to gather information on where violations throughout a company’s business practice and value chains might occur. Compare that with engagement around a specific adverse impact that has already occurred (Art. 8); these consultations will likely require a different process given that affected communities and rights-holders would be more easily identified and the focus then needs to shift to how to address the needs of those affected.
At each of these steps, it is important that the Proposal explicitly name rights-holders and not solely use the term “stakeholders,” which in the Proposal is broadly defined and encompasses a wide range of actors, including ‘individuals, groups, communities, or entities whose rights or interests’ may be affected by companies.6) Among the various “stakeholders,” the Proposal should make it absolutely clear that rights-holders are to be prioritized. Experience with human rights due diligence to date as well as experience under the French Loi de vigilance, the first law to mandate human rights due diligence, shows that where the definitions of “stakeholders” are broad, many companies pass over rights-holders.7) Particularly at later stages of the due diligence process companies should be responsible for consulting differently affected groups, including representatives of affected communities, marginalized groups within affected communities, and employees, among others. Human rights defenders may be another key actor for businesses to engage with, with due consideration for protection of their safety, given their knowledge and insights in local human rights matters.8)
In order to realize the potential of the Proposal on consultation, there should be a requirement that the consultations be meaningful9) to avoid a box-ticking exercise. Meaningful consultation should include requirements related to procedure and outcomes. At each stage, businesses should be required to create and facilitate conditions for rights-holders to participate in consultations, including through the elimination of existing barriers to rights-holder participation. The expectations of rights-holders, which vary with context and are subjective, are important considerations and connected to the political or social legitimacy as it relates to the license to operate. While procedural requirements are easier to define and evaluate, it is also possible to incorporate outcome-based requirements into regulatory schemes. For instance, if a business consistently ignores the perspectives of affected rights-holders, that business should be deemed out of compliance with the meaningful consultation requirement. To avoid such eventualities, businesses should strive to respect human rights through the incorporation of rights-holder perspectives into final decisions. Consultation that is solely process-oriented and leads to no outcomes that improve rights protection or promotion should be viewed with skepticism as it will raise the specter of “token participation” and being a box-ticking exercise.
Access to Effective Remedies
One of the five objectives of the Proposal is to “improve access to remedies for those affected.”10) Access to effective remedy is also a core component of the UNGPs. Yet the Proposal in its current wording does not require companies to provide effective remedies for rights-holders and affected communities. Art. 8 of the Proposal recognizes that companies have a responsibility to take action to neutralize or minimize adverse impacts, where relevant, including by the payment of damages to affected persons and financial compensation to affected communities. Remedies are, however, a much broader concept than mere financial compensation. The language of “where relevant” further indicates that companies have discretion to neutralize or minimize adverse impacts while not providing a remedy to rights-holders.
To fully capture the core purposes of remedies and improve access to remedies for those affected, the Proposal should better align itself with the overarching principles of effective remedies, as articulated in the UN Working Group’s 2017 Report to the UN General Assembly. In particular, it should introduce the concept of “bouquet of remedies” and stress the centrality of rights-holders in both remedial processes and outcomes.
The key purposes of remedies are to return, as far as possible, the affected rights-holder to the original position before the harm, to prevent future harm, and to deter others from committing the same or similar abuses.11) Financial compensation is only one of several forms that an effective remedy may take. Other forms include restitution, satisfaction, rehabilitation, and guarantees of non-repetition. These types of remedies may include medical care, land redistribution, vocational training, truth finding, public apology, and restoration of the environment. The draft Proposal should therefore reflect that affected rights-holders and communities should be able to seek, choose, obtain, and enforce a “bouquet of remedies”: A range of remedies depending on varied circumstances, including the nature of the abuses and the personal preferences of rights-holders.12)
The centrality of rights-holders in access to effective remedies means, among other things, that the creation and implementation of remedies should also be informed by the experiences and interests of rights-holders, including a recognition that different groups of rights-holders may experience adverse impacts differently. Centering rights-holders also entails having remedies be accessible, affordable, adequate, and timely from the perspective of those seeking them.13) The draft Proposal should therefore include language to ensure that community consultations and perspectives are central to creating, designing, and operating remedies.
Better centering rights-holders requires incorporating community perspectives through consultations and in remedial processes, but these measures are just initial steps towards providing rights-holders with a seat at the table. To center rights-holders more fully, they should also have opportunities to engage in governance when they choose, both through the creation or co-creation of mechanisms and as consistent participants in such mechanisms. Rights-holder involvement in governance not only provides additional opportunities for communities to contribute their insights and preferences but also lends legitimacy to governance mechanisms that claim to benefit rights-holders.
Community-created or co-created operational-level grievance mechanisms are examples of approaches that treat rights-holders as governance actors. Such an approach means engaging in a transparent process with affected rights-holders through meaningful consultations and allowing them to participate in the design and creation of the mechanism. Art. 9 of the Proposal, which currently does not include any language on how to ensure or assess the effectiveness of the complaint mechanisms, should explicitly reflect this possible role of rights-holders in setting up and reviewing complaint mechanisms. This is also in line with the effectiveness criteria in UN Guiding Principle 31, which articulates the crucial role rights-holders have to play in the legitimacy of complaint mechanisms.
Rights-holders could likewise play a larger role in the administrative enforcement of MHREDD legislation by developing guidance and helping to oversee the national supervisors. Currently, Art. 21 of the Proposal states that the Commission will set up a European Network of Supervisory Authorities for coordination and alignment. This Network could take on additional tasks like developing best practices and guidelines for regulators, which other EU enforcement bodies have, and include rights-holders in the Network. Some rights-holder groups have existing transnational representation. For instance, National Human Rights Institutes or their regional networks could be uniquely placed to exercise some control over the supervisory authorities. Additionally, laborers are represented transnationally through international trade unions. At minimum, therefore, the Network should be expanded to include international trade unions. Other rights-holder groups however do not have clear transnational representatives. Beyond labor, additional efforts should be made to acknowledge and include transnational rights-holder representatives as they emerge. Efforts to hold space for rights-holders without preemptively designating a representative allows for more genuine rights-holder representation and provides opportunities for rights-holders to engage in a much deeper way to uphold their interests and the protection of human rights.
MHREDD and other legislation related to business and human rights is a welcome new development, and one that is likely to spread to an increasing number of countries in the coming years. For such legislation to succeed in advancing the rights of the most affected and to lead to better human rights outcomes for rights-holders, it is crucial to anchor such laws and regulations with not only the perspective of rights-holders but their ongoing involvement. To do otherwise, as this post has discussed, would miss an invaluable opportunity to improve the landscape of business and human rights to center rights-holders in the years to come.
The authors would like to thank Tyler Giannini for his input and review of the contribution.
Tina Asgharian recently completed her Master of Laws (LL.M.) at Harvard Law School, where she worked in the International Human Rights Clinic on refining and promoting the Fourth Pillar initiative.
Bettina Braun, LL.M. is a Policy Advisor for Business and Human Rights in the International Human Rights Policy department of the German Institute for Human Rights.
Allison Miller recently completed her Juris Doctor at Harvard Law School, where she worked in the International Human Rights Clinic on refining and promoting the Fourth Pillar initiative.
|↑1||OHCHR: The Corporate Responsibility to Respect Human Rights, An interpretive Guide (2012), p. 33.|
|↑2||Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937.|
|↑3||Two of the authors, Tina Asgharian and Allison Miller, have drawn on their work as students in Harvard Law School’s International Human Rights Clinic, which has helped incubate the Fourth Pillar initiative during the past decade along with other organizations. The initiative aims to articulate a set of community-centric principles to underscore the importance of rights holder agency to the effective implementation of human rights protections such as those articulated in the UNGPs.|
|↑7||Ignacio Ibañez, Bayer, Xu, Cooper: Devoir de Vigilance: Reforming Corporate Risk Engagement (2020), p. 121, available at https://www.ipoint-systems.com/fileadmin/media/downloads/Devoir-de-Vigilance_Loi-2017-399_Study_2020.pdf|
|↑8||See UN Special Rapporteur on the situation of Human Rights Defenders statement, available at https://srdefenders.org/information/eu-proposal-on-corporate-due-diligence-a-welcome-step-forward-but-forgets-human-rights-defenders-says-un-special-rapporteur/; see also recommendations published by Front Line Defenders, available at https://www.frontlinedefenders.org/sites/default/files/front_line_defenders_briefing_-_protecting_hrds_through_effective_hredd.pdf.|
|↑10||Proposal, p. 3.|
|↑11||A/72/162, para 40.|
|↑12||A/72/162, para 38 ff; see also commentary to UNPGs 25.|
|↑13||A/72/162, para 20.|
SUGGESTED CITATION Asgharian, Tina, Braun, Bettina; Miller, Allison: Moving Beyond Token Participation: Centering Rights-Holders in Human Rights Due Diligence Legislation, VerfBlog, 2022/6/14, https://verfassungsblog.de/moving-beyond-token-participation/, DOI: 10.17176/20220615-033118-0.