When Prevention Fails - The Importance of Human Rights Remediation

When assessing corporate approaches to human rights, checking for the presence (and quality) of relevant policies and due diligence measures is a must. However, sometimes risk assessments and due diligence can fail, and companies can contribute to human rights abuses in spite of their efforts.

Introduction

When it comes to human rights risk management, policies and due diligence are of vital importance. Policies formalise company commitments, and are the first step in establishing frameworks and controls for human rights risk assessment and management, while due diligence reduces the risk of human rights abuses occurring, be this via direct company operations or wider value chains.

However, by focusing solely on preventing human rights abuses before they occur, companies ignore a crucial fact - despite best efforts, there is always a risk of causing (or being complicit in) human rights abuses. Planning for this possibility is a sensible cause of action, especially when the risk of abuses occurring is great, and the potential impacts are significant.

Taking action after human rights have been negatively impacted is commonly known as remediation, and here we will examine how companies can ensure that effective remediation is undertaken, and the types of remediation they can provide.

Ensuring Effective Remediation can be Provided

Grievance Mechanisms

Before a company can provide remediation, they must know it is required, and one of the most effective ways of achieving this is to implement grievance mechanisms. These are often in the form of reporting channels, and are of vital importance where company activities pose significant risks to the human rights of stakeholders. Reporting channels allow for stakeholders affected by corporate activities to inform companies of when, where, and how they were impacted.

Let’s take an example of a mining company that is constructing and operating pipelines for transporting industrial sludge from its mines and processing facilities. Imagine that this company has established a community hotline, and via this it was informed of a major breach in its pipeline within around three hours of the event. Without this mechanism, the time it may have taken for word to reach the company could have been significantly greater.

Prior Planning and Prediction

Companies can also utilise planning and prediction to help ensure effective remediation can be provided. Risk assessments can allow for potential impacts to be identified, and measures to address these can be planned ahead of time. Using our example, the mining company in question was aware that pipeline breaches were a real possibility, and while it had taken measures to limit the risk of these occurring, it had also planned a response for such an event.

As a result, the company was able to initiate a response protocol as soon as the report was received via its community hotline. If it had not undertaken appropriate planning, it would have first had to decide what action would be best to take following receipt of the report. This would have extended the period between the breach occurring and remedial action, during which time the impacts of the breach could have worsened.

Resource Allocation

In addition to preparing for eventualities, companies can take steps to ring-fence or allocate resources for any potential remedial actions. This can ensure that adequate financial, human, or capital resources required to address harms created by a particular event can be mobilised quickly and efficiently.

With our example company, the leadership team was able to draw upon a cash reserve maintained specifically for remedial activities, and was able to quickly commission the services of contractors to implement pollution control measures in the vicinity of the pipeline breach. The company was also able to quickly call on key members of its engineering team as a result of an emergency stand-by policy.

Providing Remediation After the Fact

As we have addressed, no amount of planning can entirely remove the risk of negatively impacting the human rights of stakeholders. In instances where these rights are impacted, acknowledgement and apology are important first steps, but remediation can help companies to actively limit impacts they have caused.

One of the simplest and most direct forms of remediation is to pay compensation to those impacted. This can be to cover loss of assets such as land and property following the most extreme events (e.g. where an asset is destroyed or damaged beyond the point of any value), and in less severe events to cover costs associated with repairs and replacement. In instances of pollution events, companies can, for example, pay for clean-up operations and land remediation measures.

Compensation may also be used to pay for the medical expenses of those impacted, such as treatment and rehabilitation costs, as well as to cover the loss of future earnings attributable to injury. This can be of particular importance in settings where families often depend on a single breadwinner, and where these individuals are at greatest risk of being impacted.

Companies can also mobilise resources such as staff, property, plant, and equipment as part of remediation efforts. While doing so will naturally incur costs to companies, actions such as these are referred to as non-financial remediation, given a lack of any direct payment to those affected.

Returning to our hypothetical mining company, imagine that its pipeline breach had the following impacts:

1. Sludge from the pipeline resulted in an electrical fire at a nearby substation, resulting in a major forest fire.
2. The forest fire then spread to a large settlement, damaging property such as homes and businesses, and infrastructure such as overhead cables.
3. Sludge from the pipeline entered a watercourse, polluting this along with land in the local area.

Actions the company took as a result of the above included the following examples of financial and non-financial remediation:

1. Opening its nearest site for use by residents as shelter during and after the evacuation.
2. Paying compensation for damage to property caused by the fire.
3. Paying for damage to farmers' crops caused by fire, and pollution to their land (i.e. to cover reduced yields while the land recovers).
4. Paying for a specialist pollution control firm to conduct clean-up operations.
5. Covering medical expenses and rehabilitation costs for those impacted by smoke inhalation and exposure to hazardous pollutants.
6. Arranging and paying for psychotherapists to visit a school to work with pupils trapped in the building during the fire.
7. Sending members of its engineering team to assist contractors commissioned to repair utility infrastructure.
8. Using its vehicle fleet and drivers to assist with clearing building remains and making land available for reconstruction of properties.

To Conclude

Companies should always seek to avoid negatively impacting human rights, but for those where the risk of failure in this regard is high, as are the impacts such a failure can have, then planning for adequate remediation is advisable. In doing so, companies are effectively mitigating against the risk that their efforts to prevent human rights abuses fail. Even companies with the very best of intentions can fall foul of unexpected events, and developing remediation protocols and plans means they can respond to these eventualities in an efficient and effective manner.