Human Rights Impact Assessments

by Roger Alford

We are all aware of the use of environmental and social impact assessments (ESIAs) to address environmental considerations as a key factor in deciding on the appropriateness of beginning new projects. Well, there is now movement afoot to develop a similar approach for international human rights. A “Human Rights Impact Assessment” (HRIA) would mean that multinational corporations should consider the human rights implications of any new venture before they commit to the project.

John Ruggie, the UN Special Representative on Business and Human Rights, issued this report last month on the possible methodologies of HRIAs. Here is an excerpt:

11. Like ESIAs, HRIAs should describe the proposed business activity, whether it is a new investment or a significant change such as expansion, changes in supply contracts, or a new policy (for example to do with local procurement or recruitment). HRIAs should consider the full business life cycle, for example from construction through closure for large infrastructure projects, or from new market entry for information and communications businesses.

12. HRIAs should catalogue the legal, regulatory and administrative standards to which the activity is subject. This should include the relevant national and local laws and regulations of the home and host countries; requirements of project financiers; and internal company policies.

13. HRIAs should describe human rights conditions in the area surrounding the business activity – the boundaries of which should be agreed through consultation and initial scoping – before significant activity begins. Engagement of human rights experts and local stakeholders is critical to this step.

14. After describing those baseline conditions, HRIAs should put forth a view of what is likely to change because of the business activity. This is a difficult and subjective exercise; one approach is to construct multiple scenarios, while another might predict outcomes based on varying levels of intervention. An HRIA might also consider community perceptions of what is likely to change; even though a new petrochemicals plant might produce no local pollution, community fears about air or water quality will necessitate action by the company.


37. Impact assessments for private sector projects are currently discussed almost exclusively for projects with large physical footprints, but in recent years industries such as technology and finance have come under fire for not paying adequate attention to the human rights issues of their operations. There do not appear to be any HRIAs for these industries in the public domain yet, but hopefully this will change in the near future as there is no question that any industry can have significant impacts on human rights, positive and negative. One of the case studies in the Rights and Democracy HRIA pilot described in the previous section is in the technology sector.

38. Similarly, the companies known to undertake HRIAs or comparable exercises are large multinationals. As HRIAs for business become more common, both the costs and the benefits of the exercise should become clearer, hopefully leading other business enterprises to experiment with HRIAs. It should also become clear which approach would be most appropriate for which sort of company, depending on the scale and nature of the business. A medium-sized enterprise should not be expected to allocate the same amount of funding and staff time to an HRIA as a multinational, but smaller companies could apply the same methodology with one expert rather than a team, and place more emphasis on secondary research – although consultation with affected communities is still critical.

39. HRIAs are not currently required by any law, lending institution, or standard – most certainly since they have yet to be clearly defined. But it should be reasonable to expect that HRIAs will be undertaken for significant prospective investments in conflict zones or areas where human rights abuses have been prevalent. When in doubt, a diagnostic tool or preliminary HRIA (comprising secondary research and a few expert opinions rather than extensive consultation) can determine whether a full HRIA is necessary.

40. Given the proliferation of public information on human rights, including the numerous specialized resources for business (e.g. the Maplecroft maps, the Business and Human Rights Resource Centre, the aforementioned Danish Institute and HOM tools, and business-specific research by Amnesty International and Human Rights Watch), there is no excuse for any company, lender or investor to claim to be unaware that their investments could impact human rights.

The report does not make any concrete suggestions as to whether HRIAs should be mandatory or voluntary. But I think it does suggest that we will be seeing more and more of these type of developments as corporations become ever more sensitive to the social responsibility issues in their international ventures.

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