Ranking America’s Biggest Brands on Their Commitment to Deforestation-Free Palm Oil

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Building and protecting their company’s reputation in a fast moving, global economy has moved to the top of the agenda for CEOs and boards. Reputation Rules offers the frameworks, strategies, and processes for building a capability to master this challenge.

This report sets out key lessons learned from a pilot project conducted in 2009-2010 to test
the practical applicability of a set of principles for effective non-judicial grievance
mechanisms that address complaints or disputes involving businesses and their stakeholders.
The principles were developed by the Special Representative of the Secretary-General on the
issue of human rights and transnational corporations and other business enterprises and set out in his
reports to the Human Rights Council in 2008 (A/HRC/8/5) and 2009 (A/HRC/11/13).

This paper forms part of the research background to a project of the Corporate Social Responsibility
Initiative at Harvard University’s Kennedy School of Government.  The project is focused on mechanisms
for resolving grievances in the business and human rights arena. It aims to examine the strengths and
weaknesses of existing grievance mechanisms in order to highlight lessons to be drawn from their
experience, consider how they might be improved and explore what model mechanisms might look like
for the field of business and human rights.

This paper sets out in summary form a range of existing grievance mechanisms from a variety of different
contexts, whether industry or multi­industry, national, regional or international, private or public, based on
law or voluntary standards.  The aim here is to describe the mechanisms as factually as possible in order
to provide a platform for further analysis as to how effective these mechanisms are and how well they are
implemented in practice, but such judgments are not the purpose of this paper.

The common denominator among the mechanisms is that they a) address the impacts of corporations,
b) explicitly or implicitly reference human rights, and c) are non­judicial. Their purpose is to find
resolutions to grievances outside the judicial process for various reasons such as cost saving, time
saving, a desire to avoid confrontation, and a need to protect the integrity of an institution or initiative.
Some of the mechanisms can proceed in parallel with judicial processes; others are intended to avoid the
need for judicial processes, and some take effect once a case is filed with a judicial body in order to
encourage parties to come to a resolution prior to any judgment.

The concepts of social risk management and social license to operate have
become an integral part of doing business in emerging markets. These
dimensions of a company’s social and environmental strategy can be achieved
with effective stakeholder engagement, based on active participation of
and feedback from groups affected by the company’s operations. A
mechanism to address affected communities’ concerns and complaints—
a grievance mechanism —is an important pillar of the stakeholder engagement
process, since it creates opportunities for companies and communities to
identify problems and discover solutions together.

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An effective grievance mechanism is an essential addition for any responsible company to its tools for monitoring, auditing and stakeholder engagement.  But what exactly makes a grievance mechanism effective?  This guidance aims to  help answer that question.  It provides a tool for companies and their local stakeholders jointly to devise rights­compatible, effective grievance mechanisms that maximise the opportunities to achieve sustainable solutions to disputes. A rights compatible mechanism integrates human rights norms and standards into its processes and is based on principles of  non­discrimination, equity, accountability, empowerment and participation. It can deal with most kinds of grievances (bar those raising criminal liability), including – but by no means limited to those that reflect substantive human/labour rights concerns.  Ensuring it is rights­compatible in both its process and outcomes is vital to the mechanism’s credibility and legitimacy, both locally and
internationally, as well as to its potential success in practice.

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Grievance mechanisms provide a way to reduce risk
for projects, offer communities an effective avenue for
expressing concerns and achieving remedies, and promote a
mutually constructive relationship.

Local people need a trusted way to voice and resolve concernslinked to a development project,
and companies need an effective way to address community concerns. A locally based
grievance resolution mechanism provides a promising avenue by offering a reliable structure and
set of approaches where local people and the company can find effective solutionstogether.

A well-functioning grievance mechanism:
• Provides a predictable, transparent, and credible processto all parties, resulting in
outcomesthat are seen asfair, effective, and lasting
• Buildstrust as an integral component of broader community relations activities
• Enables more systematic identification of emerging issues and trends, facilitating corrective
action and preemptive engagement.

Demand for effective grievance mechanismsisincreasingly underpinned by investor policies—
such asthose of the World Bank Group’sInternational Finance Corporation (IFC)—and
international initiativessuch asthe United Nations Human Rights Council.

This Advisory Note offers practical guidance to assist in the design and implementation of
effective project-level grievance mechanisms.

This report sets out key lessons learned from five pilot projects that tested the practical applicability of the principles for effective operational-level grievance mechanisms involving businesses and their stakeholders proposed by the Special Representative of the UN Secretary-General for Business and Human Rights (SRSG), Professor John Ruggie. The pilot project involved the following five companies: Cerrejon Coal (mining sector, Colombia); Esquel Group (apparel sector, supplier factory in Vietnam; Hewlett-Packard (electronics sector, supplier factories in China); Sakhalin II (oil and gas sector, Russia); and Tesco (food sector, producers in South Africa). The report outlines the benefits of developing grievance mechanisms that are aligned with the SRSG’s principles, as well as suggesting how the proposed principles themselves could be further refined to reflect operational realities. These recommendations are reflected in the UN Guiding Principles on Business and Human Rights. This report was developed as part of a project of the Corporate Social Responsibility Initiative at Harvard Kennedy School in support of the SRSG’s mandate.