Operational-level Grievance Mechanisms

[*]

by
Antonella Angelini, Senior Research Fellow
Institute for Business Ethics, University of St. Gallen
antonella.angelini85@gmail.com

Overview

Operational-level grievance mechanisms (OGMs) is a term of art introduced and canonized in Pillar III of the UN Guiding Principles on Business and Human Rights (UNGPs). It designates one category of non-judicial, non-State-based grievance mechanisms. Typically, OGMs are formalized company procedures for receiving complaints submitted by affected stakeholders regarding negative company impacts. Claimants may seek a solution to a perceived problem or desire reparations. Whereas most OGMs involve no government oversight or coordination, some rely on third parties to assure fairness and legitimacy of the process.

Having slowly but steadily made their way into numerous international standards,[1] OGMs have emerged from Pillar III, long known as the forgotten pillar, as a prominent form of complaint and remediation process. And in turn, they have climbed up the agenda of policy circles and academia.

A milestone in this direction was the 2017 Report of the Working Group on Business and Human Rights (2017 WG Report). The Report ties the effectiveness of remedy mechanisms to their responsiveness to the diverse experiences and expectations of right-holders. This plea for the centrality of right-holders has helped kindle interest in OGMs, which are usually understood as dialogue-based complaint and resolution processes.

All the post-2017 WG Report documents, whether they discuss the UNGPs criteria for NJGMs or take a life-cycle approach to OGMs,[2] emphasize stakeholder engagement as the crucial ingredient to effectiveness. This emphasis returns in the UNGPs 10+ roadmap, which draws the path for the future UNGPs’ implementation. The roadmap, indeed, characterizes stakeholder engagement as a cross-cutting issue to support better prevention and remediation. Thus, due to these concurrent shifts in the international policy debate, OGMs are likely to be even more critical a site of analysis. The nuances between remediation and prevention and between righting corporate wrongs and managing company-community relations to avoid conflict are sure to gain traction as discussion topics.

OGMs are likewise at the juncture of different strands of academic literature. In the business and human rights field, the narrative is that OGMs are remedy mechanisms to deal with (at least potentially) wrongful corporate conduct. At the same time, this literature has predominantly adopted an institutional design focus, which has led to concentrating on the qualities of consensual mediation processes as determinants of effectiveness. Few reflections have addressed the quality of outcomes, particularly against the backdrop of exiting power relations and dynamics. This blind spot is present also in the broader, non-strictly legal literature that has seen OGMs eminently as a form of company-community engagement efforts, or at best as conflict management tools, where mediation, rather than remediation, is the goal of the process.

This teaching note traces these, partly competing, trends and narratives back to the origins and shifts in the notion of OGMs through the UNGPs’ drafting process. It then offers a selection of issues, partly beyond the UNGPs’ perspective, which reflects emerging trends in the practice of private remedies and hurdles originating from the tensions nested in the concept of OGMs.[3]

The Path to OGMs

In the late 2000s, eager to disseminate learning outcomes of its internal grievance mechanisms, the International Finance Corporation, followed by other international financing institutions,[4] was the first to advise its clients to use company-administered processes for external stakeholders. But the notion of “operational-level grievance mechanisms” emerged as a full-fledged term of art with the UNGPs and their drafting process. The first milestone was a set of policy guidance documents elaborated by the J.F. Kennedy School of Government. One of them, the 2008 Rights-Compatible Grievance Mechanisms: A Guidance Tool for Companies and Their Stakeholders (Guidance Tool), dealt with the criteria for establishing rights-compatible grievance mechanisms at the operational level.

Underlying the Guidance Tool – and echoing in a later paper by its lead author, C. Rees (Rees 2010) – is the collocation of grievance mechanisms in the realm of alternative dispute resolution (ADR). The goal is to prove that tools of this nature can enhance human rights as much as (and sometimes even more appropriately than) litigation. Hence comes the focus on rights compatible mechanisms. At the same time, this conceptual origin of grievance mechanisms also means to see them as tools for resolving disputes rather than strictly speaking for providing a remedy. Or, there is at least an overlap between these two functions, which is not without tension.

Several implications follow. The first is that borrowing from a standard mediation setting leads to imply that grievance mechanisms must entail some proximity between the parties. Tellingly, supply chain workers are made to fit into the category of “geographically coherent” groups. The second implication has to do with institutional design. Rees argues that a rights-based approach as understood in the development field is the key to reconciling the apparent incompatibility between human rights and mediation. In this approach, stakeholder empowerment comes from participating actively in the mediation process and receiving a satisfying outcome. Thus, the Guidance Tool emphasizes stakeholder participation at every stage of the lifecycle of the grievance mechanism and inscribes it at the heart of all the effectiveness criteria. This emphasis on continuous engagement also ties grievance mechanisms to an idea of accountability from below.

Third, the ADR lenses lead to seeing conflict as coterminous with one-to-one disputes rather than large-scale, ingrained patterns of confrontation. More precisely, there is a distinction between the generic terms of complaint or grievance and dispute. The former indicates a perceived undue behavior that the corporation may recognize as faulty; the latter, a disagreement between the parties. Issues of structural power, in turn, tend to slip into the background.

The 2008 Protect, Respect, and Remedy Framework is the first official document speaking of grievance mechanisms at the operational level as one subcategory of NJGMs. The shift away from certain aspects of the Guidance Tool is already evident. The Framework is less vocal about the role of extensive stakeholder participation against power imbalances and less clear about excluding adjudicative processes from the realm of OGMs. On this point, the 2008 Framework limits itself to stating that problems may arise if a company acts as both defendant and judge and that OGMs should, therefore, seek focus on direct or mediated dialogue.

These developments find an echo in the last pre-UNGPs document worth mentioning: the 2011 Piloting Principles for Effective Company-Stakeholder Grievance Mechanisms (the 2011 Piloting Principles), also authored by Harvard’s Kennedy School. The revision of the effectiveness criteria, especially those meant to address power imbalances, is more profound than meets the eye.

For instance, the 2008 Guidance Tool framed legitimacy as a criterion for balancing out power relations through stakeholder participation in the governance of the mechanism. The 2011 Piloting Principles, instead, claim that formally independent governance structures are not ideal for all contexts and add that the ultimate test for legitimacy is the actual use of a mechanism by its intended addresses. This approach conflates two different things: using and trusting an OGM. The emphasis on the perceptions of single users, for its part, blurs the role of collective types of agency and blunts the progressive potential of stakeholder empowerment as envisaged in the 2008 Guidance Tool.

Another visible shift concerns the criterion of equitability. The 2008 Guidance Tool pleaded for addressing power imbalances as a hurdle towards informed dialogue. The 2011 Piloting Principles frame equitability in terms of access to resources. But the broader context is one where direct dialogue and the role of a third party as mediating certain instances of such dialogue are less central. Finally, the Piloting Principles spell out rights compatibility as a standalone standard rather than an overarching principle of OGMs. This reformulation leads to seeing OGMs as means of effective access to an outcome. 

The UNGPs build on the 2011 Piloting Principles. The key provisions on OGM—UNGP 29 and 31—provide for a new form of private remedy mechanisms that is inspired from the field of ADR but: 1) waters down of the original focus on access principles as being the centerpiece of a HR-based approach that should enhance the dignity of rightsholders directly involved in the process; 2) reduces the importance of the “third party” element in OGMs and adopts a general focus on engagement and dialogue; 3) places the new mechanisms in the hands of corporation as part of their due diligence duty, rather than in the hands of rights-holders as part of their right to have access to effective remedies. The following paragraphs unpack several (but by means not all) of the implications following from this approach.

Stakeholder engagement and power imbalances

UNGP Principle 31 establishes the effectiveness criteria for all NJGMs. In its final comma, it provides specifically for OGMs that they should be “Based on engagement and dialogue: consulting the stakeholder groups for whose use they are intended on their design and performance, and focusing on dialogue as the means to address and resolve grievances.”

Against the backdrop of the historical context sketched above, one can trace the centrality of stakeholder engagement back to the 2008 Guidance Tool and, in turn, to the conceptual turf of mediation.

The Guidance invites companies to meet the principle of engagement and dialogue by encouraging “direct, informed and constructive engagement” with the aggrieved parties to a dispute. But the need to engage with representatives of the locally affected stakeholder groups is also a crucial component of legitimacy. Accordingly, the Guidance recommends creating a representative stakeholder group that can participate in creating the OGM and take an oversight role in its functioning.

There is no trace of these specific steps in the UNGPs, where the recommendation to engage with affected groups is vague and framed to ensure the use of the mechanism rather than a more substantive form of legitimacy through ongoing representation.

The recent policy documents on OGMs emphasize stakeholder engagement but differ in the depth and specificity of their recommended actions. For instance, the ARP III Report speaks predominantly of stakeholder consultation. The ICJ Report on the Effectiveness of OGMs, for its part, mentions engagement various times, but mostly in general terms, aside from advising companies to establish a multi-stakeholder oversight body for providing feedback and learning from experience. On the more progressive end of the spectrum is the 2019 Handling and Resolving Local-level concerns and grievances by the International Council on Mining & Metals. The Guidance, indeed, endorses such options as co-design and participatory evaluation of the grievance mechanism. It also explicitly supports the prospect of an independent process that can address complex issues or in e of a perceived imbalance of power that affects the use of the grievance mechanism. Tellingly, it says, “Having an independent process goes one step further than simply enhancing the involvement of community members in the grievance mechanism, and involves the company ceding control over the mechanism to an independent body.”

Part of this exception has to do with the sectoral focus of the Guidance. Stakeholder consultation has a long pedigree in extractive industries. Instead, empirical data shows that it is rare and limited in scope in sectors where the sunk costs of operations are lower (Hertel 2019). In these sectors, the threat of exit looms large, and the concentration of economic rights abuses is the highest – such as garment or agriculture.  

More profoundly still, from its early days to its most recent developments, the debate on stakeholder engagement in OGMs has failed to address the specter of power asymmetries and the inevitability of conflict in stakeholder relations. Even the 2008 Guidance Tool, with its conceptual origin in mediation and its human-rights-based approach, focuses on obtaining legal and outcome legitimacy through engagement. But as noted by Giannini about his first-hand experience with the Porgera mining OGM (Papua New Guinea), seeking political legitimacy for OGMs is rare and underestimated. Issues of power imbalances and conflict come more into focus in other strands of literature, particularly in publications in development and extractives (Giannini, 2018). For instance, the political CSR literature relies on a Habermasian conception of deliberative democracy to frame stakeholder engagement. Such a conception prizes consensus derived through the joint communicative efforts of the actors (Scherer and Palazzo, 2007). By contrast, borrowing from Mouffe’s notion of antagonistic pluralism, another strand of literature invites to use and structure discord rather than try to reduce or eliminate it. In this vein, Dawkins proposes arbitration as an agonistic mechanism to address power asymmetries in stakeholder engagement (Dawkins, 2015). This suggestion may serve to systematize and clarify the functions of the independent body widely advocated for in recent policy documents on OGMs.

Role of Dialogue

The 2008 Guidance Tool conceived OGMs as apt to hosting the entire panoply of mediation techniques – from negotiation and mediation to other facilitated forms of dialogue. At the same time, it tied and discussed the appropriateness of each format to the circumstances of the case. When the parties disagreed over the legitimacy of the grievance or the solutions proposed to it, the Guidance Tool suggested having recourse to a third-party facilitated process. Direct negotiation, therefore, was the preferred option only in a limited set of low-conflict scenarios. Neither the UNGPs nor later documents take up this articulated approach to dialogue.

Still, the typical idea is that OGMs are dialogue-based complaint and resolution processes for a wide range of (often low-level) adverse impacts. New forms of remedial methods seem, however, to be emerging. A key example is the remedy mechanism maintained by Barrick Gold, the majority-owner of the Porgera Joint Venture mine in Papua Nuova Guinea from 2006-2015 (Columbia Law School and Harvard Law School, 2015). This mechanism was single-issue, time-bound, and sought final settlement for known past abuses by providing a fixed remedy – all features that delineate a process more adjudicative than dialogue-based (Knuckey and Jenkin, 2015). Company-designed mechanisms of the Barrick type also involve far higher stakes and risks in terms of impact on individual rights than the standard complaint resolution model of OGMs. Insights from the transitional justice literature may serve to deal with the adjudicative components to be found in the practice of some existing OGM (Schormair and Gerlach, 2020).

Various strands of private power publications have raised even more radical challenges to the desirability or the possibility of dialogue in private remedy mechanisms. Authors in the deliberative democracy and agonistic pluralism strand have stressed the importance of contestation even where a direct relationship between stakeholders would be possible. Arbitration is, thus, an alternative to dialogue (Dawkins, 2015). The premise crucial to the 2008 Guidance Tool that two parties to a “dispute” can have a genuine interaction is prone to critique from an epistemic justice perspective. Dialogue cannot bring to fair agreements “when rights-holders are not perceived as credible epistemic agents” (McDonnell, 2022).

Role of human rights

The 2008 Guidance Tool frames the relationship between human rights and grievance mechanisms for the first time. In so doing, it borrows from the human rights-based approach in development theory and practice (Grama, 2017). This approach suggests that human rights should be the framework for dealing with grievances, which does not equate with deciding grievances based on human rights. The point was to devise mechanisms offering an empowering process through which rightsholders would pursue both rights and interests. In the words of Rees (Rees, 2010), who paved the way to conceiving OGMs as alternative dispute settlement mechanisms, “through an understanding of human rights not only in terms of outcomes, but also in terms of processes aimed at advancing human dignity, a more felicious relationship between the two (human rights and mediation) become apparent.” There is also a more pragmatic aspect at play: resolving a dispute will be unlikely in practice without considering human rights.

The above explains why, initially, rights compatibility was not a stand-alone effectiveness principle but the ultimate result of the appropriate incorporation of the principles ensuring an empowering grievance handling process. The UNGPs operate a shift in which rights compatibility comes explicitly to refer to the outcomes and remedies of OGMs as being in line with human rights (UNGP 31, f). Implicitly, this shift reveals some aspects of ambiguity in the relationship between human rights and the scope of OGMs. Three such elements – one theoretical and two of a policy nature – will be highlighted for present purposes.

One distinctive feature of OGMs is to function as collectors of concerns and complaints not necessarily serious enough or not necessarily formulated as human rights abuses (see UNGP 29). The theoretical question here is: does the entitlement to claim-making for rightsholders change depending on whether the grievance involves human rights abuses or not? If a rightsholder is entitled to a remedy for corporate conduct impinging on rights, what standing does they have towards the company when there is no such basis? Is the company then simply dispending solutions in the classical gift-giving relationship of corporate philanthropy? Can these actions still be considered as remedies? International practice reflects this ambiguity well. As a 2021 analysis of the policies of 256 companies across 22 industries has shown, only few companies use the term “human rights” in its description of types of claims accepted or make specific specifically references the company’s human rights policy and indicates that it accepts claims relating to how the company frames the issue of human rights. Most OGMs, instead, state to respond to “unlawful or unethical” actions as outlined by state laws and the company’s ethics policy.[5] Hence, there is a tension between the remedial intent of OGMs and their nature and functioning as dispute resolution mechanisms.

The second set of questions relates to how well-equipped OGMs are for dealing with certain types of highly sensitive or otherwise complex human rights abuses. Some OGMs have addressed claims with underlying serious human rights violations or abuses potentially amounting to criminal offenses. Such acts fall in the realm of official investigation and prosecution by responsible government authorities. Because these OGMs have often created obstacles to complainants, notably in pursuing judicial avenues for their claims, some commentators have suggested that OGMs avoid dealing with serious human rights violations altogether (RAID, 2019). Others have suggested that OGMs differentiate between general concerns and complaints regarding human rights (ICJ, 2019). OGM personnel shall be trained to identify and treat each type of grievance accordingly, potentially using scaling-up mechanisms towards domestic authorities.

Another point worth noting is about collective rights, particularly labor rights, which are routinely violated, sometimes as part and parcel of the very production model of the relevant supply chains. Collective bargaining, minimum wage, or the right to organize are typical examples of such violations. Dealing with these structural issues through a mechanism intended for dispute settlement has already obvious limits. But, even granting these limits, the point is that most mechanisms are individualized and tend to isolate rightsholders. This individualization of grievances, which is inscribed in OGMs, is particularly detrimental to collective human rights. In such cases, the lack of a representative component, for instance, through unions, make OGMs prone to be a vehicle for retaliation or simply to remain ineffective.[6]

Finally, instructors shall take note of the growing attention towards the position of particularly vulnerable groups, including women, children, and migrant workers. This trend is leading to policy guidance on how to devise grievance mechanisms addressing the position, including the human rights, of these actors. The focus is mostly on identifying specific rights that may be violated and hurdles to access to OGMs.[7]

Between accountability from below and risk managements

From the 2008 Guidance Tool onwards, the case for OGMs has alternatively, or conjointly but in a juxtaposed fashion, relied on two arguments. The first is that an effective grievance mechanism can curb the risk of civil society’s negative campaigning or reputational damage and is, therefore, part of good risk management. At the same time, there is the idea that OGMs, unlike auditing and other top-down tools, can provide an avenue for accountability from below.

These two arguments find reflection in the UNGPs, especially in the functions of OGMs as defined in UNGP 29:

“Operational-level grievance mechanisms perform two key functions regarding the responsibility of business enterprises to respect human rights.

  • First, they support the identification of adverse human rights impacts as a part of an enterprise’s ongoing human rights due diligence. They do so by providing a channel for those directly impacted by the enterprise’s operations to raise concerns when they believe they are being or will be adversely impacted. By analysing trends and patterns in complaints, business enterprises can also identify systemic problems and adapt their practices accordingly;
  • Second, these mechanisms make it possible for grievances, once identified, to be addressed and for adverse impacts to be remediated early and directly by the business enterprise, thereby preventing harms from compounding and grievances from escalating.”

On the one hand, then, OGMs are associated with Pillar II as an extension of corporate due diligence, i.e., corporate risk management processes concerning human rights violations. On the other hand, OGMs formally fall under Pillar III on access to remedy. But there is a gap here that the UNGPs fail to recognize, let alone bridge, between remedy and other forms of grievance handling. Two aspects, one theoretical and the other empirical, are worth highlighting for present purposes.

The first is this. The OGM model discussed in early policy documents made room for stakeholder engagement from the design stage to actual grievance resolution. This architecture, sustained by the idea that OGMs should realize a human rights-based approach to mediation, seemed to justify the link, if not the identification, between grievance handling in OGMs and remedial action. The business case argument, for its part, while strong in sectors with high sunk costs, such as the extractives, was more tenuous in supply chain contexts, where buyers typically have low commercial and reputational exposure towards their multiple suppliers. The UNGPs overcame this weakness by shifting from a business case to a corporate duty argument. Most policy documents emphasize and try to unpack the link between due diligence and company-created mechanisms.[8]

At the same time, though, the UNGPs placed OGMs in the basket of NJGMs without articulating the elements of effectiveness that apply to the different types of outcomes resulting from the various kinds of mechanisms and processes contained therein. The result is the coexistence between a corporate due diligence focus, with the early-warning and conflict prevention functions of OGMs, and a more amorphous remedial one. This coexistence has fuelled strands of literature with different, if not conflicting, views of the purposes of OGMs and, more broadly, the relationships between governments, companies, and communities. Against this backdrop, Grama argues for a new agenda on OGMs (Grama, 2022). Central questions would include whether the purpose of a given mechanism is to remedy or foster other community relations goals and how one shall conceive of the notion of remedy in the specific context of OGMs. 

The second point worth mentioning has to do with the evidence around the accountability potential of OGMs. With the increased prominence of the transparency and continuous learning effectiveness criteria in policy circles, companies have started providing more information about grievances in their sustainability and corporate reports. They have also begun developing KPIs related to grievance mechanisms, especially to the number of grievances received and the time taken to resolve them. These indicators, however, measure

inputs and activities related to the grievance mechanism, not the results it is designed to achieve. Evidence of gaps between grievance policies and evidence/reporting is particularly strong in supply chain contexts. For instance, a 2022 Know the Chain report rating the performances of 129 companies in different industries finds that while only 29% do not disclose having a grievance mechanism that is available to suppliers’ workers, 77% do not provide evidence of the practical operation of the mechanism and 88% do not have evidence that grievance mechanisms are available to, and used by, workers below the first tier.[9]

Beyond institutional design as the yardstick of the effectiveness of OGMs

The debate on NJGMs has always pivoted around the issue of effectiveness and has progressively come to see it as a matter of institutional design. Such is the case with the UNGPs. A joint reading of UNGP 26 (the operational principle of Pillar III) and UNGP 31 (on the effectiveness criteria for NJGMs) suggests that the core objectives of the remedial pillar are around the effectiveness of access to a grievance mechanism. UNGP 31 ventures outside this scope only limitedly by stating that the “outcomes and remedies” of NJGMs should accord with internationally recognized human rights. But the substantive element of remedy—its effectiveness generally and as applied to individual cases of harm—comes into focus only with the 2017 WG Report. The Report urges to see the satisfaction of the grievant with their remedy as the central functional relationship that determines effectiveness. This notion of satisfaction of the grievant has a strong affinity with non-state-based remedy mechanisms, although especially when applied to OGMs, it may foster the individualization of issues, including those with a systemic or collective quality.

Anticipating the 2017 WG Report’s vision, Scheltema has put forward several elements that should be crucial to assessing the outcomes of NJGMs (Scheltema, 2013). Particularly worth noting is the inclusion of parameters taking into account the context of a grievance. For instance, the recurrence of similar issues over time might indicate a failure to address underlying causes of complaints. In such cases, remedy outcomes might be more effective if they drive a change in the company-community relationship and address power imbalances. Community control over framing the nature of their grievances is important to curb the risk of providing unsatisfactory or only shallow remedies and/or outcomes. The framing process can yield significant influence over the forms of redress that are viewed as appropriate – whether involving apologies, restitution, compensation, punitive sanctions designed to provide redress for specific grievances, or systemic interventions designed to prevent recurring patterns of grievance through wider agendas of regulatory or policy change.

Extending the focus even further, Haines and Macdonald propose looking at the enabling conditions that support the effectiveness of nonjudicial regulatory interventions (Haines and Macdonald, 2020). Besides institutional design, they identify two additional clusters of enabling conditions: institutional empowerment and social empowerment. Institutional empowerment has to do with the degree of authority established by a mechanism over the parties to a given grievance and the mechanism’s institutional capacities. This last aspect concerns the resources and functions that the NJM commands independent of its interactions with parties in a given grievance case. The cluster of social empowerment encompasses aspects of community leverage and community control over defining the terms of the appropriate remedy. The term leverage refers to an actor’s ability to influence the imposition of costs or withholding advantages from those they seek to influence.

As a final note, it is worth adding that the question of effectiveness of OGMs may come into a new light by pursuing a more radical questioning about the specific and actual function(s) of a given mechanism (Grama, 2022). The effective outcomes of a mechanism with a remedial function may look very different from those of a mechanism for managing company-community relations.[10] The ARP III Report, for its part, concludes that OGMs can hardly, in and by themselves, satisfy the conditions for providing an adequate remedy.

Beyond the centrality of corporations as developers and operators of OGMs

Most of the existing OGMs are designed and implemented primarily by the target companies.

This prevalence has long supported and concealed two assumptions in the UNGPs. The first conflates the level at which OGMs should operate – the local site level – with the nature of the corporate’s involvement in a grievance handling and resolution process. The second assumption conflates corporate uptake and their duty to provide access to remedy, with being at the driving seat of designing and implementing a grievance mechanism. Thus, while expanding the notion of access to remedy, the UNGPs shrink the realm of private remedy mechanisms to corporate-created ones.

International practice, however, increasingly offers glimpses of a less corporate-centered landscape. One example is the pilot grievance mechanism developed by community members in Thilawa, Myanmar (CDOGM). The process, facilitated by Earth Rights International, began in 2014 and led in 2017 to a full-fledged community members’ proposed design (Earthrights International, & SOMO, 2015). The pilot had a broad scope, including the land confiscation issue that had worsened since the early implementation of the Thilawa special economic zone. Company-community discussions on the pilot OGM reached a stalemate in 2017 when project members landed their grievance mechanism.[11] This lack of uptake is the most obvious (and anticipated) hurdle the Thilawa initiative has faced. Another likely one would have been to ensure a long-term commitment by community members to implementing, overseeing, adjusting, and perpetuating the mechanism. Such a commitment is hard to get, especially where community interests are or tend to get dispersed.

Processes for addressing grievances at the site level also exist in the realm of enforceable agreements between lead firms and unions or worker-based organizations (EBAs) (Bair and Blasi, 2019). While EBAs include provisions for legally binding enforcement at least of buyers’ commitments, the backbone of enforcement is through complex private remedy mechanisms, usually managed by a third-party institution (WSR-Network, 2017). The threat of market consequences in terms of suspended or cut contracts ensures a high compliance rate from both buyers and suppliers. Remediation concerns the set of standards that are variously attached to the agreements. But, in line with the conflict-avoidance vocation of OGMs, these mechanisms also address issues that are either less severe than violations of the agreed standards or not falling squarely within them.

Contrary to standard monitoring processes, where social auditing is separate from remedy mechanisms, in EBAs the same people investigate complaints and conduct field audits (WSR-Network, 2018). This continuity creates a constant feedback loop between due diligence and remediation.

Ultimately, there are signs of hybridization in the realm of private remedy mechanisms. One example is the co-enforcement model in the US, where workers’ organizations and advocacy groups partner with the government and are accountable to the government to enforce labor standards (Fine, 2015). The third Report of the Accountability and Remedy Project (ARP III) by the Office of the United Nations High Commissioner for Human Rights (OHCHR) also recognizes that States have an essential, and up to now underestimated, role as setters of the policy and legal environment for private remedies. While not explicitly endorsing the option of public-private remedy mechanisms, the Report lays the foundation for a more significant role of States in the realm of private remedy mechanisms (see policy objectives 1-5).

Teaching Approaches

There are different teaching approaches to discuss OGMs. After having provided a general framework about the origins of OGMs in the UNGPs, one possible approach is to focus on the guidelines set forth in Principle 31. Such analysis may include collecting and comparing model examples of companies that claim to follow the UNGP’s and have fully functioning operational-level grievance mechanism to handle complaints about negative human rights impacts. The comparison may be industry-specific or cross-industry. It may also focus on specific cross-cutting themes, e.g., how do the UNGPs effectiveness criteria address the challenges of access to remedy for marginalized groups, etc. Existing databases offer a useful data source for such comparative analyses. For instance, the OGM Research Project at New England Law, Boston, has conducted research and data analysis related to 256 companies across 22 industries. The 2021 Project Report offers a valuable guide identifying trends and developments to structure the course.[12]

Another way to discuss the UNGPs perspective on OGMs is by relying on the OHCRH ARP III Report, which identifies 16 Policy Objectives for States and for developers of OGMs. The Report places these objectives in three clusters: 1. Facilitating access to effective non-State-based grievance mechanisms by strengthening domestic law and policy; 2. Improving the effectiveness of non-State-based grievance mechanisms; and 3. Enhancing access to effective remedy using non-State-based grievance mechanisms through greater cooperation and coordination.

Policy students may for example focus on differences in scope, challenges and functioning of OGMs depending on the industry and production context (e.g., buyer-driven or supply-driven supply chains, etc.). Business students may broach OGMs through the project-cycle approach to analyze more carefully the steps and options for action at the operational and company level.

Instructors in law may wish to link OGMs to other strands of literature on nonjudicial approaches within regulatory processes of complaint handling or dispute resolution. This regulatory scholarship encompasses theories of “experimentalist” governance (De Búrca et al., 2010) and “new governance” (e.g., de Sousa Santos & Rodríguez-Garavito, 2005). It may also be valuable to consider broader literature on stakeholder engagement and dialogue.

Various instructors have also adopted a project method approach either focusing on a specific issue or on a specific mechanism. The first example is the Penn State Law’s project for Creating an ARP III-Based Remedy Rating Mechanism for NJGMs, including OGMs. Using the 16 Policy Objectives as a framework, the project aims to construct a rating system  to assess the extent to which specific NJGMs work toward the ARP III policy objectives. Another example is the joint case study conducted by Harvard Law School and Columbia’s Institute for Human Rights of the Porgera mine’s OGM in their respective law clinic programs. The case study included several field trips to Papua Nuova Guinea.

Learning objectives may include:

  • Providing the definition of grievance mechanisms under the UNGPs.
  • Listing the various types of grievance mechanisms envisaged in the UNGPs and locating operational-level grievance mechanisms therein.
  • Citing and describing the steps leading to the emergence of the notion of operational-level grievance mechanisms.
  • Enumerating the UNGPs effectiveness criteria for non-judicial grievance mechanisms in general and for operational-level grievance mechanisms specifically.
  • Describing the functions of operational-level grievance mechanisms as framed in the UNGPs and as evolved in practice.
  • Tracing the place and relevance of consensual negotiation and collaborative problem-solving approaches in non-judicial grievance resolution, particularly at the operational level.
  • Discussing the notion of “meaningful stakeholder engagement”, its applications to the various stages of grievance handling and resolution, and sources of inequality in company-community engagement and grievance resolution processes.
  • Locating operational-level grievance mechanisms within broader processes of community engagement and informal problem-solving approaches.  
  • Recognizing the policy documents defining the grievance process and any additional document relevant to grievance hearing and resolution.
  • Assessing the links or lack thereof between a company’s grievance mechanism and its human rights due diligence policies.
  • Assessing the appropriateness of the material and personal scope of an operational-level mechanism depending on the circumstances of the case.
  • Discussing how a given mechanism link grievance resolution to the individual or collective rights of affected right-holders.
  • Identifying potentially right-threatening components of a grievance mechanism or aspects of a grievance handling and resolution process.
  • Differentiating between the notion of effective access to remedy and access to an effective remedy.
  • Identifying whether a given grievance mechanism pursues a remedial function or another function (company-community relationship management, etc.).
  • Identifying the enabling conditions other than institutional design for the effectiveness of non-judicial, non-state-based grievance mechanism, and particularly operational-level mechanisms.
  • Assessing whether and to what extent a given operational-level grievance mechanism individually provides an effective remedy in the circumstances of the case and for the needs of affected stakeholders.
  • Citing examples of grievance resolution processes led by private actors other than corporations (communities, worker-organizations, etc.).
  • Discussing the role of the State as access facilitators and partners to effective non-State-based, non-judicial grievance mechanisms.
  • Using principles of law and practice from the broader literature not only on corporate social responsibility and management theory, but also of international and domestic laws relating to remedy and reparation, global governance, and transitional justice.

Key Questions

General

  • The UNGPs envisaged non-state-based grievance mechanisms as one of the three types of tools to provide access to an effective remedy in business-related human rights abuses. How are grievance mechanisms used – for what issues, by whom, and with what outcomes?
  • Policy documents recommend stakeholder engagement as good practice in most stages of a grievance mechanism. What are the nuances in the emerging terminology around stakeholder engagement, from effective participation and meaningful consultation of affected groups to co-design, etc.? Is a notion of democratic legitimacy inscribed in any of these terms?
  • Grievance mechanisms are linked to various objectives: ensuring accountability, providing a remedy, and supporting human rights due diligence. Can these objectives turn out to conflict with one another in reality?
  • Grievance mechanisms are often woven into the broader fabric of community engagement, which includes philanthropy and other corporate social responsibility efforts. How does this embedment impact grievance mechanisms as an expression of the corporate legal duty to remedy wrongdoings?
  • Institutional design and regulatory strategy feature prominently as the basis for grievance mechanisms effectiveness, starting from the UNGPs.  What may be other, more diffused, enabling conditions for effectiveness? What is the role of broader sources of social power, e.g., rightsholders’ coalitions, etc.?
  • The UNGPs frame grievance mechanisms as early-warning, prevention-oriented, and dialogue-based complaint and resolution processes. But international practice is branching out to new directions. For instance, some grievance mechanisms in the extractive sector have taken on quasi-adjudicative functions. How shall scholars conceptualize reparation through grievance mechanisms beyond the conceptual framework initially provided by the UNGPs? Which other bodies of literature may prove helpful and relevant to this purpose?
  • A case study approach is the most used qualitative research method on grievance mechanisms. Which alternative approaches may allow investigating the net and combined results of individual mechanisms in terms of providing some form of remedy for the adverse impacts of business activities in a given industry or region?
  • The UNGPs conceive of operational-level grievance mechanisms, and private non-judicial grievance mechanisms in general, as emanating from corporations, either exclusively or in partnership with other (public or private) actors. As the realm of private regulation expands, is this implicit assumption worth revisiting? How shall the regulatory initiatives led by other actors, e.g., workers, be included in our understanding of grievance mechanisms?

For business students

  • Companies remain reluctant to recognize grievance management as a standard business practice, notably when company-community relations are not immediately problematic or where the sunk costs of operations are low. What arguments and evidence can enhance support for grievance management?
  • Grievance mechanisms should be rooted within a company’s community relations programs. Which processes ensure a context-sensitive mix of proactive community engagement and reactive grievance resolution?
  • Operational-level GM, particularly in the extractive sector, are often adopted under a company-wide framework. In what areas is corporate headquarters involvement significant? For what specific advantages? 
  • Buyer companies increasingly have grievance mechanisms open to workers of their suppliers. However, access to these mechanisms remains limited in scope – e.g., only to first-tier suppliers – and effective reach – e.g., lack of information on how grievance mechanisms are communicated to workers. How shall buyer companies address these issues? What does the UNGP effectiveness criterion of accessibility mean in supply chain contexts with pervasive subcontracting?
  • Senior management buy-in is crucial at the head office and site level. How can developers and operators of mechanisms mitigate the lack of or limited support from either level?
  • External and internal stakeholders may harbor concerns and resistance towards formal mechanisms for grievance resolution. What shall a design process look like to identify and address these respective and potentially different concerns?
  • Cross-departmental coordination and collaboration are critical to the effective resolution of grievances. Which management systems are most suited to this objective?
  • What type of governance and reporting structures can best ensure formal accountability for external and internal stakeholders, respectively? 
  • The volume and types of grievance in need of addressing will likely change over a project or activity’s lifecycle. What management processes best ensure the flexibility in structure and resources necessary to accommodate these changes?
  • Adopting a remedy or a remedy agreement is far from the end of the story. What resource needs are to be taken into account and mobilized (e.g., turnover issues) to ensure implementation over time?
  • Companies provide few indications of how grievance management ties into their due diligence processes. How can systemic issues be effectively detected when assessing grievance trends? How can the results of this assessment feed into and inform a company’s human rights due diligence processes?
  • Most public and increasingly private financing institutions require that their financed or investee companies provide an effective grievance mechanism. What verification processes should financial institutions establish to ensure that the UNGPs effectiveness criteria are streamlined through the entire timeline of the financial relationships with their clients and investee companies?
  • Companies are now reporting more information about grievances in their sustainability and corporate reports. What issues, e.g., lack of a consistent definition for grievances across companies or operations, can hinder the use and comparability of this information in ESG assessments? How shall financing stakeholders cope with these risks?
  • The lack of financing mechanisms for corrective or restorative measures in response to environmental and social harm remains a limit against adequate access to remedy for affected communities and individuals. What funding options could financial institutions embed in their investment agreements or other financing arrangements to set aside funds for remedy or support a mechanism for accessing funds for remedy?
  • Following grievance trends through a careful analysis of KPIs is essential towards continuous learning. How are companies to include the perspective of local communities and individuals towards developing qualitative KPIs on the impacts of grievance resolution?

For law students

  • Grievance mechanisms usually allow individuals or groups to raise their concerns with the company, have them reviewed, and potentially obtain some form of outcome that can counteract or make good the adverse impact. How does this form of standing relate to the concept at the heart of the right to remedy that one person shall have restored what is lost when human rights are violated?
  • Grievance mechanisms tend to individualize issues that reflect systemic patterns of abuse and/or involve collective rights, e.g., collective worker rights, indigenous rights, etc. What are the implications, conceptually and practically, of this gap between the nature and the treatment of human rights abuses in grievance mechanisms?
  • The UNGPs place grievance mechanisms within the umbrella of the corporate responsibility to respect human rights, which is seen mainly as a negative responsibility not to harm others. Can and shall grievance mechanisms also be instruments for a (positive) duty to contribute to realizing human rights? If so, through what schemes, e.g., Hybrid public-private grievance mechanisms?
  • Private grievance mechanisms that purport to address claims of serious wrongdoing on the part of a company have come under negative scrutiny from civil society organizations. Under what conditions (if any) should companies engage in remediation of serious human rights abuses? What procedures, e.g., escalation to public authorities, shall be in place as a minimum guarantee in these cases?
  • Adopting a low threshold for registering concerns or issues as a formal grievance can facilitate the conflict prevention function typically ascribed to grievance mechanisms. What are the legal considerations relevant to deciding whether an issue or a concern should be considered a formal grievance?
  • Operational-level grievance mechanisms can be open to various rightsholders. When and why does it make sense to have distinct operational-level grievance mechanisms for communities, contractors, and employees?
  • Retaliation is increasingly coming into focus as a severe, pervasive, and multifaced risk, which rights holders may not be aware of or anticipate when seeking remedy through a grievance mechanism. Are the usual solutions – e.g., anonymity, confidentiality, etc. – sufficient to meet this risk? Is some form of representation – e.g., through unions or worker organizations – an option to mitigate individual targeting?
  • Migrant workers, women, and children have received attention as vulnerable groups requiring special consideration, particularly in ensuring the accessibility of grievance mechanisms. What other dimensions, aside from facilitating access, may need positive action from the company to make grievance mechanisms suitable for these and other vulnerable groups? What mechanisms can ensure the prompt identification of a situation of vulnerability that is not already contemplated by a grievance process?
  • Alternative dispute resolution (ADR) techniques were a central component of grievance mechanisms in the policy documents leading to the UNGPs, but have failed to find the same role in practice. How can ADR techniques become more and more systematically integrated into grievance mechanisms, e.g., concerning the need for establishing independent processes for dealing with complex issues?
  • Individual feedback from users of grievance mechanisms is recognized as necessary for continuous learning. But what channels can allow communities and individuals to provide more systemic feedbacks, e.g., requests for revision of the grievance process, reports of unsatisfactory performance, etc.?
  • Public disclosure of a grievance mechanism’s performance is an essential aspect of transparency and accountability. Is the adoption of mainstream reporting standards, e.g., under the Global Reporting Initiative, enough to meet this need? What legal considerations should inform the refinement of KPIs, particularly from a mere quantitative to a more qualitative dimension?

For policy students

  • The state’s primary responsibility for providing remedy means it is responsible for underpinning the entire system and acting as a watchdog on companies. What process shall a state implement to clarify the types and contributions of grievance mechanisms in its jurisdiction? Conversely, how should companies engage with the state, particularly in contexts where the rule of law is weak or non-existent?
  • Bilateral (state-company or worker-company) or trilateral (state-company-worker) models involving a mechanism co-ownership are still very limited in practice. Collaboration, however, has obvious advantages, if only in terms of spreading the burden of due diligence and design. What strategies can mobilize the potential of hybrid grievance mechanisms? 
  • Company-community relations often involve legacy issues, particularly in the extractive sectors. When is it advisable to have a separate, independent process for dealing with complex problems? How shall the two processes operate in parallel? 
  • A grievance mechanism can emerge from formalizing a pre-existing informal grievance handling. Is the process of formalization clear to community members? How can companies use stakeholder dialogue to build understanding about the future mechanism?
  • Epistemic inequality is pervasive in company-rightsholder relations, including in the establishment and the functioning of grievance mechanisms. For instance, complex projects and operations can be hard to understand without some technical background. What processes and tools can anticipate and address epistemic inequality in the various forms it may take? 
  • Co-design has progressively entered the tool of good practices, particularly for community grievance mechanisms. What incentives exist for fostering co-design in light of the company concerns of losing the driving seat in grievance management?
  • In the backdrop of the ongoing pandemic, how can existing grievance mechanisms be made effective in the face of unexpected events, disruptions with immediate negative impacts, and crises?
  • There is often a gap between the company and the operational level: a general policy at the company level and little transparency over operational level policies: How should this be addressed?
  • The implications of climate change are increasingly likely to be felt as adverse impacts at the operational level. What is the role of grievance mechanisms as a channel for access to remedy in this context? Are issue-specific mechanisms, e.g., the High Carbon Stock Approach Grievance Mechanism, a promising model to incorporate complex scientific evidence in grievance assessment? 
  • The fate of existing grievance mechanisms is often uncertain in corporate restructuring operations, particularly mergers and acquisitions. What practices shall become the new standard, e.g., disclosure and transparency towards rightsholders and the general public about changes or demise of the current policies?
  • Grievance mechanisms are one component of the regulatory initiatives for (global) supply chains. What is the role of political economy in understanding the remedy function of these mechanisms?

Teaching Resources

Notes

[*] This teaching note may be cited as:

Antonella Angelini, “Teaching Note: Operational-level Grievance Mechanisms,” in Teaching Business and Human Rights Handbook (Teaching Business and Human Rights Forum, 2022), https://teachbhr.org/resources/teaching-bhr-handbook/teaching-notes/human-rights-and-the-environment/.

[1] See in particular, Int’l Fin. Corp. [IFC], World Bank Grp. [WBG], Performance Standards on Environmental and Social Sustainability, 1–2, 7, 9 (2012), https://www.ifc.org/wps/wcm/connect/24e6bfc3-5de3-444d-be9b-226188c95454/PS_English_2012_FullDocument.pdf?MOD=AJPERES&CVID=jkV-X6h.

[2] See in particular, International Council on Mining and Metals. “Handling and Resolving Local-Level Concerns and Grievances.” Human Rights in the Mining and Metal Sector, ICMM, 2019 (ICMM Manual). Accessed February 10, 2022. https://www.icmm.com/website/publications/pdfs/social-performance/2019/guidance_grievance-mechanism.pdf; International Commission of Jurists. “Effective Operational-level Grievance Mechanisms.” International Commission of Jurists, Geneva, 2019 (ICJ Report). Accessed 10 February 2022. https://www.icj.org/wp-content/uploads/2019/11/Universal-Grievance-Mechanisms-Publications-Reports-Thematic-reports-2019-ENG.pdf; Office of the High Commissioner for Human Rights. “Accountability and Remedy Project III: Enhancing effectiveness of non-State-based grievance mechanisms in cases of business-related human rights abuse. Main Report.” UN Document: A/HRC/44/32, 2019 (ARP III Final Report) Available at: https://www.ohchr.org/EN/Issues/Business/Pages/ARP_III.aspx and Accountability and Remedy Project III: Enhancing effectiveness of non-State-based grievance mechanisms in cases of business-related human rights abuse. Addendum: Explanatory Notes to Final Report.” UN Document: A/HRC/44/32/Add.1, 2019 (ARP III Final Report Addendum). Available at: https://www.ohchr.org/EN/Issues/Business/Pages/ARP_III.aspx.

[3] This teaching note does not systematically discuss the effectiveness criteria listed in UNGP Principle 31. Such a discussion, based on insights from the practice of NJGMs, including OGMs, make the subject of objectives 7 to 14 of the 2019 ARP III Report by the UN Office of the High Commissioner for Human Rights. In principle, OGMs designate mechanisms exclusively at the operational level. This teaching note sometimes departs from this focus, making a few motivated and explicit references to grievance handling at other levels directly connected or relevant to the operational one.

[4] Aside from multilateral and regional banks, some private financing institutions require their clients to adopt OGMs. For an interesting assessment of these criteria in different project contexts, see BankTrack. “Trust Us, We’re Equator Banks” Part I: the presence or absence of grievance mechanisms and stakeholder engagement processes under the Equator Principles, 2020. Accessed 25 February 2022. https://www.banktrack.org/download/trust_us_were_equator_banks_briefing_paper/201124_part_1_trust_us_were_equator_banks.pdf.

[5] The Center for International Law & Policy Operational Grievance Mechanism Research Project. “Trends and General Practices of Company Operational-Level Grievance Mechanisms.” Operational-Level Grievance Mechanism Research Project, New England Law, Boston, 2021. Accessed February 10, 2022. https://www.nesl.edu/docs/default-source/default-document-library/ogm-project-trend-analysis-spring-2021.pdf?sfvrsn=74967ca0_2.

[6] In this respect, Office of the High Commissioner for Human Rights. “Preventing retaliation Preventing retaliation through non-State-based grievance mechanisms.” Session at the Forum on Business and Human Rights 2020. Accessed March 3, 2022. https://media.un.org/en/asset/k15/k15gf15skh.

[7] See, International Migration Organization. “Operational guidelines for businesses on remediation of migrant-worker grievances.” IOM, Geneva. 2021. Accessed February 28, 2022. https://teachbhr.files.wordpress.com/2022/06/363be-operational-guidelines-for-businesses_228129.pdf; United Nations Children’s Fund (UNICEF). Operational-level grievance mechanisms fit for children.” United Nations Children’s Fund (UNICEF) 2018. Accessed 22 February, 2022. https://www.unicef.ca/sites/default/files/2019-01/UNICEF-GRIEVANCE-MECHANISMS.pdf.

[8] In this respect, see the ARP consultation exploring the links between human rights due diligence, accountability, and access to remedy, 04.03.2022, organized by the OHCHR. Accessed 08 March 2022. https://www.ohchr.org/Documents/Issues/Business/consultation-arp-hrdd-cn-agenda.pdf.

[9] Know the Chain. “Closing the gap: Evidence for effective human rights due diligence from five years measuring company efforts to address forced labour.” Know the Chain, 2022 :17-18. Accessed 22 February 2022. https://knowthechain.org/closing-the-gap-evidence-for-effective-human-rights-due-diligence-from-five-years-measuring-company-efforts-to-address-forced-labour/.

[10] In this direction, the 2019 ICMM Manual quite aptly summarizes “The results – its near-term outputs and longer term outcomes – should be some combination of: (a) remedy for people who have been harmed; (b) changes to processes or practices that have caused harm; (c) restored, protected or improved relationships with the communities for which the mechanism exists.”

[11] For a full account of the events leading up and following the establishment of the company OGM at Thilawa, https://www.business-humanrights.org/en/latest-news/myanmar-thilawa-economic-zone-launches-complaint-mechanism-ngo-says-it-falls-short-of-intl-standards-inc-responses-from-company-other-agencies/ (Accessed 22 February 2022).

[12] For more information, see the references in the Teaching Resources below and the project website: https://www.nesl.edu/practical-experiences/centers/center-for-international-law-and-policy/projects/operational-grievance-mechanisms-project.