Toolkit

ADDRESSING SECURITY AND HUMAN RIGHTS CHALLENGES IN COMPLEX ENVIRONMENTS

Third Edition, Available in English, French, Spanish and Chinese

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A compendium of concrete good practices to security and human rights challenges aimed at companies, security providers, civil society, national regulators and other practitioners

 

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1.2. Governance and transparency

a) Governments may selectively enforce laws and policies, making decisions on corporate operations without consulting with local communities or fully taking into account their social and environmental impacts, potentially resulting in human rights violations. In such situations, companies risk being perceived as benefiting from or being complicit in these practices.

 

Good Practices*

Clearly and widely communicate the company’s commitment to respect the rights of local communities

  • Ensure the company’s human rights policy covers economic, social and cultural rights of communities and is reflected in all corporate procedures. (See Challenge 1.3.a.)
  • “Report transparently on implementation of soft law guidelines.” (IHRB: 42)
  • Publicly condemn violence against civilians in the region where the company operates. (Swisspeace: 33)
  • Be aware that silence or inaction in case of government malfeasance can be seen as a demonstration of indifference by the company and hence expose it to dangers and risks. (UNGC: 18)
  • Ensure the company’s grievance mechanism is known and accessible to communities. (See Challenge 4.1.e.)

Conduct a legal assessment as part of the context analysis (See Challenge 2.1.a.) and, on this basis, identify and assess risks regularly (See Challenge 4.1.a.)

  • Assess how and to what extent the legal system is able to address security and human rights issues.
  • Evaluate the potential for the company to be “indirectly or directly complicit in human rights abuses, in the illegal use of force and/or in gross human rights violations.” (UNGC: 18)
  • Consider the risk of causing or contributing to gross human rights abuses as a legal compliance issue. (GPs: 25)
  • Do not assume that conducting human rights due diligence, by itself, will automatically and fully absolve the company from liability for causing or contributing to human rights abuses. (GPs: 19)

Conduct a human rights impact assessment to ensure that any proposed development does not affect the human rights of local communities (See Challenge 4.1.a.)

Develop a human rights risk prevention and mitigation strategy in consultation with communities and other relevant stakeholders (See Challenge 4.4.a.)

  • Develop detailed policies on bribery issues and put in place robust management procedures such as training and whistle-blowing to prevent corruption. (UNGC: 15) (See Challenge 1.2.b.)
  • Prioritise the most serious risks and impacts. Where risks or potential impacts are high or extreme, do not start the project or activity until the risks have been reduced or mitigated. (PDAC-CDA: 18) “A company’s inability to operate in ways that do not, at a minimum, ‘avoid harm’ should prompt serious consideration of withdrawal from the context.”[5]
  • Exceed national legislation on human rights where it falls short of best practice or international law. (IHRB: 42)
  • Tailor the risk mitigation strategy to the company's involvement in particular risks or impacts, considering also the seriousness of each of those risks and impacts.
  • Ensure that the company does not exacerbate the situation. “Avoid contributing to the criminalisation of human rights defenders or the use of law enforcement agencies to repress peaceful protest or other forms of opposition to the project.” (OECD 2015: 54)
  • Engage local communities through their own representatives in any decision-making process involving the exploitation of natural resources or construction on land, where stakeholders are likely to be impacted but are not necessarily protected by the government negotiating the agreement. (HRT: 6) (See Challenge 4.1.b. and Challenge 4.1.c.)
  • Be aware that” there are no quick fixes for (pre-existing) conflicts, and a company neither can, nor should, try to address them on its own.” (PDAC-CDA: 4)

Engage with relevant government agencies to advocate for solid resource governance and compliance with human rights standards

  • Set the company’s human rights expectations from the start of the engagement with the host government and negotiate contracts and agreements accordingly. (See Challenge 1.3.a.)
  • Seek to ensure the government fulfils its responsibility regarding consultations. (See Challenge 4.1.d. and Challenge 4.2.a.)
  • Ensure investment agreements do not reinforce weak governance by interfering with national efforts to implement laws, regulations or policies. “Contractual stabilization clauses, if used, should be carefully drafted so that any protections for investors against future changes in law do not interfere with the State’s bona fide efforts to implement laws, regulations or policies in a non-discriminatory manner in order to meet its human rights obligations.” (UNIG: 39)
  • “Ensure that agreements with the host government specify that land acquisition and resettlement be conducted in accordance with international standards.” (CSBP, Flashpoint Issue 2: 6)
  • When governments are unwilling to include human rights provisions in agreements, try to include these issues through other avenues, such as MoUs with security forces, training programmes, capacity building, and operating procedures.[6] (See Section 2.3. MoU and Section 2.5. Training)
  • Coordinate with competent authorities to strengthen their ability to respond to increased risks, ensuring that security measures adopted are appropriate to the risks.
  • Advocate for changes in royalty distribution to ensure that portions of private sector royalty are reaching local communities and having a positive impact on local wellbeing and economic diversification.
  • Develop plans of action with local authorities in order to foster responsible investment.

Engage with other actors to develop host government capacity and promote good governance and respect for human rights

  • Develop a dialogue with international actors playing a role in governance support and state building.
  • Support efforts by international donors to assist host governments with security sector reform, developing national institutions’ capacities and strengthening the rule of law. (VPs: 2)
  • Support capacity-building in the legal system to strengthen judicial grievance mechanisms related to human rights.
  • Identify and support programmes to build capacity of national and local authorities on business and human rights that are adapted to the local context.
  • Support efforts to strengthen local government institutions, such as anti-bribery programmes.
  • Support efforts to promote fair rules for investment – e.g. rules allowing for a better division of the territory between areas assigned to private companies and areas reserved for the use of the local population (e.g. artisanal miners, farmers, ...).
  • “Harness the potential of multi-stakeholder initiatives to lobby host governments on relevant human rights matters.” (IHRB: 42)
  • Promote the establishment of local, regional and national fora to discuss potential and actual social and environmental impacts of projects in order to prevent, mitigate and remediate them.
  • Consider collective corporate action for addressing government policies that have negative impacts on local communities. (GIR: 175)
  • Support the efforts of media and civil society, including human rights institutions, to hold the local government accountable.
b) Host governments and local authorities may manage legitimate payments by extractive companies in a non-transparent way.

 

Good Practices*

Conduct a risk assessment including questions on governance and transparency, and update it regularly

Make a clear and unequivocal commitment to transparency of all revenue flows to governments (CSBP, Flashpoint Issue 9: 6)

  • Develop a detailed company policy on transparency and the non-payment of bribes.
  • Highlight international, regional and national (both from host and home country) legislation on bribery and corruption prominently on the company’s website.
  • Put in place robust management procedures such as training and whistle-blowing to prevent corruption. (UNGC: 15)
  • Publish what you pay to governments in a clear and accessible form. (CSBP, Flashpoint Issue 9: 6) Make all payments to governments available in your financial reviews. Guidance on related good practices can be found at www.publishwhatyoupay.org.
  • Inform communities about the companies’ payments to the host government. Use booklets, video and audio that explain the companies’ operational processes and payments in simple language. (CSBP, Flashpoint Issue 1: 6)

Promote international best practice on transparency of payments and financial management in all engagement with the host government

  • Include a clause on transparency in the agreement/MoU with the host government. Agree with the host government to make “unclassified” information, regarding payments, transfers or any other support, available to the public (subject to legitimate commercial and security concerns).
  • Encourage the host government to distribute a part of the taxes paid by the company to regional and/or local governments, making this commitment known to the local population so that local authorities are held accountable for the use of these revenues.

Engage in efforts to improve government management of revenues from corporate operations

  • Support the “development and enforcement of relevant national legislative frameworks to ensure transparency and oversight of the financial process”. (ITGNs: 22) Also consider engagement with parliamentary committees to understand their roles and responsibilities with regard to oversight of resource management.
  • Identify ways to “support the development of national capacity in financial management- including a reliable corps of accountants, auditors and bookkeepers who can ensure that the financial integrity and probity of the process is guaranteed from a national perspective.” (ITGNs: 23)
  • Encourage the oversight of public investment decisions by relevant state bodies, such as anti-corruption commissioners and security sector oversight bodies (e.g., parliamentary committees, independent oversight institutions). 
  • Engage constructively in multi-stakeholder processes that provide fora for business-government engagement on transparency and accountability, such as the Extractive Industries Transparency Initiative, at both national and international levels. (UNGC: 17; CSBP, Flashpoint Issue 9: 6)
  • Support the role of civil society organisations in analysing how revenues are utilised to provide additional transparency to the process.
  • Promote broad participation and transparency in decisions regarding the use of revenues, as this contributes positively to national ownership by enhancing popular understanding of the dynamics and challenges involved in the national management of revenues from corporate operations. (ITGNs: 23)
c) Companies may be perceived as trying to unduly influence public institutions when they get involved in efforts to strengthen them.

 

Good Practices*

Share information on any company involvements in strengthening public institutions

  • Ensure clear communications nationally and to local communities on the company’s involvements in strengthening public institutions and why. Highlight the fact that the company is not unduly influencing the decisions or practices of public institutions in any way.
  • When engaging with local communities, solicit ideas on how to improve support to capacity-building of public institutions. Where possible, integrate these suggestions in ongoing efforts to strengthen public institutions. 

Support national ownership of host government security sector reform processes

  • Ensure that company engagement with host governments is inclusive and consultative, and that company policies are informed by the perspectives, priorities and vision of national stakeholders (i.e. not only the executive, but also civil society, communities, the legislature, the media, ...). (ITGNs: 13-16) If the public is involved in consultations and planning, they will be able to see more clearly and have confidence that the company is operating transparently and not unduly influencing public institutions.
  • Where feasible, provide the host government with matching funds rather than grants or donations. This empowers government officials, encourages a national process of prioritisation and contributes to national capacity building. (MIGA: V-3) Ensure adequate oversight of the use of funds provided by the company.
  • Support appropriate efforts by the government in its re-organisation of law enforcement around project sites (e.g. some financial support) while leaving decision-making to the relevant institution.

Engage with other actors to develop host government capacity and promote good governance (See Challenge 1.2.a.)

d) In contexts of weak governance and poor enforcement capacity, companies may feel they have little option other than to take on some responsibility in the provision of services to local communities, which the host government and local authorities should normally assume.

 

Good Practices*

Conduct a socioeconomic baseline study and a risk assessment and update them regularly (See Challenge 4.1.a.)

  • Analyse the government’s capacity and deficiencies in providing public services and protecting the population’s rights, and consider the risks associated with these. (IHRB: 49)

When engaging with all stakeholders, emphasise the central role of the state in ensuring respect for the rule of law, providing for social services and developing the local economy

Work together with host governments to improve public service provision at the local level

  • Provide technical assistance to strengthen the government’s capacity to deliver social services efficiently. (IA-ICMM: 20)
  • Exercise the company’s “convening power to bring government representatives and local communities together to discuss steps towards ensuring government-provided services.” (GIR: 145)
  • Form a tripartite partnership with government and local communities, where each of the three partners contributes to making the project successful. Ensure there is a good understanding about the roles and responsibilities of each party, in alignment with the UN Guiding Principles on Business and Human Rights. (GIR: 146)

Engage in efforts that enhance governance capacity and support international best practice in resource governance (See Challenge 1.2.a.)

Ensure that social investment programmes are sustainable and developed with local communities

  • Use the findings from the socioeconomic baseline study to identify development opportunities, in particular any gaps and deficiencies in areas such as logistics, suppliers, distribution channels, or training.[7] Consider investing in development projects that fill those gaps, drawing on the company’s own expertise.
  • Prioritise projects in consultation with community members and development partners. Develop, implement and manage social investment programmes in partnership with local communities and with the support of government authorities.[8]
  • Work directly with the national, regional and local governments to ensure that the company’s social investments are in line with and do not displace regional and local community development plans. (UNGC: 26)
  • Design all social investment with a clear and conscientious exit strategy and ensuring that other parties, including local communities and government, can take them over. (UNGC: 26) This means that local stakeholders must have a sense of ownership over the programmes from the beginning.
  • Assess the effectiveness of the social investment in terms of impacts rather than outputs. (CSBP, Flashpoint Issue 5: 5)