Human Rights & Business: Alternative Conflict Resolution

Lodging a complaint instead of going to court? The effectiveness of this alternative in cases of human rights violations by companies is now being examined on the basis of factual examples. A project sponsored by the Austrian Science Fund FWF analyses three categories of complaint mechanisms, focusing on those established by international institutions, companies and multi-stakeholder initiatives. A total of nine case studies concerning organisations like the World Bank, a well-known sportswear manufacturer and several international initiatives will be examined. The project's goal is to identify best practice and excellence criteria for dealing with complaints regarding human rights violations in a corporate context.

Human rights are more important than corporate profits. As self-evident as this statement may seem, it does not always reflect reality. Child labour and environmental destruction caused by industrial activities make this more than obvious. Indeed, balancing human rights and business interests can be problematic. Yet existing mechanisms for resolving conflicts of this kind quickly reach their (national) limits - they are complex, time-consuming and thus often prove to be unsatisfactory. Consequently, victims repeatedly experience a lack of legal protection. A current project by the Austrian Science Fund examines extrajudicial complaint mechanisms which may provide useful alternative routes to conflict resolution.

Complain Not in Vain

Project leader Dr. Karin Lukas from the Ludwig Boltzmann Institute of Human Rights describes the project's focus: "Complaint mechanisms appear to offer an efficient means of settling disputes out of court. We will analyse nine examples to see whether and to what extent this is actually the case." Dr. Lukas distinguishes between three categories of organisations that have established complaint mechanisms for resolving conflicts with businesses: international institutions, companies and multi-stakeholder initiatives.

For the "international institutions" category, Dr. Lukas and her team analyse the complaint mechanisms put in place by the OECD, the World Bank and the International Finance Corporation (IFC). The OECD, for instance, published relevant guidelines for multinational companies and established an implementation mechanism through national contact points. The World Bank and the IFC set up internal mechanisms to deal with human rights violations in projects financed by them. In the "companies" category, Dr. Lukas and her team look in more detail at the complaint mechanisms employed by Adidas, as well as Hewlett Packard Mexico Ltd. and the mining corporation Goldcorp. All three are multinationals which established their own internal complaint mechanisms some time ago and have already gained experience with them. To complement their study, the team will also analyse mechanisms established by multi-stakeholder initiatives, in particular the Fair Wear Foundation, the Ethical Trading Initiative and the Fair Labour Association. These organisations set up guidelines for the protection of workers in particular industries and put mechanisms in place within their partner organisations to sanction and remedy violations.

Guidance to Grievance

Regarding the primary target groups for the results to be expected of her work, Dr. Lukas explains: "For people who have seen their human rights violated, the results will be able to serve as guidelines for assessing the effectiveness of such complaint mechanisms. In fact, efficient extrajudicial complaint mechanisms can lower the emotional and financial barriers to taking action against the violation of one's rights. And we are defining criteria of excellence for companies. These will provide a useful basis for establishing a complaint mechanism and will help it function efficiently." The project results take on a particular importance in view of the concept presented by UN Special Representative John Ruggie in 2008. It calls for companies to respect human rights, for states to protect individuals against human rights violations by third parties, and for ways of dealing with human rights violations in an appropriate manner. The project, which has now won funding from the Austrian Science Fund, will offer scientifically qualified data to help translate this concept into reality.

Scientific contact
Mag.a Dr. Karin Lukas, EM.A., LL.M.
Ludwig Boltzmann Institute of Human Rights
Freyung 6, 1. Hof, Stiege II
1010 Vienna, Austria
T +43 / (0)1 / 4277 - 27431

Austrian Science Fund FWF
Mag. Stefan Bernhardt
Haus der Forschung
Sensengasse 1
1090 Vienna, Austria
T +43 / (0)1 / 505 67 40 - 8111

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Vienna, October 29th, 2012