Alignment with International Standards

1. No explicit reference to international human rights standards or covers some but not all salient human rights
​2. No explicit role for rights holders in standard setting

Scope

3. No requirement of brands to share responsibility with suppliers
​4. Does not adequately account for vulnerable people
5. Does not adequately account for gender

Audits

​6. Allows the company or supplier being audited to pay directly for and/or choose the auditor
7. No requirement for auditors to have human rights competencies and knowledge of the local context
8. Audits not carried out in person, among other procedural weaknesses
9. Certification granted despite insufficient sample size

Grievance Mechanisms

10. No grievance mechanism at the scheme level and/or no requirement for a grievance mechanism in the certification standard
11. No controls to ensure the effectiveness of the grievance mechanism in providing remedy

Governance & accountability 

12. No or poor communication of the certification requirements to the chain of custody participants
13. No process to suspend or withhold certification until corrective action plans are adopted and implemented
​14. Does not make information on audits, complaints, or compliance public

Go to Red Flag 11

CRF Home > 14 Red Flags > ​​Grievance Mechanisms > Red Flag 10

10. No Grievance Mechanism at the Scheme Level and/or No Requirement for a Grievance Mechanism in the Standard

• What this means 
• Why investors should care
• What to look for 
• Checklist

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The right to remedy is a fundamental human right found in every major international human rights instrument. The UNGPs specifically provide that “industry, multi-stakeholder and other collaborative initiatives that are based on respect for human rights-related standards should ensure that effective grievance mechanisms are available.”[1] ISEAL’s Assurance Code of Good Practice also highlights the importance of grievance mechanisms and requires that:

The scheme owner shall have in place a publicly available and accessible complaints resolution procedure and shall require this also of its assurance providers and oversight bodies. Each procedure shall require the respective body to: investigate and take appropriate action regarding relevant complaints, within defined timelines; review and take any necessary corrective actions; and keep a record of all complaints and resulting actions to be made available for internal audits and management reviews.[2]

Certification schemes commonly require participating companies and processors to have a complaints mechanism, which should meet the standards of the effectiveness criteria of UNGP 31 on non-judicial grievance mechanisms and include rights holders in their design and implementation (see Red Flag 2 in Alignment with International Standards). Additionally, certification schemes need an effective grievance mechanism of their own to ensure that there is a check on a certified entity’s handling of complaints and that the certification is not “green lighting” a certified company that has harmed a community. No certification should close off options for a community seeking remedy. Grievance mechanisms should be in place at the supplier, buyer, and certifier levels.
 
Grievance mechanisms are critical for detecting breaches of a certification scheme’s standards and ensuring accountability. Audits alone are insufficient because even when done well they provide only a snapshot of conditions at a part of the operations and at a certain point in time. In addition, audit deception—efforts to hide human rights and labor abuses—is common[3] (see Red Flag 6 in Audits.) When audits do uncover violations, there may be corrective actions, but rarely are there provisions for remedy for rights holders.

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[1] United Nations, Guiding Principles on Business and Human Rights: Implementing the United Nations  ‘Protect, Respect and Remedy’ Framework (2011), 32-33,  https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf.
[2] ISEAL, Assuring Compliance with Social and Environmental Standards: ISEAL Code of Good Practice Version 2 (January 2018),  https://www.isealalliance.org/get-involved/resources/iseal-assurance-code-good-practice-version-20.
[3] Transparentem, Hidden Harm: Audit Deception in Apparel Supply Chains and the Urgent Case for Reform (October 2021), 2,  https://transparentem.org/project/hidden-harm/.

Certification schemes that do not require companies to ensure that all suppliers have a grievance mechanism create risk. Many companies and certifications are slippery on this point: they claim that grievance mechanisms are in place, despite not being widely implemented. For example, companies might highlight pilot programs to create the impression that grievance mechanisms are prevalent across suppliers, even when they are not.
 
A 2018 report on Indonesia Sustainable Palm Oil (ISPO) by Netherlands-based research organization Profundo found that the ISPO standards “contain no grievance mechanism for workers. The only grievance mechanism is related to land disputes and compensation. Indonesian national law does provide protection to workers, but this is not referenced in the standard.”[1] The report recommended that ISPO set up a grievance mechanism.
 
→ Demonstrates: Reputational risk, legal risk

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[1] Retno Kusumaningtyas, External Concerns on the RSPO and ISPO Certification Schemes (Profundo, January 21, 2018), 2, 25, https://www.foeeurope.org/sites/default/files/eu-us_trade_deal/2018/report_profundo_rspo_ispo_external_concerns_feb2018.pdf.

Investors can check the certification standard to see if the certification requires that certified entities maintain a grievance mechanism. If it does, investors can ask portfolio companies for proof that it exists. If it doesn’t, investors should ask what the plans are to develop a grievance mechanism and a timetable for putting it in place.
 
Information on whether the scheme itself has an effective grievance mechanism is typically found on its website, and the same questions would apply.

➔    Fair Wear’s Brand Performance Check indicators require that member companies actively support operational‐level internal grievance mechanisms, and its website explains that its grievance mechanism serves as a safety net when other options fail or are not trusted by workers.
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➔    In 2020, Bonsucro updated its Code of Conduct with a provision that members that are the subject of complaints through the breach of the code “agree to be bound by the terms of Bonsucro's grievance mechanism.”[1] The grievance mechanism is available in Spanish, Portuguese, and English, and aligns with the UNGPs Effectiveness Criteria[2] (see Red Flag 11 in Grievance Mechanisms). In the 2023 update to the Bonsucro Production Standard, Bonsucro made having a grievance mechanism aligned with the UNGPs a “Core Indicator.”[3]

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[1] “Bonsucro Code of Conduct v2,”  Bonsucro, April 2020, https://bonsucro.com/wp-content/uploads/2020/11/Bonsucro-Code-of-Conduct.pdf.
[2] “Bonsucro Grievance Mechanism,” Bonsucro, June 2020,  https://bonsucro.com/bonsucro-grievance-mechanism/.
[3] See criterion 1.4 (indicator 1.4.2) of the Bonsucro, Production Standard Version 5 (July 2023), 13, https://bonsucro.com/wp-content/uploads/SCH_Bonsucro-Production-Standard-V5.2-July-2023-ENG.pdf.

Does the scheme require member companies to have a complaints mechanism that meets the effectiveness criteria established in UNGP 31?
​❐  Yes 
❐  No
❐  Partially

Does the scheme require member companies to report on how often the complaint mechanism is used?
❐  Yes 
❐  No
❐  Partially

Does the scheme itself have a grievance mechanism that is used and does it report on how often it is used?
❐  Yes 
❐  No
❐  Partially​