Alignment with International Standards

1. No explicit commitment to international human rights standards or covers some but not all salient human rights
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​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
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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
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9. Audit passed on a non-representative sample or insufficient sample size

Grievance Mechanisms

10. No grievance mechanism at the initiative level and/or no requirement for a grievance mechanism in the standard
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11. No controls to ensure grievance mechanisms provide effective remedy

Governance & accountability 

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

Go to Red Flag 11

Main Page > 14 Red Flags > ​​Grievance Mechanisms > Red Flag 10

10. No Grievance Mechanism at the Initiative 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]

Grievance mechanisms are critical for detecting breaches of a 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). When audits do uncover violations, there may be corrective actions, but rarely are there provisions for remedy for rights holders.

Initiatives commonly require participating entities to have a complaints mechanism. The mechanism should meet the standards of the effectiveness criteria of UNGP 31 on non-judicial grievance mechanisms (see Red Flag 11) and include rights holders in their design and implementation (see Red Flag 2). Additionally, schemes need an effective grievance mechanism of their own as a check on a certified entity’s handling of complaints and to ensure that the initiative is not “green lighting” an entity that is causing or contributing to adverse impacts. No certification should close off options for a community seeking remedy grievance mechanisms should be in place at the supplier, buyer, and certifier levels.

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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/.

Sustainability initiatives that do not require adhering entities and members to have a grievance mechanism create risk that a serious ongoing harm may go undetected. 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 should review the MSI's standard to see if the whether it requires participants (members, certified entities or those under assessment) to maintain an operational grievance mechanism. If so, request evidence that it exists; if not, ask for plans and a timeline to establish one. 
 
Good practice examples:

➔    Fair Wear’s Brand Performance Check indicators require adhering entities to actively support operational grievance mechanisms. According to the website, its grievance mechanism serves as a safety valve when other options fail or are not trusted by workers. 
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➔    In 2020, following a UK National Contact Point complaint against Bonsucro, the initiative 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 its 2023 update to the Production Standard, Bonsucro designated a UNGP aligned grievance mechanism as 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​