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RED FLAG 10
Grievance Mechanisms
No Grievance Mechanism at the Scheme Level and/or No Requirement for a Grievance Mechanism in the Standard
Reputational risk
Legal risk
What this means
Why investors should care
What to look for
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 common3 (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 initiative levels.
Footnotes
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
Footnotes
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 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 member companies 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.1
➔ 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.”2 The grievance mechanism is available in Spanish, Portuguese, and English, and aligns with the UNGPs Effectiveness Criteria3 (see Red Flag 11). In its 2023 update to the Production Standard, Bonsucro designated a UNGP aligned grievance mechanism as a “Core Indicator.”4
Footnotes
1 Fair Wear, Brand Performance Check; Fair Wear grievance mechanism overview.
2 “Bonsucro Code of Conduct v2,” Bonsucro, April 2020, https://bonsucro.com/wp-content/uploads/2020/11/Bonsucro-Code-of-Conduct.pdf.
3 “Bonsucro Grievance Mechanism,” Bonsucro, June 2020, https://bonsucro.com/bonsucro-grievance-mechanism/. 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.
4 “Bonsucro Grievance Mechanism,” Bonsucro, June 2020, https://bonsucro.com/bonsucro-grievance-mechanism/.
Checklist for Red Flag 10
Does the scheme require member companies to have a complaints mechanism that meets the effectiveness criteria established in UNGP 31?
Does the scheme require member companies to report on how often the complaint mechanism is used?
Does the scheme itself have a grievance mechanism that is used, and does it report on how often it is used?
Ready to assess an initiative?
GO TO THE CHECKLIST ↗
