This piece examines whether business-driven remediation processes, such as Operational-level Grievance Mechanisms, should allow corporations to act as the remedy provider in cases of corporate human rights abuse.
The blowing up of a cave in Jukaan Gorge by mining giant, Rio Tinto, for expansion of an iron ore mine in the Hammersley Ranges of Western Pilbara, caused huge public outrage in Australia and across the globe. Some experts argued that the act of blowing up the cave was within the law while pointing out the deficiencies in the current local laws, especially Western Australia’s Aboriginal Heritage Act 1972. One deficiency in the Act is the absence of a statutory requirement ensuring traditional owners be consulted on matters pertaining to cultural heritage. As a fallout of the blast and growing investor pressure, the CEO of Rio Tinto along with two other senior executives had to resign from their positions. This step was welcomed by the National Native Title Council and hailed as the “first step to recovery”. After the announcement of a Senate inquiry and a visible public relations crisis, Rio Tinto pledged to conduct a review of its heritage management processes and subsequently released a document titled “Board Review of Cultural Heritage Management.” In this document, Rio Tinto expressed its unreserved apology and highlighted the priorities for change in its heritage management processes, including working closely with the traditional owners of the land, the Puutu Kunti Kurrama and Pinikura people (PKKP). However, the fact of the matter was that the damage had been done and the Aboriginal site lost. The remedy offered for heritage destruction was largely corporate driven with limited involvement of the state. The idea of inclusion of the corporate actor as part of the solution to a corporate wrongdoing is not novel. The United Nations Guiding Principles on Business and Human Rights (UNGPs) provide some guidance on this. In the UNGPs, the notion of providing remedies through business-driven remediation processes is known as Operational-level Grievance Mechanisms (OGMs). The theoretical underpinning for OGMs is enshrined in Principle 29 of the UNGPs where it states that “business enterprises should establish or participate in effective operational-level grievance mechanisms.”
Operational-Level Grievance Mechanisms And their Role In The UNGPs
Events such as the blowing up of the cave in the Jukaan Gorge remind us of the constantly expanding role of multinational corporations and its potential adverse impact on society. The rise of corporations as economic powerhouses necessitated a debate on establishing a universal legal framework addressing human rights concerns caused by adverse business operations. Towards this goal, the UNGPs were developed after extensive multi-stakeholder consultations with independent experts and companies. The UNGPs are a set of non-binding principles providing guidance on matters relevant to corporate human rights conduct. The endorsement of the Guiding Principles in 2011 by the United Nations’ Human Rights Council provided a focused approach by establishing Three Pillars. Pillar 1 (Protect) emphasised the state responsibility to protect. Pillar 2 (Respect) emphasised the corporate responsibility to respect human rights. Pillar 3 (Remedy) emphasised the provision of an access to remedy in cases of corporate wrongdoings. These three pillars constituted the “Protect, Respect and Remedy” framework of the UNGPs.
Remedy is defined in the UNGPs as including “apologies, restitution, rehabilitation, financial or non-financial compensation and punitive sanctions (whether criminal or administrative, such as fines), as well as the prevention of harm through, for example, injunctions or guarantees of non-repetition.” Different forms of remedy are offered through different grievance mechanisms which are classified as either state-based or non-state based. State-based mechanisms are administered by a branch or agency of the State, or by an independent body on a statutory or constitutional basis. They may be judicial or non-judicial. Examples include courts (for both criminal and civil actions), labour tribunals, national human rights institutions. Non-state-based mechanisms are private mechanisms offered by non-state entities and examples include OGMs which are used by companies to redress grievances.
OGMs are defined as “a formalized means through which individuals or groups can raise concerns about the impact an enterprise has on them—including, but not exclusively, on their human rights—and can seek remedy.”
According to Principle 31(h) of the UNGPs, OGMs should be based on engagement and dialogue along with fulfilling other criteria of effectiveness of non-judicial mechanisms: legitimate, accessible, predictable, rights-compatible, equitable and transparent.
Commentary to Principle 29 in the UNGPs states that OGMs perform two key functions. Firstly, they support the identification of adverse human rights impacts as a part of an enterprise’s ongoing human rights due diligence by providing a channel for those directly impacted by the business’ operations to raise concerns when they believe they are being or will be adversely impacted. Secondly, these mechanisms make it possible for grievances, once identified, to be addressed and for adverse impacts to be remediated early and directly by the business enterprise, thereby preventing harms from compounding and grievances from escalating.
OGMs have the potential to be directed in favour of the company because they allow the establishment of a system where there is the trading of the right to file future claims in court in exchange for receiving remedies. It is easier for companies to premeditate the remedies through an OGM rather than going through years of unpredictable and expensive litigation in courts. This generates a transactional understanding of remedies based on the denial of the procedural right to receive adequate remedies through an independent process.
Company as the Judge, Jury and Executioner
At a cursory glance, the use of OGMs sounds reasonable. It provides immediate relief for those who might not be able to receive remedies through state-based judicial mechanisms. Individuals who are adversely impacted by business activities can apply for remedies provided by the company through participating in the OGM. However, this has consequences in terms of international standard-setting for corporate accountability. One such consequence is the corporate take-over of the grievance redressal process.
There are three phases in resolving a grievance. The first phase is investigation of the claim. The second phase is the determination of its validity. The third phase is the remediation of the grievance. The use of OGMs suggests that in all the three phases the lead to resolve grievances is taken by the company. This meant that the offending company investigated, determined, and remedied the harms caused to the claimants. Since OGMs are administered and directed by corporations, they become the judge, jury, and executioner in cases of their own wrongdoing. This is particularly challenging because it puts the corporation in a position where it is actively adjudicating grievances against itself. There is potential danger of the misuse of OGMs especially when there is no independent oversight of the OGM. This was evident in the OGMs used in Papua New Guinea and Tanzania. In both the cases, the use of legal waivers in OGMs ensured that the companies further denied access to remedies for those who are adversely impacted.
Access to effective remedy has both procedural and substantive aspects. Without the procedural right to access to remedies, the substantive right to remedies is of limited use. The right to a fair and impartial assessment of one’s claim is crucial to securing the broader goal of corporate accountability. It entitles an aggrieved person to have the option, if they choose, of receiving a hearing in a court of law with the matter being adjudicated upon by independent judges based on substantive principles of fairness and justice of the legal system irrespective of the lack of resources possessed by the victims. OGMs have the potential to deny this important procedural right. State-based judicial mechanisms ensure that private remediation processes, such as OGMs, do not unfairly deny a resource-deprived individual from seeking justice. It is possible that an offending company participates in the resolution of grievances, but this should not be used to subvert access to justice in other forums.
In the Jukaan Gorge explosion, the company tendered an apology and admitted at the Senate inquiry that there was “poor communication” internally between the heritage and operational personnel. Whereas an enquiry by the Australian Government is a positive step towards ensuring that strict action is taken against mining giants such as Rio Tinto, it is equally important to realise the limitations of corporate-driven remedy processes. There is a climate of self-regulation which ensures that corporations act as partners in determining the remedy rather than recognising them as offending entities. The Jukaan Gorge explosion, perhaps not illegal per se vis-à-vis domestic laws, shows how corporate wrongdoing is redressed with corporations playing a crucial role in the process. Rio Tinto can play an important role in resolution of grievances, but assuming the role of remedy-provider is confronting. This trajectory challenges the established understanding of human rights law placing responsibility on the State for protection and promotion of rights. However, the rise of newer processes such as OGMs can be indicative of a shift toward corporate remediation of corporate wrongs.
Justin Jos is a PhD candidate at the Faculty of Law at University of New South Wales, Australia. His research aims at developing a theory on the use of legal waivers in operational-level grievance mechanisms by multinational corporations in cases of corporate human rights abuse. The author would like to thank Andrew Symington, PhD candidate at UNSW and the team at the ILA Reporter for all their comments and suggestions.
The author acknowledges the Bidjigal and Gadigal peoples of the Eora nation as the traditional custodians of the land on which he works and pays his respects to Elders past and present and extend this respect to all Aboriginal and Torres Strait Islander people. Sovereignty was never ceded.