Activity HRa2.7

Objective

Ethical Suppliers Procurement

Concept

Human Rights

Activity Type

Impact

Rating System Application

B+I:D B+I:O O+M:D O+M:O

Ethical Procurement SEAL 5 · 8 · 12 · 16 · 17

Owner shall remediate Supplier procurement negative impacts to human rights

Scope

The Owner shall provide for or cooperate in the remediation of negative human rights impacts during Supplier procurement where the Project caused, contributed, or is linked to that could not be prevented or mitigated through defined actionable steps. The aim is to neutralize past negative effects through remediation and restoration, not just halting future negative impacts. This activity is confined to the project and not the broader organizational operations.

Requirements ¹⁷³

Act to Avoid Harm

01.

Identification of Owner level of attribution as caused, contributed, or linked (see Guidance below).
02.
Corrective actions for each negative impact according to the level of attribution.
1. a.
  Projects/properties that have directly caused negative impacts shall take the following actions for remediation:
  i. Immediate Cessation: Cease the actions causing the negative impacts immediately. If possible, reverse the abusive activity.
  ii. Compensation: Provide compensation to the affected individuals or communities for losses suffered. This can include, but is not limited to, financial reimbursement, psychological support, medical care, and payment of backpay (in wage and hour violations).
  iii. Accountability: Hold accountable those individuals within the organization responsible for the negative impacts. This could involve disciplinary action, dismissal, or in extreme cases, referral to legal authorities for potential criminal charges.
  iv. Preventative Measures: Implement strategies, policies, and procedures to prevent recurrence, such as due diligence processes, staff training, and regular monitoring and review.
2. b.
  Projects/properties that have contributed to negative impacts shall take the following actions for remediation:
  i. Disengage: Where feasible, cease business relationships with entities causing the negative community impacts.
  ii. Mitigate: If disengagement is not immediately possible, take steps to mitigate ongoing harm, such as by using influence over the contributing partner to halt or prevent further negative impacts.
  iii. Remediate: Assist in remediating harm, potentially through joint efforts with other entities. This could involve participating in restoration projects, funding rehabilitation programs, etc.
  iv. Public Disclosure: Where appropriate, publicly disclose the business's contribution to the negative impacts and the steps it has taken to address it.
3. c.
  Projects/properties directly linked to negative impacts via their business relationships shall take the following actions for remediation:
  i. Leverage: Use their influence over business relationships to mitigate or prevent negative impacts.
  ii. Collaborate: Work with other businesses, governments, or non-governmental organizations to pressure the entity causing the negative impact to reform its practices.
  iii. Policy Implementation: Implement stricter policies for partners, including contractual clauses that stipulate adherence to standards.
  iv. Transparency and Reporting: Regularly report on their efforts to address the linked negative impact, which could include internal audits, third-party audits, and public reports.
  Note: If the above remedies are not successful, consider ending the business relationship.
03.

Compliance with all applicable laws and respect internationally recognized human rights wherever they operate. When faced with conflicting requirements, businesses should seek ways to honor the principles of internationally recognized human rights.
04.
Evaluation of the effectiveness and appropriateness of the remediation efforts through at least one of the following:
1. a.
  collect feedback from affected individuals or communities regarding their satisfaction with the remediation efforts.
2. b.
  solicit the opinion(s) of independent third-party assessors or auditors to provide an unbiased evaluation of remediation efforts.

Indicators

The performance indicator is the percentage of remediated Suppliers procurement negative impacts. The first context indicator is the total number of affected individuals compensated with the type of compensation received (financial, psychological support, medical care, etc.). The second context indicator is the number of preventative measures, such as policies and procedures designed to prevent recurrence, due diligence processes, staff training programs, etc.

Step 1

To calculate the performance indicator:

Determine the total number of negative impacts identified during Activity HRa1.2
For each negative impact, determine the level of attribution (caused, contributed, linked) and the progress of implemented corrective actions as listed in the Requirements above: 25% for the first action, 50% for the second action, 75% for the third action, or 100% for all four actions (corrective actions under each attribution level in the Requirements are listed in a progressive order so they must be implemented in the order they are listed to achieve progressive percentages of completion).
Calculate the weighted remediation percentage for each negative impact by multiplying the level of attribution by the corrective action progress (weights are 1.0 for caused, 0.7 for contributed, 0.5 for linked).
Calculate the overall KPI as the average of all the weighted remediation percentages.

Step 1: Calculate the Weighted Remediation Percentage for Each Negative Impact

R# = A# x C#

Step 2

Step 2: Calculate the Overall KPI

P = (R1 + R2 + R3 + … / N) x 100

Scoring

Outcome threshold

The target outcome threshold is 100% of negative impacts remediated.

Points assignment

Points	Percentage of Remediate Impacts
2 points	40 – 69% remediated impacts
4 points	70 - 84% remediated impacts
6 points	85 -95% remediated impacts
8 points	96 - 99% remediated impacts
10 points	100% remediated impacts

Documentation

01.

List of financial, human, and material resources utilized for this activity.
02.

This is a comprehensive list of all identified negative impacts. It should include details about each impact, such as the nature of the impact, the parties involved, and the level of attribution.
03.

Remediation Action Plans outlining the corrective actions to be taken for each negative impact, based on the level of attribution.
04.

Regular progress reports (if applicable) providing evidence of the implementation of the corrective actions. These should include details of the actions taken, the results achieved, and any challenges encountered. This may not be applicable if the remediation actions are completed in a short timeframe.
05.

For each negative impact, a completion report should be prepared when all corrective actions have been successfully implemented. This report would provide evidence of the successful remediation of the impact.
06.

A summary report of all remediation completion reports, providing a count of the total number of negative impacts and the number that have been successfully remediated.
07.

Independent audit reports (if applicable) could provide third-party verification of the successful remediation of the negative impacts. These reports should include a detailed assessment of the effectiveness of the corrective actions and the extent of the remediation. This may not be applicable if an independent audit is not feasible or necessary.
08.

Testimonials or statements from impacted parties (if applicable), including affected communities and other relevant parties, could provide additional evidence of the successful remediation of the negative impacts. This may not be applicable if impacted parties are not available or willing to provide testimonials.
09.

Any legal documents (if applicable) related to the negative impacts, such as court rulings or settlement agreements, could provide further evidence of the level of attribution and the successful remediation of the impacts. This may not be applicable if there are no legal proceedings related to the negative impacts.
10.

Internal records (if applicable), such as meeting minutes, emails, or memos, could provide additional evidence of the actions taken to remediate the negative impacts. This may not be applicable if internal records are not kept or are not relevant to the remediation process.

Definitions

Severe negative impact (appears in Requirement ) — is one that causes significant and lasting harm to individuals or communities such as serious injury, loss of life, child labor, forced labor, discrimination, and displacement.

Guidance

On identifying level of Attribution ¹⁷⁴

Where a business enterprise causes or may cause an adverse human rights impact, it should take the necessary steps to cease or prevent the impact. This situation is considered to exist for Tier 1 Suppliers, or those directly hired by the project Owner.

Where a business enterprise contributes or may contribute to an adverse human rights impact, it should take the necessary steps to cease or prevent its contribution and use its leverage to mitigate any remaining impact to the greatest extent possible. Leverage is considered to exist where the enterprise has the ability to effect change in the wrongful practices of an entity that causes a harm. This condition exists in Tier 2 Suppliers, or those Suppliers hired by Tier1 directly hired Suppliers.

Where a business enterprise has not contributed to an adverse human rights impact, but that impact is nevertheless directly linked to its operations, products, or services by its business relationship with another entity, the situation is more complex. Among the factors that will enter into the determination of the appropriate action in such situations are the enterprise’s leverage over the entity concerned, how crucial the relationship is to the enterprise, the severity of the abuse, and whether terminating the relationship with the entity itself would have adverse human rights consequences. This condition occurs in Tier 3 and beyond where the project Owner has little control or influence over Suppliers or vendors hired at this level in the supply chain.

Referenced Source

United Nations Convention on the Rights of the Child (1989)
ILO Minimum Age Convention 138 (1973)
UN Universal Declaration of Human Rights (1948), Article 23
International Covenant on Economic, Social, and Cultural Rights (1966)
Social Accountability International SA8000® International Standard (2014)