Process requirements 7
Here we explain what is meant by providing remediation. We describe the concept, when the supplier is required to remedy, as well as the need to consult in a meaningful way with affected rights-holders and evaluate whether they are satisfied with the process and the result.
Excerpt from the contract terms
Supplier shall, if Supplier has caused or contributed to actual adverse impact, provide for remediation by
a) in so far it is possible, restoring affected rights-holders to the situation they would be in had the adverse impact not occurred and enabling remediation that is proportionate to the significance and scale of the adverse impact,
b) consulting in a meaningful way with affected rights-holders or their representatives on appropriate forms of remedy and
c) assessing whether affected rights-holders are satisfied with the process and its outcome.
Even with the best policies and processes, you can cause or contribute to adverse impacts that you have not anticipated or been able to prevent. If you identify such a situation, you shall actively, on your own or in collaboration with other actors, engage in remediation.
Definition indemnity
Remediation and remedy refer to both the processes of providing remedy and the substantive outcomes that can counteract, or make good, the adverse impact. These outcomes may take a range of forms, such as apologies, restitution, rehabilitation, financial or non-financial compensation, and punitive sanctions (criminal or administrative, such as fines), as well as the prevention of harm through, for example, injunctions or guarantees of non-repetition.
If a supplier has not caused or contributed to an adverse impact but is linked to the impact, there are no expectations for the supplier to provide for remedy. However, the supplier should use its leverage to influence the entity causing or contributing to the harm to remedy the harm.
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How to carry out a risk analysisStep 1: Mapping the supply chain The first step in a risk analysis consists of mapping the supply chain to find out its structure. This includes identifying in which countries the work is carried out, and if possible also in which regions. This is particularly relevant if the work is carried out in any region known to have high risks. Within certain industries such as food, textiles and IT there is a lot of information. For other industries such as pharmaceuticals, however, transparency is low. To obtain this information, you can ask the category manager, the category councils, ask questions of suppliers, find out import data, read audit reports and market analyzes for specific industries. It is also important to identify what type of work is carried out and what type of actors in the supply chain that performs it. Is it, for example, an industry characterized by low wages and health-hazardous processes? Does the workforce consist of migrant workers or seasonal workers? Is the supply chain complex with many subcontractors and a lack of transparency? This type of information is important as both geographical risks, industry risks and product risks need to be taken into account. Step 2: Gather information from credible and independent sources Once you have mapped the origin and the supply chain, the next step is to gather information about the situation of human rights, workers' rights, the environment and business ethics in the relevant countries where the work is carried out, that is, both for final manufacturing, component manufacturing and raw materials. For this you need to turn to credible and independent sources such as international organizations, authorities, voluntary and civil society organizations and global trade unions. Sources Step 3: Identify and assess negative impacts The last step involves assessing the actual and potential negative impact the supply chain is associated with, based on the information that has been compiled in steps 1 and 2. This is to be able to determine which concrete measures need to be taken to manage the risks. Often several risks have been identified and to prioritize them you need to make a seriousness assessment. The most significant risks are prioritized based on probability and seriousness ( read more under point d in process requirement 2 )
a) Restore affected rights-holders
You must, to the extent possible, restore affected rights-holders to the situation they would be in had the adverse impact not occurred and enable remediation that is proportionate to the significance and scale of the adverse impact.
Suppliers shall in so far it is possible, restore affected rights-holders to the situation they would be in had the adverse impact not occurred and enable remediation that is proportionate to the significance and scale of the adverse impact.
Restoring affected rights-holders to the situation they would be in had the adverse impact not occurred, refers to “making good” the adverse impact.
“In so far it is possible” acknowledges the fact that rights-holders may die or lose limbs due to enterprises’ actions or omissions, circumstances that are simply not possible to restore.
The proportionality (significance and scale) must be decided in the individual case. The assessment of what is proportionate generally requires consultations with rights-holders.
Suggested verifications
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Process document(s) which describe(s) supplier’s remediation processes, either covering all areas of operations or divided into employees, rights-holders in and around the operations, and rights-holders in supply chains, including a mapping of the state-based and non-state based processes relevant in each case.
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Remediation plans, for sample products.
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Meeting minutes where decisions on remediation have been recorded, for sample products.
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Agreements on remediation, for sample products.
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Summaries of remediation, for sample products.
b) Consult with rights-holders
You shall consult in a meaningful way with affected rights-holders or their representatives regarding appropriate forms of remedy. Remedy can take different forms and it is important to understand what those affected would view as effective reparation, in addition to your own view.
Examples of remedies are apologies, restitution, rehabilitation, financial or non-financial compensation, and punitive sanctions (criminal or administrative, such as fines), as well as the prevention of harm through, for example, injunctions or guarantees of non-repetition.
The following may be helpful in determining appropriate forms of remedy:
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Existing standards: in some cases, domestic and international standards or laws exist on what constitutes appropriate forms of remedy.
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Precedent: where domestic and international standards do not exist, enterprises may seek to be consistent with what has been provided in similar cases.
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Stakeholder preferences: the perspective of those affected on what is appropriate remedy is important for human rights impacts.
One area where precedents have been developed is for the repayment of recruitment fees to migrant workers, to remedy debt bondage. Below are two examples of principles and guidance:
As always, consultations should be meaningful. This means that they must be characterized by two-way communication, good faith on the part of the parties, responsiveness and be ongoing.
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How to carry out a risk analysisStep 1: Mapping the supply chain The first step in a risk analysis consists of mapping the supply chain to find out its structure. This includes identifying in which countries the work is carried out, and if possible also in which regions. This is particularly relevant if the work is carried out in any region known to have high risks. Within certain industries such as food, textiles and IT there is a lot of information. For other industries such as pharmaceuticals, however, transparency is low. To obtain this information, you can ask the category manager, the category councils, ask questions of suppliers, find out import data, read audit reports and market analyzes for specific industries. It is also important to identify what type of work is carried out and what type of actors in the supply chain that performs it. Is it, for example, an industry characterized by low wages and health-hazardous processes? Does the workforce consist of migrant workers or seasonal workers? Is the supply chain complex with many subcontractors and a lack of transparency? This type of information is important as both geographical risks, industry risks and product risks need to be taken into account. Step 2: Gather information from credible and independent sources Once you have mapped the origin and the supply chain, the next step is to gather information about the situation of human rights, workers' rights, the environment and business ethics in the relevant countries where the work is carried out, that is, both for final manufacturing, component manufacturing and raw materials. For this you need to turn to credible and independent sources such as international organizations, authorities, voluntary and civil society organizations and global trade unions. Sources Step 3: Identify and assess negative impacts The last step involves assessing the actual and potential negative impact the supply chain is associated with, based on the information that has been compiled in steps 1 and 2. This is to be able to determine which concrete measures need to be taken to manage the risks. Often several risks have been identified and to prioritize them you need to make a seriousness assessment. The most significant risks are prioritized based on probability and seriousness ( read more under point d in process requirement 2 )
Suggested verifications
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Process document(s) which describe(s) the consultations with rights-holders in the remediation process.
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Meeting minutes from consultations with rights-holders, for sample products.
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Documentation from mediation or adjudication, for sample products.
c) Assess satisfaction
You must assess whether affected rights-holders are satisfied with the process and the result.
The purpose of the assessment is to ensure that the adverse impact has been addressed and to compile lessons learned for future remediation processes. The assessment also sends the signal to affected rights-holders that their opinions matter, which may further the dialogue with rights-holders and perhaps prevent future harms from compounding and grievances from escalating.
Examples of methods are surveys and interviews.
Suggested verifications
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Process document(s) which describe(s) the assessment of rights-holders’ satisfaction with the process and the outcome.
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Summaries or reports of conducted assessments, for sample products.