For large projects and multinational companies, impact assessment studies have become standard. Social, environmental and health impacts are investigated using internationally accepted methodologies and are commissioned to anticipate multiple classes of challenges. Each impact assessment normally addresses a defined area or topic. But experience has proven that standard assessments cannot capture the full range of issues that might trigger or exacerbate human rights claims. A human rights impact assessment (HRIA) employs a different scope, methodology and perspective to foresee impacts.

The main objective of conducting an HRIA is to identify, understand and manage corporate impacts in the field of human rights. An HRIA helps a company to gain a thorough understanding of the (potential) impact of corporate activities, a better understanding of the stakeholders’ perspectives, and ways to manage corporate impacts in a process that benefits all involved.

Furthermore, assessing human rights impacts helps companies to proactively shape a strategic approach to human rights based on the relevant risks and opportunities, rather than reacting only to external pressure and unexpected incidents.

HRIAs should be viewed as a strategic tool, which can help the company:

• Maintain a good reputation.
• Establish open relationships with affected stakeholders.
• Cement relationships with employees, associates and partners (including government, NGOs, etc.).
• Maintain the legal and social license to operate.
• Explore opportunities to address the needs and perceptions within the local communities and to improve the quality of life for local inhabitants.
• Minimise adverse risks associated with the company’s operations.
• Finally, an HRIA can help a company demonstrate its responsibility to respect human rights.

A company’s business case for doing an HRIA should consider both:

• The challenges arising from the mismanagement of human rights risks and impacts; and
• The opportunities presented in proactively managing the human rights risks and impacts.

The diagram below identifies some of the key challenges companies may face if they do not address human rights risks and impacts. A human rights impact assessment will help a company demonstrate its operations and is not only fiscally sound but also socially acceptable.

The opportunities arising from proactively managing a company’s business activity should not be overlooked. This exercise will yield useful business intelligence that can lead to a number of positive spin-offs.

For example, useful business intelligence on a company’s human rights risks and impacts can help the company to:

• Develop proactive approaches to mitigating any problems.
• Understand where the company lags and has gaps in relation to human rights due diligence.
• Develop appropriate policies, processes and systems to add to the existing company risk assessment approach.
• Develop a systematic approach to the management of human rights risks and impacts.
• Update policies and procedures.
• Develop relevant community projects based on identified risks and impacts, as well as local needs.

Engaging in a human rights impact assessment that has stakeholder engagement at the heart of the process will also present an opportunity to interact and work in partnership with stakeholders, to co-create mitigation plans that are feasible, practical and meet the needs of the company as well as the stakeholders.

The greatest challenge for companies wanting to adequately deal with human rights is the great complexity of the issues involved. Business activity can impact human rights in numerous and often interconnected ways, and the scope of company responsibility, both legally and with regards to stakeholder expectations, could be difficult to define.

First of all, there is the question of which human rights companies should be responsible for. So far, most corporate policies have focused on human rights connected to their work force and their supply chains. Still, there is a broad variety of human rights that company activities might have an influence upon, especially in considering the broader political, social or geographic context in which the company operates.

Secondly, a company is not only responsible for certain rights, they are also responsible for a selection of individuals who enjoy those rights, or “rightsholders”. These rightsholders need to be defined with sufficient accuracy so that no-one is overlooked.

Thirdly, while there is some consensus that companies should be responsible for human rights within their “spheres of influence”, it is necessary to identify clear boundaries as well as areas that are under direct control or only within the range of influence.

While most major corporations have policies in place regarding internal issues such as employment and non-discrimination, issues become more complicated in areas where efforts are dependent on the cooperation with third parties – a challenge which, for example, the numerous initiatives for ethical supply chain management are currently working to overcome.

The following section provides a sense of some of the practical challenges involved in the balance between corporate‐level commitments and operational‐level management practice in terms of respecting human rights.

• Language and terminology: Human rights language and terminology is complex and nuanced and there are a myriad of human rights instruments that companies are expected to understand and be familiar with. The language in these instruments can often be legalistic. Indeed the concept of due diligence has both a legal and commercial heritage, such as its use within mergers and acquisitions. As a result, senior managers can struggle to understand what is required of them and their operations from a human rights perspective, in regards to communities as well as their own workforce and supply chain.

• Departmental tensions: The human rights agenda in mining has largely been driven by civil society campaigning on behalf of communities impacted by mining and unions representing workers in mining. As a result, human rights discourse has tended to penetrate mining companies via specific functional disciplines. This has somewhat hindered companies in linking human rights considerations to other areas of business, such as supply chain, employee relations and cultural heritage. It is often challenging for companies to engage with human rights in ways that they are comfortable with. Many companies have occupational health and safety (OH&S), diversity, community development and gender programmes in place that already address a number of human rights without framing them as such. For example, there is a strong argument for situating OH&S procedures for preventing fatalities as a response to Article 3 of the Universal Declaration of Human Rights (UDHR) and the Right to Life. However, it is also clear that companies have encountered significant resistance to framing such issues in human rights terms even though a growing number of company policies and how it relates to the management practice of human rights is evident. This is partly because doing so represents a challenge to pre‐existing structures within the company.

• Security issues: Many information sources have shown that the interface between public and private security forces can be fraught with challenges. Issues in this category included lack of training, lack of control over outsourced security forces, unclear definitions of roles and responsibilities, as well as lack of clear protocols regarding engagement with the police.
• Impact or abuse: There is not always a clear‐cut delineation between social impacts and human rights abuses. For example, if an operation/company diminishes livelihoods on one hand, but responds on the other with a livelihood restoration programme, the company may still be accused of having infringed on the rights of a community. Similarly, how to balance different rights in an operational reality brings distinct challenges. For example, the question of how a company balances local cultural practices that may sit in contrast to a company’s international human rights commitments is enormously complex. When mining companies operate in a community that does not give voice to women, or does not recognise a woman’s right to work in a mine, what is the company’s responsibility? The company has made commitments to international human rights that provide for gender equality and non‐ What are the implications for community engagement, for development, and for employment?

The human rights and business agenda represents a significant shift in the dynamic between companies and communities in terms of impact. It encourages company managers to acknowledge that communities are not simply receivers of impacts responsible company managers should mitigate, but rather that they have a responsibility to respect the rights of communities. In this way a human rights discourse, when adopted and internalised by a company, has the potential to create more equitable power relationships between communities and the company.

A focus on human rights management and integration thereof into management practices may have a number of advantages.  To overcome the challenges highlighted above, the following recommendations can be considered:

• Maintain a dynamic human rights training programme: Training is important, both in general human rights issues and for specific functional or operational areas. But due to the potential complexity of the issues, provision should be made for training at all levels of literacy. Management should also be made aware of pertinent human rights issues that are topical at a local or national level as well as industry level.

• Create a human rights risk register: On an organisational risk approach, rights are viewed though a risk lens, not a human rights one, and compliance comes out of the process of managing the risks. The core assumption of the risk register is threefold: That information will be collected, recorded and utilised in the identification of specified organisational risks. It then provides guidance on assessing the impact of particular occurrences at different organisational levels. The stated objective is to develop organisational risk-information channels which, depending on the perceived seriousness of the risk, could stretch all the way up to the most senior management and ministerial levels. Examples of key focus areas for these risks can include working conditions, trade unions, discrimination, salary and government relations.

• Take a multi‐disciplinary approach to assessment: Assessing human rights risks and impacts requires looking broadly across the business, as well as ensuring the inclusion of external stakeholders such as communities, government, unions, contractors and suppliers. Assessment requires an inclusive process, both internally and externally.

• Some external involvement, for example through drawing on external human rights expertise, can help to ensure neutrality and to facilitate open dialogue with stakeholders such as employees, communities or other third parties. Involving a range of internal staff integrates and builds on their knowledge and capacity, and is complemented by the neutrality and impartiality of external assessors.

Addressing impact in human rights terms also represents a significant opportunity for companies to better understand the consequences of their impacts and respond to human rights risks.

Human rights‐based thinking will help companies in the future to better navigate these complex operating contexts.