Management System Approach Aims To Meet Human Rights Expectations

A range of external expectations exists for companies to demonstrate how they respect human rights, including having business processes in place to prevent or mitigate human rights issues caused by the company’s projects or operations.


A range of external expectations exists for companies to demonstrate how they respect human rights, including having business processes in place to prevent or mitigate human rights issues caused by the company’s projects or operations. The International Petroleum Industry Environmental Conservation Association (IPIECA) has responded to the emergence of external guidelines in connection to implementing human rights due diligence by improving existing management systems and processes.


United Nations Guiding Principles on Business and Human Rights. The ­United Nations Guiding Principles on Business and Human Rights were developed through an iterative process spanning 6 years and involving extensive stakeholder consultation.

In the first stage of the work, John Ruggie, United Nations special representative to the secretary-general, conducted 3 years of research to develop the global Protect, Respect, and Remedy Framework on business and human rights. Ruggie developed the framework to help clarify the distinct roles of states and businesses in human rights. It rests on three interdependent pillars—the state duty to protect against human rights abuses by third parties through regulation and legislation; the corporate responsibility to respect human rights through due diligence; and the need for citizens to have access to effective remedy, both judicial and nonjudicial.

The United Nations Human Rights Council endorsed the framework in 2008. Upon endorsement, Ruggie established the United Nations Guiding Principles. The principles supplement the framework by outlining how governments should meet their duties and how companies should demonstrate their responsibilities.

IPIECA’s Business and Human Rights Initiative. IPIECA launched a 3-year business and human rights project that leverages the collective experience and practical knowledge of its members. The objectives of the project are to

  • Support the organizational capability of IPIECA members in two focus areas, company due diligence and community-level grievance mechanisms
  • Serve as the authoritative reference body for the oil and gas industry on business and human rights issues, including the United Nations Guiding Principles on Business and Human Rights and other relevant external guidelines

The project is implemented through the IPIECA Human Rights Task Force, made up of 38 members from 20 oil and gas companies and associations. The task force implements four distinct programs.

  • Collaborative learning: IPIECA organizes technical workshops, with input from external experts, to support the continuous improvement efforts of its members.
  • Technical guidance: IPIECA develops and disseminates practical guidance and tools to assist members in managing human rights issues at an operational level.
  • Strategic resource: IPIECA provides technical expertise to relevant external initiatives and groups with the aim of sharing industry’s insights, experience, and knowledge.
  • Global engagement: IPIECA actively participates in global forums and initiatives to contribute to the growing body of knowledge and ideas on business and human rights issues.

Human Rights Due Diligence Process

Human rights due diligence processes are not a legal requirement but rather a good industry practice to manage issues and effects associated with business operations. The expectations for companies are

  • Respect human rights in projects or operations
  • Seek to prevent or mitigate potential human rights issues that may be directly caused by the company’s projects or operations, or seek to influence partners and suppliers
  • Have in place policies and processes to manage human rights issues
  • Commit to respect human rights with endorsement by senior leadership
  • Conduct assessments to identify potential human rights issues in projects or operations, have processes to manage the issues, and have a means to track the response
  • Communicate with stakeholders how issues are being addressed
  • Establish a grievance mechanism to address issues raised by the community

According to the principles, the due diligence process has four main expectations:

  • Assessing actual and potential effects
  • Integrating and acting upon the findings
  • Tracking responses
  • Communicating how effects are being addressed

Because human rights can cut across different phases of an oil and gas project life cycle; can be associated with different issues and potential effects; and are managed by different company functions, roles, and responsibilities, there is no one-size-fits-all approach to implementing human rights due diligence.
The business case for human rights due diligence is simple and straightforward: It is good business practice to know the potential human rights issues and effects associated with business operations and to factor them into management plans. This is especially important for oil and gas companies that may operate in countries over several decades and where local conditions and circumstances can change.

Some of the business drivers for improving human rights due diligence can be summarized as

  • Identification and management of potential effects on communities, positive and negative
  • Prevention of disruptions to construction and operations and improvement of business continuity, including providing reliable energy and managing budgets and schedules
  • Improvement of relationships with local employees and communities based on ongoing engagement and dialogue about project issues and other relevant concerns
  • Protection of employees, communities, and company assets from negative effects by providing a safe and secure operating environment
  • Creation of positive contributions to host communities (e.g., improving access to health, education, and livelihoods)
  • Protection of the company’s reputation in the country and internationally (e.g., by being a preferred employer and helping to ensure continued access to new markets and customers)

Organizational Reality

The goal—or hope—of many external guidelines and standards, including the United Nations Guiding Principles, is that they will be institutionalized by companies and broader industry. The process will likely undergo three ­phases—habitualization, objectification, and sedimentation.

Habitualization is a response to a given issue, problem, or challenge that may be pertinent to a particular industry. Objectification is when the practice begins to build up a perceived value within the organization. Sedimentation occurs when the practice starts to become part of normal business process and systems governance among different groups within the organization.

Implementing Human Rights Due Diligence Process

A human rights due diligence process can be framed as a “plan, do, check, act” methodology to manage human rights issues and effects. This methodology correlates with the existing management-system processes of many oil and gas companies.

  • It leverages existing mechanisms and governance structures.
  • It enables interaction with the company’s process leads, advisors, and other experts, thereby capturing and spreading relevant experience and technical knowledge and building ongoing support.
  • It minimizes unintended risks, such as identifying potential issues and effects without having a systematic way of managing them.
  • It helps companies to integrate identified potential human rights issues and effects with social, environmental, health, and other effects.

Key Components of Human Rights Due Diligence

The core process components of a human rights due diligence are

  • Vision/Objectives: A company’s vision and objectives for managing human rights are articulated and reinforced through a formal company code of conduct, corporate social responsibility policy, human rights policy, human rights statement, or some other formal mechanism.
  • Accountability: Because human rights issues cut across different company functions, appropriate roles and responsibilities, including accountability, are assigned. Company processes, programs, or tools should specify which department is responsible and what the associated roles and tasks are.
  • Assess/Plan: The assessment and planning includes identifying the phase in the project life cycle; taking inventory of existing processes, programs, and tools that can be used to assess potential issues and effects; collating and reviewing information from prior assessments or external sources; and conducting the assessment to identify, scope, and analyze potential issues and effects.
  • Implementation: Once potential issues and effects are identified and prioritized, findings should be incorporated into a management plan, which includes communication with internal and external stakeholders as needed, with the intent to properly address and close out the issue or effect.
  • Review: A set of indicators for monitoring, tracking, and evaluating the plan is built into the implementation process. There is no one-size-fits-all approach to the review process; it varies depending on the company’s existing processes and procedures.
  • Improve: Once the review is completed and the findings are properly scoped and analyzed, the areas of improvement serve as an internal engagement mechanism to enhance the existing process, procedures, or programs, such as internal or process review sessions.

Implementation Issues To Consider With Human Rights Due Diligence

Several implementation issues for conducting due diligence should be considered carefully, including

  • Clear and appropriate roles and local responsibilities: Because human rights may require cross-functional engagement, clear and appropriate roles, responsibilities, and accountability should be designated.
  • Legal and regulatory issues associated with human rights issues: IPIECA members are recommended to work in close consultation with key functions to properly assess the legal and regulatory context and inform implementation of their due diligence.
  • Handling sensitive information: Implementing due diligence can uncover sensitive, personal, and confidential information that should be handled carefully. Internal procedures for controlling documentation and the exchange of information are recommended.
  • Prioritizing potential issues and effects: Companies should consider prioritizing potential issues and effects to inform their management plans.
  • Engagement and communication: The assessment of potential human rights issues and mitigation measures should involve ongoing engagement and communications with potentially affected and concerned stakeholders.
  • Fit-for-purpose approach: Implementing a due diligence process may vary according to prevailing business processes of the company, size of the project, the prevalence of human rights issues, and the local context of the operations. In all cases, the due diligence process should be ongoing and iterative.

This article, written by Editorial Manager Adam Wilson, contains highlights of paper SPE 164979, “Management Systems Approach to Managing Human Rights Issues,” by Tam Nguyen, Chevron, Bert Fokkema, Shell, Julie Vallat, Total, and Roper Cleland, IPIECA, prepared for the 2013 SPE European HSE Conference and Exhibition, London, 16–18 April. The paper has not been peer reviewed.