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Strict Standards: Non-static method Log::error() should not be called statically in /homepages/9/d283779664/htdocs/blihr/public/blihr/components/global_header.php on line 153

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BLIHR | Step 2

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STEP 2: Undertake Human Rights Risk Assessment at the pre-feasibility stage of any project or new operation

Risk assessment is an ongoing activity within business but is perhaps most crucial at the pre-feasibility stage of any new venture or when the circumstances around an existing operation change substantially.

There are different ways human rights might create risk for business: 

  • Operational risk: this concerns a delay, limit, threaten or disruption to a specific activity or licence to operate; and
  • Financial risk: this concerns a risk that has financial implications for the business.
  • Reputation risk: this includes both local and/or international reputation risks, as poor relations with specific stakeholders, such as local communities;

The good management of risks can also create opportunities and human rights can be key here, for example establishing a social licence to operate in a particular area through considering the human rights of local communities.

The Business and Human Rights Matrix is designed to help companies identify risks and opportunities.  Stakeholder panels may give advice on local concerns regarding a business’s operations and may also provide input on possible solutions, but taking this step alone is not sufficient.  Mapping a business’s sphere of influence may also help to identify the risk of complicity when operating in a country with a poor record on human rights.  In addition, carrying out  regular checks and updates is advisable if a particular country ranks low on an index of corruption levels or, if the country is rated as having a poor record on human rights or rule of law.  There are a number of government agencies and NGOs that rank countries by risks in these areas (such as Transparency International or Amnesty International). 

Stakeholder panels may give advice on local concerns regarding a business’s operations and may also provide input on possible solutions. In a global operation, the stakeholder engagement process should involve employees from across the business, such as investor relations, country management, compliance officers, Human Resources, CSR personnel and Risk Management. This highlights the importance of ensuring that employees understand the importance of managing human rights risk, engaging stakeholders and the benefits of a human rights-aware approach.  

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