Provide stakeholders with the opportunity to complain and pay compensation for any human rights violations
Complaints and compensation
The final step is about the company’s duty to make grievance mechanisms available, and about how you can make sure that remediation is available for victims of human rights, climate and environmental violations.
What is remediation?
If a business causes or is directly associated with negative impact on people, the company should repair the damage. The closer the damage is to your company, the more control and influence you will have over possible remedies.
Remedies can be a public apology, restitution, re-employment, financial compensation, sanctions, assurance that the damage will not recur or making sure that the damage is otherwise repaired.
Go back to Step 3: “Take care of negative impacts” for help in assessing how you are associated with a negative impact. See also the decision tree, which can help you assess how you are connected to a possible violation of human rights:
What is a grievance mechanism?
According to international guidelines, all employees must have the opportunity to express themselves to their organisation. A company grievance mechanism should be provided for people to express concerns, complain, point out violations of human rights, etc. This mechanism may serve to curb or prevent otherwise irreparable damage, nip problems in the bud and prevent issues from escalating into conflicts.
Your grievance mechanism can be a mailbox, a dedicated e-mail account, a telephone hotline or a platform on the company website. Another option is a third-party grievance mechanism administered by a trade association, a trades union, a civil society organisation or a multi-stakeholder group. We recommend that you include suppliers and sub-suppliers, and make sure that they have proper grievance mechanisms of their own – perhaps they already have a mailbox for complaints? Ask them.
The grievance mechanism must be accessible to all relevant parties and be readable in relevant local languages. If remote workers or other relevant groups do not have internet access, the grievance mechanism should not be online.
Is a whistleblower scheme a complaint mechanism?
The EU Whistleblower Directive is intended to protect people who report breaches of EU legislation that harm the public interest. The Whistleblower Directive obliges private companies with 50 or more employees to establish a whistleblower scheme which may be administered either by an internal person or department or provided externally by a third party before 17 December 2023.
In some cases, the whistleblower scheme will be able to function as a complaint mechanism but be aware that the purpose and target group of the whistleblower regulations differ from the due diligence guidelines.
8 criteria for an effective grievance mechanism:
- Legitimacy – company stakeholders must have confidence that the mechanism will ensure that the company is held accountable
- Accessibility – all stakeholders must be aware of the grievance mechanism, and the company must offer adequate assistance to individuals or groups who might be prevented from gaining access
- Predictability – there must be a clear, public procedure, including time frame, for each stage of the complaint process, and clarity about possible processes and outcomes, as well as how changes are implemented
- Justice – to ensure a fair, informed, and respectful grievance process, victims must have access to information, advice, and expertise
- Transparency – to build trust in the system, all parties are kept informed on an ongoing basis and have access to information about the execution of the complaint process
- Compatible with rights – results and remedies must be in line with internationally recognised human rights
- Continuous learning – all experiences are part of a learning process so that the mechanism can be updated and improved to address and counter future complaints and damage
- Involvement and dialogue – the evolution of the mechanism must be based on dialogue with relevant stakeholder groups, and dialogue is employed in addressing and resolving any problems and complaints
Source: UN Guiding Principles on Business and Human Rights #31: https://www.ohchr.org/documents/publications/guidingprinciplesbusinesshr_en.pdf
How you should handle a complaint
- Confirm receipt of the complaint immediately and provide a timeframe for the complaint procedure
- Make sure the complaint process is transparent to all parties throughout
- Be open and talk to those affected by the negative impact
- Provide adequate remediation and compensation to victims
- Take action to prevent the negative impact from happening again
- Continuously use your experiences to improve the process and promote dialogue in the value chain
Inspiration: This is what a grievance mechanism might look like
Mail or phone
At warfair, complaints and feedback about commerce, products and partners can be submitted by email or phone.
Complaints can be submitted in any language and the process is anonymous and protected.
Complaints are handled by warfair’s Ethics Committee based on warfair’s own policy.
Mailboxes in production
At Gasa Nord Grønt, all nurseries have set up special mailboxes where employees can anonymously express themselves and, for example, complain, come up with ideas and generally give praise to management.
A simple initiative that has resulted in more challenges being dealt with before they become real conflicts or problems.
Third party grievance mechanisms
Complaints about negative impacts on human rights in businesses in Denmark may be dealt with by the Labour Court, the National Board of Industrial Injuries, the Equal Treatment Board and others.
For grievances related to companies outside of Denmark, you must go through the National Contact Point Denmark, the Mediation and Complaints Institution for Responsible Business Conduct.
When should you stop working together?
The clear expectation is that your company has an active plan for how to prevent negative impacts on human rights in your value chain. But there is no expectation that you will be able to solve all problems together with a supplier or partner.
We encourage all companies to take a constructive and pragmatic approach to improving conditions, and that you develop solutions together with suppliers. Changing suppliers when you discover issues does not solve the problem. Long-term collaboration based on trust provides a much better opportunity to effect positive change.
Of course, if a supplier repeatedly breaks agreements or does not respect or meet your requirements, you may have to terminate the relationship. However, international guidelines call for the company to first attempt to open a dialogue to help the supplier understand the need to live up to agreements. Your company is furthermore encouraged to assess whether terminating the business relationship may result in further negative impact on human rights.
See how others are working with human rights, environment and climate
About this guide
This guide is aimed at small and medium-sized businesses - i.e. companies with 2 to 250 employees, across industries. Human rights due diligence is relevant whether you are in the B2C or B2B market, import, export or have your own production in Denmark.
The purpose of the guide is to help SMEs in their work with human rights, environmental and climate due diligence - regardless of company size and resources. The guide provides inspiration on where to start and how to strengthen your current processes.
The guide has been prepared by Ethical Trade Denmark. A first version of the guide - focused on human rights and targeted at the food cluster - was developed in collaboration with the Danish Agriculture & Food Council and Arla, co-financed by the Danish Business Authority.
The guide may not be modified, reproduced or translated without prior written agreement with Ethical Trade Denmark. The guide may only be used in educational contexts with clear credit to Ethical Trade Denmark, including a clear logo.