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Non-Judicial and Judicial Grievance Mechanisms for Addressing Disputes between Business and Society: Their Roles and Inter-relationships

This short paper is adapted from a background note prepared for a multi-stakeholder consultation of the UN Secretary-General’s Special Representative for Business and Human Rights, Professor John Ruggie, on the issue of non-judicial grievance mechanisms. The consultation was held on 20-21 November 2008 in Boston, was co-organized by the Corporate Social Responsibility Initiative at Harvard Kennedy School and Oxfam America and hosted by Foley Hoag. A report of the discussions can be found at: http://www.business-humanrights.org/Updates/Archive/UNSpecialRep-Consultationsworkshops

The consultation was the latest in a series looking at the role of non-judicial grievance mechanisms in addressing grievances and disputes between companies and the groups in society that their activities may impact. Earlier discussions had explored the minimum criteria such mechanisms must conform to in order to be legitimate and effective, as well as discussing the strengths and weaknesses of existing non-judicial mechanisms and the gaps that remain to be addressed.

The purpose of the background note was to stimulate discussion about the respective roles, strengths and weaknesses of both judicial and non-judicial mechanisms in remedying adverse corporate human rights impacts. Based closely on that note, this paper proposes a working definition of ‘access to remedy’ and outlines the evolving landscape of non-judicial mechanisms in the business and human rights area and the importance of their mutually reinforcing relationship with judicial mechanisms. It then considers a number of characteristics typically seen as advantages and disadvantages of judicial and non-judicial mechanisms. The paper concludes with a suggested, initial list of cross-cutting factors that aggrieved individuals or parties to a dispute may typically want to consider when deciding whether to use judicial or non-judicial mechanisms in pursuit of a solution.

A. ‘Access to Remedy’: A Working Definition

The current meaning of the word ‘remedy’ is at least threefold: a treatment for an injury or disease; a means of counteracting something undesirable or making good an undesirable situation; or a means of legal ‘reparation’ (in the sense of making amends for a wrong).[1]

The Special Representative’s work on access to remedies for corporate human rights impacts seeks to explore a range of stakeholder views as to what access to remedy does, could and should mean in the context of business and human rights. This necessarily entails addressing both judicial and non-judicial mechanisms for dealing with alleged corporate abuses, including how such mechanisms can work effectively together. The implications of existing state obligations to provide access to effective remedies for human rights abuses committed by third parties, including businesses, and of the individual right to remedy in international human rights law are considered in a separate study produced by the SRSG.[2]

For the purposes of this discussion, ‘access to remedy’ is conceptualized as:

The opportunity and ability to use effective judicial or non-judicial mechanisms, as appropriate, to counteract or make good a situation where corporate activities are alleged to have caused harm to the enjoyment of human rights by an individual or group.

B. The Existing Landscape

In addition to established national and regional judicial systems, there already exists a broad array of non-judicial grievance mechanisms at the national, regional and international levels that can address disputes between companies and individuals or groups in society. These include:

·  mechanisms at the company or project level to which impacted individuals and groups (e.g., workers, communities etc.) can bring complaints;

·  mechanisms linked to industry and multi-stakeholder initiatives (e.g., the Fair Labor Association, Ethical Trading Initiative, Social Accountability International, International Council of Toy Industries, Voluntary Principles on Security and Human Rights, Global Framework Agreements);

·  national mechanisms based in government (e.g., National Contact Points of OECD Member States, consumer complaints bodies);

·  national mechanisms that are state-supported but independent of government (e.g., ombudsman offices, labor dispute resolution offices, national human rights institutions); and

·  regional and international mechanisms (e.g., ILO-based mechanisms, the Compliance Advisor/Ombudsman [CAO] of the World Bank Group).

The functions filled by non-judicial mechanisms can vary according to the wider context in which they operate:

·  in some instances, mechanisms have been developed to fill gaps where compliance might better be enforced by national judicial or administrative mechanisms but these are weak or absent (for instance the FLA, ETI, SAI etc.);

·  in other instances they have developed to support compliance with standards that may go beyond current legal requirements, whether in developed or developing states (e.g., OECD NCPs, the CAO of the World Bank Group); and

·  even where rule of law institutions are well-developed, non-judicial mechanisms often operate as part of a deliberately tiered system designed to complement and/or precede national judicial mechanisms (e.g., labor dispute resolution bodies, national human rights institutions).

C. Understanding Roles and Inter-relationships

Ideally, judicial and non-judicial mechanisms should form a mutually reinforcing web of remedial options in cases of alleged corporate abuse. Yet the question remains as to what the right relationship is between these two broad categories of mechanism in the field of business and human rights. It is a field where there are wide variations between (and to some extent within) states with regard to the existence, understanding and implementation of legal requirements addressed to companies. It is a field where there are also wide variations within (and to some extent between) states in the intellectual, experiential and ‘cultural’ affinities for judicial or non-judicial remedial approaches.

In understanding and assessing the current web of judicial and non-judicial grievance mechanisms, it is imperative to consider:

(a)  the question of what the relationship between these mechanisms should be;

(b)  the fact that in many situations there is advantage in having a range of remedial options available.

The following section of this paper highlights some broad potential advantages and disadvantages of judicial and non-judicial mechanisms. It is based on the assumption that the mechanisms considered perform reasonably effectively. The barriers to their effective functioning that frequently exist in practice are explored elsewhere in the work of the Special Representative.

D. Potential Advantages and Disadvantages of Judicial and Non-Judicial Mechanisms

The following table attempts to identify some characteristics that are typically but not always seen as advantages and disadvantages of judicial grievance mechanisms. It assumes that there is a relevant cause of action.

(Please note that the following tables are not intended to be definitive, nor are pros and cons in the same row intended as related ‘off-sets’.)

Pros of Judicial Mechanisms / Cons of Judicial Mechanisms
Finality of the outcome / Substantial, sometimes prohibitive, costs of litigation, creating a potential inequality in terms of legal representation
Enforceability of the outcome / Potential for extended delay in reaching an outcome
High profile/public nature of the outcome, which should contribute to: deterrence of similar behavior; precedent-setting; and systemic change / Formality and potentially daunting nature of the proceedings
Scope for specific remedies, in particular, financial compensation and punitive measures or criminal sanctions / ‘All-or-nothing’ outcome, which lacks the flexibility or creativity to address ongoing relationships
Capacity to deal with large-scale, complex claims / Location of the forum and the relative distance of the parties from it, especially in relation to home versus host state courts
Can uphold key human rights goals including equality, transparency, accountability / Less likely to achieve other key human rights goals such as participation and empowerment

Turning to non-judicial grievance mechanisms, the following tables identify some relevant advantages and disadvantages of two broad types within this category. The first table considers pros and cons of investigatory and quasi-adjudicative processes (that involve reaching findings or conclusions, recommendations, e.g., as provided by some consumer complaints offices). The second table considers pros and cons of dialogue-based processes (such as mediation, conciliation, e.g., as provided by some national human rights institutions). In practice, of course, various non-judicial mechanisms are designed to provide both functions whether in sequence or in parallel (e.g., the CAO of the World Bank Group, OECD NCPs).

Pros of Quasi-Adjudicative Mechanisms / Cons of Quasi-Adjudicative Mechanisms
Can provide a clear assessment of compliance (or non-compliance) with standards and, in some instances, recommend or require remedial action / Can vary widely in procedural approach and are therefore less well-known and predictable in terms of process
Formal (and often public) nature of the outcome, including in some instances the power to withdraw funding or membership, which should contribute to deterrence of similar behavior in the future / Typically lack capacity for enforcement (whether through the state or through the mechanism’s own leverage)
Parties may be able to use findings from the process as evidence in any subsequent judicial proceedings / May not be able to compel the production of evidence or the attendance of a party or other individual
In some cases, can link investigation and assessment to capacity-building assistance to avoid recurrence / Typically engage representatives or proxies for the impacted individual(s), potentially reducing their participation and empowerment
Pros of Dialogue-Based Mechanisms / Cons of Dialogue-Based Mechanisms
Less formal nature of the proceedings can be less daunting than either judicial or quasi-adjudicative processes / Can vary widely in procedural approach and are therefore less well-known and predictable in terms of process
Engagement with the process typically carries limited financial costs for the parties / Do not typically provide a formal or public definition of ‘who was right and ‘who was wrong’, nor a clear decision on whether standards were breached
Typically faster in commencing and completing process, providing more immediate solutions and remedy / The outcomes may not be enforceable, unless linked into state-based administrative or judicial processes
Can help maintain, restore or build relationships between parties / Require the willingness of both parties to work towards a resolution
Can address specific concerns of the parties and identify tailored solutions and forms of remedy / Do not provide for punitive outcomes
Can often go to the place of the dispute rather than requiring the parties to travel to a distant location / Do not set clear precedents with deterrent effect for others
Can empower aggrieved parties by giving them a participatory role in the process and outcomes / Outcomes are not aggregated and publicized in a manner that can leverage systemic change

E. Cross-cutting Factors

Drawing on these and any other pros and cons of judicial and non-judicial mechanisms, is it feasible to identify some cross-cutting factors that may suggest when one or the other type of mechanism is likely to be more appropriate? Of course, there should ideally be a range of remedial options available in every case, with the aggrieved parties able to weigh the benefits and costs of each. The purpose of this exercise is simply to identify what kinds of factors might lead the parties to pursue one option rather than another in different situations or in order to reach different goals.

An initial list of such factors could include (in no set order):

·  the scale of the alleged harm, which could relate to:

o  its nature and gravity (especially if it amounts to a criminal offense);

o  the number of affected individuals or communities; and

o  the type of right affected;

·  the type of remedy sought by the claimant or victim, including the relevance of any potential delay;

·  the potential costs involved in pursuing one approach over another;

·  the existence of serious inequalities between the parties;

·  the purpose(s) an aggrieved party is seeking to achieve, e.g., compensation, formal (or public) conclusions, a tailored solution, or a change in behavior;

·  the importance to the parties of an ongoing relationship between them;

·  the relative accessibility of various mechanisms in the host and/or home state, including issues of physical distance; and

·  the clarity and specificity with which a particular right or duty is defined in domestic law and whether there is therefore a cause of action.

F. Summary

The foregoing was designed to promote and not to foreclose discussion. At a minimum, however, it would suggest that judicial and non-judicial grievance mechanisms perform different roles in the provision of remedy, yet roles that are overwhelmingly complementary in nature and that rarely, if ever, represent a zero-sum calculation. Non-judicial mechanisms can never replace the essential function of judicial processes in society, including in the context of business-related disputes. Yet non-judicial grievance mechanisms also have a unique role to play in providing remedy and may be preferred by the parties to some disputes for a variety of reasons. The ideal scenario is one where victims of abuse and parties to a dispute are able to make an informed choice as to which avenue to pursue. The primary concern must then be to ensure that both kinds of mechanism – judicial and non-judicial – work as effectively and efficiently as possible so that they are as worthwhile in practice as they are necessary in theory.

Prepared by Rachel Davis and Caroline Rees,

Corporate Social Responsibility Initiative, Harvard Kennedy School

March 2009

[1] See Compact Oxford Dictionary of Current English (Oxford: OUP, 2005, 3rd ed) entries for “remedy” and “reparation”.

[2] See Addendum to the SRSG’s 2009 report to the Human Rights Council, forthcoming.