Provision 06

DEFINITION: Listed in the United Nations’ Universal Declaration of Human Rights, human rights are the universal rights and freedoms that belong to all people without discrimination. Since 2011, the UN Guiding Principles on Business and Human Rights have become the primary reference for the private sector’s responsibility to respect human rights.

EXAMPLES: You’ve probably already been dealing with Human Rights risks within your business, without using human rights language per se. Examples may include your health and safety procedures and working hours policy, which respect employees’ ‘right to life’, ‘right to just and favourable conditions of work’, ‘right to health’ and labour rights which are akin to Human Rights.

RISKS: Risks of Human Rights abuses or impacts can be found in any country, sector and workplace. As we’ve already seen, Human Rights include issues covered under responsible business practices you will be implementing already: providing a safe workplace, paying your employees correctly, ensuring there is no workplace discrimination and so on.

You must also consider Human Rights risks within your supply chain, risks you may be linked to or contribute to. Businesses risk being exposed to criticism of complicity perpetrated by the state or by business partners, often more so in countries where Human Rights risks are high. These could include actions taken by your suppliers and subcontractors.

Companies that source from artisanal and small-scale miners, or from conflict-affected and high-risk areas, run a greater risk of directly or indirectly contributing to Human Rights abuses, including the use of forced and/or child labour, sexual violence and poor health and safety of workers and communities.

COP6: The Code of Practices (COP) contains many provisions that cover Human Rights considerations in an implicit way. COP6 is designed to help members explicitly integrate the UN Guiding Principles into their operations by focussing on Human Rights risks relevant to their business.

It’s important to remember that this provision, is about continuous improvement. You are not expected to be a Human Rights expert, but you are expected to give time and resources to consider Human Rights risks and potential impacts in your operations and in that of your supply chain – always considering your size, sector, location and potential of risks.

Not only are Human Rights within the remit of all businesses, the global regulatory environment is evolving all the time to enforce this. More countries are adopting modern slavery, due diligence and transparency laws. Here are some examples of regulations that cover Human Rights:

2010 California Transparency in Supply Chains Act

2015 UK Modern Slavery Act

2017 French Duty of Vigilance Law

2018 Australian Modern Slavery Act

And the expected EU Directive on Human Rights and Environmental Due Diligence.

Should businesses expect increased regulation of business and their impact on Human Rights in the future? The answer is yes!

The 2019 COP requires members to implement across four areas:

6.1 Members shall respect human rights by considering all potential and actual impacts in their operations and business relationships. They shall also commit to, and implement, the UN Guiding Principles on Business and Human Rights as appropriate to their size and circumstances.

As a minimum, members shall:

a. Have a policy commitment, endorsed at the highest level of their organisation, to respect human rights within their operations and business relationships, and procedures for implementing the policy in alignment with COP 2 (Policy and implementation).

b. Have a human rights due diligence process to identify, prevent, mitigate and account for adverse human rights impacts that are connected to their business.

c. Provide for, or support legitimate processes to enable, the remedy of any adverse human rights impacts that they have caused, contributed to or been linked with.

d. Communicate annually with stakeholders about their human rights due diligence efforts and remedy activities in accordance with COP 3 (Reporting).

So this means:

Having a written policy on Human Rights (COP 6.1A)

Carrying out Human Rights Due Diligence to identify, prevent and mitigate Human Rights risks and impacts that are connected to your business (COP 6.1B)

Providing for or supporting the remedy of any Human Rights impacts that you have caused, contributed to or been linked with. This includes developing a grievance mechanism for Human Rights issues (COP 6.1C)

Communicating annually about your Human Rights due diligence efforts and remedy activities (COP 6.1D).

The policy can be standalone or integrated into other policies you already have under COP2, Policy and Implementation or other policy requirements within the COP such as Codes of Conduct and Ethics, CSR policy etc. It will need to be:

• approved at senior manager level;
• clear on what your expectations are of your employees, business units, suppliers and subcontractors (this will help ensure everyone understands their role in delivering the policy);
• publicly available; and
• proactively communicated to relevant stakeholders.

AT THE AUDIT: Your auditor may review your website, office posters, intranet pages, letters, emails, contracts, sustainability or annual reports and your grievance mechanism as evidence under this provision. As always, they may also speak to you and your colleagues about your Human Rights policy, as well as due diligence, risk assessments and reporting material for this provision.

RISK ASSESSMENT: The first step is to conduct a risk assessment of your Human Rights risks. Develop an ongoing risk management process, where you identify actual and potential Human Rights risks for workers in your operations and supply chains. Let’s look at some examples of risks you may be causing or contributing to:

INTERNAL RISKS

• Failing to pay wages to employees (COP15)
• Discriminating against certain employees (COP22)
• Exposing workers to hazardous conditions without adequate safety equipment (COP23)
• Employing child and/or forced labour (COP19 and 20)
• Preventing employees enjoying Freedom of Association (COP21)
• Using security personnel who violate employees’ Human Rights (COP13)
• Polluting drinking water supplies by dumping chemical effluents from production processes into waterways (COP26.2C)

EXTERNAL RISKS

• Causing suppliers to breach labour standards due to last minute changes to production requirements without adjusting deadlines
• Working with a supplier that is using non-voluntary prison labour without any policies or supplier agreements forbidding this
• Relying on labour agents using deceptive tactics to recruit migrant workers, who are then forced into debt to pay recruitment-related fees

BEWARE: You may be liable for risks that are indirectly linked to you. Examples include:

• Migrant labour abuse at your supplier’s manufacturing site, despite your policies against this and confirmation from your suppliers that such policies are implemented
• A supplier subcontracts parts of production to child workers in homes, in contradiction to contractual obligations
• Suppliers using raw stones sourced through an agent originating from mines that allow child workers to perform hazardous work endangering their health.

You may have already undertaken a risk assessment of some of these internal risks as part of your conformance to other COP provisions. For external risks, you will also need to assess the risks you may face which you may not have assessed before – this may be a new undertaking for you.

You can download RJC’s risk assessment tool to help you conduct a risk assessment under COP6 or any other provision:

https://www.responsiblejewellery.com/wp-content/uploads/RJC_Risk_Assessment_Toolkit-1.zip

You can download RJC’s Human Rights due diligence toolkit to help you with your COP6 due diligence process:

https://www.responsiblejewellery.com/wp-content/uploads/RJC_Human_Rights_Due_Diligence_Toolkit_Nov2013_eng-1.zip

Please note that the Human Rights due diligence toolkit was developed alongside the previous version of the COP (2013COP) however, it can be used by members preparing to be audited against the 2019COP also.

MITIGATION: If you identify any Human Rights impacts, you will need to stop them from happening. This should be relatively straightforward if they’re internal and will probably already have been identified and resolved under another COP provision.

If you identify any potential risks that are external to you (within your supply chain for example) it may be harder to mitigate the risk because it involves an external actor. The process to mitigate these risks will be varied and depend on many factors, but will primarily revolve around your leverage with the external actor and the information you can obtain from them. You may wish to ask about:

• Copies of codes of conduct developed by or signed by the business partner
• Audits or certifications obtained
• Whether you or an independent third party can make an on-site visit
• Copies of risk assessments
• How they source materials/supplies/workers and so on.

REVIEW: You should review your risk assessments whenever your business faces changes, for example:

every time you start a significant new activity or business relationship;

if you receive a grievance or allegation;

if you start sourcing new products or from a new country or from new suppliers, or

if the country you are operating in, or sourcing from, undergoes a change that affects the risk of Human Rights (for example, political change). (for country risks, please use the list of country risk assessment resources available in the DD toolkit for diamond and CG)

AT THE AUDIT: If you have evidence of risk assessments you’ve conducted under relevant COP provisions, you should note this and be able to demonstrate this to your auditor during your audit.

MECHANISM: You must develop a grievance mechanism – this is like a complaint’s procedure – for external stakeholders to raise Human Rights risks and concerns. You may combine this with the grievance mechanism developed for your employees under Harassment, Discipline, Grievance Procedures and Non-Retaliation (COP18.4C), or your grievance mechanism developed for external stakeholders under COP7 Due Diligence, COP14 Provenance Claims (if applicable).

Remember that a grievance mechanism must clearly outline how:

• Someone can raise a grievance giving the email address, link, phone number etc
• You will investigate grievances
• You will communicate the outcomes after an investigation
• You will document outcomes
• You will ensure the confidentiality and anonymity of the person raising the grievance if appropriate
• You will protect those who raise grievances from retaliation.

Please note: For smaller companies, a complaints procedure or grievance mechanism can simply be a phone number or an email address that stakeholders can use to report a complaint to.

REMEDY: Once developed, a grievance mechanism must be acted upon.

• If you have caused or contributed to a Human Rights impact, you will need to stop the cause
• If you are linked to a Human Rights impact, you will need to use your leverage to prevent the event from happening again.

This will involve communication to relevant business partners or those affected. Wherever and whenever you identify a Human Rights risk, you need to communicate with those potentially affected to explain how you are addressing the risk. Similarly, if you identify a Human Rights impact, get in touch with those affected as quickly and directly as possible and give them all the safety and welfare information they may need.

Remedy can take many forms:

• acknowledgement and apology,
• compensation (financial or other) for the harm,
• or something else.

Please note: If risks are small (and this may be so for smaller members) you will not need to pro-actively develop systems for remedy, unless those impacts have been found. In other words, if the risks of potential Human Rights impacts are low, you won’t need to develop a detailed system for remedying them – however all members will need to identify that remedy may be needed in future and outline in simple terms what that will be (stopping the action, discussing with suppliers, acknowledgement and apology, compensation, etc).

AT THE AUDIT: Members will need to demonstrate their process supports how grievances or complaints raised are tracked. For a smaller company, this can be as simple as keeping all emails in one folder for review and monitoring. As always, auditors may speak to you and your colleagues about how the grievance mechanism works in your business, for both employees and external stakeholders to raise concerns.

A core expectation of COP 6.1D is to communicate progress against COP6 annually. COP3 (Reporting) outlines a similar requirement to members to report annually on their practices relevant to the COP and so conformance for COP3 and COP6.1D can be combined.

HOW TO COMMUNICATE: There are lots of different ways you communicate, for example by:

• issuing a sustainability report;
• writing a letter or email;
• publishing information on your website; or
• having a meeting or other face-to-face engagement.

If you do not have a website, preparing a memo and sending it on request or when your partners visit you is a good idea.

Members that belong to larger groups can choose to report annually either on an individual basis or on a consolidated group basis if it is clear which individual companies are part of the group and any company-specific information related to Human Rights is disclosed.

WHAT TO COMMUNICATE: The information you publish will need to be a summary of your:

• Due diligence system – what you do to identify risks and how you may have made changes to reduce risks
• Grievance mechanism – how this works and what impacts you have identified and remedied (if relevant).

If you are reaching out to suppliers but they’re not sending you any information, you should still report on what actions you’ve taken – this includes outlining your risk assessment and due diligence process as well as your grievance mechanism. You are not reliant on information from your suppliers alone to report on your Human Rights approach. If your suppliers have not provided you with the necessary information, communicate how you plan to engage with your supplier(s) and obtain the needed information.

Please note: You must report to both employees and external stakeholders. The most efficient way of doing this is on your website.

If you do not have a website, you can make the reporting available upon request.

Human Rights issues are covered across many provisions within the COP. Usually these are internal, where members are required to fulfil the rights of their employees, but some provisions also address Human Rights issues faced by external stakeholders:

Provisions covering INTERNAL risks

• Health & Safety (COP23)
• Hazardous Wastes (COP25)
• General Employment Terms (COP5)
• Working Hours (COP16)
• Remuneration (COP17)
• Harassment, Discipline, Grievance Procedures and Non-retaliation (COP18)
• Child Labour (COP19)
• Forced Labour (COP20)
• Freedom of Association (COP21)
• Non-Discrimination (COP22)

Provisions covering EXTERNAL risks

• Sourcing from ASM (COP8)
• Sourcing from Conflict-Affected and High-Risk Areas (COP7)
• Wastes & Emissions (COP26)
• Various provisions for mining companies (COP31-42)

LINK WITH COP2 AND COP7: Members must develop a policy on their responsible business practices under COP2. You can include a policy covering Human Rights under COP6 within your policy under COP2 or combine it with any other policies required in the COP, for instance a Due Diligence policy under COP7. However, you must remember to specifically include the phrase ‘Human Rights’ if you do, and communicate it to external stakeholders, not just employees.

LINK WITH COP3: Members must report their responsible business practices under COP3. You can include your reporting on COP6.1D within your reporting for COP3. You must remember to include an overview of your Human Rights due diligence actions and findings when you do. This can be a summary of those actions, systems and findings.

LINK WITH COP12: Members must conduct Know Your Counterparty (KYC) due diligence on their business partners, including suppliers. This is to assess for money-laundering risks. Therefore, while members are asked to conduct due diligence on their business partners under COP6, the risks covered under COP12 are focused on anti-money laundering, and not on Human Rights.

LINK WITH COP18: Under Harassment, Discipline, Grievance Procedures and Non-Retaliation COP18.4C, members must develop a grievance mechanism for employees to raise concerns or complaints. Members can combine this procedure with one for COP6 by making it accessible to external stakeholders also.

AT THE AUDIT: If you’ve combined all your policy statements into one, you auditor will review the one policy document across relevant provisions. The same will apply to your reporting material, risk assessments and due diligence systems if they’ve been developed for implementation across two or more provisions.

COP6 and COP7 work in tandem to define RJC’s expectations for how members conduct human rights due diligence of their supply chain. There are however some differences:

• COP7’s objective is to help companies respect Human Rights and avoid contributing to conflict through their sourcing practices. Under COP7, due diligence refers specifically to the reasonable identification and assessment of risks related to sourcing materials from conflict-affected and high-risk areas (CAHRAs). The specific risks it’s intended to identify are outlined in Annex II of the Organisation for Economic Co-operation and Development’s (OECD’s) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the ‘OECD Guidance’). COP7 requires members to identify key aspects of your material’s supply chain (e.g. the refiner of the metals you buy and the country of origin of stones) and assess whether there are risks associated with sourcing from conflict-affected or high-risk areas, or not. This involves seeking information from suppliers and assessing that information.
• COP6 does not require information to be gathered by your suppliers, unless you identify a potential risk or actual impact and you ask your supplier for information to understand it further, mitigate against it, or remedy after it. Remember also that COP6 is asking for members to consider Human Rights risks internally too, not just in supply chains.

AT THE AUDIT: If you’ve combined all your policy statements into one, you auditor will review the one policy document across relevant provisions. The same will apply to your reporting material, risk assessments and due diligence systems if they’ve been developed for implementation across two or more provisions.

As with the other provisions within the Code of Practices, members of all sizes are expected to conform with COP6, and the vast majority of RJC members are smaller companies. The way that a smaller member will conform will be different to a larger member, and having fewer suppliers for example, will make it more straightforward. While all members will be required to develop management systems, these will not need to be as formalised as for larger companies. SMEs often have more informal systems, but a more informal approach to respecting Human Rights can still be effective, if there is a policy, a fit-for-purpose due diligence process, a process to raise grievances and enable remedy, and reporting on all of this.

While the following examples apply to all our members, SMEs may particularly find them useful for implementing COP6 in their organisations:

• When developing a policy on Human Rights, this can be integrated in your overarching responsible business policy (COP2)
• When developing a grievance mechanism (6.1C), this can be as simple as assigning someone responsibility and releasing their email address or phone number – it can be integrated with your grievance mechanism under COP18.4C, though remember it needs to be accessed by external stakeholders, whereas under COP18.4C this is only for employees
• When developing reporting on Human Rights, this can be a simple summary of your actions, and integrated into reporting on your responsible business practices (COP3).

Starlight Engagement Rings

Starlight is a thirteen-person company who buy gold bands and loose diamonds. They mount the stones to the bands in-house to their design and sell engagement rings

The company have 10 suppliers and are based in London, UK

Actions:

1.Phyllis, manager for sourcing, writes a Human Rights policy statement to add to their main policy document which has policy statements on sourcing from conflict-affected and high-risk areas (COP7), as well as statements on employee health & safety (COP23), on non-discrimination (COP22) and so on

2.A grievance mechanism is set up – this is Phyllis’ name and email address added to all B2B contracts and the company website. Phyllis know to log all complaints or grievances raised in a separate folder and reply to those who raise grievances if they are not anonymous

3.Phyllis conducts a risk-assessment of internal Human Rights risks

a. Phyllis reviews the risk-assessments conducted on other provisions and adds a few risks that have been missed to the risk assessment tool – for example a risk-assessment on non-discrimination is not explicitly required under COP22 and was not conducted when preparing for the previous audit

b. After updating the risk assessment tool with these potential risks, Phyllis concludes that all internal risks have been adequately mitigated. This does not mean that they do not exist and never will, but sufficient actions have been taken to prevent them

4.Phyllis then conducts a risk-assessment of external Human Rights risks

a. Phyllis identifies only one new risk, but it has potentially big impacts – by changing orders at the last minute because of changes to orders they receive from their biggest customer, they may force their supplier of wedding bands to breach labour standards. Phyllis adds the risk to the risk assessment tool and makes a note to raise this at the next call with their wedding band supplier, and their customer, as well as a copy of Starlight Engagement Rings’ policy document which contains supplier expectations on Human Rights issues

b. The customer acknowledges this issue and tells Phyllis they’re hoping to reduce last-minute changes but this will take time as they’re currently involved in a merger with another retailer – the issue has been raised with the customer and Phyllis makes a note to pick the issue up again in 6 months’ time

c. The wedding band supplier tells Phyllis that they have several subcontractors they can use to complete orders if there’s a last-minute rush. Phyllis asks for more information about these subcontractors. The wedding band supplier gives the necessary details, including the supplier code of conduct they require the subcontractors to sign, which states their requirements on remuneration, working hours and so on. Phyllis is happy with this information, though asks the wedding band supplier to consider visiting the site of their subcontractors to ensure the code of conduct is adhered to. This is agreed in principle and Phyllis makes a note to raise this again in a year’s time

5.While no Human Rights impacts have been found, and while Starlight Engagement Rings are a small company dealing with a much bigger customer and supplier, they have taken steps to manage a potential Human Rights risks in their supply chain

6.At the end of the year, Phyllis writes a summary of what she’s done on Human Rights and puts it on the company’s website.

It’s important to be aware that COP6 is a critical provision, which means if a major non-conformance is identified, this could be escalated to a critical breach – a serious infraction of the COP. Please make sure that you have actioned all four elements required under COP6 to avoid triggering a major non-conformance or a critical breach.

It’s important to remember that if a minor non-conformance is found (for any provision), that it will need to be closed before your next audit, otherwise there is a risk that it could be escalated to a major non-conformance in the future.