[Executive Summary] Status Survey on Human Rights Impact Assessment of Public Institutions/Public Enterprises and Research on Improvement Measures

Executive Summary of Status Survey on Human Rights Impact Assessment of Public Institutions/Public Enterprises and Research on Improvement Measures*

 

 

 I. Introduction

– Research Background, Purposes, Contents, Methodology

 

On application recommendation of “Human Rights Management Manual for State-Owned Enterprises” published by National Human Rights Commission of Korea in 2018, most public institutions are acknowledged to establish a human rights management system and conduct a human rights impact assessment of institution management. Ergo, it remains unknown how human rights impact assessment of major projects is enforced in related public institutions and no research has been conducted on this matter.

 

This research seeks to clarify the principles of effective human rights impact assessment and implementation steps and detailed procedures. And it provides guidelines for public institutions to effectively or efficiently assess human rights impact on major projects. It continues by evaluating the current status and actual conditions of human rights impact assessment on major projects of public institutions. Based on the evaluation, it also draws up a systematic improvement plan to ensure effective human rights impact assessment. Ultimately, this study aims to ensure that public institutions fulfill their responsibilities for respecting human rights through human rights due diligence by conducting effective assessments of human rights impacts on major projects.

 

For the purposes of such research, domestic and foreign literatures on human rights impact assessment, reports on human rights impact assessment on major projects by public institutions, media coverages of public institutions, cases of human rights impact assessment of foreign companies, and overseas legal systems for human rights impact assessment have been examined. In addition, a survey was conducted on 899 public institutions out of a total of 1,002 public corporations, quasi-governmental organizations, other public institutions, local public corporations, and metropolitan local governments. And in-depth interviews were conducted for 35 people, including personnel in charge of human rights management at public institutions and persons in charge of external consulting firm.

II. A Concept of Human Rights Impact Assessments
– Purposes and Meaning of Human Rights Impact Assessments

 

The United Nations “Guiding Principles on Business and Human Rights” (UNGPs) require all companies to fulfill their due diligence for human rights, and the first of which is to assess human rights impact. “Assessing human rights impact” defined by the above principles of implementation is distinct from “human rights impact assessment.” If the former is human rights impact assessment in a broad sense meaning, the latter can be referred to as either a narrow sense meaning of human rights impact assessment or a formal human rights assessment in which the former is systematically and structurally conducted in a participatory and analytical manner.

 

Whether it is a broad or narrow sense meaning, the purpose of human rights impact assessment is to fulfill the responsibility of respecting human rights through the implementation of due diligence. According to the UNGPs, “human rights” is a wide range of “internationally recognized human rights” in human rights impact assessment and “impact” is a negative impact on the rights subjects of businesses. Business enterprises can cause negative impacts directly through their own business activities, but they can be also “directly linked” or “contribute” to cause negative impacts by their business relationships. “Evaluation” includes not just identifying negative human rights impacts but it also involves developing a plan for addressing the issues identified.

 

III. Conditions For Effective Human Rights Impact Assessments

 
1. Principles for Effective Human Rights Impact Assessments

 

Principles for effective human rights impact assessments include participation, inclusiveness, accountability, transparency and significance. Since human rights impact is a negative impact on rights holders, it is important to stakeholders to participate meaningfully in the human rights assessment processes. In particular, because human rights impact assessments are led by public institutions in reality, the principle of participation must be observed to ensure minimum neutrality and independence. Moreover, since the concepts of “human rights”, “impact” and “assessment” of human rights impact assessments are comprehensive, human rights impact assessments should be executed in accordance with this conceptual comprehensiveness. In order to achieve human rights impact assessment by fulfilling its purposeful implementation of due diligence, the responsibility for respecting human rights is to be achieved. Human rights impact assessment shall not be a mere formality. It should be carried out with accountability to relieve those affected by negative human rights and to ensure that the responsible entities involved take charge of their accountabilities.

 

Hence participation, inclusiveness and accountability are the most fundamental principles for effective human rights impact assessment. However, in order to ensure participation, transparency should be assured as stakeholders must have timely access to relevant information. Moreover, human rights impact assessments should be executed in accordance with their conceptual inclusiveness, but in reality, multiple projects cannot be assessed simultaneously. Thus, the subjects of the assessments should be selected for evaluation among those projects. If there are several human rights impacts identified, there may be a situation in which to choose the priority targets for response. Significance is the supplementary principle applied on this occasion.

2. Steps and Procedures for Effective Human Rights Impact Assessments
 

This research referred to the manuals on human rights impact assessment published by the World Bank, IFC and IBLF, The Danish Institute for Human Rights, National Human Rights Commission of Korea, etc. To assure that the human rights impact assessment is a “systematic and structure evaluation process through analytical and participatory methods”, specific implementation steps of human rights impact assessment are categorized in following order: 1) Planning, 2) Data Collection, 3) Data Analysis, 4) Reporting Results. The above each step is also subdivided into three procedures: 1) Selecting the Implementation Subjects for Evaluation, 2) Establishing Scopes for Project Subjects for Evaluation, Persons Involved in Implementation, and Major Human Rights Issues, 3) Preparing a Plan, 4) Designing a checklist, 5) Determining Targets and Methods for Data Collection, 6) Data Collection, 7) Analyzing of Impact Status, Target, Type, Cause, etc., 8) Analyzing Impact Severity, 9) Creating a Response Plan, 10) Post Evaluation, 11) Writing a Result Report, 12) Reporting and Disclosure of Results Report.

3. Conclusion
– Evaluation Index for An Effective Evaluation of Human Rights Impact Assessments

 

The five principles for effective human rights impact assessment should be followed in all four stages and twelve procedures for effective human rights impact assessment. However, priorities can be set among the principles depending on stages or procedures. The principles of inclusiveness and significance should be abided more crucially in certain implementation step and procedure, especially Establishing Scopes for Projects Subject for Evaluation and Data Analysis of the Planning step. Indicators to assure that the principles are adhered to in the steps and procedures above will be: “whether selection of projects subject for evaluation was appropriate” and “whether the severity assessment was made considering the fact that it can be indirectly involved in human rights influences.”

 

The principle of participation is important in Data Collection, and the principle of transparency is important in Planning and in Reporting and Disclosure of Results Report. Indicators to ensure that the principles are well complied with this step and procedure will be: “whether stakeholders are identified comprehensively in the project and are able to participate especially in data collection procedures substantially” and “whether the plans and outcome reports are disclosed to enable meaningful participation by stakeholders.”

 

The principle of accountability is essential in Planning and Creating a Response Plan. And the indexes for ensuring that these principles are followed in the above steps or procedures will be: “whether there are procedures to address human rights impacts and to ensure remedies to victims in the human rights impact assessment stage of major projects” and “whether an appropriate human, physical, and normative infrastructure exists.”

III. Current Status of Human Rights Impact Assessments on Major Projects of Public Institutions
 
1. Practice of Implementing Human Rights Impact Assessment on Major Projects

 

• Time of Implementation: Most public institutions (91.1%, 154 respondents) conducted project human rights impact assessments after the projects were implemented.
• Period of Implementation: In some cases, the implementation period from the Planning to the Writing a Results Report report took 18 months, but the average was 3.6 months.
• Existence of Human, Physical, and Normative Infrastructures: Most public institutions had a Human Rights Management Committee. The chairman of the Human Rights Management Committee was more likely to be the head of the institution (42.6%) than the outside members (25.4%). In relation to physical resources, most public institutions implemented the budget of the department in charge without a separate budget set for evaluating the human rights impact of major projects. More than half institutions spent less than 1 million won, but 21.89 percent spent more than 10 million won. 71% (120 respondents) of the implementation agencies were disclosing guidelines for implementing human rights management (including provisions for human rights impact assessment on major projects), which can be considered as a normative infrastructure.
• Pre-training: Most public institutions provided trainings to departments of human rights management departments and business before implementing the human rights impact assessment for major projects. Only 14 public institutions responded that they did not provide any trainings.
• Referenced Data: A majority (54.4%) of public institutions conducting human rights impact assessments for major projects referred to the National Human Rights Commission of Korea’s “Human Rights Management Manual for State-Owned Enterprises.”
• Organizing the Implementation Subjects: 75.7% of public institutions did not entrust to external institutions, but the department in charge of human rights management became the main body and directly implemented the human rights impact assessment for major projects. The 41 public institutions entrusted to external institutions considered “professionalism (46.9%)” the highest standard for selecting entrusted institutions.
• Selection of Projects Subjects for Evaluation: the most common considerations were “the vulnerabilities of the affected stakeholder group (18.1%, 81 respondents)”, “the size of the project: sales/investment amount, etc. (17.4%, 78 respondents)”, and the number of affected stakeholder groups (15.2%, 68 respondents)”.
• Identification of Stakeholders: Most respondents (86.4% and 146 respondents) have identified the stakeholders in the projects subject to human rights impacts on major projects. Among the stakeholder groups, “workers (16.5%, 88 respondents)”, “local residents (14.8%, 79 respondents)” and “first-tier partner companies (13.7% and 73 respondents)” were acknowledged the most.
• Preparation of a Plan: 93.5% (158 respondents) of public institutions prepared plans before conducting the assessment of human rights impacts on major projects.
• Data Collection Method: All but one public institution was using checklists for data collection. Among the data collection methods, “reviewing document data such as internal regulations and records (37.5%, 132 respondents)” was the most followed by “surveys (23.6%, 83 respondents)”, “interviews (22.4%, 79 respondents”, and “visiting business sites (13.6%, 48 respondents)”.
• Determining the Types of Impact: About half of public institutions (52.1%) were reviewing the potential human rights impact when assessing the human rights impacts. Public institutions were considering “providing direct causes (47.3%, 141 respondents)”, “providing indirect causes (32.9%, 98 respondents)”, and “directly linked to through business relationships (19.8% and 59 cases)” in ways that involve human rights influences.
• Determining the Severity of the Impact: Most public institutions (74%, 125 respondents) determined the severity of the impacts if they were deemed to have human rights impact on major projects.
• Creating a Response Plan: 77.5% (131 respondents) of public institutions that conducted human rights impact assessments on major projects were establishing countermeasures to reduce, prevent, and rescue human rights impact found in the assessment as part of the assessment of human rights impact on major projects. 84% of public institutions were preparing separate procedures from the existing ones to raise objections. 46.7% of public institutions were actually operating separate objection procedures from the existing ones. Six institutions were operating objections outside of their institutions.
• Disclosure of Results Report: 58.3% (116 respondents) of public institutions were disclosing the results of human rights impact assessments on major projects on their websites. A number of public institutions (73.4%) were trying to release the report in a way that stakeholders could easily understand the contents. Nearly all public institutions (99.4%) reported to management the results of the human rights impact assessment on major projects.

2. Evaluation of Human Rights Impact Assessment on Major Projects
 

• Implementation Status: The overall implementation rate of human rights impact assessment for major itself remains low. It is clear that the implementation rate of public enterprises is 47.2%, higher than that public institutions of other types of different legal entities. However, in comparison to the size of assets, the public institutions of different legal categories have higher implementing rates (84.9%) than the average ratio of assets per publics institution, while that of public enterprises are far below (47.22%). In particular, the amount of assets of four state-owned companies, which did not assess the human rights impact of major projects, amounted to 236.8 trillion won. The figure is smaller than the total assets of 401 local public enterprises and 725 local government invested or funded institutions, or 224.7 trillion won. Nevertheless, considering the size of assets, it is an acute problem for state-owned companies not conducting human rights impact assessments on their major business projects.

 

• Compliance with Principles: Compliance with the principles of inclusiveness and significance was decent during the step of Data Analysis. However, there was much to be sought regarding compliance with the inclusiveness and significance principles in the Selecting the Implementation Subjects for Evaluation. Specific resources to determine the major business projects of public enterprises are issues raised by media articles, human rights advocacy groups, and rights holders. However, these raised issues regarding negative human rights impact have been considered very little. And most public enterprises that execute business projects with high human rights risks in underdeveloped countries failed to select overseas projects for evaluation. In particular, over the past few years, various associates, including the media and human rights advocates, have posed problems of serious human rights violations such as human trafficking and forced labor at home and abroad. However, the public institutions involved did not evaluate their relevant projects.

 

With regard to the principle of participation, public institutions have distinguished the stakeholders but have been passive in engaging those persons concerned in specific human rights impact assessments.

 

Regarding the principle of transparency, the percentage of public institutions disclosing their plans was low. The resulting reports were often publicly disclosed. Nonetheless, most of the disclosure contents remained only in the area of “evaluation results” or “evaluation procedures.”

 

With respect to the compliance with the principle of accountability, it was not confirmed whether “there were measures to respond to human rights impacts and to guarantee relief of victims when implementing the human rights impact assessment for major projects.”

 

However, it seems evident that human, physical, and normative infrastructures were not properly established before the human rights impact assessments were conducted. In particular, the lack of physical resources and the absence of internal norms appear to be severe.

IV. Improvement Plans of Human Rights Impact Assessment on Public Institutions
 1. Technical Improvement Plan

 

As a technical improvement measure, the data for the human rights impact assessments in businesses were the most imperative apparatus for human rights management managers at public institutions. As a part of this research, “III. Conditions for Effective Human Rights Impact Assessment” was compiled to present “Appendix 2. Guidelines for Human Rights Impact Assessment on Public Institutions.”

 

The National Human Rights Commission of Korea should acquire at least a reliable pool of experts for public institutions to be educated on human rights impact assessment. Furthermore, the relevant consultations should be practiced in public institutions.

 
2. Institutional Improvement Plans

 
A. improvement of the System on Human Rights Impact Assessments

 

(1) Regarding the Mandatory Disclosure of Human Rights Impact Assessment Reports

 

Public institutions should disclose the results of human rights impact assessment to the relevant management information disclosure system such as ALIO (All Public Information In-One). Article 11-1 of the “Act on Contracts to which the State is a Party” shall be amended to include the results reports of human rights impact assessments in the disclosures. The Minister of Economy and Finance should revise “Standards for the Consolidated Publications of Public Institutions.” In specific, the detailed enclosure criteria for each consolidated publication item in the first Addenda: “Detailed Standard of Public Announcement by Consolidated Publications Item” should be amended. The “Report on the Results of the Human Rights Impact Assessment on Businesses” should be disclosed in the standard column. And the regarding contents shall be appended to the item column.

 

In the case of local public enterprises, the human rights impact assessment shall be included in the disclosure under Article 46 (2) of the Local Enterprises Act correspondingly. Moreover, the guidelines of the relevant Minister of Public Administration and Security should be revised in Article 44-2 of the “Enforcement Decree of the Act on Contracts to which the State is a Party” to ensure that the human rights impact assessment is disclosed in the management information disclosure system (Clean-Eye).

 

(2) Regarding the Response to Human Rights Impact of Subcontractors

 

When public institutions sign contracts with their subcontractors, public institutions should acquire a basis so they can address to human rights impacts. Some public institutions already require              memorandum on human rights management when entering integrity agreements with their subcontractors under Article5-2 of the “Act on Contracts to which the State is a Party.” However, Article 4-2 of the “Enforcement Decree of the Act on Contracts to which the State is a Party” has to be amended so that the contents of contracts include information that public institutions can address to human rights impact of their subcontractors. It might be available to add matters related to the address to human rights impacts to the contents of the integrity contract. Or Article 5-4 of the “Act on Contracts to which the State is a Party” could be entirely amended and supplement to the human rights management law in compliance with the “Labor Standards Act”.

 

In addition, it can be considered to revise the “Guidelines for Fair Subcontract Transaction” to annex the meaning of “actions to address human rights impacts” to clarify that such an act does not constitute unfair management interference with subcontractors.

 
B. Improvement of the System to Evaluate Human Rights Impact Assessment

 

(1) Regarding the Criteria for Evaluation

 

Public institutions should effectively assess human rights impacts through management evaluation of human rights management. And in order to assure that, the Ministry of Economy and Finance should also independently establish human rights management as a separate indicator, as should the Ministry of the Interior and Safety’s management evaluation. The details of human rights management in the “Human Rights Management for State-Owned Enterprises”, in particular, the impact of human rights on projects, shall be included in the detailed evaluation. In addition, the Ministry of Economy and Finance and the Ministry of the Interior and Safety should also affix the criteria for evaluating the human rights impact assessments on businesses to the detailed evaluation criteria of the human rights management mentioned above.

 

(2) Regarding the Subject of the Assessments

 

In the evaluation category of “performance of duties” when evaluating standing auditors and auditors at public institutions of the Ministry of Economy and Finance, the evaluation index of “appropriateness of internal audit operation and follow-up management” reflects the results of the Board of Audit and Inspection’s assessments. And the “integrity of institutions” evaluation indexes exhibit the results of the National Civil Rights Commission of Korea’s measurement of integrity. Therefore, the National Human Rights Commission of Korea should also evaluate the human rights impact assessment in projects of public institutions and assess the human rights management as well. And it would be worthwhile to ensure those assessments are included in the management assessment of the Ministry of Economy and Finance. The National Human Rights Commission of Korea should be able to execute such assessments in conjunction with the aforementioned consulting works on human rights management in public institutions. And for these processes, based on the regulations of the advisory committees (Article 15 of the National Human Rights Commission Act), have an advisory organ in order to provide advice to the public institutions regarding the human rights management or establish a center for human rights management by through the revision of the institutions affiliated with the National Human Rights Commission of Korea.

 
V. Implications of Human Rights Norms in Relation to the Projects of Public Institutions

 

This research organized the prescriptive evidences that are highly related to the human rights regulated by the International Bill of Human Rights in the context of “business and human rights area”. It also includes general comments from the Treaty Bodies, which, when making notes of a normative basis, is a constituent interpretation of the norm. And this research also explicates the implications of each human right in relation to “business and human rights” in the International Bill of Human Rights in the following order: Human rights stipulated by the ICCPR and the ICESCR, human rights prescribed by the ICCPR, and human rights prescribed by the ICESCR. Furthermore, each human rights affected by corporate activities are introduced with detailed examples to help understanding.

 

VI. Cases of Human Rights Impact by Industry

 

In this research, the cases of human rights impact that actually occurred in 16 out of 18 industries are portrayed according to the large classification of Korean Standard Industrial Classification.

 

VII. Domestic and International Exemplary Cases on the Assessment of Human Rights Impacts on Businesses

 

Four stages of implementation of the human rights impact assessments on businesses and nine public institutions and nine foreign companies that implemented 12 detailed procedures in an appropriate manner were portrayed.

 

Appendix 2. Guidelines for Human Rights Impact Assessment on Public Institutions

 

These guidelines can be divided into three main chapters. Chapter 1 introduces specific activities necessary for public institutions to implement the effective human rights impact assessments within 4 steps and 12 detailed procedures, with 5 principles for effective human rights impact assessment. Chapter 2 deals with how human rights impact assessments on businesses relate to human rights management, responsibilities for respecting human rights, and due diligence concerning human rights in a format of questions and answers. And in order to help understanding the exact terminologies in Chapters 1 and 2, Chapter 3 (A Glossary of Frequently Used Terms) has been appended.

 

The guidelines were produced as part of the “Status Survey on Human Rights Impact Assessment of Public Institutions/Public Enterprises and Research on Improvement Measures”. Therefore, the significant findings in the research were included in the corresponding sections of the guidelines. They also enclose domestic and international exemplary cases on the human rights impacts assessment on businesses. And finally, in-depth interviews with human rights management officials and the persons concerned of public institutions are accommodated.

*Status Survey on Human Rights Impact Assessment of Public Institutions/Public Enterprises and Research on Improvement Measures is commissioned by the National Human Rights Commission of Korea in 2020. The original full report is only available in Korean. 

(번역: 자원봉사자 유가영)