Due diligence system and risk management in human rights IBERDROLA

KEY CONCEPTS

In this section you will find information about:

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WHAT ARE HUMAN RIGHTS?

Human rights are universal legal agreements that protect individuals and groups against actions and omissions that affect their freedom and human dignity. These are basic minimum standards, based on human needs, such as the right to health, a decent home, a quality education or a job in acceptable conditions.

International human rights law establishes States’ obligations to act in certain situations, or to refrain from acting in a certain way, in order to promote and protect the human rights and fundamental freedoms of individuals or groups of people. The actions of companies, like those of any non-state actors, can affect the enjoyment of human rights by others, both positively and negatively. Companies can affect the human rights of their employees, their customers, the people working in their supply chains or the communities settled around their area of ​​activity.

Experience shows that companies can violate human rights when they do not pay enough attention to the existence of that risk and how to mitigate it.

Human rights are universal and inalienable

Human rights are inherent to all people, regardless of their nationality, place of residence, sex, national or ethnic origin, color, religion, language, or any other condition. We all have the same human rights, without any discrimination, that is, all people are born with the same human rights in any place, at any time, for the mere fact of being people, and they cannot be relinquished.

Human rights are indivisible and interdependent

That is, all rights are equally necessary for the life and dignity of a person, and are related to each other. There is no possibility of dividing them into categories that prioritize some over others, since they are all equally important. The realization of a right in many occasions depends on the parallel realization of others.

 

WHAT ARE THE UN GUIDING PRINCIPLES?

In June 2011, the Human Rights Council of the United Nations approved the UN Guiding Principles on Business and Human Rights presented to it by the Special Representative of the Secretary-General of the United Nations, Professor John Ruggie.

The Guiding Principles have been integrated into principal standards and international codes of business conduct such as the OECD Guidelines for Multinational Enterprises or the Performance Standards of the International Finance Corporation. On the other hand, the Renewed Strategy of the European Union for 2011-2014 on Corporate Social Responsibility dedicated a section to the application of the Guiding Principles, in which it urged its Member States to develop national plans for their implementation. In this regard, last July, the Council of Ministers of the Spanish Government approved the National Action Plan for Business and Human Rights, which takes these Principles as a framework for action. In addition, Directive 2014/95 / EU of the European Parliament and Council, of 22 October 2014, on the disclosure of non-financial information and information on diversity by certain large companies and certain groups, has established the obligation for large companies to include in their management reports, a non-financial statement that contains information, insofar as it is necessary to understand the development, results and the situation of the company, and the impact of its activity on people.

The Guiding Principles are governed by three pillars:

1. The duty to Protect by states,

2. The duty of Respect for human rights by companies, to prevent and mitigate any damage related to their operations and business relationships, and

3. The joint duty to provide mechanisms to Remedy human rights abuses.

The Guiding Principles urge companies to establish a due diligence process that begins with the identification of real and potential impacts, the design of a specific policy on the matter and the creation of repair mechanisms, in order to prevent, mitigate and overhaul the real and potential impacts of their activities in all the territories they operate and in all their commercial relationships.

[For more information you can consult the document: Guiding Principles on Business and Human Rights.]

 

DEFINITIONS OF KEY CONCEPTS

Transversal issues

These are issues that are relevant to all the stakeholders with which the company associates, such as corruption and bribery, fiscal responsibility, transparency, data protection or cybersecurity, which apply to all types of people and businesses, regardless of their size, sector and context of operation.

Resources and Real Estate

It refers to the material resources and property (movable and immovable) assets that the company has for the development of its operations.

Supply chain

We can call the supply chain the way in which the materials and / or services flow throughout different organizations, entities or people, from the raw materials to the delivery of the finished products to the client (the final consumer). It integrates all the companies that participate in the production, distribution, handling, storage and commercialization of a product / service and its components.

Value chain

The company's value chain covers the activities that convert supplies into a value-added product. It includes the persons, entities and organizations with which it has a direct or indirect commercial relationship and that (a) provides products or services that contribute to the company's products or services or (b) receives products or services from the company.

Direct customers

People, organizations or entities that use the services and / or products of the company, especially those that do it regularly. These are recipients of goods, services, products or ideas, in exchange for money or another item of value.

Indirect customers

They are those who will benefit from the products or services of the direct customer.

 

Context of Operation

The context of operation or operational context of the company is the place in which the company carries out business activities. It can refer to a country, region within a country or a local area.

 

Communication

Clarity about the process related to the policy, norm or mechanism that regulates the issue and who is responsible for managing the process.

Due Diligence in human rights

It is a continuous risk management process that a reasonable and prudent company must follow to identify, prevent, mitigate and account for how it manages negative impacts on human rights. It includes four key steps: evaluation of real and potential impacts of human rights; integration and action on results; follow up on the responses; and, communication about how impacts are managed.

Human Rights

The basic international standards aimed at guaranteeing dignity and equality for all. Every human being has the right to enjoy them without discrimination. They include the rights contained in the International Bill of Human Rights - Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. They also include the principles relating to fundamental rights set forth in the Declaration of the International Labor Organization on the Fundamental Principles and Rights at Work.

Frequency

Number of times there is an issue in a period of time (day, month, year...).

Gravity

A negative impact on human rights that is serious by virtue of one or more of the following characteristics: its scale, scope and remediability. Scale, means the seriousness of the consequences on human rights. Scope, the number of people who are or could be affected. Remediability, means the ability to return the affected people to a situation equal or similar to the situation of the enjoyment of their rights before suffering the damages.

Interest groups

Any person or organization that may affect or be affected by the actions and decisions of the company. The primary focus must be on the people or groups of interest affected, or potentially affected, that is, people whose human rights have been or may be affected by the company's operations, products or services. Other interest groups are, for example, the legitimate representatives of potentially affected stakeholders, trade unions, as well as civil society organizations and others with experience and knowledge related to the company's impacts on human rights.

Negative impact on human rights

A negative impact on human rights occurs when an action eliminates or reduces a person's ability to enjoy their human rights.

Market

The market is a mechanism through which buyers and sellers interact to determine prices and exchange goods and services.

Mitigation

The mitigation of a negative impact on human rights refers to the measures adopted to reduce the degree of impact. Mitigating a human rights risk refers to the measures taken to reduce the likelihood of a potential negative impact.

Own business

Businesses developed with the company's own capital.

Rules

Specific rules that must be followed or to which the behaviors, tasks or activities in an organization must be adjusted in order to carry out compliance with an issue.

Prevention

The prevention of a negative impact on human rights refers to the measures taken to ensure that the impact does not occur.

Policies

Set of general criteria that guide the decision making in the company regarding a matter.

 

Processes

Set of logically related tasks that exist to manage the policy, norm or mechanism at local and / or holding level, that operate and manage the affairs in the company.

Resources

Budget, time and personnel to manage an issue.

Business relationships

It is about the relations that the company has with its partners, entities in its value chain and any State or non-state entity directly related to its operations, products or services. They include indirect relationships in their value chain, beyond the first line, as well as positions of minority or majority participation in joint ventures.

Relevance

Importance given to an issue.

Remediation

It refers to the process of providing remediation for a negative impact on human rights and the substantive results that can counteract, or compensate, the negative impact. These results can take a variety of forms, from apologies, restitution, rehabilitation, financial or non-financial compensation and punitive sanctions (whether criminal or administrative, such as fines), as well as the prevention of damages through, for example, precautionary measures or guarantees so they do not repeat themselves.

Responsible official

Person(s) in charge of managing the processes that operate and manage a certain issue in the company.

Responsibility to respect human rights

It is the responsibility of the company to avoid infringing on the human rights of people, and to address and manage the negative impacts that may be involved, as established in the UN Guiding Principles on Business and Human rights.

Business partner

They are entities with which the company has some form of direct and formal relationship in order to meet its business objectives. This includes, but is not limited to, contractual relationships. Examples include joint venture partners, suppliers, dealers or licensees, business clients, customers, governments, suppliers, contractors and consultants.

Affected third parties

A person or persons whose human rights have been or may be affected by the operations of the company, products or services.

Worker or employed persons

A person who performs work for a company, regardless of the existence or nature of any contractual relationship with the company.

CONTACT

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