Case Study: Business and Human Rights Due Diligence and Strategy Development for Operations and Value Chain

Consultivo | Impact Stories

Human Rights Due-Diligence Consulting, Strategy Advisory and Audit Services: Consultivo was commissioned to develop a comprehensive Business and Human Rights (BHR) Strategy for one of India’s largest steel and mining companies, covering their operations and value chain.

This project spanned 17 business units, impacting 36,000 employees and 50,000+ contract workers.

The strategy aimed to address the company’s human rights challenges across its operations, value chain, and diverse stakeholder categories, ensuring alignment with global human rights standards and fostering long-term sustainability.

Scope of Work for Human Rights Due-Diligence Consulting

Our thorough Business and Human Rights due diligence process included:

1. Secondary Research and Assessment for Human Rights Due-Diligence

Business & Value Chain Analysis: Conducted extensive research on the company’s business units, value chain partners, and the human rights practices in place. This included analysing company locations, industry footprint, and existing Business & Human Rights (BHR) systems.
Existing Standards & Policies: Reviewed relevant reference standards and industry benchmarks to assess the company’s current alignment with international BHR expectations.
Client Expectations: Engaged with the client to understand their expectations, which shaped the customization of deliverables.

2. Development of Human Rights Framework for Human Rights Due-Diligence

Customised Due Diligence Checklist: Created a tailored framework for conducting due diligence, considering the unique human rights issues relevant to the company’s business units and value chain. This checklist became the foundation for a detailed assessment of existing practices, policies, and procedures.
Human Rights Stakeholder Categories: The due diligence covered multiple human rights stakeholder groups, including:
- Company personnel (employees and those working on behalf of the company)
- Contract workforce
- Communities impacted by the company’s operations
- Consumers/customers of the company’s products and services
- Employees of value chain partners (suppliers, vendors, dealers, distributors, sales representatives)
- Family members of company personnel

3. Application of Standards and Protocols

Utilising relevant international standards and protocols to guide the assessment, including:

- UNGP (United Nations Guiding Principles)
- OECD (Organization for Economic Cooperation and Development) Guidelines
- ILO Framework
- Group Business and Human Rights Guidelines
- BRSR
- DJSI assessment
  Relevant national laws
- Industry best practices
- Good practices from Indian industry leaders (public domain information)

4. Mapping of Human Rights Issues for Human Rights Due-Diligence

The strategy addressed multiple key human rights issues like:

No child labour
Human rights in the value chain
Rights of indigenous persons
Land rights settlement and rehabilitation
Rights of migrant workers
Non-harassment
Rights of persons with disabilities
No forced labour
Right to clean air and water
No contemporary forms of slavery
Health and safety.
Right to privacy
Equal opportunity and non-discrimination
Fair wages and living wages
Freedom of association and right to collective bargaining

Issue Mapping: Conducted a detailed mapping of potential human rights risks across the company’s operations and value chain. This included analyzing risks in different regions and business units, taking into account the company’s impact on various stakeholder groups.

5. Identification and Prioritisation of Salient Human Rights Risks

Vulnerability Assessment: Identified and prioritised salient human rights risks by conducting a thorough vulnerability assessment. This was supported by direct engagement with stakeholders to understand the impact of company operations on people.
Risk Heat Map Development: Created a risk heat map aligned with the company’s Enterprise Risk Management Framework, visually highlighting areas of high vulnerability where human rights risks were most significant.

6. Development of a Human Rights Due Diligence Approach

Mitigation Strategy: Developed a comprehensive mitigation approach to address identified human rights risks, dovetailing with the company’s existing processes and systems. This approach provided actionable steps for the company to take in response to each identified risk.
Remediation Framework: Proposed a structured remediation process for addressing potential violations of human rights, ensuring that any breaches were resolved in a timely and ethical manner.
Damage Control Strategy: In case of actual human rights violations uncovered during due diligence, a damage control strategy was recommended. This included internal and external communication protocols, following international best practices to ensure transparency and trust.

7. Communication and Disclosures

Internal & External Communication Strategy: Consultivo developed a robust internal and external communication strategy, providing recommendations on how the company should communicate their human rights efforts and any challenges to key stakeholders, including investors, employees, and affected communities.
Disclosure Recommendations: Recommended best practices for disclosures on human rights performance, aligned with industry norms and international guidelines such as the UN Guiding Principles on Business and Human Rights (UNGPs) and Global Reporting Initiative (GRI) standards.

8. Stakeholder Training

Training Sessions: Delivered targeted training sessions to relevant company personnel, contract workers, and key stakeholders. These sessions focused on Business and Human Rights imperatives, risk management, and global best practices.

9. Final Report and Presentation

Comprehensive Report: The final report detailed the findings from the due diligence process, mapping of human rights risks, and suggested mitigation strategies. It also included the risk heat map, a customized due diligence framework, and actionable recommendations.
Presentation to Leadership: The final strategy and findings were presented to the company’s senior leadership, ensuring that they had the insights necessary to drive informed decision-making and integrate human rights into their business practices.

Read more on Consultivo M&A Due Diligence Services

Post-Audit Action Plan

Following the audit, Consultivo developed a comprehensive post-audit action plan aimed at addressing critical gaps in the client’s human rights practices. This plan included:

Specific corrective actions to align operations with international best practices and local legal requirements.
Strategies for ongoing monitoring and evaluation of human rights impacts as operations progress.

Read more on Consultivo HR Audit & HR Due diligence

Impact

Through this project, Consultivo provided the steel and mining industry giant with a robust Business and Human Rights (BHR) Strategy. The strategy ensured the company’s operations and value chain were aligned with international human rights standards and best practices. The detailed mapping of human rights issues and the creation of a risk heat map empowered the company to prioritize actions that would protect the rights of its workers, communities, and other key stakeholders.

The customized human rights due diligence framework and the comprehensive mitigation plan allowed the company to proactively address critical human rights risks across its operations. By embedding human rights into its corporate governance and risk management frameworks, the company is now better equipped to foster an inclusive, safe, and ethical business environment, both for its employees and the broader community.

Furthermore, the internal and external communication strategies and disclosure recommendations enabled the company to enhance transparency, build trust with stakeholders, and demonstrate its commitment to human rights in a clear and responsible manner.

Consultivo’s work ensured that the company’s approach to human rights would not only mitigate risks but also contribute positively to the overall sustainability of its business in the long term.

A Case Study : Pre-Investment ESG Due Diligence

About Consultivo Due Diligence Services

Consultivo specialises in ESG and Sustainability-focused due diligence, designed to support pre-investment and M&A decisions.

With expertise in key areas such as ESG Due Diligence, EHS Due Diligence, OHS Due Diligence, Environmental Due Diligence, HR Due Diligence, and Business & Human Rights Diligence.

As a due diligence company or due diligence vendor, we help investors and companies identify risks, assess compliance, and unlock opportunities for sustainable growth, ensuring informed, responsible, and strategic decision-making.

Empanelled sustainability consultant for International Finance Corporation (IFC), World Bank Group, KfW IPEX Bank, Germany and many more financial Institutions.