Operational risks of IHL violations

Many businesses operate in diverse and often challenging social, economic, political and cultural landscapes. Business operations often traverse borders, in complex and dangerous environments where countries are, or are at risk of, experiencing armed conflict.

Many of these companies also have business or supply chain partners carrying out essential operations in these areas. Due to the nature of modern armed conflict – which has evolved well beyond vicinal State versus State warfare – the risks that entities face when operating in conflict-affected areas have significantly increased.

Companies are exposed to operational risks, arising from having a physical presence in these regions. Operational risks refer to potential loss as a result of inadequate or failed internal processes, people, and systems or external events. The operational risks of business activities in conflict-affected areas may include:

• interrupted operations
• difficulty in retaining a stable workforce
• security and safety risks for staff and infrastructure
• involvement in criminal activity
• direct targeting of company assets
• decrease in the value of company assets (such as land, factories, and mines)

Managing the operational risks associated with doing business in a conflict-affected area, or arising out of non-compliance with IHL, is essential to the safety of personnel and operational efficiency. If these operational risks are not well understood or adequately managed, they can manifest in operational impacts such as community protests, permit denials, lost development opportunities and suspension or closure of operations.

There are some questions you can ask yourself when contemplating your business’s operational risk. Such as,

• Does your current risk management process include a directive to identify the risks and impacts arising from causing or contributing to breaches of IHL?
• Has your business considered and accounted for the security and operational implications of non-compliance with IHL – both by your own personnel and by external parties against your personnel or property?

While there is no official or regulated best practice model, good practice in this respect could look like:

• A business integrating IHL considerations into country risk assessments and human rights due diligence processes for new and ongoing projects. These assessments and processes include personnel from all core business functions, with diverse perspectives of the business’ operations who can inform IHL risk discussion.
• A business undertaking IHL risk assessments when conducting activities in conflict-affected areas, and highlighting the operational and legal implications of IHL non-compliance in these assessments.