Risk analysis and management

Businesses today are more aware of their human rights obligations than ever before and are increasingly exposed to conflict-affected areas, primarily due to the proximity of business operations to war zones and the propensity to hire private security forces when operating in insecure environments. Such exposure gives rise to heightened legal, operational, ethical and reputational risks to business personnel, assets and ‘corporate brand’.

It is essential that companies exposed to these types of risks understand the principles of IHL and how they apply to their business, particularly those with strong commitments to observing human rights obligations.

Risk analysis and management frameworks support businesses to identify, reduce and manage risks arising from non-compliance with IHL. In order to gauge IHL risks, business enterprises should identify and assess any actual or potential adverse IHL impacts. This is a foundational step for effective management of IHL risks, and also human rights risks more broadly.

The UN Guiding Principles on Business and Human Rights (UNGPs) are a useful starting point for businesses looking to identify and manage IHL risks. They recommend human rights due diligence as a starting point for businesses seeking to identify the potential human rights impacts of business operations. Having operations or business relationships in conflict-affected areas requires ‘enhanced’ or ‘heightened’ human rights due diligence as the risk of involvement in adverse impacts may be higher than in most other contexts.

The UNGPs recommend that business enterprises treat the risk of causing or contributing to gross human rights abuses as a legal compliance issue. They note that having operations or business relationships in conflict-affected areas may increase the risk of businesses being complicit in gross human rights abuses committed by other actors (for example, security forces and other business partners), which necessitates extra care. The UNGPs express that companies should exercise human rights due diligence in all contexts, and Principle 12 of the UNGPs explicitly states that “in situations of armed conflict enterprises should respect the standards of international humanitarian law.”

Questions to consider

• Have you considered whether your business activities or supply chains are at risk of being impacted by armed conflict?
• Does your current risk management process include a directive to identify the risks and impacts arising from causing or contributing to breaches of IHL?

Example of good or best practice

• Business investment and new-country entry decisions are based on rigorous and lengthy risk-benefit analysis which includes risk assessment, risk mitigation and a determination of whether operational presence in an area is likely to improve or exacerbate existing human rights challenges.
• The business integrates IHL considerations into country risk assessments and human rights due diligence processes for new and ongoing projects.
• If the business conducts activities in conflict-affected areas, it undertakes IHL risk assessments and highlights the operational and legal implications of IHL non-compliance in these assessments.