“There is growing awareness of the usefulness of grievance mechanisms in helping to address corporate-community conflict. The United Nations (UN) Guiding Principles on Business and Human Rights have been an important catalyst for the development of operational-level grievance mechanisms under the “Protect, Respect and Remedy” framework,1 while grievance mechanisms, in turn, have played a fundamental role in the practical implementation of the UN Guiding Principles.

The International Finance Corporation’s (IFC) Policy and Performance Standards on Environmental and Social Sustainability (IFC Sustainability Framework) recognize that grievance mechanisms are necessary for businesses to responsibly address human rights issues.2 The Performance Standards require client companies to establish a grievance mechanism for affected communities that is scaled to the risks and adverse impacts of the project.3 The Standards further require that clients offer an effective grievance mechanism to facilitate the early identification of grievances and a prompt remedy for people who believe they have been harmed by a client’s actions.

CAO’s casework has shown that, while policies relating to grievance mechanisms might be well-developed, there are still challenges in their application, resulting in a lack of consistency in both the design and implementation of grievance mechanisms at the operational-level. In addition, the perceived and actual costs associated with establishing, implementing, and maintaining a grievance mechanism present another challenge: for businesses with small margins, investing in a grievance mechanism when the need and potential outcomes are unproven may be considered too great an expense when compared to other company priorities.

This toolkit is intended to address these barriers to implementation. It builds on previous CAO guidance on community grievance mechanisms,4 and has two primary purposes. First, it offers a practical guide to designing and implementing effective grievance mechanisms, particularly for projects with limited staff, time, and budget. Second, it provides a repository of best practice tools and techniques from CAO’s work, as well as from the work of other practitioners. Throughout this document, most of the examples used to illustrate the types of complaints received by a grievance mechanism come from the extractive industries (oil, gas, and mining). Extractive industries have more extensive experience with grievance mechanisms than other sectors, because of the nature of their activities, which can have a high impact on land and water resources, as well as the degree of scrutiny received by the sector. This experience is evidenced by the language used in sustainability reports from extractive industry companies, which commonly focus heavily on community issues, including grievance mechanisms. In contrast, sustainability reports for many agriculture companies have typically placed less focus on these issues. As grievance mechanisms are still an emerging field of practice in sectors other than the extractives, this guide compensates for the lack of quantifiable data by using a number of fictionalized cases that are based on real-life examples from smaller-scale businesses in various sectors.
The specific design and implementation of each grievance mechanism will vary, bringing its own set of challenges and opportunities. This toolkit offers guidance on assessing the local context, determining what might work in a particular situation, and troubleshooting when issues arise.”