Energy

25 survey respondents classified themselves as being in the energy sector (oil, gas and renewables). Around half (47.37%) of the energy sector respondents conducted express human rights due diligence, which is notably lower than the mining sector. This is perhaps surprising given the similar characteristics between these two industries. Although we did not seek to ascertain the cause for this disparity, the lower take-up by energy companies may be linked to the fact that a lower percentage of energy sector respondents - 33.33% - indicated that their company has been connected to allegations of human rights impacts. Reasons for this might include the fact that a high proportion of energy projects are offshore and thus less proximate to inhabited areas, and the fact that mining projects often take up a larger surface area, increasing the potential for community conflicts (particularly, say, compared to a renewable energy project).

In terms of companies that have undertaken specific human rights due diligence:

  • 100% of processes were conducted with reference to the Universal Declaration of Human Rights, 80% to the Voluntary Principles on Security and Human Rights and 60% to the UN Guiding Principles on Business and Human Rights.1
  • The process was integrated into other processes in 77.78% of cases, including environmental impact assessments, mergers/acquisitions or investment decisions (88.33%), entering a new market or developing a plant/factory/mine/facility in a new area or community (66.67%), engaging a new supplier or a new business partner (50%) and entering into partnership with a government, or for auditing purposes (33.33%).
  • 100% of companies identified human rights impacts.
  • 80% of companies identified human rights impacts related to their third parties
  • In 66.67% of cases, the function/department responsible for identifying the human rights impact was CSR and/or Legal, followed by Operations Management, Procurement/Supply Chain Management, Human Resources Compliance and/or Team Dedicated to Human Rights (50% respectively).
  • In 60% of cases, the CSR function was responsible for implementing action(s) to prevent, mitigate or remedy actual or potential adverse impacts.

Of the companies that had not undertaken express human rights due diligence, 77.78% did take human rights into account in other due diligence processes, such as in the areas of workplace health and safety (85.71%), labour rights (71.43%) equality/non-discrimination (42.86%) and community, indigenous or land rights (28.57%).

There is, unsurprisingly, substantial overlap between the actual or potential human rights impacts identified by respondents for the mining sector and the energy sector:

  • Involuntary relocation
  • Impacts on indigenous communities in the vicinity of the operations
  • Impacts on non-indigenous communities in the vicinity of the operations
  • Environmental impacts
  • Impacts on land
  • Impacts on water
  • Security
  • Potential impacts of fly-in, fly-out workforce
  • Gender discrimination
  • Health and safety
  • Supply chain issues
  • Labour rights

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1 Also at 60%: the OECD Guidelines on Multinational Enterprises, the IFC Performance Standards and the International Covenant on Economic, Social and Cultural Rights.