Mediation for Business and Human Rights Cases

by Jennifer Egsgard & Dr Karl Mackie CBE

Disputes about the human rights impacts of businesses around the world are increasingly being discussed in boardrooms, law courts, and the media.

Human rights impacts are the most acute impacts a company can have on people, whether they are economic, social or environmental in nature.

They are those impacts that rise to the level of affecting people’s basic dignity and equality as human beings. They may take the form of forced or child labour, impacts on privacy or freedom of expression, on freedom from discrimination, on health and safety, decent working conditions, access to clean water or nutrition, displacement from home or homeland, to name a few examples.

These impacts can and do occur in any country and across all sectors, from extractives to consumer goods to banking to information technology and beyond.

The United Nations Guiding Principles for Business and Human Rights (“Guiding Principles”) were endorsed by the UN Human Rights Council in 2011 and set the authoritative standard for companies’ responsibility to respect human rights in their operations by avoiding infringing on human rights and addressing adverse human rights impacts which may arise.

To accomplish this, the Guiding Principles provide that companies should have: policy commitments to respect human rights; human rights due diligence processes to identify, prevent, and mitigate adverse human rights impacts; and to the extent that human rights impacts have been caused by or contributed to by the company,[1] they should “provide for or cooperate in their remediation through legitimate processes”.[2]

Since then, many companies have developed extensive policies and due diligence systems to help identify and prevent adverse human rights impacts caused in their global operations with positive results.

However, there have been few avenues to resolve business and human rights allegations and disputes quickly, legitimately and fairly.

Limitations of Grievance Mechanisms and Litigation

Operation-level grievance mechanisms and litigation are two common means by which business and international human rights disputes are currently being resolved. While these avenues are significant, they also face some limitations.

As suggested by the Guiding Principles, [3] companies have used non-state based operational-level grievance mechanisms in an attempt to resolve international business and human disputes.

While these grievance mechanisms have been successful in some cases, others have been criticized for reasons such as: lacking independence and being controlled by the company’s interests;[4]  not sufficiently engaging the interests of local populations[5] or addressing power imbalances between the parties;[6] providing inadequate compensation for loss or assessment of damages, and focusing on strict legal rights without regard for improved relations with the community.[7]

Transnational civil litigation claims are being increasingly made against parent companies of global companies for harm allegedly caused by their foreign subsidiaries, for instance in the case of Lungowe v Vedanta Resources plc [2019] UKSC 20.

Litigation, whether transnational or local to an area where harm allegedly occurred, however, can be less than ideal for all parties.

For impacted people and communities, litigation may be expensive, extraordinarily lengthy, and difficult or impossible to access for practical or legal/jurisdictional reasons.

Remedies available from courts are limited, may lack the pragmatism, balance and creativity required for a satisfactory resolution, and may not adequately address the actual harm caused or the goals and interests of a community.

Local stakeholders may be unable to participate in a foreign litigation process or feel that their concerns or interests are not taken into account in a proceeding focussed on legal tests and specific evidence. Litigation often strains relationships with opposing parties, making it difficult for parties to continue working with one another.

For companies, long-lasting and very public litigation can be uncertain, time-consuming, lead to reputational harm with detrimental impacts to business relationships, market share, takeover and financing opportunities, and can entrench disagreements with stakeholders making future business difficult or impossible.

Mediation of Business and Human Rights Disputes

Mediation, due to its inherent flexibility and responsiveness, success rates, and ability to be used in the early stages of possible conflicts, provides an opportunity for more effective prevention or the resolution of many business and human rights disputes.  Its strengths include:

  • The use of skilled neutral mediators to facilitate tough or sensitive discussions in order to help parties identify underlying interests, and focus on and reach agreement on complex matters
  • The ability to accommodate the complexities of different party perspectives on a problem, of multiple parties or languages (via co-mediation models), and to cut through the challenge of uncertain legal principles or jurisdictional application by focusing on core consensual outcomes
  • The ability to proceed in parallel to, or before the adoption of, formal legal proceedings, so as to test the opportunities for consensual outcomes in conflict settings
  • The capability to provide flexible and cost-effective processes that can arrive at creative and pragmatic outcomes tailored to the realities of a specific situation and the parties involved, rather than to the narrow provisions of a law or contract.
  • Through the role of an independent facilitator, the ability to address the often-inherent power imbalances between companies and affected individuals or communities, giving affected people direct agency in the process and its results.
  • The ability of the parties to the dispute to retain control over the process and decisions on whether and when an agreement is satisfactory, while also being able to agree to make any outcome binding in nature.

Human Rights Reviews and Official Leverage 

Because of their inherent complexity and geographical mix or uncertainties in corporate-community relations, many human rights situations are difficult to bring into a dialogue process.

One of the mechanisms that does provide leverage in this respect, are the OECD Guidelines for Multinational Enterprises.[8]  These govern a wide range of areas intended to define good corporate conduct, including the UNGP.  They require member countries to appoint a ‘National Contact Point’ (“NCP”) where complaints about multinationals’ conduct can be registered for investigation and report to government.

While some NGOs have queried the NCP system and its apparent lack of tangible compensation remedies for human rights cases, it does provide a form of incentive for companies to be seen to behave responsibly and be responsive to specific human rights violations.

For the last seven years, the UK NCP has been working with CEDR Founder and President Dr Karl Mackie CBE and CEDR to explore the use of professional mediation in these kinds of complaints (the more common system used by NCPs internationally is an informal investigation through to formal report by NCP staff, often civil servants in their home country.)

The NCP cases, covering a wide range of human rights concerns from environmental damage to child labour to property dispossession, have proved in multiple instances to be amenable to mediation techniques and to consensual outcomes.

The mediation process helps raise the level of in-depth communication taking place between multinationals and the NGOs who are typically acting for complainants.  The outcomes often include commitments by companies to enhance their human rights diligence and to recognise and respond to alleged inappropriate instances of conduct.

Since working with the NCP system, CEDR has enlarged the discussion on enhancing mediation usage in human rights, by forming a task force of stakeholder groups, and profiling at a UN Forum in 2019 the possibility of a dedicated facility for mediation in a wider range of such cases.

Further work is being done to extend the lessons from this experience to companies’ relations with stakeholder groups more generally on a range of topics. 

Mediation has been evolving globally as a form of dispute resolution for over forty years.

Affected communities and companies alike stand to benefit from being able to access mediation of business and human rights disputes, as will other stakeholder groups with a stake in effective corporate behaviour or in achieving enhanced social capital outcomes from the corporate world.

This blog was written by Jennifer Egsgard and Dr. Karl Mackie CBE.


[1] Guiding Principles, Principle 15, available at:

[2] Guiding Principles, Principle 122, available at:

[3] Guiding Principles, Principles 29 – 31.

[4] “Effective Operational Grievance Mechanisms”, International Commission of Jurists, 2019, (“ICJ Report”) available at: , p. 44

[5] “Effective Operational Grievance Mechanisms”, International Commission of Jurists, 2019, (“ICJ Report”) available at: , p. 9.

[6] “Effective Operational Grievance Mechanisms”, International Commission of Jurists, 2019, (“ICJ Report”) available at: , p. 11.

[7] “Effective Operational Grievance Mechanisms”, International Commission of Jurists, 2019, (“ICJ Report”) available at: , p. 24.


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