Systematically recording and processing complaints

The grievance mechanism is a core element of corporate due diligence. Where persons are or may be adversely affected by your company's business activities, they must have the opportunity to raise complaints – persons within your own company and those affected externally.

How can a grievance mechanism benefit my company?

The introduction of a grievance mechanism is beneficial in several ways:

• Regulatory frameworks on human rights due diligence require the establishment of a grievance mechanism. By establishing a transparent complaints process, your company fulfils these regulatory requirements.
• A grievance mechanism serves as an early warning system. It helps to identify human rights and environmental risks at an early stage. In addition, the evaluation of incoming complaints can improve your risk analysis.
• Complaints form the basis for measures to remedy adverse impacts.
• Grievance mechanisms provide information for assessing the effectiveness of your preventive and remedial measures. Early risk identification, targeted remedy and measuring effectiveness thus contribute to preventing harm and reducing cost and reputational risks.
• An accessible, systematic, and transparent grievance mechanism also helps you to improve relationships with various stakeholder groups. Your company thereby signals its commitment to taking responsibility, engaging in open dialogue, and providing remedy.

What are the requirements and quality criteria for a grievance mechanism?

For your grievance mechanism to be genuinely used and effective, it must meet certain requirements. These so-called effectiveness criteria are based on the UN Guiding Principles on Business and Human Rights and apply regardless of whether you build your own procedure or join an existing initiative.

Of particular importance is a complaints option for those persons who, due to the specific nature of your company's business activities, could be especially affected by adverse impacts. This target group is derived from the findings of your risk analysis.

Who should be able to access a complaints procedure?

A complaints mechanism must be freely accessible to all persons potentially affected by your company's business activities – both within and outside the company. In addition, external third parties should also have access, such as non-governmental organisations (NGO) or the general public.

Draw on the findings of your risk analysis and identify which groups of persons within and outside your company may be affected. As with the risk analysis, it is legitimate for an SME to prioritise initially and focus on certain groups of persons. The higher the human rights risk to certain persons and the closer the relationship between your company and those persons, the greater the responsibility to establish a complaints channel for them.

Guiding questions:

• Which persons are primarily and potentially adversely affected by the company's business activities?
• Who are therefore the potential users of your complaints mechanism?
• In which countries are these persons located?

All target groups identified in phase 5.2 must have access to the grievance mechanism. When establishing this procedure, most companies do not start from scratch. Many already have formal or informal grievance mechanisms or compliance systems in place that can be drawn upon.

What is the best way to get started?

As a smaller company in particular, you can take a pragmatic approach. You can already make significant progress by gradually extending existing internal mechanisms –for example in relation to corruption, discrimination, or working conditions – to your direct suppliers, and by creating a central point of contact for third parties on your website. You can also participate in grievance mechanisms offered at industry level or by multi-stakeholder initiatives. This allows you to benefit from established structures and shared industry standards without having to build your own procedure.

To establish a grievance mechanism efficiently and systematically, the first step is to understand the status quo in your company.

Implementation support: Documenting the status quo

Understand the situation in your company and gather information on existing complaints processes, for example regarding language and country coverage as well as thematic focus. The Action Guide on the core element "Complaints Mechanism" of the Automotive Industry Dialogue provides an example of this:

What grievance mechanisms exist in your company, and which human rights topics do they cover?

Common examples in companies include:

• Central email address
• Telephone hotline
• Works council
• Suggestion/complaints box
• Confidential adviser
• Representative for severely disabled employees
• Equal opportunities officer
• Procedures via public authorities, multi-stakeholder initiatives, or civil society organisations

Do your specific target groups already have access to these complaints mechanisms?

Typical access barriers may include:

• Lack of awareness of the existence of the mechanism
• Language
• Illiteracy
• Costs
• Fear of punishment or negative consequences
• Lack of trust in the complaints mechanism, e.g. regarding anonymity

How can gaps be closed?

Prioritise - gaps should be closed first in areas where the adverse human rights impacts are most severe.

• As a smaller company in particular, exchanges with groups of persons connected to the company often take place directly and informally. To increase the reach of your complaints mechanism, simply setting up a dedicated email address or telephone number and communicating this on your own website can already make a significant difference.
• Remove access barriers. Choose pragmatic solutions to facilitate access – for example by explaining the grievance mechanism graphically, disclosing processes that guarantee confidentiality.
• It is also increasingly common for companies within the same industry to offer a joint grievance mechanism. Therefore, enquire with your industry association before developing your own new solution.

Various access barriers can be reduced through targeted measures. The following overview provides suggestions on how to overcome typical hurdles.

A grievance mechanism is more than just a channel for receiving complaints. To ensure that your due diligence process continues to evolve, complaints should be recorded systematically and analysed on an ongoing basis. A structured complaints handling process provides the foundation for this.

Process requirements for a grievance mechanism

A clear process for handling received complaints helps to ensure their prompt resolution. Regulatory requirements also stipulate that you document the process and make it publicly available as rules of procedure. The following structure is recommended:

Evaluating complaints

Evaluate incoming complaints regularly and systematically rather than processing them only on a case-by-case basis. Pay particular attention to recurring patterns and clusters – these often indicate structural risks that go beyond individual cases. When evaluating complaints, always ensure the protection of complainants: evaluate complaints in a way that avoids drawing conclusions about individuals, for example by examining data in anonymised or aggregated form – particularly when attributing complaints to specific locations or suppliers. The following guiding questions help in evaluating complaints:

• Which topics or risks appear particularly frequently in the complaints?
• Can the complaints be attributed to specific locations, suppliers, or business areas?
• Do the complaints reveal risks that have not yet been identified, or have been insufficiently addressed, in your risk analysis?
• Do the complaints indicate that existing preventive or remedial measures are not working as intended?