Italy: NCP recommends auditor RINA make a “humanitarian gesture” to families affected by Ali Enterprises fire; RINA’s refusal to sign mediation agreement disregarded harmed families, says NGO
'Faulty Pakistan factory audit: Italian social auditor RINA yet again disregards families harmed by textile factory fire', 11 December 2020
Italian social auditing company RINA Services S.p.A. has refused to take responsibility for the faulty certification of a garment factory in Karachi (Pakistan) in which over 250 people died. Pakistani survivor and labour rights organisations together with European allies had filed a complaint at the Italian OECD National Contact Point in September 2018.
As an enterprise located in a member country of the Organisation for Economic Co-operation and Development (OECD) RINA must observe the organization’s Guidelines for Multinational Enterprises. When confronted with the complaint to the Italian OECD National Contact Point (NCP) RINA rejected any liability and said it had duly audited the building according to regulations. The company said that is could not solve the issues in the auditing industry on its own and stated that the NCP process was not the right avenue to provide compensation to the affected families. The Italian OECD NCP however saw merit in the complaint and went forward to organise a mediation process.
The outcome of the lengthy mediation process was a compromise in which the NCP proposed that RINA would commit to pay 400,000 USD to those affected by the fire and that a company representative would meet with the families to express sympathy. Secondly, it suggested RINA would commit to pursuing improvement of global certification systems, such as including buyers’ purchasing practices into factory audits, as well as to improving its own due diligence practices. This would include transparency about RINA’s policies on risk management, corruption, and conflict of interest.
Believing this to be a fair compromise – even though it would not do full justice to the affected families – the complainants signed the agreement in March 2020. RINA, however, suddenly backed out of its commitment to the process and refused to sign before deadline, indicating that it saw the payments to the families as the biggest hurdle. In its final statement, the NCP recommends RINA to nevertheless make a “humanitarian gesture” towards the families in form of financial compensation and by expressing sympathy in person, as well as to proactively improve the company’s due diligence and certification practices.
“RINA’s behaviour clearly shows that we need mandatory rules on companies’ human rights due diligence that can be enforced through courts” said Miriam Saage-Maaß, head of the Business and Human Rights Programme at the European Center for Constitutional and Human Rights (ECCHR).