How can companies be connected to specific risks or harms?
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Business-related harms to people, communities and the environment are often connected to foreign companies and global supply chains, i.e. a company operating locally might be owned by, supplying or financed by an actor elsewhere. Understanding that connection is often the first step toward identifying remedy or complaint options that may be relevant to your situation.
Most of the time, the most accessible options for seeking remedy are local (courts, public authorities, company complaints systems or other complaint bodies in the country where the harm happened). The options available, and how well they work, depend on the country.
When the harm is connected to a foreign company or global supply chain, there may be ways to seek remedy or make a complaint abroad.
How can a foreign company or global supply chain be connected to a local harm?
A foreign company or global supply chain may be connected to a local harm when a local company directly causing the harm:
- is owned by a foreign parent company,
- directly or indirectly (via other suppliers) supplies goods or services to a foreign company,
- receives money from a foreign bank, investor or development finance institution,
- exports its products or services to another country.
A foreign company may also directly cause local harm through its own operations, products or services in the place where the harm occurs.
Where a foreign company is connected to local harm through its supply chain, the question is to what extent it can be made responsible for it. In other words: what is the company’s contribution to the harm, even if a supplier or other business partner is the one directly causing it on a local level?
The framework for corporate involvement in risks or harms as outlined in the UN Guiding Principles on Business and Human Rights (UNGPs) and reflected in the OECD Guidelines for Multinational Enterprises provides useful guidance.
The UNGPs' Involvement Framework
Under the international UN and OECD standards on business, human rights and the environment, corporate levels of involvement in harm can range from:
- causation (which usually is the case if the harm directly results from the company’s own operations); to
- contribution or joint causation (if, for instance, there is corporate complicity in harmful state or private action, or if exploitative price pressures by lead firms on suppliers exacerbate wage theft and other risks for workers); to
- linkage (if, for instance, a supplier causing harm is part of a company’s supply chain, but the company itself has clearly no negative role in that harm).
The same UN and OECD standards, and increasingly binding legislation, require companies to take appropriate action to prevent, reduce, end and remediate harms they are connected to through their operations and value chains (due diligence). What ‘appropriate’ means here depends on a range of factors, including the level of involvement in the harm.
The responsibility to provide remedy in the sense of compensation and restitution requires a degree of (joint) causation, or contribution, according to these standards. The same may apply to liability in civil court cases for damages.
However, even if they are merely linked to harm (solely) caused by a business partner, companies cannot look away but have to take appropriate prevention and mitigation action, and may also provide and cooperate in remedy, or at least influence the business partner to provide it.
The involvement framework is not static: linkage can become contribution to (or joint causation of) harm if, for instance, there is persistent inaction or inadequate action by a company on a risk or harm in its supply chain that it identified or should have identified.
What remedy and complaint options may be available if the harm is connected to a foreign company or global supply chain?
If a harm or risk is connected to a foreign company or global supply chain, it may be possible to use complaint or remedy options under special laws and frameworks that deal with transnational business harms. These options may be based in the country where the goods or services are directly sold or where the foreign company connected to the harm is based or operates.
Some of these laws and frameworks apply not only to harms in a company’s own operations or subsidiaries, but also to harm the company should have identified and addressed in its supply chain or other business relationships. This can include suppliers, contractors, subcontractors or companies it buys from or works with. Whether this is possible depends on the specific law or framework and on how the company is connected to the harm.
The Remedy and Complaints Compass contains more information on the laws and frameworks that deal with transnational business harms. It does not cover local options in detail because these vary significantly between countries. Although local options are usually the first to consider, transnational options may be useful when local options are not available, unsafe, or do not work effectively.
If the harm or risk you or the people you represent have experienced is connected to a foreign company or global supply chain, answer these questions for information on the transnational laws and frameworks most relevant to your case or explore this overview of instruments and frameworks.
What if the harm is not connected to a foreign company or global supply chain?
The Remedy and Complaints Compass focuses on laws and frameworks that may help when a harm is connected to a foreign company or global supply chain. It does not cover local options in detail because these vary significantly between countries.
If the harm you or the people you represent have experienced is not connected in any way to a foreign company or global supply chain, or if you want to explore local options at this time, you can find general information on types of remedy and useful resources here.
How can I know if a foreign company is connected to the harm I have experienced?
It is often difficult to identify whether a foreign company is connected to a harm, especially if you do not work for the company or deal with it directly, or if the harm occurs at the level of raw material production, for instance.
The below tools and directories may be useful:
- BankTrack database of dodgy deals: Find out which banks are financing certain projects or companies that have been identified as damaging human rights or the environment. You can also ask BankTrack for assistance with identifying who is financing certain projects or companies.
- The Counter: SOMO’s global helpdesk investigating companies by “following the money” to reveal corporate and capital structures, shell companies in tax havens, hidden profits, secret owners, supply chains, and influential investors.
- CSDDD Databub: SOMO also operates a database of EU and non-EU companies that, based on their most recent turnover and employee figures, fall within the scope of the Corporate Sustainability Due Diligence Directive (CSDDD).
- *Open Supply Hub: an open, searchable map of more than 2.5 million production locations worldwide across sectors to promote accessibility and standardisation of data, engagement, and impact.
- *Supply Trace: This open-access platform combines trade data and on-the-ground research to surface forced labor risk in global supply chains.
- *Trase: This tool maps agricultural commodity supply chains (soy, cattle, palm oil) from production regions to traders and importers.
- *Import Yeti: A free, searchable database of US customs shipment records to identify suppliers and trace import relationships.
- *OpenCorporates: The largest open database of legal corporate entities: 235 million+ companies across 140+ jurisdictions.
- *OpenOwnership: Provides beneficial-ownership data and operates the open Beneficial Ownership Data Standard for collecting, storing and exchanging high-quality data.
*Also listed in Open Supply Hub and WikiRates’ Corporate Accountability Resource Bank, a community-managed database of tools organised into 11 categories.