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GRI 413: Local Communities 2016

EFFECTIVE DATE: 1 JULY 2018

Introduction​

GRI 413: Local Communities 2016 contains disclosures for organizations to report information about their impacts related to local communities, and how they manage these impacts. The Standard is structured as follows:

  • Section 1 contains a requirement, which provides information about how the organization manages its impacts related to local communities.
  • Section 2 contains two disclosures, which provide information about the organization’s impacts related to local communities.
  • The Glossary contains defined terms with a specific meaning when used in the GRI Standards. The terms are underlined in the text of the GRI Standards and linked to the definitions.
  • The Biblogrpahy lists authoritative intergovernmental instruments and additional references used in developing this Standard.

Background on the topic​

This Standard addresses the topic of local communities. In the GRI Standards, local communities are defined as individuals or groups of individuals living or working in areas that are affected or that could be affected by the organization’s activities. The local community can range from those living adjacent to the organization's operations to those living at a distance.

An organization’s activities and infrastructure can have significant economic, social, cultural, and/or environmental impacts on local communities. Where possible, organizations are expected to anticipate and avoid negative impacts on local communities. Establishing a timely and effective stakeholder identification and engagement process is important to help organizations understand the vulnerability of local communities and how these might be affected by the organization’s activities.

Due to the heterogeneous nature of local communities, an organization is expected to consider the differentiated nature of communities and the distinct and specific vulnerabilities these groups can suffer as a result of the organization’s activities.

These concepts are covered in key instruments of the Organisation for Economic Co-operation and Development and the United Nations: see the Bibliography.

1. Topic management disclosures​

An organization reporting in accordance with the GRI Standards is required to report how it manages each of its material topics.

An organization that has determined local communities to be a material topic is required to report how it manages the topic using Disclosure 3-3 in GRI 3: Material Topics 2021 (see clause 1.1 in this section).

This section is therefore designed to supplement – and not replace – Disclosure 3-3 in GRI 3.

REQUIREMENTS​

  • 1.1 The reporting organization shall report how it manages local communities using Disclosure 3-3 in GRI 3: Material Topics 2021.

Guidance​

The reporting organization can also describe:

  • the means by which stakeholders are identified and engaged with;
  • which vulnerable groups have been identified; any collective or individual rights that have been identified that are of particular concern for the community in question;
  • how it engages with stakeholder groups that are particular to the community (for example, groups defined by age, indigenous background, ethnicity or migration status);
  • the means by which its departments and other bodies address risks and impacts, or support independent third parties to engage with stakeholders and address risks and impacts.

Background
Communities have individual and collective rights deriving from, among others, international declarations and conventions such as:

  • the United Nations (UN) Declaration, ‘Universal Declaration of Human Rights’, 1948;
  • the United Nations (UN) Convention, ‘International Covenant on Civil and Political Rights’, 1966;
  • the United Nations (UN) Convention, ‘International Covenant on Economic, Social, and Cultural Rights’, 1966;
  • the United Nations (UN) Declaration, ‘Declaration on the Right to Development’, 1986.

Other standards such as the International Finance Corporation’s (IFC) Performance Standards (PS) also provide widely-accepted good practice approaches for organizational assessment, engagement and treatment of community-related impact issues (see IFC PS1 – Assessment and Management of Environmental and Social Risks and Impacts, and PS4 – Community Health, Safety, and Security).

2. Topic disclosures​

Disclosure 413-1 Operations with local community engagement, impact assessments, and development programs​

REQUIREMENTS​

The reporting organization shall report the following information:

  • a. Percentage of operations with implemented local community engagement, impact assessments, and/or development programs, including the use of:
    • i. social impact assessments, including gender impact assessments, based on participatory processes;
    • ii. environmental impact assessments and ongoing monitoring;
    • iii. public disclosure of results of environmental and social impact assessments;
    • iv. local community development programs based on local communities’ needs;
    • v. stakeholder engagement plans based on stakeholder mapping;
    • vi. broad-based local community consultation committees and processes that include vulnerable groups;
    • vii. works councils, occupational health and safety committees, and other worker representation bodies to deal with impacts;
    • viii. formal local community grievance processes.

RECOMMENDATIONS​

  • 2.1 When compiling the information specified in Disclosure 413-1, the reporting organization should use the data from Disclosure 2-6 in GRI 2: General Disclosures 2021 to identify the total number of operations, if the organization has reported its total number of operations when describing its activities.

Guidance​

Background
A key element in managing impacts on people in local communities is assessment and planning in order to understand the actual and potential impacts, and strong engagement with local communities to understand their expectations and needs. There are many elements that can be incorporated into local community engagement, impact assessments, and development programs. This disclosure seeks to identify which elements have been consistently applied organization-wide.

Where possible, organizations are expected to anticipate and avoid negative impacts on local communities. Where this is not possible, or where residual impacts remain, organizations are expected to manage those impacts appropriately, including grievances, and to compensate local communities for negative impacts.

Establishing a timely and effective stakeholder identification and engagement process is important to help organizations understand the vulnerability of local communities and how these might be affected by the organization’s activities. A stakeholder engagement process, both in early planning stages as well as during operations, can help establish lines of communication between an organization’s various departments (planning, finance, environment, production, etc.) and key stakeholder interest groups in the community. This enables an organization to consider the views of community stakeholders in its decisions, and to address its potential impacts on local communities in a timely manner.

Organizations can utilize a number of useful tools to engage communities, including social and human rights impact assessments, which include a diverse set of approaches for proper identification of stakeholders and community characteristics. These can be based on issues such as ethnic background, indigenous descent, gender, age, migrant status, socioeconomic status, literacy levels, disabilities, income level, infrastructure availability, or specific human health vulnerabilities that may exist within stakeholder communities.

An organization is expected to consider the differentiated nature of local communities and to take specific action to identify and engage vulnerable groups. This might require adopting differentiated measures to allow the effective participation of vulnerable groups, such as making information available in alternate languages or formats for those who are not literate or who do not have access to printed materials. Where necessary, organizations are expected to establish additional or separate processes so that negative impacts on vulnerable or disadvantaged groups are avoided, minimized, mitigated, or compensated.
[International Finance Corporation (IFC), Guidance Notes: Performance Standards on Environmental and Social Sustainability, 2012.]

Disclosure 413-2 Operations with significant actual and potential negative impacts on local communities​

REQUIREMENTS​

The reporting organization shall report the following information:

  • a. Operations with significant actual and potential negative impacts on local communities, including:
    • i. the location of the operations;
    • ii. the significant actual and potential negative impacts of operations.

RECOMMENDATIONS​

  • 2.2. When compiling the information specified in Disclosure 413-2, the reporting organization should:

    • 2.2.1 report the vulnerability and risk to local communities from potential negative impacts due to factors including:
      • 2.2.1.1 the degree of physical or economic isolation of the local community;
      • 2.2.1.2 the level of socioeconomic development, including the degree of gender equality within the community;
      • 2.2.1.3 the state of socioeconomic infrastructure, including health and education infrastructure;
      • 2.2.1.4 the proximity to operations;
      • 2.2.1.5 the level of social organization;
      • 2.2.1.6 the strength and quality of the governance of local and national institutions around local communities;
    • 2.2.2 report the exposure of the local community to its operations due to higher than average use of shared resources or impact on shared resources, including:
      • 2.2.2.1 the use of hazardous substances that have an impact on the environment and human health in general, and specifically have an impact on reproductive health;
      • 2.2.2.2 the volume and type of pollution released;
      • 2.2.2.3 the status as major employer in the local community;
      • 2.2.2.4 land conversion and resettlement;
      • 2.2.2.5 natural resource consumption;

  • 2.2.3 for each of the significant actual and potential negative economic, social, cultural, and/or environmental impacts on local communities and their rights, describe:

    • 2.2.3.1 the intensity or severity of the impact;
    • 2.2.3.2 the likely duration of the impact;
    • 2.2.3.3 the reversibility of the impact;
    • 2.2.3.4 the scale of the impact.

Guidance​

Background
This disclosure is focused on significant actual and potential negative impacts related to an organization’s operations and not on community investments or donations, which are addressed by GRI 201: Economic Performance 2016.

This disclosure informs stakeholders about an organization’s awareness of its negative impacts on local communities. It also enables the organization to better prioritize and improve its organization-wide attention to local communities.

Bibliography​

This section lists authoritative intergovernmental instruments and additional references used in developing this Standard.

Authoritative instruments:

  • Organisation for Economic Co-operation and Development (OECD), OECD Guidelines for Multinational Enterprises, 2011.
  • Organisation for Economic Co-operation and Development (OECD), Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones, 2006.

Additional references:

  • United Nations (UN) Convention, ‘International Covenant on Civil and Political Rights’, 1966.
  • United Nations (UN) Convention, ‘International Covenant on Economic, Social, and Cultural Rights’, 1966.
  • United Nations (UN) Declaration, ‘Declaration on the Right to Development’, 1986.
  • United Nations (UN) Declaration, ‘Universal Declaration of Human Rights’, 1948.
  • International Finance Corporation (IFC), Performance Standards on Environmental and Social Sustainability, 2012.
  • International Finance Corporation (IFC), Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets, 2007.