Advisory Note

A GUIDE TO DESIGNING AND

IMPLEMENTING GRIEVANCE MECHANISMS
FOR DEVELOPMENT PROJECTS

June 2008

The Office of the Compliance Advisor/Ombudsman

for the
International Finance Corporation (IFC)
Multilateral Investment Guarantee Agency (MIGA)
Members of the World Bank Group
 About the CAO

The CAO (Office of the Compliance Advisor/Ombudsman) is an independent post that reports
directly to the President of the World Bank Group. The CAO reviews complaints from
communities affected by development projects undertaken by the two private sector lending
arms of the World Bank Group, the International Finance Corporation (IFC) and the Multilateral
Investment Guarantee Fund (MIGA). The CAO works to respond quickly and effectively to
complaints through mediated settlements headed by the CAO Ombudsman, or through
compliance audits that ensure adherence with relevant policies. The CAO also offers advice and
guidance to IFC and MIGA, and to the World Bank Group President, about improving the social
and environmental outcomes of IFC and MIGA projects.

The CAO’s mission is to serve as a fair, trusted,

and effective independent recourse mechanism and to
improve the environmental and social accountability of IFC and MIGA.

For more information about the CAO, please visit www.cao-ombudsman.org

About the CAO Advisory Role and Advisory Notes

In its advisory capacity, the CAO provides advice to the President of the World Bank Group and
to the management of IFC and MIGA relating to broader environmental and social policies,
guidelines, procedures, resources, and systems. This advice is often based on the insights and
experience gained from investigations and audits in the CAO’s Ombudsman and Compliance
roles. The objective in the advisory function, and in preparing this Advisory Note, is to identify
and help address systemic issues and potential problems early.
 ADVISORY NOTE

A Guide to Designing and Implementing Grievance Mechanisms for

Development Projects

The Office of the Compliance Advisor/Ombudsman

June 2008
© 2008 Compliance Advisor/Ombudsman (CAO)
2121 Pennsylvania Avenue NW
Washington DC 20433 USA
Telephone: 202-458-1973
Internet: www.cao-ombudsman.org
e-mail: cao-compliance@ifc.org

All rights reserved.

Compliance Advisor/Ombudsman (CAO)

2121 Pennsylvania Avenue NW
Washington, DC 20433 USA

The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not
necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and
Development /the International Finance Corporation or the governments they represent.

The CAO does not guarantee the accuracy of the data included in this work. The boundaries, colors,
denominations, and other information shown on any map in this work do not imply any judgement on the
part of the CAO concerning the legal status of any territory or the endorsement or acceptance of such
boundaries.

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 Contents

Foreword…………………………………………………………………………………………………..v
Executive Summary………………………………………………………………………………………1
Part I. Overview
Chapter 1. The Need for Grievance Mechanisms……………………………………………6
Chapter 2. Understanding Grievance Mechanisms………………………………………...15
Chapter 3. Initiating a Grievance Mechanism……………………………………………….17
Part II. Developing and Implementing Effective Grievance Mechanisms
Chapter 4. Define Scope and Determine Goals (Phase 1)……………………………...…23
Chapter 5. Design the Grievance Mechanism (Phase 2)……………………………...…..25
Chapter 6. Implement and Operate (Phase 3)………………………………………………42
Chapter 7. Monitor, Report, and Learn (Phase 4)…………………………………………..46
Appendixes
Appendix A. Individuals Interviewed for this Guide ……………………………….………..50
Appendix B. Interview Questions……………………………………………………….…….51
Abbreviations and Acronyms………………………………………………………………….……….54
Notes……………………………………………………………………………………………………..55
Glossary………………………………………………………………………………………………….56
Bibliography……………………………………………………………………………………………...59
 Some Definitions for This Guide
Grievance – An issue, concern, problem, or claim (perceived or actual) that an
individual or community group wants a company or contractor to address and resolve.

Company-community grievance mechanism – A locally based, formalized way to

accept, assess, and resolve community complaints concerning the performance or
behavior of a company, its contractors, or employees.
Foreword
Grievance mechanisms are increasingly important for development projects where
ongoing risks or adverse impacts are anticipated. They serve as a way to meet
requirements, prevent and address community concerns, reduce risk, and assist larger
processes that create positive social change. Today, many companies employ ad hoc or
exclusively internal processes to address grievances. Unfortunately, these systems often
produce less than satisfactory outcomes from the perspective of the company and the
community. Recognizing this, and noting a lack of effective alternatives, companies and
communities are becoming more proactive in their efforts to design and build more
effective strategies for addressing community grievances.

Yet it is often challenging for companies to design and implement successful grievance
mechanisms that suit the project context. Recognizing the challenge, the Compliance
Advisor/Ombudsman (CAO) offers this guide to help groups develop project-level
grievance resolution mechanisms. This guide also emphasizes the importance of
communication and coordination among companies, communities, and other
stakeholders directly affected by large development projects. We have learned from
many years of experience that open dialogue and collaborative grievance resolution
simply represent good business practice—both in managing for social and
environmental risk and in furthering company and community development objectives.

This guide is offered as a companion to performance standards and accompanying

Guidance Notes published by the International Finance Corporation (IFC) and
Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group. These
standards set forth a role for grievance mechanisms for projects financed or assisted by
IFC and MIGA.

Against the backdrop of the IFC and MIGA Performance Standards, this guide
consolidates knowledge and lessons regarding grievance resolution from various
sources, including on-the-ground experiences of the CAO, findings from studies on
grievance resolution in the workplace and in environmental conflict resolution, and
practical experience in establishing peace accords and procedures in post-conflict
disputes over land and property. Our methodology also included an extensive review of
existing information on grievance mechanisms from the field of conflict resolution.
In addition, we obtained first-hand accounts through interviews with industry personnel,
academics, nongovernmental organizations, international financial institutions,
consultants, and others with experience of grievance mechanisms. These interviews
focused on the challenges involved in designing and implementing grievance
mechanisms and the practical strategies and steps required for an effective system,
regardless of its form.

v
As grievance resolution mechanisms are increasingly adopted, companies and
communities must learn how to design and implement these systems cooperatively and
more effectively for their potential to be realized. We hope this guide will equip people
interested in initiating a grievance resolution program with the practical steps and tools
they need to be successful in efforts to address community concerns and promote
improved relationships, fair remedies, and just procedures.

Meg Taylor
Vice President, Compliance Advisor/Ombudsman
June 2008

vi
Executive Summary
Grievance mechanisms provide a way to reduce risk for projects, provide an effective
avenue for expressing concerns and achieving remedies for communities, and promote
a mutually constructive relationship.
Local people need a trusted way to voice and resolve concerns linked to a development
project, and companies need an effective way to address community concerns.1 A
locally based grievance resolution mechanism provides a promising avenue by offering a
reliable structure and set of approaches where local people and the company can find
effective solutions together.2
A well-functioning grievance mechanism:
• Provides a predictable, transparent, and credible process to all parties, resulting
in outcomes that are seen as fair, effective, and lasting
• Builds trust as an integral component of broader community relations activities
• Enables more systematic identification of emerging issues and trends, facilitating
corrective action and preemptive engagement.
Demand for effective grievance mechanisms is increasingly underpinned by investor
policies—such as those of the World Bank’s International Finance Corporation—and
international initiatives such as the United Nations Human Rights Council.
This Advisory Note offers practical guidance to assist in the design and implementation
of effective project-level grievance mechanisms.

The Four Phases of Designing and Implementing Grievance

Mechanisms
Developing and implementing a grievance mechanism can be broken down into four
phases, each with its own set of activities.
• Phase 1. Define scope and determine goals. The design team develops the
overarching purpose and goals for the grievance mechanism and makes sure
that design decisions flow from its purpose.
• Phase 2. Design. The design team assembles a preliminary plan that outlines the
purpose, goals, scope, resolution approaches, structure, and specifics about how
the grievance mechanism will function. This preliminary plan is tested and refined
through consultation with employees and community members and presented to
senior management for their approval.
• Phase 3. Implement. The company and the community work together to
introduce, refine, and institutionalize the grievance mechanism.
• Phase 4. Monitor, report, and learn. Information is gathered on the effectiveness
of the mechanism in particular and, more generally, on the company’s ability to
prevent and address grievances. This information is used to refine the system.
These four phases are discussed in detail in chapters 4–7.

1
Good Practice Markers
Problems are often resolved more easily, cheaply, and efficiently when they are dealt
with early and locally.
The experience and research compiled for this guide indicate that there is a core set of
practices that mark effective, credible company−community grievance mechanisms.
These practices are offered as good practice markers for effective grievance resolution
systems.
Refine core company values. To improve their community relations in general and
grievance resolution in particular, companies can adopt certain critical values or
attitudes. These include:
• Commitment to fairness in both process and outcomes
• Freedom from reprisal for all involved parties—within the company and in the
community
• Dedication to building broad internal support for the grievance mechanism across
project lines
• Mainstreaming responsibility for addressing grievances throughout the project,
rather than isolating it within a single department
• Willingness by senior management to visibly and sincerely champion the
grievance system.
Start early in the project cycle. The most successful grievance mechanisms are put in
place as early as possible—ideally, during the project feasibility phase—and are
modified for later project phases. Problems are often resolved more easily, cheaply, and
efficiently when they are dealt with early and locally.
Involve the community in the design. Stakeholders from the community and company
should be involved in the grievance mechanism design. Indeed, some experts feel that
imposing a company-designed system could be worse than having an ad hoc system.
The company should engage community representatives to identify key factors, such as
the kinds of disputes that could arise during the project life, how people in the community
actually want to raise concerns, the effectiveness of current company procedures for
resolving complaints, and the availability of local resources to resolve conflicts. Based
upon this assessment, community representatives should help shape both the design
and future improvements.
Ensure accessibility. An effective grievance mechanism should be accessible to
diverse members of the community, including more vulnerable groups such as women
and youth. Multiple points of entry, including face-to-face meetings, written complaints,
telephone conversations, or e-mail, should be available. Opportunities for confidentiality
and privacy for complainants should be honored where this is seen as important.
Maintain a wide scope of issues. The grievance mechanism should be open to a wide
range of concerns: both those based in factual data and those arising from perceptions
or misperceptions. Perceived concerns can be as critical to address as actual hazards.
The mechanism should also be able to address multiparty and multi-issue complaints.
Develop culturally appropriate procedures. The mechanism should be responsive,
respectful, and predictable—clearly laying out an expected timetable for key process
milestones. The grievance mechanism should be capable of bridging deep divides,
including cultural divides. The design and operation of the grievance mechanism should
consider cultural differences, such as communities’ preferences for direct or indirect
negotiation; attitudes toward competition, cooperation, and conflict; the desire to

2
preserve relationships among complainants; authority, social rank, and status; ways of
understanding and interpreting the world; concepts of time management; attitudes
toward third parties; and the broader social and institutional environment.
Incorporate a variety of grievance resolution approaches. To accommodate
differences in personal and cultural preferences, the grievance mechanism should offer
a variety of grievance resolution approaches, not just a single grievance procedure. The
complainant should have influence over which approach to select. Some complaints may
be managed in an informal way solely by those directly involved, such as a company
representative and the complainant. Others may rely on more formal independent
redress, such as arbitration, using a neutral third party. Some mechanisms may rely on
an interest-based approach, such as responding to the stated legitimate and perceived
needs of the complainant. Others may rely on a rights-based approach, based on legal,
contractual, or other rights. Where possible, local, customary ways of grievance
resolution should be evaluated and incorporated into the system.
Identify a central point for coordination. A well-publicized and consistently staffed
position, held by an individual or team, should be maintained. This central coordinator
facilitates the development and implementation of the grievance mechanism,
administers some of its resources, monitors internal and external good practice, ensures
coordination among access points, and makes certain that the system is responsive to
the information it manages.
Maintain and publicize multiple access points. Expanding access beyond those
individuals who have the primary responsibility to receive grievances can significantly
reduce barriers to entering the system and encourage community members to address
problems early and constructively. Individuals serving as access points are most
effective if they are trustworthy, trained, knowledgeable, and approachable regardless of
the ethnicity, gender, or religion of the complainant.
Report back to the community. The company should provide regular feedback to
relevant stakeholders to clarify expectations about what the mechanism does and does
not do; to encourage people to use the mechanism; to present results; and to gather
feedback to improve the grievance system. Information reported back might include
types of cases and how they were resolved and the way the grievance has influenced
company policies, procedures, operations, and the grievance mechanism itself.
Use a grievance log to monitor cases and improve the organization. In addition to
resolving individual or community disputes, the grievance mechanism is an opportunity
to promote improvements in the company. A grievance log (or register) can be used to
analyze information about grievance and conflict trends, community issues, and project
operations to anticipate the kinds of conflicts they might expect in the future, both to
ensure that the grievance mechanism is set up to handle such issues and to propose
organizational or operational changes. Sometimes, enacting policies or other types of
structural change can resolve grievances around a common issue, rather than
continuing to settle individual complaints on a case-by-case basis.
Evaluate and improve the system. The company should periodically conduct an
internal assessment of the grievance mechanism to evaluate and improve its
effectiveness. Important elements of evaluation include general awareness of the
mechanism; whether it is used and by whom; the types of issues addressed; the ability
of the mechanism to resolve conflicts early and constructively; the actual outcomes
(impacts on project operations, management systems, and benefits for communities); its
efficiency; and, most fundamentally, the ability to accomplish its stated purpose and

3
goals. At certain times, the company should also solicit and include the views of
stakeholder representatives to see how the mechanism is proving effective in practice.
A good grievance mechanism should be simple to understand but not simplistic in its
dealings with people and issues. Clarity and a user-friendly approach are certain to yield
positive results. An example of a basic grievance mechanism structure is provided in
figure 1.

Figure 1. The Typical Steps of a Grievance Mechanism

Receive and register grievance

Screen and assess

Act to resolve locally?

No Yes

Reject Refer as
Define approach
complaint appropriate

Communicate Implement
approach
decision

Track and
document Not resolved?
Revise choice
or execution
Resolved? of approach

Process
feedback and
learn

4
 Part I. Overview
A locally based grievance resolution mechanism offers a reliable structure and set of
approaches whereby local people and the company can find effective solutions together.
Chapter 1. The Need for Grievance Mechanisms
Companies are being called upon to lead and work with their host communities to find
nontraditional approaches for preventing and addressing community grievances.
For communities, large-scale development projects represent dramatic change (see box
1.1). While change may lead to opportunity for some, it may put others at risk despite
project efforts to be socially and environmentally responsible and genuine attempts to
engage communities and create project safeguards. Risk and change work hand-in-
hand to create conditions where community conflicts arise.

Box 1.1. Defining “Community”

For some types of projects, the definition of community is complex. For example,
pipeline projects can impact people along a corridor thousands of miles long. In this
instance, the “community” may include people of different ethnic groups as well as
different countries. The communities along the pipeline may experience short-term
impacts during construction but typically fewer and different impacts during
operation. On the other hand, the community surrounding a mining project is more
limited spatially. For this example, the community may experience more localized
but longer-term impacts.

Consider the following examples:

• In a small Andean town of clustered adobe dwellings, contractors leave a local
restaurant without paying for their lunches. Indignant community members block
the road to the project so no vehicles can pass.
• A local resident reports the presence of mercury in her teakettle. She insists it
came directly from her kitchen faucet. While this is scientifically impossible, the
story makes headlines in the local and national media and escalates ongoing
tensions between the company and the local population.
• Villagers undergoing resettlement repeatedly raise complaints with the company,
ranging from eligibility criteria and rates of compensation to the location of
resettlement sites and quality of services at those sites. The company struggles
to find a way to deal with the increasing number of disputes in the face of the
growing impacts of resettlement.
Companies in the business of developing large-scale projects must find effective ways to
fairly and respectfully address community disputes to reduce their risk and protect local
people who may become exposed to some form of harm (see table 1.1).

6
Table 1.1. Types of Grievances that Companies Typically Encounter

Type of grievance Complainant(s) Examples

Relatively minor and one- An individual or family A company truck damaging a

time problems related to community member’s fence; a
company operations one-time disrespectful
encounter between a company
employee and a community
member

Relatively minor but An individual or family or small Livestock getting loose

repetitive problems related group of people because company employees
to company operations fail to close gates

Relatively minor but Multiple individuals, families, or Company-related road traffic

repetitive and widespread larger groups raising dust that settles on
problems clothes hung out to dry

Significant and larger Community groups, Company blasting allegedly

repetitive problems nongovernmental or causing structural and/or
community-based aesthetic damage to building
organizations, or local
governments

Major claims that company Community groups, Company operations

activities have resulted in nongovernmental or adversely impacting a
significant adverse community-based community’s water supply,
impacts on larger organizations, or local making it unsafe for drinking,
populations of people governments livestock, and/or irrigation

Major claims over policy or Nongovernmental A company’s noncompliance

procedural issues organizations, community with its own policies; failure to
groups or community-based follow guidelines of multilateral
organizations, or local lenders for adequate
governments consultation to achieve prior
and informed consent;
inadequate resettlement and
compensation of affected
populations

A thoughtful response is all the more urgent for companies operating in countries with
poor governance structures and an inadequate judiciary. Companies may be particularly
at risk when it comes to community grievances in places where the government is not
able to mediate between different societal interests. In environments with an inadequate
means to voice and resolve grievances, communities may turn to other venues to protest
where the risk level for companies is dramatically higher, including the streets, an
unpredictable court system, or the international press. Alternatively, they may feel
powerless to act, while their grievances—unresolved, ignored, or scorned—accumulate
over time, eventually erupting into intractable community opposition (see box 1-2).

7
Box 1.2. Community Expectations When Grievances Arise
When local people present a grievance, they generally expect to receive one or more
of the following:
• Acknowledgment of their problem
• An honest response to questions about company activities
• An apology
• Compensation
• Modification of the conduct that caused the grievance
• Some other fair remedy.
In voicing their concerns, they also expect to be heard and taken seriously. Finally,
the company, contractors, or government officials must convince people that they can
voice grievances and work to resolve them without retaliation.

To address these challenges, companies are being called upon to lead and work with
their host communities to find nonjudicial, dialogue-based approaches for preventing and
addressing community grievances.

Traditional Ways Companies Handle Grievances

All companies use some approach to address conflicts with local people, but it is more
rare to find a well-constructed, systematic approach. Interviewees for this guide cited
three common ways companies handle grievances.
Blind trust: Rely on reputation to avoid disputes
Proponents of the trust approach advise that a grievance mechanism is not necessary
as long as the company has established sufficient trust with the community. Relying
upon a purely preventive approach, however, is not recommended. Inevitably,
complaints arise that trust alone cannot avert. While trust will likely make the resolution
process easier, it is not a substitute for a grievance mechanism—and a grievance
mechanism is not a substitute for trust.
Ad hoc approach: Hope for the best
Individual managers apply their own idiosyncratic version of grievance resolution on a
case-by-case basis as specific disputes arise. Each case is handled as an individual
event, without a basis in conscious policy or established practice. The approach is
pragmatic, flexible, and inconsistent. The tactics and techniques used depend upon the
specific circumstances of each case. Senior management often is not involved.
Ad hoc approaches pose several limitations for companies:
• Transparency is lacking. Complainants do not know where to find assistance with
their grievance.
• Successful resolution is too dependent upon the skills of the particular project
personnel who happen to receive the complaint.
• The approach is too reactive to address conflicts of any complexity.
• Only a limited number of grievances can be handled, as grievance management
is viewed as taking time away from the “real” work of the business.
• The structure impedes the company’s ability to provide equitable, efficient, and
consistent responses across the project, since staff resolve complaints
independently without knowing how others are addressing similar situations.

8
Investigate, decide, and announce: Control the process and the outcome
Most companies that have developed a more formal grievance mechanism subscribe to
some variation of an “investigate, decide, and announce” approach.
More formal than the ad hoc approach, this model offers an internal, multistep procedure
with specific time frames. Complaints are received through designated channels and
investigated to establish their validity or to determine that the complaint is without basis.
If the complaint is deemed eligible for further investigation, it is referred to management
for action and a formal company response is prepared and presented to the
complainant. If the complainant does not accept the response, there may be an appeals
process through successive levels of the company management hierarchy.
These models also encounter many criticisms. Experience has shown that internally
based mechanisms:
• Reinforce power inequities by leaving companies in a position of power and
communities in a position of dependency
• Significantly limit procedural choices available for solving the problem
• Emphasize investigations and formal responses based upon internal discussions
over face-to-face dialogue and problem solving
• Prevent the complainant from having much influence in crafting a solution
• Omit stakeholders from involvement in the design of the grievance mechanism
• Rely upon individuals without specific training or capacity in grievance resolution
to manage the system
• Adapt through trial and error.

A Better Approach: Grievance Resolution Mechanisms

Local people need a trusted way to voice and resolve concerns linked to a project’s
operations (see box 1.3). A locally based grievance resolution mechanism provides a
promising avenue by offering a reliable structure and set of approaches where local
people and the company can find effective solutions together. A well-functioning
grievance mechanism:
• Increases the likelihood that small disputes can be brought to a conclusion
relatively quickly before they become deep-seated grievances
• Keeps ownership of the dispute in the hands of local people
• Offers an early, efficient, and less costly way to address concerns
• Promotes a more stable business climate for companies that reduces risk and
enhances accountability to the host community.

Box 1.3. Communiity Perspective on Grievance Resolution

Communities affected by development projects need a means to have their grievances addressed. They
may seek a system that provides access to influence over decisions that affect their lives, access to a fair
hearing and procedural justice, access to information, and access to a fair remedy—without fear of
retaliation.
Communities may also believe that an effective grievance mechanism can result in a more equitable
allocation of benefits, costs, and risks during the life of the project. Notably, grievance mechanisms can:
• Give affected communities the leverage to negotiate mutually acceptable agreements under
which their concerns can be addressed
• Enhance the ability of a company to justly address community concerns
• Ensure that even the poor and most marginalized get their concerns heard and addressed
Some suggest that well-designed systems not only resolve individual complaints, but also change project
policies and operations for the better.

9
Without the feedback loop that a good grievance mechanism can provide, the company
may miss crucial opportunities to identify ways to improve operations. (For more on the
business case for grievance mechanisms, see box 1.4.)

Box 1-4. The Business Case for Grievance Mechanisms

“There is only one chance to make a good first impression. It’s difficult to get
back on track after a project has problems.”
--General Manger, mining project, Peru
The general manager at a large copper mining project under development in
Peru makes a powerful case for the practical benefits a grievance mechanism
offers a company and the community. A veteran of community complaints
and grievances and with extensive experience working in the conflicted
mining sector in Peru, he has seen first hand what conflict can do to a project.
He describes the motivation behind their grievance resolution mechanism like
this: “It’s part of a process of engaging constructively with communities. We
see it as an opportunity to share information. With a more formal system, we
can identify issues early that could become big problems in the future. There
is only one chance to make a good first impression. It’s difficult to get back on
track after a project has problems. We have seen what happened with other
mining projects in Peru. Creating a grievance mechanism at the beginning of
a project sends a message to the community and NGOs that you want to
engage productively. Developing a process early allows you to do a
substantial amount of learning that you can apply when the project becomes
a full-scale development in the future . . . Much of the work is done by
contractors, and this is one of the few ways to offer consistency between
company and contractor responses as well as control behavior of contractors.
It also is a chance to instill our corporate ethic in our contractors. We think
grievance mechanisms also make affected people part of the solution, which
is a good practice.”
In addition to serving as a platform to resolve grievances, an effective grievance
mechanism can help achieve the following goals:
• Open channels for effective communication
• Demonstrate that a company is concerned about community members and their
well-being
• Mitigate or prevent adverse impacts on communities caused by company
operations
• Improve trust and respect
• Provide structures for raising, addressing, and resolving issues that reduce
imbalances in power
• Promote productive relationships
• Build community acceptance of a company’s “social license” to operate (see box
1.5).

10
Box 1.5. A Company’s “Social License” to Operate
Just as a company must secure permits and licenses from local, regional, and national
governments, it must secure a “social license” from the local and wider community to
function as a legitimate and respected operator in their midst.a To obtain a social license,
companies are realizing that it is good business practice to take the level of social and
environmental performance “beyond compliance” with basic legal requirements; they are
finding it necessary to meet and sometimes exceed societal expectations. This, in turn,
requires companies to align their operations with local needs, values, and concerns. For
an increasing number of companies, grievance mechanisms form an integral part of this
effort.
a. Gunningham, Kagan, and Thornton (2004).

IFC and MIGA’s Policies and Guidance on Grievance

Mechanisms
Recognizing both the community development and the business case for managing
grievances, the International Finance Corporation (IFC) and Multilateral Investment
Guarantee Agency (MIGA), the private sector components of the World Bank Group,
already have policy commitments that contain provisions relating to grievance
mechanisms.
IFC’s and MIGA’s Policy and Performance Standards on Social and Environmental
Sustainability were introduced to manage social and environmental risks and impacts
and to enhance development opportunities of their projects.3 The Performance
Standards are the basis of the Equator Principles (adopted worldwide by private sector
banks and financial institutions) and also serve as good practice standards for
development projects around the world.

With respect to client requirements, Performance Standard (PS) 1 presents the most
significant reference to grievance mechanisms. The section on Social and
Environmental Assessment and Management Systems (pp. 5–6) states: “The client will
respond to communities’ concerns related to the project. If the client anticipates ongoing
risks to or adverse impacts on affected communities, the client will establish a grievance
mechanism to receive and facilitate resolution of the affected communities’ concerns and
grievances about the client’s environmental and social performance.” Further reference
to grievance mechanisms are associated with the Performance Standards on Labor and
Working Conditions (PS2); Community Health, Safety and Security (PS4); Land
Acquisition and Involuntary Resettlement (PS5); and Indigenous Peoples (PS7).

With respect to their own institutional commitments, IFC’s and MIGA’s Policy on
Social and Environmental Sustainability recognizes that both Bank members are held
accountable to the Compliance Advisor/Ombudsman (CAO), which is the independent
recourse mechanism available to project-affected peoples. The question of how a
project-level grievance mechanism interacts with the CAO is dealt with below.

IFC has also prepared a set of Guidance Notes that correspond to each standard to
explain requirements.4 Box 1.6 summarizes the principles and good practice measures
described in the Performance Standards and Guidance Notes.

11
Taken together, the Policy, Performance Standards, and Guidance Notes of the IFC and
MIGA form a robust foundation upon which the rationale and design of project-level
grievance mechanisms—as elaborated in this document—rests.

Box 1.6. Principles and Good Practice Measures on Grievance Resolution

Derived from IFC and MIGA’s Performance Standards and Guidance Notes
IFC’s and MIGA’s Performance Standards and Guidance Notes present various
principles and good practice measures on grievance mechanisms:
• Establish a procedure for receiving, recording or documenting and addressing
complains that is easily accessible, culturally appropriate, and understandable
to affected communities.
• Inform the affected communities about the mechanism during the company-
community engagement process.
• Consider when and how to seek solutions to complaints in a collaborative
manner with the involvement of the affected community,
• Scale the grievance mechanism to the potential risks and adverse impacts of
the project.
• Address concerns promptly, using an understandable and transparent
process that is readily accessible to all segments of the affected
communities—and at no cost and without retribution.
• Ensure full participation of both genders and vulnerable groups.
• Take into consideration customary and traditional methods of dispute
resolution when designing the system.
• Assign consistent, experienced, and qualified personnel within the client
organization with responsibility for receiving and responding to grievances.
• Establish a redress mechanism so those who feel their grievances have not
been adequately addressed have recourse to an external body for
reconsideration of their case.
• Document grievances received and responses provided and report back to
the community periodically.
• Provide periodic reports on issues that the grievance mechanism has
identified as of concern to those communities.
• Be aware of judicial and administrative mechanisms available in the country
for resolution of disputes and do not impede access to these mechanisms.
The Performance Standards and Guidance Notes emphasize that a grievance
mechanism should help the client understand the community’s perception of project
risks and impacts so as to adjust its measures and actions to address the community
concerns

12
How Grievance Mechanisms Fit into Project-level Stakeholder
Engagement
Actively anticipating potential problems and initiating preventive strategies and actions
should be integral activities for companies and communities.
Stakeholders are persons or groups that are directly or indirectly affected by a project,
as well as those that may have interests in a project and have the ability to influence its
outcome either positively or negatively. Stakeholder engagement requires a range of
activities and interactions between a company and community over the life of a project
that are designed to promote transparent, accountable, positive, and mutually beneficial
working relationships.
Stakeholder engagement includes identifying and analyzing stakeholders, disclosing
information through community consultation, anticipating and preventing conflicts,
forming partnerships, and involving the community in project monitoring. Stakeholder
engagement can prevent conflicts by building rapport, positive relationships, and trust
between the company and a community. Grievance resolution mechanisms are one
component of an effective stakeholder engagement program.
One of the most effective forms of prevention a company can encourage is the active
participation of employees at all levels in their host community’s civic, social, or religious
life (see box 1.7). Such participation can provide a means to build positive personal
relationships, establish connections with community groups and leaders, promote open
and informal communication and information exchange, and demonstrate concern by the
company and its employees for the community’s well-being. It can also offer informal
access to information about community concerns and provide early warnings about any
conflicts in the making. Such alerts are valuable; they give the company plenty of time to
prepare an adequate response and address escalating tensions.

Box 1.7. The Importance of Community Engagement to Avoid Conflicts

“Community engagement is a core strategy to know what our problems are before a
grievance arises. Our local staff is involved in local chambers of commerce, church
organizations, festival committees, and many other civic activities. [We] also have a
foundation—with local people on the board—and they decide where community
development funds go. The most proactive mechanisms have been active locally in
civic life.”
---A company vice president in charge of community relations

Sometimes, prevention through well-formulated stakeholder engagement can be seen

as an unnecessary frill in project development. Companies are often reluctant to make
necessary expenditures of effort, funds, time, and personnel when it is not clear that they
are needed. Neglecting prevention, however, is often detrimental to both companies and
communities. Prevention is good management, and benefits typically outweigh costs.

How Grievance Mechanisms Fit into the Larger Context of

Project Accountabilty
In addition to being part of an effective stakeholder engagement program, grievance
mechanisms also fit into the larger world of corporate accountability that goes beyond
the project level. Grievance mechanisms often are used as a first resort. If the grievance
cannot be resolved, the complainant may refer to an external party, such as the court
system, or an independent recourse mechanism, such as the CAO, to hear the case.

13
Various accountability mechanisms exist at the industry, national, regional, and
international level.5 Nonproject-level accountability mechanisms do have limitations,
however:
• The judiciary—often the institution of choice for resolving conflicts in some
countries—is not trusted by either companies or communities in many parts of
the world.
• Traditional systems of justice may be preferred by some community members;
however, project developers may not fully understand or trust these forums. It is
unlikely that companies would be willing to abide by their process or decisions.
• Independent recourse mechanisms, such as the CAO or the World Bank’s
Inspection Panel, can play a valuable role, but are available to complainants only
when the financial organization has an interest in the project, and are often
subject to several other jurisdictional limitations.
Nonproject recourse mechanisms present a reasonable alternative in some
circumstances but do not replace a working project-level grievance mechanism.

14
Chapter 2. Understanding Grievance Mechanisms
A grievance mechanism should be in place throughout the entire project cycle.
A project-level grievance mechanism is a locally based, formalized way for a company to
accept, assess, and resolve community complaints related to company activities. It
offers a package of widely understood and effective procedures for solving problems that
are culturally appropriate, in combination with specially trained personnel, and aims to
help parties reach speedy, efficient, and acceptable resolutions with dignity, justice, and
finality.
The grievance mechanism draws upon conflict resolution resources from several
areas—those inside the company, traditional and customary systems, and private
systems (mediation, conciliation, arbitration).6 These approaches complement one
another and act together in a coordinated way.
Sometimes a company representative and a community member sit together informally
and work out an agreement on their own. Other times, a trusted third party—possibly a
mediator, technical expert, local authority, ombudsman, or wise person—may help the
parties talk or suggest ways in which they can resolve their dispute fairly.A grievance
mechanism should be in place throughout the entire project cycle, beginning with the
planning phases and continuing through construction and operations, until the end of the
project life. While the grievance mechanism may evolve as the project moves through
various phases, the dual goals of accountability to stakeholders and risk reduction
remain constant.

Some Guiding Principles

Some of the approaches to grievance resolution advocated in this Advisory Note are
grounded in principles of mediation and interest-based negotiation common to the field
of alternative dispute resolution (ADR). ADR approaches emphasize creating an
enabling environment for inclusive decision making and generation of locally owned
decisions. Ultimately, ADR approaches focus on empowering parties to participate in a
process that is fair, principled, and robust.
There are circumstances when interest-based conciliation approaches are not
appropriate or desirable to one or the other party in a dispute. Under these
circumstances, arbitration or judicial recourse may be more appropriate after careful
consideration. Some observers are concerned that interest-based approaches can
encourage one party (usually the weaker) to compromise or negotiate away its
fundamental human rights. Clearly, any grievance mechanism incorporating mediation or
other interest-based processes must be grounded in a framework of ethics and
principles that should not be violated. A report from the UN Special Representative on
business and human rights suggests that grievance mechanisms should be:
• Legitimate: A mechanism must have clear, transparent, and sufficiently
independent governance structures to ensure that no party to a particular
grievance process can interfere with the fair conduct of that process.
• Accessible: A mechanism must be publicized to those who may wish to access it
and provide adequate assistance for aggrieved parties who may face barriers of
access, including language, literacy, awareness, finance, distance, or fear of
reprisal.
• Predictable: A mechanism must provide a clear and known procedure, with time
frames for each stage; clarity on the types of process and outcome it can (and
cannot) offer; and a means of monitoring the implementation of any outcome.

15
 • Equitable: A mechanism must ensure that aggrieved parties have reasonable
access to sources of information, advice, and expertise necessary to engage in a
grievance process on fair and equitable terms.
• Rights-compatible: A mechanism must ensure that its outcomes and remedies
accord with internationally recognized human rights standards.
• Transparent: A mechanism must provide sufficient transparency of process and
outcome to meet the public interest concerns at stake and should presume
transparency wherever possible. Nonstate mechanisms in particular should be
transparent about the receipt of complaints and the key elements of their
outcomes.7
As one example, in the case of the CAO, the Ombudsman “will not support agreements
that would be coercive to one or more parties, are contrary to IFC and MIGA policies, or
that would violate domestic laws of the parties or international laws.” 8

Components of a Grievance Mechanism

Grievance resolution mechanisms include several elements, including some or all of the
following:
• A transparent grievance receipt and registration system to provide ways for
community members to register complaints and confirm they have been received
• Grievance eligibility assessment to determine if the issues raised in the complaint
fall within the mandate of the grievance mechanism and the complainants are
eligible to file a complaint
• Grievance evaluation to clarify the issues and concerns raised in the complaint,
gather information on how others see the situation, and identify whether and how
the issues might be resolved
• Problem solving, with or without the assistance of independent, third parties that
include:
o Internal decision-making processes, whereby issues are handled by
designated company officials, using stated standards and criteria, to
develop and propose a company response to the grievance and to allow
for an appeals process
o Joint problem solving, in which the company and the complainant engage
in direct dialogue
o Third-party decision making to offer a solution when a voluntary
agreement is not possible
• Grievance tracking, monitoring, and reporting to the community
• Company-community feedback and information sharing to strengthen grievance
resolution processes
• Organizational learning and identification of systemic problems and the need for
changes to policies and procedures to prevent recurrent future disputes.
There is no ideal model or one-size-fits-all approach to grievance resolution. Indeed, the
best solutions to conflicts are generally achieved through localized mechanisms that
take account of the specific issues, cultural context, local customs, and project
conditions and scale. Nonetheless, the CAO’s experience—together with research
undertaken for this study, which solicited the views of a wide range of practitioners—
suggest that these basic components are especially helpful.

16
Chapter 3. Initiating a Grievance Mechanism
Grievance resolution is everybody’s business, from the company’s core business
operations, to production, to environmental management.

Grievance mechanisms start somewhere and with someone. It is common practice for
the company’s community relations, external affairs, human resources, or legal
department to be charged with initiating the effort. These offices, however, are not the
backbone for resolving community grievances. Grievance resolution is everybody’s
business, from the company’s core business operations, to production, to environmental
management. As one regional director commented: “You need to view inside and
outside the fence as part of the same system. Otherwise, Environmental and Operations
folks will look at grievance handling as Social’s job . . . dismissing a complaint as
something that has nothing to do with them. The reality is that grievances often
materialize as a result of perceptions by community members related to environmental
and operations issues and performance.”

Identify and Engage Key Actors

When starting out, it is important to recruit support and leadership for building the new
system: from within the company, from the community, and from a range of
stakeholders. To develop needed support:
9
• Identify a promoter within the company. These individuals are rarely experts on
grievance mechanisms. Nonetheless, they are important change agents who:
o Maintain momentum through the early stages, addressing skepticism and
resistance
o Garner support inside the company and the community
o Build the business case and articulate it to gain acceptance from senior
management
o Contribute ideas that strengthen how the grievance mechanism will work
o Critically assess results once the grievance mechanism is up and
running.
• Identify promoters within the community. It is also important to locate key
champions within the community who can help build support for the use of the
system and address concerns. The mechanism should ensure that promoters
represent the community (such as elected, selected, or traditional leaders), and
are not a self-promoting individual or group with a political agenda.
• Cultivate leadership within the company and community. Leadership commitment
is critical for deciding whether or not to move forward with developing a
grievance mechanism. The initiative should not proceed until such support can
be raised.

Establish a Design Team

Building a core design team is especially important for large, controversial projects.
The design team serves as a strategy team, sounding board, designer, and promoter.
The team normally provides technical and political capability to move the process
forward, enhances acceptance during the initial introduction, and ensures that
implementation is effective. Building a core design team is especially important for large,
controversial projects.

17
Effective design teams:
• Comprise individuals of mixed levels and functions from the company (such as
operations, environmental affairs, community relations, legal affairs,
contractors). Staffing the design team from just one function, such as community
relations or human resources, is unwise.
• Include a balanced group of representatives from the community, representing
the range of constituencies and demographics that will be using the grievance
mechanism, while keeping the team small enough to be responsive.
• Are representative and manageable in terms of their size (8 to 12 members).
• Rely upon clear terms of reference and a work plan that outlines team goals,
roles and responsibilities, level of decision-making authority, reporting lines,
tasks, time frame, and products.
• Use the services of a professional design consultant or facilitator with
experience in developing community/company grievance mechanisms to help
the team get started.

Understand the Current Environment

The first task for the design team is to conduct an assessment of the type of grievances
that are likely to arise, local capacity to handle grievances, and, if the project is already
operating, the nature of any community grievances that have been presented so far.
This type of assessment forms an integral part of any stakeholder identification and
engagement planning process. Much of the necessary information could be available in
project documents, such as the Social and Environmental Impact Assessment (SEIA), or
in the archives of the project sponsor or various government agencies.
Some specific questions related to grievance mechanisms may not have been addressed
by previous work. To fill these gaps, the assessment process should involve a range of
approaches, including interviewing and consulting with the community and company and
reviewing documents. When approaching a community, the design team must respect
cultural sensitivities. Based on data collection and analysis, the design team can develop
an overarching goal and direction for the grievance mechanism that recognizes the needs
of both the community and the company and that responds to the question of what you
want the grievance mechanism to accomplish. The analysis also guides the team in its
decision about which specific design features to select to ensure compatibility with context
and culture.
Stakeholder feedback is part of any design team’s education. To address doubts, gather
valuable input, and build support, those leading the initiative should develop a plan for
gathering input from local company and community people at the front end of the planning
process, as follows:
• Before designing the grievance mechanism, reach out to a broad group of
stakeholders (employees, contractors, managers, community leaders, local
officials) through public meetings or a series of focus groups.
• Use outreach meetings to receive information and understand people’s doubts,
objections, expectations, and perceptions related to a grievance mechanism.
• Help people understand why the system is being put in place, what it will look like
in broad terms, and how it might benefit local people and those connected to the
company.
• Use such conversations to gather valuable input about traditional ways that
members in the community handle conflict. Identify some of the cultural differences
the complaints system will need to address if people are to use it.
• Survey existing dispute resolution capacity in the community and consider how it
might play a role in the grievance resolution mechanism.
18
An effective outreach process engages all stakeholders to help shape what the
grievance resolution mechanism looks like; increase transparency by presenting the
company’s preliminary thinking about the grievance resolution mechanism (why the
company wants to put one in place and ways in which it will benefit local people); and
build understanding and support for the initiative among diverse stakeholders.

Assessing a project that is new (a greenfield project) will identify different issues than a
project that has been in operation for some time.
Greenfield Projects
An assessment for a greenfield project will often be simpler than for an existing project
because no grievances have yet occurred (see box 3.1).

Box 3.1. Information Needed to Develop a Grievance Mechanism for a Greenfield

Project
Characterize existing community systems for handling grievances and locate local dispute
resolution capacity.
• How does the community typically handle conflicts? (Consider traditional systems based
on clan, religious, or other customary institutions; government systems, such as an office
of human rights; or privately created systems, such as centers for mediation, arbitration,
or conciliation.)
• Are trusted institutions within the community engaged in resolving grievances, and might
they play a role in the grievance mechanism?
Evaluate dynamics working for or against the introduction of a grievance mechanism inside and
outside the company.
• Are there existing mechanisms that could be viewed as competing?
• Does the company have the support of senior management?
• Does the company work with contractors to establish procedures consistent with its own?

Existing Projects
When a project has been operating for some time, the company, contractors, and the
community may be resistant to switching from their current way of handling disputes to
using a formal grievance mechanism. On one hand, company employees may protest
that a more formal approach to managing complaints will undermine a supervisor’s
authority, increase workload, or open the floodgates to complaints from local people and
increase the risk of litigation. On the other hand, community members may be wary that
such an initiative is little more than a public relations scheme. Both groups will have
doubts about the ability of the mechanism to prevent retaliation.
An information-gathering exercise can help identify concerns and suggest ways to
develop and implement a grievance mechanism that will be accepted and used by
stakeholders (see box 3.2).

19
Box 3.2. Information Needed to Develop a Grievance Mechanism for Existing Projects
Characterize grievances, key actors, causes, and costs.
• What are the current types of grievances related to company operations? What additional
issues do people anticipate? What are possible causes of these grievances? How often do
they seem to arise?
• Whom do the community members blame for the issues (the company, one particular
employee, a subcontractor, or others)?
• Whom do the issues being raised typically affect? Individuals? Whole families or
communities?
• Why are these grievances arising?
• Are there structural problems that could be changed to reduce conflict, such as different
policies, rules, roles, decision-making processes, communication systems, or a better
division of labor?
• What are the costs of these conflicts for the company and the community? (Costs should be
discussed not only in monetary terms, but also in broad terms, such as relationship costs,
time, and reputation.) How severe is the impact?
• Who will use the grievance mechanism? How do users differ? Are they from different ethnic,
tribal, language, or religious groups? Do they have different levels of education? Are some
rural and some urban? Are some women and some men? Based on any of these
differences, do they maintain different assumptions about conflict and its resolution that will
affect how they feel about a new grievance resolution mechanism?
• Who will have standing to bring a complaint (local individuals, local community groups, local
or national NGOs, international NGOs, local governments, regional-national governments)?
Characterize the current system for handling complaints.
• How are complaints handled now? Identify formal, informal, and ad hoc approaches inside
the company for addressing grievances.
• Are there mechanisms for early intervention or resolution so cases do not escalate?
• How well are any of these systems working? Are the existing channels for dealing with
community complaints able to handle future grievances?
• Why are particular procedures being used or not used?
• Where are the gaps?
• What are the existing barriers for those who might want to complain?
Identify existing preventive measures.
• What form of stakeholder engagement does the company have in place?
• How does the company communicate with the community?
• Does the company have methods for anticipating potential conflicts?
Characterize existing community systems for handling grievances and locate local dispute resolution
capacity.
• How does the community typically handle conflicts? (Consider traditional systems based on
clan, religious, or other customary institutions; government systems, such as an office of
human rights; or privately created systems, such as centers for mediation, arbitration, or
conciliation.)
• Are trusted institutions within the community engaged in resolving grievances, and might
they play a role in the grievance mechanism?
Evaluate dynamics working for or against the introduction of a grievance mechanism inside and
outside the company.
• Are there existing mechanisms that could be viewed as competing?
• Does the company have the support of senior management?
• Have contract employees and others been consulted and is there a plan to win their support?

20
Once the information has been gathered, it is important to consider what to do with the
results. For example, is this the time to check back with senior management? Is it
valuable to report back to the community and the company to build support and
acceptance of the analysis, diagnosis, and broad purpose? Does the design team have
the authority to proceed directly to the design stage?
This is also the time for the design team to build its own capacity and knowledge about
grievance mechanisms. Design teams should become familiar with:
• Models and features of effective grievance mechanisms
• Good practice markers employed by the company, industry, and financiers (see
the Executive Summary)
• Common pitfalls to avoid
• What other projects are doing. (Consider making on-site visits or holding
interviews with companies and their community stakeholders where a grievance
mechanism has been implemented.)
Once these and related tasks have been accomplished, it is time for the design team to
develop a detailed design.

21
 Part II. Developing and Implementing
Effective Grievance Mechanisms
There is no ideal model or one-size-fits-all approach to grievance resolution. The best
solutions to conflicts are generally achieved through localized mechanisms that take account
of the specific issues, cultural context, local customs, and project conditions and scale.
Chapter 4. Define Scope and Determine Goals (Phase 1)
Phase 1. Define Scope and Determine Goals
• Define the scope of grievances to be handled.
• Determine the purpose and goals.

In this phase, the design team determines the scope of grievances to be handled by the
system and the purpose and goals. These elements form the foundation upon which the
grievance mechanism will be assembled. They are crafted from the subjective
assumptions and values of team members and a more objective analysis presented in the
situation assessment.

Define the Scope of Grievances

Using the information gathered through the situation assessment, the design team’s next
step is to review the type of grievances that are likely to arise or, in the case of an
operating project, that have arisen so far. Generally, grievance mechanisms should be
open to a wide range of concerns: both those based in factual data and those arising from
perceptions or misperceptions. Perceived concerns can be as critical to address as actual
hazards. They often arise when people do not have adequate information. The mechanism
should also be able to address multiparty and multi-issue complaints. The design team
then prioritizes those types of complaints that the mechanism will primarily target.

Define the Purpose and Goals

If a design team cannot reach consensus on a statement of purpose—or if it does so
superficially—its future work may be in jeopardy.
The design and implementation of a grievance mechanism must respond directly to the
purpose and goals defined. In turn, the purpose and goals must respond to some
fundamental questions: “Why is a grievance mechanism being established?” “What do we
hope to achieve in both the short term and the long term?”
If a design team cannot reach consensus on a statement of purpose—or if it does so
superficially—its future work may be in jeopardy. Consensus sometimes can be difficult to
reach, however, because diverse stakeholders come to the “design table” with very
different life experiences, values, and assumptions about grievance mechanisms. These
differences may create tension during discussions about a mechanism’s fundamental
purpose and goals. While all can appreciate that a primary goal revolves around resolving
specific grievances in a manner that meets both company and community needs, it is
important to uncover more unconscious assumptions related to the system’s purpose to
ensure agreement and commitment by all.

23
Discussions about the purpose of the grievance mechanism go to the very heart of matters
underlying power relationships between a company and a community.

Discussions about the system’s purpose go to the very heart of matters underlying power
relationships between a company and a community. It is hard to imagine a comprehensive
approach to understanding conflict between companies and communities that does not
address how power is wielded and distributed. If these discussions fail to occur, grievance
mechanisms run the risk of becoming just another tool by which the company wields
power. Consequently, in articulating the purpose and goals for the grievance mechanism,
questions such as the following should be considered:
• Will the grievance mechanism be oriented primarily around concerns of the
community or around joint concerns of the company and community?
• Is the grievance mechanism oriented toward identifying root causes of conflict and
addressing them through systemic change, or is it exclusively focused on the
resolution of individual complaints?
• Is the grievance mechanism primarily oriented toward company investigation and
internal redress or toward a more comprehensive set of options for resolution and
the provision of justice?
• How can the grievance mechanism be structured in a way that does not reinforce
power inequities?

24
Chapter 5. Design the Grievance Mechanism (Phase 2)
Phase 2. Design the Grievance Mechanism
• Prepare a preliminary design.
• Choose ways to receive, register, screen, assess, and respond to grievances.
• Select grievance resolution approaches.
• Design a means to track and monitor grievances.
• Develop the grievance mechanism infrastructure.
• Review and refine the design.

Prepare a Preliminary Design

The way a grievance resolution mechanism is designed is as important as what form it
finally takes, because the process establishes credibility and trust.
In this phase, the design team develops a plan or blueprint for what the grievance
mechanism will look like. In its simplest form, a grievance mechanism can be broken down
into the following primary components (see figure 5.1):
• Receive and register a complaint.
• Screen and assess the complaint.
• Formulate a response.
• Select a resolution approach.
• Implement the approach.
• Settle the issues.
• Track and evaluate results.
• Learn from the experience and communicate back to all parties involved.

Choose Ways to Receive, Register, Screen, Assess, and Respond

to Grievances
Receive and Register a Complaint
Receiving and registering complaints is a simple process where local people can inform
the company about concerns directly and, if necessary, anonymously or through third
parties. Reception procedures are most effective if they are convenient, culturally
appropriate, simple to understand, and easy to use (see box 5.1).

Box 5.1. Culturally Appropriate Grievance Receipt and Registration

In some cultures, senior managers may be the most appropriate people to solicit and
accept community complaints. As the general manager of a gold mine explains, “Rural
Mongolia is an oral, face-to-face type of culture. Attending to relationship is crucial.
Here, relationships go a long way toward project understanding and to addressing
problems. Our procedures are simple and straightforward and ones that invest a lot of
face time. Much of the face time is that of the general director, who is out meeting and
greeting on a regular basis.”

25
26
The grievance receipt and registration process should include support as described below.
Multiple channels should be available to gather and forward local people’s concerns.10 A
network of people (community leaders, government officials, community organizations,
contractors, company environmental and operations employees, community liaison
officers) should be accessible. At least one member of the network should be independent
of the company. Those designated to accept complaints, whether written or oral, record
them on a simple form, which is forwarded to the central point of contact at the company
for further action (see box 5.2).11
Diverse methods that are culturally appropriate should be used, including self-identified,
confidential, or anonymous procedures (professional letter writers, suggestion boxes, mail-
in forms, toll-free telephone, electronic submission through a company’s Web site).
A central point of contact should be available to receive complaints and log them into a
central register.
Designated complaints-resolution staff, consisting of both male and female employees,
should accept complaints, provide relevant information on the process, discuss the
complainants’ situations with them, and explore possible approaches for resolution
Processes for acknowledging the receipt of a grievance and informing the complainant
about the time frame in which a response can be expected should also be in place.
Box 5.2. The Importance of Maintaining Multiple Channels to Receive Grievances

“In our current system, anyone (field team, land team, community liaison officers, etc.)
can take a grievance. It can be in the form of a letter from people, or they can use our
company form. The local population can call the community liaison officer [CLO]
directly. Alternatively, an operation’s worker or field team can make a call to the CLO
and ask them to visit the complainants, etc. It is crucial to make sure the field teams are
aware of process and know how to refer to the CLOs and take a complaint
themselves.”

---A company representative from a pipeline company

Once a complaint has been received, it should be recorded in the complaints log or data
system.

Screen for Eligibility

It is advisable to give complainants the benefit of the doubt and engage in a conversation
before deciding to reject a complaint.
This step determines whether a complaint is eligible for inclusion in the grievance
mechanism. Design teams should develop a screening procedure based upon a few
simple eligibility criteria that do not involve judging the substantive merit of the complaint.
Eligible complaints may include those where:
• The complaint pertains to the project
• The issues raised in the complaint fall within the scope of issues the grievance
mechanism is authorized to address
• The complainant has standing to file.
Ineligible complaints may include those where:
• The complaint is clearly not project-related
• The nature of the issue is outside the mandate of the grievance mechanism
27
 • The complainant has no standing to file
• Other company or community procedures are more appropriate to address the
issue.
If the complaint is rejected, the complainant is informed of the decision and the reasons for
the rejection.
It is advisable to give complainants the benefit of the doubt and engage in a conversation
before deciding to reject a complaint. Complainants often provide incomplete information.
The company needs to make an effort to truly understand the grievance before
responding. In addition, some companies have found that even where cases appear
frivolous or seem to be unlinked to project operations, the potential issues underlying
these complaints may still need to be explored, as they could indicate some underlying
concern with the project, such as lack of trust in the project. In such cases, it may be
advisable to proceed with an assessment before determining whether the complaint is
inadmissible. Some practitioners observe that making a commitment to investigate all
complaints submitted, and to be seen as taking responsibility even when there is not a
clear link between the complaint and the operation, can increase trust in the project. If
eligible, the complainant should be notified, and the grievance should be processed and
proceed to an assessment. Box 5.3 presents a checklist to keep in mind for handling
procedures at this stage.
Box 5-3. A Checklist of Grievance Handling Procedures

 Assessment procedures (who conducts the assessment

and how is the assessment conducted)
 Procedures to identify appropriate people in company to
whom a specific concern should be forwarded
 Procedures to determine the appropriate resolution
process (in consultation with complainant)
 Procedures for making decisions on proposed settlements
 Appropriate time frames for each step in the grievance
resolution process (including screening, assessment, and
resolution)
 Notification procedures to the complainant about eligibility,
assessment results, proposed settlement, and the like.

Assess the Grievance

During the assessment, the team gathers information about the case and key issues and
concerns and helps determine whether and how the complaint might be resolved.
Tips for assessing the grievance follow:
• Determine who will conduct the assessment. Typically, the complaints coordinator
performs this task or directs it to an appropriate staff or department for assessment
(production, procurement, environment, community relations, human resources).
• Encourage a company member to engage directly with the complainants to gain a
first-hand understanding of the nature of the complaint.
• Clarify the parties, issues, views, and options involved
o Identify the parties involved.
o Clarify issues and concerns raised by the complaint.
o Gather views of other stakeholders, including those in the company.
o Determine initial options that parties have considered and explore various
approaches for settlement.
• Classify the complaint in terms of its seriousness (high, medium, or low).
Seriousness includes the potential to impact both the company and the community.
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 Issues to consider include the gravity of the allegation, the potential impact on an
individual’s or a group’s welfare and safety, or the public profile of the issue. A
complaint’s seriousness is linked to who in the company needs to know about it
and whether senior management is advised.
• Rather than resorting to a purely unilateral “investigate, decide, and announce”
strategy, engage more directly with the complainant in the assessment process,
and involve the complainant in influencing the resolution process to be selected,
and settlement options.

Formulate a Response
The system for responding to the complainant should specify who communicates and how.
In some cases, it may be appropriate that feedback be provided by the staff member
responsible for assessment accompanied by the coordinator of the complaints procedure.
The site manager may participate in feedback, depending upon the seriousness of the
complaint.
Tips for formulating a response follow:
• The complaint coordinator or relevant department may prepare the response. The
response should consider the complainants’ views about the process for settlement
as well as provide a specific remedy. The response may suggest an approach on
how to settle the issues, or it may offer a preliminary settlement.
• To present and discuss the response to the complainant, consider holding a
meeting with the complaint coordinator, relevant company manager, and the
complainant. If a direct meeting is not possible, consider meeting with a neutral
third party serving as facilitator. The group would also discuss appropriate next
steps during this meeting. If the proposal is a settlement offer and it is accepted,
the complaint is resolved successfully and there is no need to proceed to the next
step of selecting a resolution approach. If the complainant is not happy with the
response about a resolution process or substance, the group should try to reach an
agreement that would be mutually acceptable.
• If the case is complex and a resolution time frame cannot be met, provide an
interim response—an oral or written communication—that informs the person of
the delay, explains the reasons, and offers a revised date for next steps.

Select Grievance Resolution Approaches

“Ninety percent of complaints should be handled in face-to-face meetings.”
---Regional Director for Environment and Social Responsibility
of a multinational corporation
The grievance mechanism should offer a variety of grievance resolution approaches to
accommodate differences in personal and cultural preferences—not just a single
grievance procedure. Where possible, customary ways of grievance resolution should be
evaluated and incorporated into the system. It is also important that the complainant
influences the way a problem will be handled.
Four Grievance Resolution Approaches
In general, there are four basic approaches design teams should consider when
evaluating what array of resolution approaches to offer:
1. The company proposes a solution.
2. The community and company decide together.
3. The company and community defer to a third party to decide.
4. The company and community utilize traditional or customary practices.

29
The approaches vary in how the authority to make decisions is addressed. One approach
may involve only the parties to the dispute; another may involve facilitation by an
independent third party without decision-making authority, such as a mediator.

Use when:
• The complaint is straightforward, the issue is clear, and the solution is
obvious.
• People in the company can resolve the issue alone, to the satisfaction of the
complainant, based on their knowledge and authority.
• A considered and respectful company proposal is more likely to be acceptable
to the complainant.

Approach 1. The company proposes a solution

In this approach, the company proposes a solution and offers it to the complainant. The
company and community would jointly decide if the solution is acceptable and, hence,
share decision-making authority.
Companies gain several advantages:
• A more rapid response
• Use of fewer company personnel and material resources
• Some control of resolution procedures and outcomes.
Tips for implementing this resolution approach follow:
• Review information collected through the initial assessment process and make a
settlement proposal that the company hopes the complainant will accept. The
appropriate department or manager can conduct this step. The proposal should be
based on consistent standards and criteria so that similar complaints receive
similar remedies.
• Present the company’s proposal to the complainant. How the proposal is presented
may be as important as what is in the proposal. Measures that help increase the
acceptability of responses include:
o A rationale for the decision and presentation of any data that were used to
reach a conclusion (for example, value of land, crop, or animals; costs to
repair a road).
o An opportunity during the company decision-making process for the
complainant to verbally present his, her, or their case to a company
representative. The representative should listen to and acknowledge the
complainant’s statement to help reach emotional closure and restore positive
relations between the complainant and the company.
o Timely delivery of a response and rapid restitution once a decision has been
made.
o Delivery of the company’s response in writing and, when appropriate, a visit
by a company representative to explain the decision in person.
• If the complainant rejects the proposal, offer the option of a joint decision process
(as described in Approach 2). If this approach is not acceptable, the grievance may
be referred to an external mechanism for assessment or adjudication.

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Approach 2. The community and company decide together
With the potential to resolve perhaps 90 percent of all grievances, “decide together” should
be the centerpiece of any grievance mechanism’s resolution options.

Use when:
• An ongoing relationship and a face-to-face resolution process matter
• The case is more complex and several diverse stakeholders are involved
• Local community members distrust a company proposal
• The response from a “company proposes a solution” procedure is not
acceptable
• Talking together is required to promote more accurate communication, share
information, or develop mutually acceptable solutions
• There are procedural, psychological, and substantive interests for both parties
that lend themselves to such an approach.

“Decide together” approaches are probably the most accessible, natural, and
unthreatening ways for communities and companies to resolve differences. With the
potential to resolve perhaps 90 percent of all grievances, “decide together” should be the
centerpiece of any grievance mechanism’s resolution options.
Under this option, company representatives and complainants share decision-making
authority and jointly engage in a problem-solving approach to reach a resolution of the
grievance by themselves. The process may involve only the company and complainant, or
may be facilitated by a neutral third party without decision-making authority, such as a
mediator. Among the advantages are the following:
• Those directly involved can address the complaint early, rapidly, and informally.
• Ownership of the dispute and its solution rests with the parties—those who are
most qualified to know the issues and who have the most to gain from an equitable
resolution.
• Parties can devise solutions that do not feel like a compromise.
• The process can improve relationships as well as address substantive concerns in
a principled and creative way, leaving both sides better off.
• Joint problem-solving approaches are often less adversarial, faster, more flexible,
and less costly in economic and noneconomic terms.
“Decide together” may be a more formal process that involves a mediator to help the
parties reach an agreement. Alternatively, it may be an informal process employed almost
immediately when a grievance arises at the place of origin (see box 5.4).
There are several common “decide together” approaches that can be used separately or in
combination.
Listening. Good listening is fundamental to every grievance resolution approach. It
provides a greater sense of fairness and addresses a basic need of anyone with a
grievance—to be heard by people who count. Simply listening supportively, thinking
through a problem, discussing and seeking ways to reduce tension, and perhaps looking
into a problem informally may adequately address a grievance.
Information sharing. Facilitating access to information can help clarify facts or
misperceptions. For example, a community member may have questions regarding a
company’s operations, its environmental and social performance, or its impacts. Or they
may want to provide someone in authority with information about a perceived safety
problem.

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Dialogue and negotiation. This can be one of the most effective approaches to resolve a
grievance, particularly if dialogue is initiated early and the parties are interested in an
approach that will meet their interests and concerns. The complainant and appropriate
company representatives may choose to speak on their own, in the presence of a trusted
person invited by the complainant, or in the presence of designated observers, such as
respected members from the community who serve as witnesses to the grievance
resolution process.
Joint fact-finding. This may be an appropriate approach when critical information to resolve
a complaint is missing, the accuracy of information is being questioned, or a conflict about
data is exacerbated by a long history of disagreement and lack of trust among the parties.
The company and complainant share control of the process and jointly frame the
questions to be studied, define the process for gathering information, select experts to
conduct the research, decide how the information will be analyzed, and determine how the
results will be used. In this way, the company and complainant learn together and jointly
decide how to use the results of any investigation. In cases where there are significant
power imbalances or major differences in people’s technical backgrounds, ways will need
to be found to equalize access to expertise and close gaps in knowledge.
Finding a “bridge.” Dispatching trusted messengers between the parties can be helpful
when parties are more comfortable talking through a third person rather than sitting
together, when direct confrontation would damage the relationship, when saving face is
critical, or when it is culturally more acceptable to deal with an issue through indirect
means.

Box 5.4. On-the-Spot Resolution

Many grievances can be resolved early and rapidly on the spot, in an informal process
of investigation and resolution. One mine manager, for example, recalled how “a truck
had parked in a farmer’s field without authorization. The farmer accused the truck
[driver] of causing damage to his crops. Immediately, our community relations
department identified the responsible contractor, went out to the farmer’s field, brought
the farmer into the conversation, and invited a local authority representative, whose
role was to observe and pass judgment, in a sense, about the complaint. Together, in
the middle of the farmer’s field, the group sorted out the problem and the community
relations officer made a decision on the spot that the contractor was at fault and agreed
to compensate for the damages.

Tips for implementing this resolution approach follow:

• When using dialogue, negotiation, joint fact-finding, or a bridge:
o Ensure that the appropriate individuals from the company and from the
complainant’s side are participating in the talks
o Draw out each person’s view of the situation
o Define the issues people want to talk about
o Identify each party’s highest priority concerns and needs
o Explore a variety of ideas and options for addressing a complaint
o Incorporate customary ways for resolving disputes.
• More complicated, contentious cases may require extensive planning, a more
formal approach, and a trusted party (potentially an outside mediator) to organize
and conduct the talks.

32
Approach 3. The company and community defer to a third party to decide

Use when:
• “Decide together” procedures are not acceptable to one or more parties.
• There are disputes of fact or conflicts about data.
• The parties have been unable to reach a voluntary settlement through other
procedures.

On occasion, companies and complainants are unable to resolve a problem on their own.
In such cases, the parties hand decision-making authority over to an independent, neutral
party. The neutral party may be a trusted individual or group in the community, a
respected technical expert, or an independent arbitrator.
Compared to typical court decisions, this approach offers several advantages:
• Simpler and less legalistic procedure
• Expedited decisions
• Lower costs
• Choice regarding who hears and decides a case
• More predictability, accessibility, impartiality, and transparency than may be
available from legal institutions.
There are three main approaches that can be used: arbitration, fact-finding, and use of an
existing external mechanism—approaches likely to be more formal and rights-based.
Arbitration. Arbitration is a private, voluntary, and adjudicative process for resolving
complaints. It involves joint submission of a complaint by concerned parties to a mutually
acceptable and impartial intermediary—an arbitrator—that may be an individual or a
group, such as a panel. After parties present their views, the intermediary makes a
decision. Compliance with laws, policies, standards, rules, regulations, procedures, past
agreements, or common practice may serve as the basis for decisions.
In a typical arbitration case, the parties engaging in the process would decide if the
decision is binding (the parties promise at the beginning of the process to implement the
intermediary’s decision) or nonbinding (the intermediary’s decision is a recommendation to
the company and the community, and can be appealed in court or to some higher
authority). When arbitration is incorporated as part of a grievance mechanism, however,
there is a serious risk to the credibility of the mechanism if binding decisions cut off a
complainant’s right to judicial recourse. As such, some mechanisms have allowed that
arbitration will be nonbinding on the complainant but binding on the company.
In addition, often arbitration cases require that both parties share the cost equally, making
this option out of reach for many complainants that would use a grievance mechanism.
Therefore, grievance mechanisms should consider using public, no-cost arbitration
mechanisms or letting the company pay the full cost if no-cost solutions are not available.
Some grievance mechanisms allow complainants to take issues directly to arbitration
without resorting to a “decide together” approach.
Fact-finding. A company and complainant may initiate a fact-finding process to obtain an
independent assessment of the nature of a grievance and of relevant company practices
(see box 5.5). The independent intermediary selected controls the process, investigates
the problem, identifies causes, makes findings, and develops recommendations on steps
and terms for the settlement of the claim. The fact finder’s process is less formal than
arbitration and does not require a hearing. The fact finder has the right to pursue his or her
own leads and to receive testimony and facts outside the presence of the opposing party.

33
The fact-finding report may serve as a basis for further negotiation, a company response,
an offer of settlement, or a final decision by senior managers.
Fact-finding is recommended when it is important to employ third party expertise to resolve
a data dispute using a process that is less formal and without the need for a hearing. Like
arbitration, fact-finding by a third party can be binding or nonbinding, depending on the
decision of the parties. If the result of fact-finding is to be binding, parties decide on this
outcome before beginning the process. As with arbitration, care should be taken if the
parties decide to make the outcome binding. Nonbinding fact-finding can be both powerful
and compelling. If parties agree on the process and intermediary, there is often strong
social pressure to voluntarily comply with its outcome.

Box 5.5. Lessons in Fact-finding

The experience of a mining company in Africa illustrates the importance of designing

fact-finding exercises carefully. The company and the district administrator of the local
government had received several hundred complaints about blasting related to the
mine. The company recognized the need to deal with this cluster of conflicts and met
with the administrator to discuss an approach. The administrator suggested that both
the community and the company hire separate experts. A mining company official
recalled: “They hired a group and we hired a group and we planned to compare notes
once the fact-finding processes had been completed. Although there is not a significant
substantive difference between the findings, we now realize we should have been
much more transparent about who our expert was, why we hired that person, the
process we would use to share information about results, the process for what to do
with the results if they differed, etc. We should have been much clearer about the path
forward. Instead, we agreed with the community to submit our findings to the chief
administrator, who would receive and distribute both documents and convene the
parties. We neglected to think through with the community how we would proceed
together if our separate fact finders disagreed. Now we each are going to receive
documents with some contradictory conclusions. We have no process for dealing with
the differences and the chief administer feels a bit caught in the middle.”
Existing external mechanisms. When the parties are unable to reach decisions voluntarily,
design teams should explore possible resources in the form of trusted local governmental
and civil society institutions that may be able to provide independent decisions and
recommendations. This point underscores the importance of surveying local resources
and enhancing rather than undermining their authority or duplicating what already exists.
While the concept of independent redress is appealing, the practicalities of
developing such mechanisms at the project level are extremely challenging (see
box 5.6).

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 Box 5.6. Challenges in Developing Independent Redress Mechanisms

The local context can make locating or developing an independent recourse

mechanism particularly challenging. One company official described a situation where
over 100 distinct communities were involved. She put it this way: “In a distrusting
society that is ethnically mixed, a panel that everyone would see as fair and
independent is not feasible. No one would ever agree on the composition or the
outcomes. If such a commission said no, the complainants would go elsewhere. We
find that it is impossible to have an independent panel all would accept. If you could
have a credible panel that could render decisions parties would accept, this would be
useful. I can’t see how to do this here. From my experience, this is asking a lot.” In this
case, it would be difficult if not impossible to make an agreement with only one panel.
Realizing that an independent panel would not work, the same company entered into
an agreement with a local NGO to run a grievance mechanism for the company. The
NGO fielded a team that visited each village, took grievances, logged them, and then
passed them on to the company. It was felt that this would add some transparency and
credibility to the overall system. The company would then address the grievance as
they thought appropriate, and inform the NGO of the outcome. When the NGO felt the
company had come up with the “wrong” answer, the grievance was returned to the
company for further internal discussions. If still unable to come to an agreement with
the NGO, the company would discuss that particular grievance with an independent
monitoring panel focused on land and compensation issues. There was only one issue
(that related to 15 grievances) that the company ended up discussing with the
independent monitors. The cases were resolved quickly thereafter.
While the NGO mechanism provided third-party verification of substantive resolution
and case closure, it also lengthened the process and complicated the system. The
company believes the NGO’s participation was worthwhile for many reasons: notably, it
helped relieve the workload of the land team, which had become so overwhelmed with
resolving grievances that there was no one left in the field to take any new ones! The
company was able to provide an independent verification mechanism—but with an
additional layer of complication.

Approach 4. The company and community engage traditional and customary

practices

Use when:
• “Imported” procedures are unfamiliar, inaccessible, or culturally incompatible
with local customary practices of a community.
• Alternative traditional means are available that can be adapted in a way that is
mutually acceptable to both the complainant and the company.

All societies have internal ways of handling their differences. Local people may go to
secular or religious leaders to resolve their disputes with one another. They may use
traditional problem-solving or judicial procedures and may employ local standards and
criteria to guide decisions. In some communities, traditional dispute resolution procedures
are more acceptable than any external ones provided by governments or “foreign” parties,
such as a company.
Those responsible for designing grievance mechanisms should inventory local and
customary approaches for solving conflicts and consider how to adapt traditional dispute-
resolution mechanisms to deal with community-company grievances (see box 5.7).
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Initially, companies may be uncomfortable seeking resolution assistance from traditional or
customary approaches; local people and procedures, however, have elements that can
complement or augment company grievance mechanisms. Consider the following options:
Observers, witnesses, and testifiers. Many traditional cultures in Africa, Southeast Asia,
and Latin America utilize respected community members as observers and witnesses in
efforts to resolve disputes. Their presence legitimizes the process, verifies fairness, and
assures that agreements comply with widely accepted community values and norms.
Several companies interviewed for this guide actively engaged community elders, chiefs,
or widely respected and trusted community members as witnesses in initiatives to resolve
community-company complaints. Their participation has significantly increased the
acceptably of settlements, both for complainants and for concerned members of the wider
community.
Advisors. Members of traditional communities often seek advice from respected or wise
members on how their differences can best be resolved. Disputants often ask for
recommendations that comply with community norms and restore harmonious
relationships. Several companies in Africa and Latin America have sought out respected
community members for advice on how they can settle complaints in a culturally sensitive
and responsive manner. Others have either created functional equivalents of councils of
elders, which are composed of several respected community leaders or officials, or turned
to existing local institutions to provide credible advice on reasonable procedures,
standards, and criteria for settlements. For example, the Defensoría del Pueblo in Peru
and the councils of chiefs in Ghana have served this capacity effectively.
Mediators. Almost all cultures utilize some form of mediation to help people resolve
differences. In some cultures, intermediaries focus on repairing damaged relationships,
opening communication between parties, or providing procedural assistance to further
more effective problem solving. In a large number of cultures, mediators also provide wise
counsel or specific recommendations to parties on possible settlements. Once again,
companies may not be comfortable using traditional intermediaries to resolve company-
community grievances, especially if the process involves giving advice or making critical
judgments on company actions or the behavior of its personnel or contractors.
Nevertheless, use of local and respected community leaders, such as mediators, to
resolve specific kinds of issues or to work internally within community groups to help reach
agreements may be useful in furthering grievance resolution efforts.
Box 5.7. Drawing on Customary Ways of Resolving Grievances

A mining company in Peru described the value of drawing on customary ways of

addressing grievances. The General Manager explained: “We looked at the Rondas
Campesinas [a grassroots civil defense organization for rural farming communities] that
has a system in place to address grievances. We didn’t use every feature of their
system, but we tried to build on some of what they did. Our purpose was two-fold: to fit
our grievance mechanism into an existing system where we could, so that as a
newcomer you are not perceived to be in conflict with traditional ways of doing things.
Secondly, we had to ensure that what we borrowed fit within a human rights framework.
The company has high standards for human rights and behavior, so some things had to
be different.”

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Design a Means to Track and Monitor Grievances
Grievances need to be tracked and monitored as they proceed through the system (see
box 5.8). Effective tracking and documentation accomplishes several goals:
• Document the severity of a complaint (high, medium, low) according to specific
criteria. The level of severity guides requirements for alerting senior management
and determines the seniority of management oversight needed.
• Provide assurance that a specific person is responsible for overseeing each
grievance—from receipt and registration to implementation.
• Promote timely resolution.
• Inform all concerned (the complainant and appropriate company personnel) about
the status of the case and progress being made toward resolution.
• Document the company’s response and outcome(s) to promote fairness and
consistency
• Record stakeholders’ response(s) and whether additional research or consultation
is needed.
• Provide a record of settlements and helps develop standards and criteria for use in
the resolution of comparable issues in the future.
• Monitor the implementation of any settlement to ensure that it is timely and
comprehensive.
• Provide data needed for quality control measures, to assess the effectiveness of
the process and action(s) to resolve complaints.
• Identify learning from specific cases to be used later to assess the effectiveness of
the mechanism or address systemic issues that may require changes in company
policies or performance.
Tracking and documenting grievance resolution requires the following elements:
• Tracking forms and procedures for gathering information from company personnel
and complainant(s)
• Dedicated staff to update the database routinely
• Systems with the capacity to analyze information so as to recognize grievance
patterns, identify any systemic causes of grievances, promote transparency,
publicize how complaints are being handled by the company, and periodically
evaluate the overall functioning of the mechanism
• Processes for informing stakeholders about the status of a case (such as written
status reports)
• Procedures to retrieve data for reporting purposes.

Develop the Grievance Mechanism Infrastructure

Without strong commitment from the top, the grievance mechanism is likely to be
ineffective or underutilized.
Before presenting the proposed design to senior management for approval, the design
team should consider how the system will be implemented and supported over time.
Questions of governance and oversight, the institutional “home” for the grievance
mechanism, and staffing needs should be considered. These are complex and important
decisions that have practical and political ramifications.

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Define the Governance Structure
Governance of grievance mechanisms refers to the authority, procedures, and personnel
involved in handling and resolving complaints, including:
• Authority delegated to specific personnel who have general oversight of the grievance
mechanism as a whole, serve as gatekeepers for acceptance of complaints, and make
decisions regarding the redress of issues
• Companies’ internal policies and procedures that provide direction to managers and
employees on how to process and resolve complaints
• Internal procedures to ensure that the chief grievance manager can obtain the
necessary inputs and cooperation from company staff with close knowledge of the
subject of the grievance
• Explicit steps for resolving grievances.
Grievance mechanism policies should be derived from the work of the design team;
however, successful implementation depends upon approval and active promotion by the
highest levels of management. Without strong commitment from the top, the initiative is
likely to be ineffective or underutilized.

Determine the Institutional “Home” for the Grievance Mechanism

In many situations, the grievance mechanism is housed inside the company in one of its
functional units (community relations, external affairs, human resources, legal,
environmental management). In other situations, parts of the mechanism may be housed
in a local community or government agency. In Peru, for example, the Defensoría del
Pueblo houses an independent tracking mechanism that monitors complaints and
agreements reached between mining companies and local community members (see box
5.8).
Box 5.8. Community Involvement in Monitoring and Tracking Cases

Involving communities in case monitoring and tracking is a cutting edge approach. In

Peru, a large international gold mining company began registering all signed
agreements between the mine and community members with the local branch of the
government’s ombudsman’s office, the Defensoría del Pueblo. The Defensoría
provides external, independent monitoring of agreements and objective determination
of compliance, with a timeline for implementation. Each month, the Defensoría
publicizes monitoring results on accords and actions of signatories to agreements. The
agency also meets periodically with mine and community representatives to evaluate
progress made on settlements and implementation.

In general, complaints are most effectively addressed if grievance resolution is seen as

everyone’s job rather than something the “social folks” do. There should be a single point
for coordination of this function, however, and a single, high-level person who has ultimate
responsibility for the system. Where the mechanism resides and who is responsible within
the company sends a strong message to the community, company employees, and
contractors about the company’s commitment to grievance resolution.
While the home of the mechanism’s coordination function should be in a prominent unit of
the company and high-level personnel should be assigned to manage it, the work of the
system should be mainstreamed throughout operations and the business side of the
enterprise. If responsibility for resolution of complaints is assigned exclusively to
community affairs or a social and environmental unit, these entities and their leaders may
not have the authority to secure effective resolutions. Similarly, the effectiveness of the
mechanism is likely to be compromised if the mechanism is totally disconnected or only
38
loosely linked to operations—often the source of a complaint and therefore necessary to
engage in resolution.
Companies have sought various ways to mainstream grievance resolution activities and
link social and environmental functions with operations. Some solutions include regular
forums, such as meetings that bring together community affairs, environmental, and
operations staff to discuss community concerns. Sometimes, staff members are assigned
to multiple departments. In other cases, all company personnel have been trained to
handle complaints, with responsibility for grievance management ranging from merely
receiving complaints to offering a solution, depending upon the level of the employee. A
highly innovative approach—empowering operations staff on the ground to accept and
resolve complaints within their authority—is described in box 5.9.

Incorporate the Community

To draw upon the community’s perspective, the system may tap community leaders,
elders, chiefs, or other respected people. Some of their functions may include accepting
and forwarding community complaints to the appropriate company official; serving as
witnesses who publicly verify the fairness of a resolution process; acting as advisors or
advocates for either individual complainants or a company and complainant on fair,
reasonable, and/or customary procedures or solutions that could be used to settle a
complaint; and serving as facilitators or mediators.

Regardless of whether staff or others involved in designing or operating a grievance

mechanism are from a company or community, it is critical to clearly define and have
common understandings concerning roles, responsibilities, and authority.

Box 5.9. Involving Company Employees in Grievance Resolution

While many companies appoint and dedicate specific personnel to accept and handle
grievances, a few see this role and function as part of the job responsibilities of all
employees. These companies brief and prepare all employees to be ambassadors to
the community and authorize them to accept grievances from members of the public
whenever they are on the job. They are also empowered to resolve a complaint
immediately if it is within their scope of responsibility and does not require significant
expenditure of company resources.
An international forest products corporation has used this approach at some of its
plants. A company official explained: “[We] emphasize good neighbor relations. Our
Forest Managers, people accountable for the operating business, walk up and down
the road to let people know what is happening—truck traffic, spraying . . . People with
connections are from operations. We do not farm this out to community relations
people. Operations are accountable to the people. We want operations people to be
connected to the issues and the local people. [The] guy connected to the balance sheet
has to be involved.”

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Review and Refine the Design
Once the design team has detailed the components of the grievance mechanism and
designed the infrastructure for the mechanism, it is important to capture this plan in a
comprehensive design document. The team should then step back and evaluate the
design, considering questions such as those listed below.
• Will the mechanism be effective in meeting our stated goals, objectives, and
principles?
• Have we taken into consideration good practice markers?
• Will the mechanism be able to respond to the range of grievances specified in
our scope?
• Have we built in an adequate diversity of resolution approaches?
• Have we adequately identified means to improve upon those resolution
approaches, if necessary (such as through an outside mediation option,
technical expert consultation, or capacity building)?
• Do we believe that the infrastructure we have designed is sufficient to support
the effective operation of the grievance mechanism?
• Is the grievance mechanism effectively integrated into the company’s overall
stakeholder engagement approach and management? (See box 5.10.)

With the design complete, the design team should then present the grievance resolution
mechanism to senior management for their approval, along with recommendations for
governance, staffing, and the support structure. Suggestions from company management
and community stakeholders are reviewed and incorporated into the final grievance
mechanism plan. With the necessary approval in hand, the design team shifts its attention
to implementation.

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Box 5.10. Integrating a Grievance Mechanism into a Project’s
Management Framework

As part of its response to heightened community concerns, a small

hydropower facility in northern India established a grievance mechanism.
The mechanism comprised a small office in the local village to receive
complaints and a grievance redress committee made up of internal as well
as external members. After some months of operation, it became clear that
nobody from the community had lodged any serious complaints with the
office. The grievance committee had never met. Was this a sign that all was
well?
In fact, the project was plagued with complaints: to managers, the local
magistrates, the high court, district officers, and financiers. Community
members were choosing not to use the grievance mechanism to resolve
their concerns. The project manager expressed his frustration: “We have
this grievance mechanism, which we created because our financiers asked
us to do so, but it’s no use because everyone just complains everywhere
else and doesn’t want it. What is the point?”
Part of the explanation as to why the grievance mechanism failed is that is
was added as a standalone function and was not integrated into the
project’s management. As a result, neither the project managers nor
community members felt that they understood how to get the most out of it.
Some people began to see it as an additional bureaucratic step (time-
consuming busy work whose main function seemed to be filling out forms),
and the managers saw it as less responsive than reacting on the spot to a
community complaint.
It is relatively easy to see that the company could improve the situation and
strengthen its community relations by:
• Developing a grievance register to consolidate complaints from multiple
work sites and recording the response
• Periodically reviewing data for trends that might help spot systemic
problems (such as recurrent road safety issues)
• Recording feedback on grievance resolution to see what types of
responses are more effective, but also to identify persistent, recurrent,
unresolved complaints that might signal deeper problems
• Effectively raising persistent, unresolved complaints to the grievance
redress committee, and then acting on the advice of the committee to
demonstrate how the project is responsive to these concerns
• Reporting the status of grievances back to the community to
demonstrate how the company has responded, feedback that should
help build trust in the responsiveness and accountability of the company
and enhance community relations.

41
Chapter 6. Implement and Operate (Phase 3)
Phase 3. Implement and Operate

• Introduce the grievance mechanism.

• Communicate to build awareness.
• Train and support participants.

The goal of this phase is to introduce the grievance mechanism and promote its use. It
may be piloted and refined before full rollout or launched immediately on a community-
wide scale. In either case, successful implementation requires marketing materials that
describe the mechanism and its benefits in simple and visual terms, a communication and
outreach strategy that educates community members and company or contract managers
and employees about the system and their role, and training for personnel administering
the system and for those designated to accept complaints.

Introduce the Grievance Mechanism

The way a grievance mechanism is introduced to company employees and the public can
have significant implications for its effectiveness over time. Several factors must be
carefully considered, including who must receive information regarding the mechanism’s
existence and use, what information needs to be shared, and how this information will be
delivered, both in the immediate term and on an ongoing basis. The development of
incentives to use the mechanism might also be considered.

Communicate to Build Awareness

Establishing a personal connection with stakeholders is what it takes to get people to buy
into and use the system.
Educating local people and the company about the grievance mechanism is an essential and
ongoing responsibility. It does no good to have a perfectly designed grievance mechanism
that no one knows about (see box 6.1).
Get the Word Out to Communities
The fundamentals of a successful strategy to publicize the complaint’s procedure to the
local population include the following:
• Develop simple, visually engaging marketing materials. These should describe the
process for handling people’s concerns and the benefits that can result. The
materials should also inform the local population about where to go and who to
contact if they have a complaint.
• Provide materials in an understandable format and language. Consider special
approaches if the literacy rate is low.
• Use face-to-face, informal meetings in local communities as the primary vehicle for
building awareness about the program. Make these visits interactive and engaging.
Consider using puppet shows or role-plays to illustrate how to make a complaint
and how a company representative and complainant might work together to
resolve their differences. Establishing a personal connection with the local
population (as well as with company managers, employees, and contractors) is
what it takes to get people to buy into and use the system.
• Build incentives to use the system (see box 6.2). Consult the community about any
risks or fears they have associated with using the system; gather information about
42
 what else they might need to voice a complaint; and participate effectively in the
mechanism (such as training, coaches, and accompanists).
• Involve the design team as promoters.
• Supplement briefing sessions with other communication approaches, such as
brochures, posters, billboards, radio spot-ads, or brief television ads.
Remember that communicating about the grievance mechanism is an ongoing effort,
rather than a one-time launch. Otherwise you may build it, but no one will come.

Box 6.1. Reaching Out to the Public to Inform Them About Available Grievance
Mechanisms and Approaches
Most companies with effective grievance mechanisms use a range of approaches to
engage and inform community members and often take advantage of public social
gatherings; meetings of associations, committees, chambers of commerce, or service
organizations; fiestas; and town meetings. Company representatives request time or
may set up staffed tables or booths at these gatherings to present information about
the function and use of the grievance mechanism.
Companies also sponsor and convene their own forums to provide public education.
Meetings should be scheduled on a regular basis and be held at convenient times and
locales. Meetings also may be used to
• Brief the public about company activities or upcoming events
• Solicit community concerns and input on specific issues or problems and ask for
ideas on how to address them
• Assist concerned stakeholders in voicing and filing complaints, which company
personnel can accept on the spot
• Discuss a specific issue or event
In situations where individuals or communities that may be affected by a company’s
operations are spaced far apart or are located in isolated regions, company personnel
should make regular visits to meet with individuals, families, or small groups

Get the Word Out to Companies and Contractors

Companies should encourage their personnel to view complaints and opposition as a
source of valuable information that can lead to improved operations, reduced risk, and a
supportive relationship with the community.
Company personnel also need to be educated about community grievance resolution
mechanisms and procedures. This is especially true when a company expects larger
numbers of employees to be more directly involved in the informal education of community
members about complaint procedures, to accept complaints, or to participate in on-the-
spot resolution of minor problems. The following points are worth considering when
developing briefing sessions for company employees and contractors:
• Focus sessions on why the grievance mechanism is in place, its goals, benefits,
and how it operates.
• Discuss roles and expectations of employees and contractors (what to do if a
member of the community approaches them with a grievance, how best to respond
to aggrieved stakeholders), and emphasize the importance of listening, remaining
objective, and taking stakeholder concerns seriously.
• Highlight the constructive role of community dissent in project operations by
encouraging the view that complaints and opposition are a source of valuable

43
 information that can lead to improved operations, reduce risk, and develop a
supportive relationship with the community.
• Emphasize that there will be absolutely no reprisals within the company or
community.

Train and Support Participants

A fundamental goal of the grievance mechanism is to solve problems early at the lowest
level. Thus it is important to support that goal with basic stakeholder engagement and
conflict resolution training for employees. Training in a variety of responsibilities is required
in the start-up of a grievance mechanism for the following:
• Personnel who will administer the system must receive skills training in conducting
receipt and registration, referral processes, service provision, quality control,
monitoring and record keeping, and the grievance mechanism ethics.
• Grievance coordinator must receive training in conflict resolution and grievance
management.
• Those who register complaints must receive training about the receipt and
registration process and the procedure for forwarding complaints to a central point
of contact within the company. They also need a set of complaint forms.
• Managers and supervisors need problem-solving skills because the bulk of
complaints can be resolved by using informal “decide together” approaches without
having to resort to more formal procedures, such as arbitration. Managers and
employees who assume a new role—that of a problem solver—will be more
successful if they are prepared.
• Users need to information about the system, information about their rights, help in
thinking through their choices, and appreciation for their efforts to address their
disputes in a responsible, productive way.
For all these reasons, training is a key element of quality control for the system.
Incentives must also be established to encourage the use of the grievance mechanism.
Some ways to build incentives are discussed in box 6.2.

44
Box 6.2. Building Incentives to Ensure that the System Is Used

The best way to promote the use of the grievance mechanism is to ensure that it resolves
grievances effectively and that this success is demonstrated to staff and potential users.
The true proof of the success of the grievance mechanism will be measured by how much it is
used and what results it achieves. Use is connected to minimizing the risks and maximizing
the benefits of the system. For those operating the grievance mechanism, an ongoing issue
a
will be how to develop incentives and encourage its use. Focusing on the following five
questions will help grievance personnel ensure that the system is used:
1. What else can we be doing to minimize the risk and fear of using the system?
• Are we successfully demonstrating that retaliation is not tolerated?
• Are we protecting confidentiality?
• Do people feel their rights are protected?
2. What else should we be doing to encourage community members to use the
system?
3. What are we doing as a company to change the way we view conflict and
complaints?
• Are we overcoming the prevailing attitude that having a grievance registered
for something an employee or department is responsible for is not okay?
• Is grievance management included as a core competency in a performance
appraisal system?
4. What are the tangible benefits and results we see from the grievance
mechanism?
• Are we reporting benefits and results back to the community and the
company?
• Are we publicizing success stories of people who have used the grievance
mechanism?
5. Do community leaders encourage use of the mechanism?
The best way to promote the use of the grievance mechanism is to ensure that it resolves
grievances effectively and that this success is demonstrated to staff and potential users.
a. Some concepts for building incentives are drawn from Lipsky, Seeber, and Fincher
(2003, pp. 257–58).

45
Chapter 7. Monitor, Report, and Learn (Phase 4)
Phase 4. Monitor, Report, and Learn
• Monitor and evaluate
• Report back to the community
• Learn and modify

Monitor and Evaluate

The goal of ongoing monitoring is not only to improve the system, but also to improve the
company.
Creating and implementing effective grievance mechanisms is not an exact science. Their
development is experimental and always a work in progress, requiring assessment and
refinements to assure that the mechanism is achieving desired goals. Lack of satisfaction
by the system’s users, lack of support in the community or company, accessibility
problems, or procedural inefficiencies may be indicators that change is needed. In all
cases, such change should be the result of an intentional, structured, broadly participatory,
and ongoing process.
It is necessary, therefore, to monitor and evaluate the overall performance of the
grievance mechanism throughout the project life cycle. The goal of this level of monitoring
is not only to improve the system, but also to improve the company, as well. Companies
that can adapt to changes in their external environments are better able to meet their
goals.
Ongoing company-community learning and assessment of a grievance mechanism can be
viewed as a five-step process.

Get the Right People and Create Suitable Forums

• Create a grievance advisory committee as an oversight group with advisory
authority, composed of company and community representatives who monitor
performance and provide strategic advice about the grievance mechanism. (For a
discussion of a formal monitoring and evaluation entity, the Business Excellence
Committee, see box 7.1.)
• Involve appropriate company and community members: the grievance manager
and team, complainants who have used the grievance process, and the grievance
advisory committee.
• Include internal company forums such as staff meetings, community relations
meetings, and weekly safety meetings. Do not censor or discourage discussion
about the performance of the system and possible suggestions for changing the
company.
• Solicit input from community members and, where appropriate, engage them in
deliberations on appropriate changes to the mechanism.
• Use independent experts with expertise in grievance resolution mechanisms to
conduct an independent evaluation every three to five years.
• Consider appropriate venues and processes to secure the best citizen suggestions
on the functioning of the mechanism, and shape these according to local cultural
norms (see box 7.2).

46
 Box 7.1 Business Excellence Committees
Ad hoc internal company committees are sometimes created to monitor and evaluate the
performance of grievance mechanisms. However, they often fall short in achieving their
goals because of the level within the company hierarchy of personnel appointed to them,
lack of broad representation from diverse parts of the company, unclear mandates,
changing personnel, difficulty in maintaining an institutional memory concerning what has
been done in the past, and absence of authority to make needed changes directly.
One potentially more effective approach would be for senior management to create a
Business Excellence Committee. These committees have formal and permanent status
within the company. They would have a mandate to gather and regularly assess the
performance of a grievance mechanism and make any changes necessary. Senior
managers from all parts of the company involved in processing or resolving grievances
would be involved in the assessment of the mechanism to determine what to change and
how to implement changes.

Once information has been gathered, company and community representatives meet to
evaluate it.

Box 7.2. Forums and Procedures to Obtain Feedback on the Performance of a

Grievance Mechanism
Companies can create forums and procedures to obtain feedback on the performance of
a grievance mechanism through:
• Regular company-community meetings with two-way feedback and joint
appraisals of the mechanism, its components, or specific procedures
• Regular or targeted meetings between senior company managers and local
community leaders
• User evaluation or feedback forms distributed to complainants at the time of
settlement and again several months later
• In-person or telephone interviews by company staff with past complainants to
assess their satisfaction with mechanisms and procedures to address complaints.

Establish Clear Standards and Criteria for Evaluation

Identify which aspects of the grievance mechanism to evaluate: the whole mechanism, the
performance or behavior of company personnel, the time required to process complaints,
kinds of resolutions, patterns of settlements, structural issues posed by the system and its
operation, settlement costs, and so forth. Questions should be developed in two broad
areas: the performance of the grievance mechanism, and lessons related to company
operations that have emerged. Some possible questions to pursue are listed below.
Questions targeted to the grievance mechanism’s performance include:
• How well is the system accomplishing its purpose and goals?
• Is the system making a difference? How?
• Is the mechanism saving money and reducing risk?
• Does the mechanism enable complainants to raise their concerns, engage in a fair
process, and obtain a satisfactory settlement to their issues (when appropriate)?
• Where are the gaps? What is and is not working?
• What types of problems is the system addressing?
47
 • Do people know where to go? Is the mechanism accessible and easily
understood?
• Do those who receive and register complaints document the complaints?
• Can complainants readily determine the status of their complaint and how the
company is responding?
• To what extent is the system actually used by a wide cross-section of men,
women, and youth from the community?
• How well does the mechanism address the power imbalance between the
company and complainant and assure that the complainant is not always merely
receiving a judgment from the company?
• Does the mechanism provide adequate opportunities for face-to-face participation
and discussion and joint development of mutually acceptable solutions to issues in
question?
• Does the mechanism allow and facilitate, when appropriate, complainants’ pursuit
of external and independent means to redress their grievances?
• What conflict trends, community issues, and project operations could influence the
kinds of conflicts that might be expected in the future?
• Is the grievance mechanism set up to handle such issues?
• What actions would increase effectiveness?
Questions targeted toward organizational learning and improving company policies,
procedures, and operations include:
• What kind of demonstrable change and improvement is the mechanism producing
in project operations, management systems, and benefits for communities?
• How does the mechanism facilitate identification of root causes of conflict?
• What actions has the company taken to address these root causes? Is the company
adopting any structural changes?
Actions should be identified to address any system shortfalls. Evaluation meetings should
focus not only on adapting the grievance mechanism, but also on identifying specific,
structural causes of grievances themselves, the sources of which, if changed, could
eliminate a whole class of similar disputes.

Create a Plan to Implement Changes to the Mechanism

Decisions on changes to the mechanism must be followed up with a clear implementation
plan. The plan should explain in detail what is to be done, when, where, how, and by
whom. Ideally, an oversight or monitoring process should be put in place to ensure that
implementation happens in a timely and effective manner. In some cases, it may be
desirable to utilize participatory monitoring, in which both company and community
members have oversight of implementation and have the authority to raise concerns if it is
not being conducted as mutually understood or planned.12

Report Back to the Community

In the spirit of transparency and accountability, companies are encouraged to disclose
information about the results of the grievance mechanism, including the volume and
nature of complaints, case outcomes, and resolution rates—as well as key conclusions
from the monitoring and evaluation process.
The grievance team should provide regular feedback to the community to clarify
expectations about what the mechanism does and does not do, to encourage people to
use it, and to gather feedback to improve the grievance mechanism. The company and the
community should talk about:
• Types of cases and how they were resolved, presented in an interactive way that
maintains confidentiality of the parties where required

48
 • Impacts of the grievance mechanism and complaints on company policies,
procedures, and operations, including what the company is learning and how it has
changed
• How to make the grievance mechanism more effective.

Learn and modify

The company should use information from the grievance mechanism to learn and report
back to stakeholders about ways it could improve performance:
• Report on key insights emerging from individual grievances that indicate where
changes might be needed to company operations or management systems
• Indicate possible systemic changes that might be needed to ensure that particular
grievances do not recur
• Make sure that results of the analysis are factored into the community engagement
plan and the environmental monitoring plan as these tools are updated
• Continually provide upward feedback to management.
The company should assess the impacts of any changes to the grievance mechanism by
considering how the mechanism responded to complaints and how the complainants
viewed the response. The company also should assess what further modifications might
be necessary to improve the system.
By building in regular review and incorporating findings into improvements in company
procedures and activities, the company can improve both its own performance and any
development impacts on the ground.

49
Appendix A. Individuals Interviewed for this Guide
Jean Aden, Overseas Private Investment Corporation (OPIC), Office of Accountability,
USA
David Barnden, BankTrack, the Netherlands
Stan Batey, Freeport-McMoRan, USA
Steve Botts, Rio Tinto, Peru
Nicholas Cotts, Newmont Mining Corporation, Ghana
Cecilia Dalupan, Sustainable Development Resources, USA
Luke Danielson, Sustainable Development Resources, USA
Carol Fries, Rio Tinto, Peru
Ginger Gibson, University of British Columbia, Canada
Pierre Gratton, Mining Association of Canada
Amy Gray, ActionAid USA, USA
Dr. Alexandra Guaqueta, Ideas para la Paz, Colombia
Anne Marie Harmon, Rio Tinto, Peru
Bill Knight, Pronatura, Nigeria
Paul Korpi, Centerra Gold, Mongolia
Ramanie Kunanayagam, British Gas Group, UK
Thereza Lobo, Comunitas, Brazil
Shanta Martin, OXFAM Community Aid Abroad, Australia
Maria Morgan, formerly with British Petroleum, Tbilisi, Georgia
Mercedes Occhi, Reporte Social, Argentina
Alan Ovalle, Goldcorp Inc., Guatemala
Cassie Phillips, Weyerhaeuser Company, USA
Caroline Rees, John F. Kennedy School of Government, Harvard University, USA
Per Renman, Skanske Corporation, Panama
Caroline Ristau, Consultant to Pro Natura, Nigeria, Little Neck, New York
Jonathan Samuel, Anglo American, UK
James Schenck, Goldcorp Inc., Guatemala
Jorge Daniel Taillant, Center for Human Rights and Environment, Argentina
Ian Thompson, On Common Ground, Canada
Jodie Thorpe, SustainAbility Ltd., UK
Karen Westley, Shell International, the Netherlands

50
Appendix B. Interview Questions
These questions served as a general guide for interviews. Some interviewees were not
asked all of the questions if it was apparent during the interview that they did not have
experience with certain issues.
Interviewee’s Background
1. What is your position/role in your company (community organization, NGO, or local
government) and how have you been involved in handling disputes between the company
and the community?
Motivation/Impetus for Involvement or Development of Procedures and Mechanisms
2A. What motivated your company to develop procedures to address complaints with
members of affected communities (risk, reputation, a crisis event—accident, death of a
worker, demonstration; desire for positive relationships with a community; international
standards/good practice, etc.)? Ask for stories.
2B. Alternatively, for NGOs, community groups, etc.: What motivated you to become
involved in developing or participating in an accountability mechanism focused on
community grievances related to the company’s operations? Ask for stories.
Procedures and Elements in Place
3. What procedures are in place to address community grievances?
4. Describe the elements of the system (receiving/recording/documenting a complaint,
assessment, addressing/resolving the issues, implementation, independent redress,
tracking and reporting, learning/feedback to the broader organization and community,
system evaluation, etc.) Get descriptions of the elements.
5. What additional administrative or judicial mechanisms are available in the country to
resolve complaints?
Scope of Issues, Problems, Disputes, or Conflicts to Be Addressed
6. What is the overarching purpose of the accountability mechanism? What kinds of issues
are the mechanisms designed to address (land, resettlement, environmental impacts,
property loss or damage, minor small claims, etc.)?
7. Are there any gaps, that is, issues where a procedure is not available?
Process for Development of the Mechanisms
8. What kind of leadership was required and who were the champions for the introduction
of a grievance resolution mechanism?
9. Where was there resistance (inside the company, in civil society, within the community,
etc.)? What strategies were used to reduce resistance and gain buy-in, particularly from
the operations side of the business?
10. How were the procedures and mechanisms developed? (Unilaterally by the
company—who and where? In collaboration with members of the community? Others?)
11. How have you managed special design challenges (culturally appropriateness, making
it understandable to communities, accessibility to vulnerable populations, consideration of
the customary and traditional methods of dispute resolution)?
12. What kinds of challenges, frustrations, pitfalls, conflicts, or unintended consequences
were encountered in the development and/or implementation of these procedures (either
within the company or with outside parties)?

51
13. Where are the procedures housed/located? (A particular place in the company? In an
existing government or community organization? In an independent organization? In a
new organization? In multiple places and institutions?)
14. What kinds of staff and resources were dedicated to the procedures and mechanisms?
(Number of people, budget, etc.)
Kinds of Dispute Resolution Procedures and Mechanisms
15. Probe more about the specifics of the grievance mechanism and what they are
intended to do. Are there procedures that:
• Promote positive working relationships?
• Address different views on data, impacts, risks, or damages?
• Promote voluntary problem solving or negotiation between the company and
members of the community?
• Develop standards and criteria that guide decision making or awards (common
standards for compensation for land, crops, loss of an animal, or damage to a car
windshield)?
• Resolve a complaint if the company and a complainant are not able to reach a
mutually acceptable agreement (independent redress)? Get stories.
16. How do procedure components fit together? Is there a sequence of steps to follow?
17. What is the difference between the system on paper versus how it really works?
Implementation and Operational Issues
18. Explore issues related to implementation and operations:
• Who is responsible for system implementation?
• What training is provided to those who operate the system?
• What training is provided to communities so they can effectively use the system?
• How do you gain buy-in, develop support, and find champions for the system (in
the community and company)?
• What have you done to market and promote the system?
• What monitoring, quality control, and evaluation approaches are in place?
• How does the grievance resolution mechanism provide feedback to the project and
the community about patterns of conflicts and inform the need for project policy or
structural change to eliminate sources of repeated complaints?
The Way People Access and Use the Conflict Resolution Procedures and
Mechanisms
19. How do people learn about and understand the grievance mechanism? Describe the
communication and outreach strategy.
20. How do people access the procedure (filing a complaint, recording/documenting, etc.)?
21. Are people using the procedures and mechanisms? Why or why not?
Results and Satisfaction with Mechanisms
22. How has the grievance resolution process benefited the company and community?
23. How satisfied are the company and the various stakeholders, including users, with the
process and results or outcomes? Why or why not?
24. Are agreements implemented? Are there any monitoring or evaluation procedures?
Lessons, Advice, and Good Practice Indicators
25. What are the system’s key strengths and weaknesses?

52
26. What would supporters and critics say about the system and its results? (Consider
cultural appropriateness/acceptability, getting to the root of problems, fairness to different
genders, transparency, bias/lack of bias, timeliness, incorruptibility, fairness,
responsiveness, transaction costs, getting things settled, openness to access to other
dispute resolution procedures [administrative or courts], etc.)
27. How do the procedures address issue related to hazard versus outrage?
28. What sources of resistance to the grievance resolution process (structural, cultural,
attitudinal, behavioral factors) exist within the company and how is it being addressed?
29. What is it like to actually use an accountability mechanism like that of the CAO?
30. What sources of resistance exist within the NGO community for advising use of a
CAO-type mechanism? What do NGOs see as the value of such a mechanism? What
would have to be present for your NGO to advise a community to use an accountability
mechanism? Are there existing mechanisms that you know of that you feel are doing a
good job? What are the indicators? Any advice about the National Contact Points (NCP)-
type model, versus the Ombudsman model, versus CAO, versus company mechanisms?
31. What are three (or so) key lessons that you have learned about implementing
grievance mechanisms? What other insights or advice would you give colleagues? What
would you identify as emerging good practice indicators in the area of grievance
resolution?

53
Abbreviations and Acronyms
ADR – alternative dispute resolution
CAO – The Office of the Compliance Advisor/Ombudsman
CBO – community-based organization
CLO – community liaison officer
CSR – corporate social responsibility
EBRD – European Bank for Reconstruction and Development
IFC – International Finance Corporation
ISO – International Standards Organization
IRM – Independent Recourse Mechanism (EBRD)
MIGA – Multilateral Investment Guarantee Agency
NCP – National Contact Points
NGO – nongovernmental organization
OECD – Organisation for Economic Co-operation and Development
OPIC – Overseas Private Investment Corporation
PS – Performance Standard
UN – United Nations
WBG – World Bank Group

54
Notes
1
The focus of this guide is locally based systems for resolving project-level grievances
between companies and communities. The guide does not focus on public systems, such
as the accountability mechanisms of the international financial institutions, the
Organisation for Economic Co-operation and Development (OECD) National Contact
Person, or the courts. Nor does it focus on NGO-based mechanisms, such as Oxfam
Australia’s Mining Ombudsman.
2
The word “project” is used for all phases of development, including conceptualization or
exploration, feasibility, construction, operation, and decommissioning.
3
http://www.ifc.org/ifcext/enviro.nsf/Content/PerformanceStandards;
http://www.miga.org/policies/index_sv.cfm?stid=1652
4
http://www.ifc.org/ifcext/enviro.nsf/Content/GuidanceNotes
5
Rees and Vermijs (2008).
6
The option of using formal legal redress should always remain available. The company
should never impede a complainant’s right to pursue legal remedies.
7
Ruggie (2008).
8
Compliance Advisor/Ombudsman (2007). Operational Guidelines http://www.cao-
ombudsman.org/html-english/caooperationalguidelines.htm
9
Lipsky, Seeber, and Fincher (2003, p. 136).
10
In situations where local people fear that raising complaints will lead to retribution, it is
advisable to develop a receipt and registration system that relies upon a trusted third
party—a church, an aid organization, or the like—and entrust it with the role of taking
complaints to the company on behalf of local people with problems.
11
Staff not associated with complaint procedures may receive complaints from
stakeholders. Systems for managing and forwarding such complaints should be
established. The company will need to provide guidance to these staff on how to recognize
a complaint and where to refer it.
12
CAO (2008).

55
Glossary
Accountability mechanism. An office within an institution with a mandate and/or
standardized procedures, designated roles, and responsibilities to ensure that the entity
adheres to and complies with external and internal laws, policies, procedures, or
guidelines related to the institution’s performance.
Arbitration. A private, and adjudicative process for resolving complaints or disputes.
Arbitration may be voluntary or part of a contract or prearranged, necessary step in a
grievance process. Involved parties submit the contested issue(s) to a mutually acceptable
and impartial intermediary—an arbitrator—to obtain either a nonbinding opinion or binding
judgment.
Arbitrator(s). An individual or panel that conducts an arbitration hearing and process to
resolve a dispute or conflict.
Assisted negotiation(s). Talks or bargaining conducted with the assistance of an
intermediary or third party to help parties voluntarily resolve a complaint, grievance, or
dispute. A facilitator or mediator commonly provides assistance by helping parties
establish or build positive working relationships, conduct more effective negotiations, or
provide nonbinding substantive advice.
Change agent. A person who leads a change project or business-wide initiative by
defining, researching, planning, building business support, and selecting volunteers to be
part of the change team.
Company-community grievance mechanism. Institutionalized approaches, procedures,
and roles for the resolution of concerns or complaints at the project- raised by individuals
or community groups concerning the performance or behavior of a company, its
contractors, or its employees.
Complainant. An individual or group with an issue, concern, problem, complaint, or claim
that he, she, or they want addressed and/or resolved.
Complaint. An issue, concern, problem, or claim (perceived or actual) that an individual or
community group wants a company or contractor to address and resolve. Synonymous
with grievance.
Compliance. Commitment to follow and/or implement—in both spirit and letter— relevant
laws, rules, regulations, or negotiated agreements.
Compliance Advisor/Ombudsman (CAO). The independent recourse mechanism of the
International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency
(MIGA), the private sector lending and insurance members respectively of the World Bank
Group.
Compliance audit. An impartial assessment by an independent third party focused on
whether an institution has complied with relevant policies, standards, guidelines, and
procedures.
Conflict. A serious and potentially costly dispute over perceived or actual incompatible
values or more tangible interests. When acted upon, conflicts are often damaging to all
concerned in terms of relationship, time, personnel, and resource and opportunity costs
required to resolve them. Often used synonymously with dispute.
Customary approaches for grievance resolution. Roles, procedures, standards, and
criteria commonly found and used in traditional or indigenous communities to address and
resolve differences or conflicts. Examples include use of community elders or chiefs as

56
mediators or arbitrators and application of traditional norms to guide settlements or
decisions.
Dispute. A disagreement over concerns or interests, that takes the form of a claim
between parties. Claims are often countered with rejections or denials, accusations, or
counter-claims or charges. Often used synonymously with conflict.
Dispute resolution system. An institutionalized and organized method—consisting of
specified roles, rules, and procedures—for systematically resolving complaints,
grievances, disputes, or conflicts. Synonymous with grievance mechanism.
Distributive solutions/outcomes. Results of a collaborative problem-solving initiative,
mediation, or third party decision-making process over complaints or disputes over limited
resources that distributes benefits or costs between the involved parties.
Enforcement. Means and procedures to assure commitment to and/or implementation of
relevant laws, rules, regulations, or negotiated agreements, regardless of the cooperation
or will of involved parties.
External appeals process. Institutions and procedures external to a company-community
grievance mechanism that provide complainants with an independent and impartial means
to seek redress of complaints. These include, but are not limited to, private arbitration,
governmental administrative hearings, or judicial proceedings and rulings.
Facilitation. A means of helping groups work together in meetings to accomplish their
goals in ways that elicit participation, ownership, and creativity from all involved.
Governance structure. Roles, procedures, and institutional home for the management of
a grievance mechanism.
Grievance. An issue, concern, problem, or claim (perceived or actual) that an individual or
community group wants a company or contractor to address and resolve. Synonymous
with complaint.
Grievance mechanism. An institutionalized and organized method consisting of specified
roles, rules, and procedures for systematically resolving complaints, grievances, disputes,
or conflicts. Synonymous with dispute resolution system.
Grievance mechanism components. Parts of a grievance mechanism implemented to
accomplish specific tasks, such as grievance prevention, receipt and registration,
monitoring, tracking, internal company deliberations, and third-party assistance.
Interest-based negotiation/bargaining. A negotiation process focused on identification
of parties’ substantive, procedural, relationship, and/or psychological interests and
development of mutually acceptable solutions that satisfy them to the greatest extent
possible and result in joint gains for all concerned.
Intermediary/Intermediaries. Individuals or groups that are not a party to a complaint,
grievance, or dispute such as facilitators, mediators, process coaches, fact finders,
compliance advisors, or community elders who provide assistance to parties that enables
them to reach voluntary agreements, secure nonbinding advice, or obtain a binding
judgement to settle differences. Synonymous with third parties.
Internal company grievance mechanisms. Internal procedures for accepting a
complaint concerning company performance or behavior, processing it, making a decision
on its merit, and providing a response to the complainant.
International Finance Corporation (IFC). A member of the World Bank Group that
focuses on private sector projects in developing countries. It provides finamcing for private
sector projects, helps private companies in the developing world mobilize financing in

57
international financial markets, and provides advice and technical assistance to
businesses and governments.
Mediation. A way of helping parties voluntarily resolve a dispute using the assistance of
an acceptable, impartial, and neutral third party with no decision-making authority.
Multilateral Investment Guarantee Agency (MIGA). A member of the World Bank Group
whose mission is to promote foreign direct investment in developing countries. MIGA
offers political risk insurance, technical assistance, and dispute mediation services to
private sector clients.
Nonbinding agreement. A way of resolving a dispute using negotiation, mediation, or
determination by experts that does not legally bind the disputants to the outcome (unlike
legal methods, such as the courts or arbitration, which are binding).
Organizational learning. The ability of an entity to sense changes in its internal and
external environments and effectively adapt to them to better achieve its goals.
Performance Standards. A series of standards published by IFC that are applied to
manage social and environmental risks and impacts and to enhance development
opportunities of projects in which IFC and MIGA invest or serve as partners.
Receipt and registration. A simple process where local people can present concerns
directly to the company and, if necessary, anonymously or through third parties.
Social license. The extent to which a corporation is constrained to meet societal
expectations and avoid activities that societies deem unacceptable, whether or not those
expectations are embodied in law.
Stakeholders. Persons or groups that are directly or indirectly affected by a project as
well as those who may have interests in a project or the ability to influence its outcome,
either positively or negatively. Stakeholders may include locally affected communities or
individuals and their formal and informal representatives, national or local governmental
authorities, politicians, religious leaders, civil society organizations, and other groups with
special interests, the academic community, or other businesses
Stakeholder engagement. An umbrella term encompassing a range of activities and
interactions between a company and community over the life of a project that are designed
to promote transparent, accountable, positive, and mutually beneficial working
relationships. Stakeholder engagement includes stakeholder identification and analysis,
information disclosure, problem/conflict anticipation and prevention, ongoing consultation,
formation of partnerships, construction of grievance resolution mechanisms, negotiated
problem-solving, community involvement in project monitoring, regular reporting forums
and procedures, and other management functions.
Third party/third parties. See intermediary/intermediaries.
Unassisted negotiations. Talks or bargaining conducted by parties to resolve a
complaint, grievance, or dispute without the assistance of an intermediary or third party.

58
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Compliance/Advisor Ombudsman
2121 Pennsylvania Avenue NW
Washington, DC 20433 USA
Telephone: 202-458-1973
Facsimile: 202-522-7400
e-mail: cao-compliance@ifc.org
www.cao-ombudsman.org

2008

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