Conducting Human Rights Impact Assessment: Why it’s Essential

The imperative to assess human rights risks spans entire value chains. Agriculture, mining, and construction, three high-impact sectors, pose serious human rights risks. To effectively protect workers and communities, companies must conduct thorough human rights impact assessments to identify, prevent and mitigate harm before it occurs. While global assessments reveal overarching risks and industry-wide trends, only local assessments can capture the nuances of national laws, socio-economic conditions, and cultural factors . This article uses the construction sector as a case study to illustrate why it is essential for companies to conduct a tailored human rights impact assessment (HRIA).

Construction Sector: a Structurally High-risk Value Chain for Human Rights

The construction sector accounts for USD$ 15 trillion in 2024 and the market is expected to reach USD$ 19 trillion in 2027. Employing over 220 million people globally, the rapid growth of the sector comes with a significant social cost.

Key Challenges for Construction Companies

Human rights risks in the construction sector are difficult to address. Construction projects often involve numerous stakeholders working across dispersed locations and project phases :

1. Highly fragmented operations. Construction projects typically include a large array of stakeholders. Suppliers, contractors and subcontractors, project managers, architects, engineers, site supervisors: each operating under tight fixed deadlines and budget.
2. Increased subcontracting. In construction projects, sub-contracting can go down 9 levels or more, with each tier pushing costs down, at the expense of workers. Large companies often struggle to enforce their human rights standards at the lower tiers. Thus, labor abuse can thus go easily undetected and unadressed.
3. Short-term nature of projects. Most construction projects are temporary by nature, thus limiting the implementation of good practices and robust human rights policies.

4 Prevalent Human Rights Issues Faced by Construction Workers

1. Health and safety risks: Construction workers are 3 to 4 times more likely to die from accidents at work than other workers. Workers dot not always have access to personal protective equipments (PPE), or minimal safety training. At least 60,000 fatal accidents occur on construction sites around the world.
2. Working conditions: Low wage construction workers face a lack of adequate job training, excessive working hours, and a lack of access to grievance mechanisms.  
3. Recruitment practices: Intermediaries often charge migrant workers high fees for recruitment. Once on the job, many discover that their working conditions differ significantly from what was first agreed.
4. Poor Living conditions: Many migrant workers live in overcrowded, and unsafe accommodations. They face minimal leisure opportunities outside of work and receive very little support in adjusting to new local environments.

Weak Regulation and Widespread Informality: a Risk Multiplier Factor

In many countries – especially low-income ones – the construction industry relies heavily on informal labor. Informal work can sometimes account for up to 80% of employment. Informality is not just a byproduct of the system: it is now embedded in the sector’s economic model.

As a result, labor laws are routinely bypassed, depriving millions of workers of basic protections, such as social security, health coverage, or decent wage. When we know that nearly 4 billion people globally still work without any form of social protection, massive efforts are still needed to guarantee the fundamental rights to work and access social security – especially in construction. These risks are even more pronounced in countries with weak legal frameworks or restrictive labor laws, where workers may be legally prohibited from changing jobs or leaving the country without employer consent (e.g., Gulf countries).

Beyond the Usual Suspects: why is it Essential to Conduct Contextual Human Rights Impact Assessment

Human rights risks are never uniform, not even within the same sector. While high-level analyses can be a useful starting point, they often fail to capture the local realities that shape actual risks on the ground. Therefore, in the construction sector, a contextualized HRIA is essential to identify both risks and opportunities.

5 Reasons why High-level HRIA Fails to Capture Local Realities

A multi-country risk overview provides a broad picture but cannot substitute for a country-specific deep dive. These aggregated studies tend to rely on general indicators, which often mask the nuanced, real-world risks workers face.

In the construction sector, for example:

• Regulatory enforcement varies: two countries may have identical labor laws on paper, yet enforcement in one may be robust while in the other it is virtually non-existent.
• Geopolitical context matters: political instability, weak rule of law, or conflict can disrupt projects and heighten worker vulnerability.
• Economic trends are crucial: inflation, wage suppression, or local unemployment rates influence labor market dynamics and the risk of exploitation.
• Social and Cultural Norms Differ Greatly: High-level analyses overlook local social dynamics that shape workplace risks:
  • In some countries, the criminalization of LGBTQ+ identities can put employees at risk during hiring or transfers, a nuance often invisible in broad reports.
  • Similarly, differing family structures, such as nuclear families in Europe versus extended families in parts of Africa or Asia, affect how benefits and social protections should be tailored to be effective and fair. HR benefits such as parental leave, healthcare, or company support schemes must in those cases be adapted to avoid inequity.
• Environmental and Demographic Factors Impact Worker Wellbeing: aggregated assessments rarely account for local environmental conditions or demographic realities. In regions with extreme temperatures, failure to adapt working hours can endanger workers’ health. Additionally, specific ergonomic and health policies are required for countries with ageing active workforces (e.g., Eastern Europe). These specificities are often ignored in general risk evaluations.

From Risk to Opportunity: the Value of Contextualized Human Rights Strategies

Such a detailed human rights risk approach not only improve risk management but also helps shape human resources policies, workplace adaptations, and corporate social responsibility strategies, creating a clear competitive edge.

By embedding granular, location-specific insights into their HR and risk management strategies, organizations can develop solutions that are not only compliant but also genuinely human-centered, boosting both operational resilience and corporate reputation. For example, in countries with limited vocational training systems but a large and active young workforce, companies can establish training programs that build technical skills while enhancing their attractiveness. Similarly, in regions facing increasing droughts and climate stress, construction companies can adopt climate-smart adaptation strategies – such as energy- and water-efficient building techniques, sustainable material choices- , to not only mitigate environmental risks but also position them as leaders in sustainable construction.

This contextualized approach thus enables companies to also uncover opportunities for responsible innovation. By being more attuned to the needs and concerns of their stakeholders, companies can advance their social and environmental responsibilities, creating lasting value through enhanced trust, innovation and stronger relationships with both employees and communities.

How to Best Conduct a Human Rights Impact Assessment in Construction

Combine International Framework with Local Intelligence

International frameworks – UNGPs, ILO conventions, OECD Guidelines – are key to map and flag all potential human rights risks related to a specific value chain. Start by using them to have a solid first foundation to ensure no major risk is overlooked in a specific area.

However, these standards must be complemented with local intelligence. Indeed, as mentioned earlier, there is often a gap between national regulations and how effectively they are enforced on the ground.

Smart local regulation is thus often key to ensure workers’ rights.

In this gap, between legal commitments and on-the-ground reality, is where human rights violations often emerge. Operational teams may not come with a human rights background, but they witness day-to-day potential issues and abuses – from recruitment practices to working conditions. Involving them helps ground the assessment in field realities, validate findings, and reveal risks that may go unnoticed.

Ensure an Independent and Impartial Assessment is Being Conducted

Engaging independent experts with sector-specific and human rights expertise is key to ensuring an unbiased and credible assessment. Organizations such as Ksapa, bring both the expertise and a neutral perspective, enabling them to identify human rights risks within complex supply chains and support companies in defining practical, actionable solutions.

What’s Next : Turn Assessment into Action

To conduct a strong human rights impact assessment is only the first step. The true value of the exercise lies in the translation of the previous findings into a meaningful action plan.

Multiple stakeholders have developed guidelines to help companies improve their human rights performance post-assessment. They all mostly draw from recognized human rights standards (ILO conventions, UNGDP, UN standards). Some key resources include (non-exhaustive list):

• Addressing Workers’ Rights in the Engineering and Construction Sector, BSR
• Guidelines for a Better Construction Industry in the GCC: A Code of Conduct for Construction Companies, Human Rights Watch
• Framework for Dignity in the Built Environment, IHRB
• Building responsibly, a global engineering and construction industry initiative

These tools can help companies prioritize their actions and remediate relevant action plans over time to ensure human rights protection in their business model. Contact us at Ksapa to learn more about to apply these concepts for effective risk mitigation across strategies and operations.