Impact Assessments: Concepts and Definitions

Both the terms “impact” and “assessment” require some clarification. “Impact” is used here in a broad sense⁸⁰ that comprises what is, in a technical sense, often classified as “output”, “outcome”

and “impact”. Outputs are the immediate results of an intervention, for example, in the case of an educational development project the recruitment of qualified teachers or the construction of education facilities.⁸¹ Outcomes relate to the “likely or achieved short-term and medium-term effects of an intervention's outputs”,⁸² such as better quality or affordability of education. Im-pacts in the narrow and technical sense, finally, are the long-term or indirect effects of an initia-tive: The overall increase of literacy rates (specific impacts) or better income opportunities of graduates (general impact) would count as impact indicators.⁸³ However, impact assessments can comprise, depending on the respective legal regime, all of the aforementioned effects.

The term assessment also requires clarification, especially with regard to compliance. Generally, an assessment refers to the identification and evaluation of potential impacts of an initiative. The consideration of alternatives is at the heart of most impact assessments, as it allows to compare the (hypothetical) impacts of different options with each other and with the no-policy-change baseline scenario.⁸⁴ Especially where clear normative standards are missing, these relative

80 World Bank Group: Independent Evaluation Group, ‘Impact Evaluations: Relevance and Effectiveness’, 2012, p. 4.

81 EC External Services Evaluation Unit, ‘Outcome and Impact Level - Indicators’, in: Working Paper, Sep-tember 2009, p. 2.

82 Ibid., p. 4.

83 Ibid., p. 5.

84 See section 6.2.2.2.

parisons allow for a meaningful evaluation.⁸⁵ Overlaps between human rights assessment and compliance review exist. Some IA guidelines require to also assess compliance with human rights and to rule out options that would be illegal. This is, however, not at the core of IAs, and in particular where ex-ante impact assessments are conducted at an early stage before a specific legal document exists – a contract for project finance, a legislative proposal, etc. –, a compliance review in the strict sense would often be impossible. Impact Assessments are not less valuable than compliance assessments though, they rather pursue a different goal. In some regards, im-pact assessments can go beyond compliance. In particular, they also allow considering imim-pacts that do not surpass the threshold of human rights infringements. In other words, impacts that would not infringe human rights and would, therefore, pass a compliance test could nevertheless have to be considered during an impact assessment. It is this supplementary function of impact assessments that allows considering human rights impacts that would be below the radar screen of compliance, at least as usually understood in the positivist legal tradition.⁸⁶

It is also important whether there is a difference between an impact assessment and the assess-ment of impacts. Even before IAs were formalized and institutionalized, policy- and decision-makers more or less explicitly had to assess the (potential) impacts of their decisions. Indeed, the very goal of legislative or administrative decision-making is to foster intended and avoid unintended consequences. A central factor that turns the assessment of impacts into an impact assessment is the “systematic analysis of the lasting or significant changes in people’s life brought about by a given action or series of actions”.⁸⁷ An impact assessment is, in other words, the systematic and structured assessment of impacts, based on varying degrees of analytical and participatory mechanisms. Whether such a structured assessment process is explicitly called impact assessment or not is not decisive.⁸⁸

The term “Human Rights Impact Assessment” can also be used, at times, in a broad or narrow sense. In a narrow sense, it would have to be distinguished from other concepts. Most promi-nently, human rights due diligence has recently become part of the international human rights discourse, mainly in the context of corporate human rights responsibilities. The concept of “due diligence” of companies can be traced back to the U.S. Securities Act of 1933, which required brokers under certain circumstances to start an investigative process to prevent harm. If they comply with certain standards, due diligence can be used as a defense against damage claims.⁸⁹ Over time, the concept of due diligence was broadened. First, its content was extended to

85 This is one element of the IA-process where supporters of explicit reference to human rights argue that Human Rights Impact Assessments have a clear advantage over other forms, such as social or health im-pact assessments. They allegedly allow for a normative standard to evaluate the imim-pact in absolute (nor-mative) terms. While the outcome of a food impact assessment might evaluate a mechanism that reduces the number of people starving, a right to food impact assessment would come to the conclusion that other, more efficient measures must be developed in order to not violate the core content of the right to food.

86 For more on the relationship between impact assessments and human rights compliance see chapter 9.

87 Chris Roche, ‘Impact assessment: seeing the wood and the trees’, Development in Practice, 10 (2000), pp.

543–555, p. 546.

88 This view has also been endorsed in the pleadings by the Government of New Zealand before the ICJ in the Nuclear Tests Case: “The fact that the means whereby a party ensures that there is no such risk to the environment is nowadays called an EIA is purely coincidental. The EIA is simply a convenient term to describe a process whereby a party carries out a clear, legal duty”, ICJ, Nuclear Test Cases - Oral Pleadings (1995), para 22. The present thesis shares this view of “function over form”

89 Mark Taylor, Luc Zandvliet, and Mitra Forouhar, ‘Due Diligence for Human Rights: A Risk-Based Ap-proach’, Working Paper, Harvard University, in: Corporate Social Responsibility Initiative, No. 53, p. 2.

vent harm to the natural environment or to people: “A company’s human rights due diligence approach can be defined as the way a company becomes aware of, prevents and addresses any potential and/or actual human rights risks arising from its business activities that may infringe the human rights of its stakeholders.”⁹⁰ Second, the scope of the concept has slowly transcended from private to public law. The ILC Commission Commentary on Transboundary Harm, for ex-ample, states that “due diligence is manifested in reasonable efforts by a State to inform itself of factual and legal components that relates foreseeably to a contemplated procedure and to take appropriate measures in timely fashion to address them”.⁹¹ A few years later, the Ruggie Princi-ples on Business and Human Rights emphasized that due diligence covers the “responsibility” of business actors and, at the same time, the obligation of states to protect human rights, in particu-lar by adopting adequate regulation;⁹² the terminology of “due diligence” is thus familiar from human rights law and business management.⁹³ What human rights due diligence and HRIA, however, share is the common objective to make an informed decision and thus prevent poten-tial harm.⁹⁴

So due diligence is a comprehensive concept, whereas an Impact Assessment requires a more specific and usually a more detailed analysis of likely and significant consequences. The duty to conduct an IA is usually only triggered if a certain threshold has been met. This also means that an HRIA is one instrument to discharge an actor’s human rights due diligence obligations. This view is shared by the World Bank Group’s International Finance Corporation (IFC) and the In-ternational Business Leaders Forum (IBLF): “Determining a company’s human rights due dili-gence approach is an important first step towards scoping an appropriate and relevant human rights impact assessment that will complement, and add to, the existing company policies, pro-cedures and practices”⁹⁵.

What is, finally, the difference between a human rights impact assessment and a human rights audit? While both are due diligence instruments, views on what the main differences are di-verge. Some authors regard the time at which the assessment takes place and the scope of re-view as the decisive factors. In the case of environmental governance, an environmental impact assessment “assesses the potential environmental effects of a proposed facility” whereas the

“purpose of an environmental audit is the systematic scrutiny of environmental performance throughout a company’s existing operations”.⁹⁶ An important consequence is that impact as-sessments include the consideration of hypothetical or counterfactual alternatives: Unlike an audit, an ex-ante impact assessment requires that decision-makers consider alternative options,

90 International Business Leaders Forum (IBLF) and the International Finance Corporation (IFC), ‘Human Rights Impact Assessment and Management’, 2010, p. 15.

91 International Law Commission, Commentaries to Draft Articles on Prevention of Transboundary Harm from Hazardous Activities (2001) Article 3 Commentary 10.

92 ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework: Report of the Special Representative of the Secretary- General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie’, A/HRC/17/31, Principles 4, 15 et seq.; Anne Peters, ‘Global Constitutionalism: The Social Dimension’, MPIL Research Paper Series, 2017-25, p. 29.

93 Ibid., with further reference to a recent report of the ILA.

94 Mark Taylor, ‘Human Rights Due Diligence: The Role of States: 2013 Progress Report’, 2013, p. 15.

95 International Business Leaders Forum (IBLF) and the International Finance Corporation (IFC), ‘Human Rights Impact Assessment and Management’ (above, n. 90), p. 15.

96 Robert Coyle, ‘Environmental Auditing - Definition and Methodology’, in: Jeanne Mager Stellman (ed.), Encyclopaedia of Occupational Health and Safety, 54.24.

including the no-policy-option.⁹⁷ Another distinction between impact assessments and audits has been suggested by Balakrishnan and Elson and applied by Simma to the context of invest-ment law and human rights. Here, the focus is on the depth of the human rights assessinvest-ment: An impact assessment aims to identify a causal link between projects or policies and the degree of enjoyment of human rights. The methodology can consist of complex mathematical models and econometric techniques, and an IA can be very detailed and fact-intensive.⁹⁸ Human Rights au-dits, on the other hand, are suggested as a more cost-effective and less ambitious instrument that could be applied more broadly.⁹⁹ For Balakrishnan and Elson, human rights audits of eco-nomic policies examine whether ecoeco-nomic policy “has consisted of action ‘reasonably calculated to realize the enjoyment of a particular right’, selecting rights which might reasonably be thought to have a strong relation to the policy instrument”¹⁰⁰. The objective is thus not to estab-lish a causal link between an initiative and the impact, but to require consideration of potential impacts based on a reasonability test.¹⁰¹ In spite of these attempts to draw lines between audits and impact assessments, they are in fact closely related.