Should a company be held accountable when a service provider commits environmental crimes to supply it with raw materials? Is it a company’s duty to monitor whether its outsourced employees have decent working conditions? According to civil society organizations that work in the field of human rights due diligence, the answer to these questions is ‘yes’.
Human rights due diligence is the term used to describe corporate governance processes that are aligned with obligations and commitments to protect and promote human rights. This is done through the identification, prevention and mitigation of – and accountability for – damages that they cause or contribute to through activities and operations across the whole production chain (series of activities necessary for the production, distribution and sale of goods and services that covers everything from extraction and handling of raw materials to the distribution of the product).
In addition to adopting best practices, companies should be accountable for and disclose the risks and impacts of their activities, consulting all the parties involved and continually assessing the effectiveness of the adopted measures. For example, if a company wants to build a hydroelectric plant, it needs to assess all the environmental and social impacts for the specific region, by consulting experts in different fields and paying special attention to the people who live in the region, while respecting their lifestyles and cultures, in the case of riverside and indigenous peoples.
The document United Nations Guiding Principles on Business and Human Rights, approved in 2011 by the UN Human Rights Council and published in Portuguese by Conectas in 2012, contains important guidelines for the business sector. The document has three main principles: States are required to protect human rights, companies are responsible for respecting them and, when these rights are breached, appropriate and effective measures must be taken to remedy the damages and violations.
Accordingly, the Guiding Principles present four stages to be followed: assessment of the risks and impacts, integration into management of actions to prevent and control risks and impacts, monitoring of actions that are taken and disclosure and communication of actions that are taken.
The document also emphasizes that these processes should be ongoing, considering that the risks to human rights can change over time, depending on the evolution of the business and the operational context of the companies.
The due diligence laws in France (2017) and Germany (2021) are good and important examples, although it is still too early to gauge their actual impact. But there is also some legislation on the topic in Norway, California (United States), United Kingdom, Netherlands and Australia, in addition to laws that encompass the member states of the European Union. Belgium and Austria have also embarked on legislative discussions on the topic.
These laws differ on the type of enforcement and obligations, requiring different degrees of transparency, control and responsibility for the production chain. Some have led to important changes in business practices and consumer habits, while others have had little practical impact. They should all, however, have their importance recognized for having shed light on the subject and served as an inspiration and a model for the development of other more comprehensive legislation.
There is no consensus. Brazil already has important rules that allow companies that commit human rights violations to be held accountable. There are also rules that require a certain degree of damage prevention and that offer incentives to companies that adopt responsible environmental and social practices.
The Brazilian regulatory system for combating slave labor and environmental protection, for example, is internationally acknowledged and commended. Important instruments created in Brazil, such as the Dirty List, are considered exemplary by international organizations.
There is a consensus, however, that there are insufficient mechanisms that ensure and enforce a corporate governance aligned with the obligations and commitments to protect and promote human rights, that require transparency in the production chain or that establish obligations beyond the direct supplier. This is due to numerous factors: gaps in the legislation, omission by oversight and enforcement authorities, disagreements over the interpretation and application of the rules, delays in the penalties, as well as other more profound and structural challenges facing our society, such as racism, land concentration and social inequality.
These factors are exploited by companies and need to be corrected, either by changing the existing rules or by drafting new ones. The decision over which option is best requires a broad and in-depth discussion involving the whole of society.
Yes. The current challenges in Brazil include the need to tackle the federal and legislative attempts to dismantle existing and well-established mechanisms for the protection of socio-environmental and labor rights, such as the recent attempt by the Bolsonaro government to curb funding for workplace inspections, undermining the actions to combat slave labor and child labor, and the approval in the Lower House of Congress that of a bill that weakens the current environmental licensing requirements.
Civil society plays an important role in the discussions on this topic, whether by presenting existing models of legislation to society, by denouncing the shortcomings that exist in Brazil and even by proposing alternatives to remedy them.
Civil society can also demand from the State efficient ways of monitoring, inspecting and holding companies accountable for human rights violations. The law cannot just delegate to companies, it must also establish external control mechanisms. Oversight bodies, such as the Labor Inspection Secretariat and the environmental watchdog IBAMA, need to be well structured and independent. Finally, non-governmental organizations can also work to avoid setbacks in laws that protect human, environmental and labor rights on different fronts.