During the pandemic, ESG became a popular and frequent around the globe. It refers to enterprises’ environmental, social and corporate governance practices. Other terms and initiatives lead us towards the same direction, consolidating companies’ duty to conduct effective due diligence to identify their actual and potential positive and negative impacts, as well as the responsibility to take the necessary measures to remedy, avoid or mitigate the direct and indirect damaging impacts.
The European Union (EU), International Labour Organization (ILO), the Organization for Economic Cooperation and Development (OECD)and the United Nations Office of the High Commissioner for Human Rights (OHCHR) are behind the program “Responsible Business Conduct in Latin America and the Caribbean”, aiming to promote inclusive, smart and sustainable growth by supporting responsible business practices in line with international standards.
The program is based on three instruments: ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy; OECD Guidelines for Multinational Enterprises; and the UN Guiding Principles on Business and Human Rights. They all provide for the companies duty to conduct due diligence to identify, prevent and mitigate actual and potential negative impacts, including the supply chain. It connects human rights, labour, anti-corruption, sustainability, competition and other relevant impacts of enterprises.
Although discussions may be held on its sufficiency, most of those perspectives are at least partially encompassed in the Brazilian legislation. What stands out is the lack of regulation on human rights due diligence, leaving room for companies to wrongfully believe not have any legal or reputational risks.
Instruments such as the UN Guiding Principles on Business & Human Rights already provide for relevant standards on how to assess and measure the firms’ impacts on Human Rights and how to deal with them. International jurisprudence also composes the soft law framework, being worth highlighting the recent condemnation of Brazil, on October 26, by the Inter-American Court of Human Rights for 64 deaths at a fireworks factory in the city of Santo Antônio de Jesus, State of Bahia.
National precedents such as Vale dam burst or scandals with modern slavery reinforce companies’ pressing need to anticipate, measure and repair actual and potential human rights negative impacts. However, a catastrophe is not necessary to evince it.
Impacts are identifiable at all stages of business activity in four dimensions: in the internal public (employees and service providers); in the community in which enterprises operate and its surroundings; by the core activity (service or product provided); and the production and supply chain.
A commitment to Responsible Business requires effective due diligence, internal policies, and a commitment to a comprehensive approach to potential violations in line with the concept of integral reparation. Facing Human Rights issues is, thus, an unavoidable step for a coherent ESG approach and towards business responsibility.
By Clara Serva, Tozzini Freire Advogados