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Business and Human Rights in Brazil: Trends and Outlook for the Coming Years

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Business and Human Rights in Brazil: Trends and Outlook for the Coming Years December 2020 Business and Human Rights in Brazil: Trends and Outlook for the Coming Years By Luiz Gustavo Bezerra and Meg Ferreira Abstract: This article explores how the to meet their responsibility to respect Luiz Gustavo Bezerra integration of environmental, social human rights; (ii) carry out ongoing [email protected] and governance (“ESG”) factors into human rights due diligence to identify, +55 21 2127 4231 decision-making and investment prevent, mitigate and account for how strategies is expected to strengthen they address their adverse human the implementation of human rights rights impacts; and (iii) have in place Meg Ferreira principles and requirements by processes to enable the remediation [email protected] companies operating in Brazil. of any adverse human rights impacts +55 21 2127 4238 On June 16, 2011, the United Nations they cause or contribute to. Guiding Principles on Business and The company’s commitment should be Human Rights (“UNGPs” or “the expressed in a publicly available policy Principles”) were endorsed by the statement—stand-alone or integrated Human Rights Council, setting a into existing statements and codes of milestone for the protection of human conduct—and reflected in operational rights. The UNGPs are guidelines policies and procedures. Companies “directed at States and companies are expected to respect all internation- that clarify their duties and responsi- ally recognized human rights, but one bilities to protect and respect human important step to be taken when rights in the context of business developing the policy commitment is activities and to ensure access to an identifying which human rights issues effective remedy for individuals and are most salient to operations. For groups affected by such activities.”1 instance, “[e]nterprises in sectors that The three pillars on which the routinely work with toxic products, such Principles are grounded are: (i) the as chemical companies, many manufac- State’s duty to protect and fulfill turing companies, as well as mining human rights and fundamental free- companies, may pose a particular risk 2 doms; (ii) the corporate responsibility to the right to safe water.” to respect human rights; and (iii) the In addition, “[i]n the context of the need for access to appropriate and Guiding Principles, human rights due effective remedies, both judicial and diligence comprises an ongoing man- non-judicial, when business-related agement process that a reasonable and human rights abuse occurs. prudent enterprise needs to undertake, According to Principle 15, companies in the light of its circumstances (includ- must: (i) institute a policy commitment ing sector, operating context, size and similar factors) to meet its responsibility to respect and killings of indigenous peoples and activists. 3 human rights.” The due diligence process encom- Adopting and enforcing more effective practices and passes the following steps: (i) identifying and assessing policies to prevent business-related human rights actual and potential adverse human rights impacts; (ii) violations is particularly challenging in a country with integrating findings from impact assessments into continental dimensions, a myriad of ecosystems and policies and procedures and taking action to prevent natural resources, and profound socioeconomic or mitigate impacts; (iii) tracking effectiveness of inequalities within and among different regions. response; and (iv) communicating human rights impacts and related response measures to relevant Under the current political scenario in Brazil and with stakeholders. Also, pursuant to Principle 22, “[w]here the lack of standardized and mandatory requirements business enterprises identify that they have caused or applicable across different business sectors at the contributed to adverse impacts, they should provide national, regional and local levels, it is expected that for or cooperate in their remediation through legiti- the human rights agenda will be implemented mainly mate processes.” by private actors and civil society organizations. Even though discussions on mandatory human rights The rising concern of investors, policymakers, shareholders, customers and other stakeholders with due diligence have been gaining increased attention over the past months, particularly in the European ESG issues is a strong motivation for companies to Union, such a trend has yet to reach Latin American adopt sustainable and responsible practices. Such countries, including Brazil. In spite of that, Brazil and concern will likely result in the improvement of Brazilian institutions and enterprises have adhered decision-making, engagement, transparency and to a variety of global frameworks, standards and accountability, and it is expected to be the main initiatives aimed at the implementation of human driver for the integration of a human rights-based rights principles and requirements. Besides the approach into business practices in Brazil. UNGPs, those include, inter alia, the Universal According to the “Investor Toolkit on Human Rights,” Declaration of Human Rights, the OECD Guidelines released in May 2020 by the Investor Alliance for for Multinational Enterprises, the ILO Declaration on Human Rights, “[r]espect for human rights is strongly Fundamental Rights and Principles at Work, the associated with value chain resilience and a stable United Nations Global Compact, the Equator business operating environment. In parallel, investors Principles, the IFC Performance Standards and the are increasingly aware of and concerned about the Sustainable Development Goals. significant operational, financial, legal, and reputa- Human rights protection is also guaranteed under the tional risks portfolio companies might face when they 4 Brazilian Constitution and domestic laws and regula- fail to manage human rights risks.” Among these tions. For example, Decree No. 9571/2018, which sets risks are “potential project delays and cancellations, out the National Guidelines on Business and Human lawsuits and other legal risks such as noncompliance Rights (“NGBHRs”), is a non-binding framework with emerging human rights-related regulations, directed at Brazilian and multinational companies scrutiny from national-level grievance mechanisms operating in the country, and Resolution No. 5/2020 such as OECD National Contact Points (NCPs), of the National Council for Human Rights, which significant fines, productivity and recruitment chal- 5 introduces the National Guidelines for a Public Policy lenges, and negative press coverage.” on Business and Human Rights and is directed at Similarly, the 2018 report of the Working Group on companies and the government, enhance the Business and Human Rights to the UN General NGBHRs and improve human rights protection Assembly states that “[t]he responsibility to carry out against violations by business enterprises. human rights due diligence applies regardless of any There is, however, still a long path ahead, as Brazil ‘business case’ argument. Failure to conduct adequate has a long record of corporate human rights abuses. diligence on risks to people will often have not only a Examples include dam incidents and the recent human cost, but may also come back to haunt the 6 increase in illegal deforestation and land seizures in business.” The Group recommends investors to the Amazon, often associated with violence, threats “implement human rights due diligence as part of their 2 MAYER BROWN | Business and Human Rights in Brazil: Trends and Outlook for the Coming Years own responsibility under the Guiding Principles, more policy coherence in the implementation of the systematically require effective human rights due UNGPs and overall protection of human rights diligence by the companies they invest in, and coordi- against corporate violations, the demand for action nate with other organizations and platforms to ensure by investors and other stakeholders should be a key alignment and meaningful engagement with factor to push companies to adopt and enhance companies.”7 human rights policies, due diligence processes, In view of the above, even if Brazil takes longer to grievance and communication mechanisms, and a strengthen its regulatory framework to promote response to adverse impacts. Endnotes 1 UN Office of the High Commissioner of Human Rights (OHCHR), Frequently Asked Questions About the Guiding Principles on Business and Human Rights, at 5, HR/PUB/14/3 (2014), available at: https://www.ohchr.org/Documents/Publications/FAQ_PrinciplesBussinessHR.pdf 2 OHCHR, The Corporate Responsibility to Respect: An Interpretive Guide, at 21, HR/PUB/12/02 (2012), available at: www.ohchr.org/Documents/ Issues/Business/RtRInterpretativeGuide.pdf.\ 3 Id. at 6. 4 Investor Alliance for Human Rights. Investor Toolkit on Human Rights, at 5. Available at: https://investorsforhumanrights.org/sites/default/files/ attachments/2020-05/Full%20Report-%20Investor%20Toolkit%20on%20Human%20Rights%20May%202020c.pdf 5 Id. 6 Report of the Working Group on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, U.N. Doc. A/73/163, at 6. 7 Id. at 25. Mayer Brown is a distinctively global law firm, uniquely positioned to advise the world’s leading companies and financial institutions on their most complex deals and disputes. With extensive reach across four continents, we are the only integrated law firm in the world with approximately 200 lawyers in each of the world’s three largest financial centers—New York, London and Hong Kong—the
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