Status: Proposal

Law - Brazil - Brazil Draft Bill Proposal n. 572, 2022

Brazil Draft Bill Proposal n. 572, 2022

Summary Table

Obligations
  • Reporting Obligations
  • Due diligence
Normative scope
  • Human Rights
  • Environment
  • Broad ranging
Value chain scope
  • Own operations
  • Direct Subsidiaries
  • Indirect subsidiaries
  • Suppliers
Company scope
  • Large companies
  • SMEs
Administrative enforcement
  • Monitoring
  • Sanctions
Judicial enforcement
  • Civil Liability
  • Access to Justice
Obligations
  • Reporting Obligations
  • Due diligence
    • Companies need to implement protocols for control, prevention and compensation (identification, mitigation &remedy) that are adequate.
    • Companies have an obligation not to cause damage, and thereforeto immediately suspend the activity associated with the damage.
    • Mandatory stakeholder engagement in many instances, broad definition of stakeholders
    • Implement protocols and policies that facilitate community participation
    • DD needs to be an ongoing exercise as companies’ activities develop
    • Companies have a legal obligation to remedy victims, and to create funds to cover the basic needs of affected people
    • Human rights report issued every 6 months. The draft bill goes into extensive detail about what the plans ought to include
Normative scope
  • Human Rights
    • States the principle of “centrality of the victims”, and that human rights framework will override other agreements of economic, trade services and investment nature
    • Includes all conventions forbidding discrimination, and positive duty to enact anti-discrimination actions; all conventions forbidding child labour and forced labour in supply chains; data protection legislation; indigenous peoples’ rights; rights of peasants and other people living in rural areas; rights of trade unions and human rights defenders.
    • Does not mention specific conventions
  • Environment
    • Environmental rights are included
    • No reference to climate
  • Broad ranging
Value chain scope
  • Own operations
  • Direct Subsidiaries
  • Indirect subsidiaries
  • Suppliers
    • The bill refers to “any entity” in business’s global value chains
Company scope
  • Large companies
  • SMEs
    • The law applies to all companies,and their subcontractors, branches, subsidiaries, and extends to all economic and financial institutions
Administrative enforcement
  • Monitoring
    • Companies are required toself-monitor, but States’monitoring prevails over companies’ self-monitoring 
    • States must create instruments for civil society participation in the enforcement of public policies, includingmonitoring
  • Sanctions
    • Any subsidy policies benefitting violating companies, especially policies like tax exemptions, are prohibited
    • Failure to implement the report may result in preventive embargoes on the violating company
    • Prohibition/suspension of operations of companies that don’t implement preventive measures or reparation
    • Other sanctions: loss of assets gained through abuse, no public incentives, fines, loss of control and possible transferof the company to workers.
Judicial enforcement
  • Civil Liability
    • Joint and sever liability regime covering the whole business value chain (including investors, including informal business relationships)
    • Possibility of holding directors liable for not presenting the due diligence plan every 6 months
  • Access to Justice
    • Unlimited access to all documents and information beneficial to victims
    • Full and equal access to justice forpersons and communities
    • States must implement measures to attend groups in situations of vulnerability analogous to slavery 
    • Reversal of the burden of proof
    • Technical legal support to victims
    • Reasonable time limitations, and no time limitation to damage reparation claims
    • Extensive and free legal assistance to groups in situation of vulnerability
    • Business operations open to external inspection
    • Injunctive measures
Law

Framework for Business and Human Rights (PL 572/2022)

Brazil
March 29, 2022
Area Company Law and Civil Law
Reporting
Due diligence
Due diligence and remedy