Status: Proposal

Law - Mexico - The General Law of Corporate Responsibility and Corporate Due Diligence

The General Law of Corporate Responsibility and Corporate Due Diligence

Reporting
- The Act requires an annual report from applicable companies.
Due Diligence
- The Act would make it an obligation for companies to permanently implement a corporate social responsibility program and, in turn, an obligation for the authority to duly audit its suppliers on human rights issues.
- The Act applies to micro, small and medium-sized companies but only requires that they have their accounting records up to date, and include a human rights protection clause in their bylaws. It does not require them to implement due diligence measures.

Human Rights
- The Act addresses labour abuses through a human rights perspective: exploitation of workers, inhuman treatment and wages, child labor, forced labor, but also informality, unemployment, gender gap, low wages.
Environment
- The Act addresses resource exploitation, pollution and deforestation.

Large Companies
SMEs
All sectors
- The Act applies to entities belonging to the textile, mining, energy, tourism and agri-food industries.

Monitoring
- The Ministry of the Economy is tasked with monitoring compliance with this Act. However, the bill does not set out the process or frequency of this monitoring.
Administrative Sanctions
- The sanctions may include: public or private reprimand; financial penalty or fine; suspension of company activities; closure of their premises; prohibition of carrying out activities in the future; temporary decertification; judicial intervention; or dissolution of the company.
- The sanctions may be reduced by up to a third if, prior to the alleged act, there was a permanent control body in charge of verifying compliance with the Act.
- If, prior to the human rights violation, the company has a complete corporate social responsibility program and a due diligence control body, the corresponding sanctions may be waived or reduced.

Other
- Criminal liability: Companies found in violation may be legally pursued by the state under this Act. However, this does not preclude civil action from communities or other actors.
- State non-judicial mechanisms: The Act includes state non-judicial mechanisms, such as mediation.
- State consequences: If a company is found to be causing harm, it may present evidence that demonstrates that the State did not exercise its powers of supervision, or validated acts that constituted a violation of human rights, the State will be responsible for omission of the violation and the company can take legal action against the responsible authorities.
Facilitating Access to Justice
Civil Liability