CHILE Trends and Developments Contributed by: Joaquin Schafër, VGC Abogados
Corporate Sustainability in Chile: Human Rights Due Diligence Sustainability as a model of business and eco - nomic integration has been promoted for dec - ades, and has recently gained some momentum, with companies being required to integrate the three key aspects into their activities: economic, environmental and social. It is no longer enough for companies to merely comply with the regula - tory framework of the places where they oper - ate; they are now compelled to integrate envi - ronmental protection and respect for human rights into their activities. While human rights in business were once pro - moted as voluntary standards or non-enforce - able initiatives, the legal framework has now changed. Both international organisations and certain states, mainly in Europe, have enacted various regulations that directly oblige compa - nies to identify, mitigate and remedy their nega - tive impacts on human rights. These impacts include both direct and indirect effects, as well as those coming from business partners and supply chains. Although this discussion seemed distant for the Chilean legal industry, the reality is that these obligations are already present, main - ly through contracts. Likewise, different bills are currently being discussed in the National Con - gress that seek to establish the same obliga - tion of due diligence in human rights for Chilean companies. In consideration of the above, this article will first outline the international and comparative legal experience on business and human rights, before identifying the main advances that Chile has made in this area and noting the current and future changes that will be experienced, as well as the regulatory risks involved. Finally, considering the debate and possible regulatory changes, some recommendations will be pro -
posed for companies to reaffirm their commit - ment to sustainability. Business and human rights: familiar debates with new solutions The idea of holding companies accountable for negative human rights impacts is a long-stand - ing debate in international law. Since the 1970s, there have been attempts to enact codes of con - duct on the subject, with varying degrees of suc - cess. Undoubtedly, the greatest consensus was achieved in 2011, when the United Nations (UN) enacted the Guiding Principles on Business and Human Rights (UNGPs). While this instrument is not an international treaty, it is the standard of reference and launched the concept of human rights due diligence (HRDD). Broadly speaking, due diligence requires corpo - rations to undertake the following activities: • issue a policy commitment; • identify and mitigate the negative impacts of their activities on human rights; • have grievance mechanisms in place; • make their impacts transparent; and • in case of breach, to remedy and compensate the victims. One may also note that the obligation to imple - ment HRDD has been highlighted by interna - tional courts – eg, the Inter-American Court of Human Rights (IACtHR). For example, in the case of Inhabitants of La Oroya v Perú, the IACtHR ordered the state to ensure that a mining company complies with the UNGPs throughout its projects. In the face of ongoing international debate and questions about the enforceability of their standards, some states have enacted laws that directly require their companies to implement
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