BRAZIL Law and Practice Contributed by: Thaís Vasconcellos de Sá, Bermudes Advogados
case such matter escalates. These action plans that deal with the consequences of a crisis and its risk/escalation should further complement risk mitigation measures, which should also be structured as part of the overall enterprise risk management and be tailor-made to each spe- cific risk. 4.4 Crisis Simulation Companies should also consider including simu- lation exercises as part of their enterprise risk management efforts, and they usually do so. In certain situations, the regulatory provisions in Brazil require such simulations – for example, in the case of risks associated with tailings dams, where regulators impose on the structure’s owner/operator the obligation to promote simu- lations with the population located downstream of the dam, in co-ordination with local authori- ties (the Civil Defence). Other risks associated with industrial activities should also be subject to simulations for evacuation or other accidents, and the employees in such facilities should also receive appropriate simulation training. Simulations of Potential Market/Regulatory/ Political Crises Apart from simulations of risks associated with their activities, companies should consider pro- moting simulations for potential market crises deriving from extreme adverse climate events (such as flooding) that might disrupt the com- pany’s activities, as well as for other regulatory/ political risk changes in the market according to the scenario in the relevant regions and/or countries. More general simulations would typically involve adopting the pre-mapped necessary measures to minimise disruption to a company’s activities should such risks materialise, and implementing
the company’s overall immediate action plan for a crisis. 4.5 Training Training and simulations related to the materi- alisation of risks associated with the position and/or industrial location where the employee will perform their activities should be part of that employee’s overall training when starting in that position. Participation in such training and simu- lations should be mandatory and controlled by the company, via its human resources depart- ment. Simulations and training of more general risks to which the company is subject (such as regu- latory alterations, sanctions and other impacts deriving from political factors) should be con- sidered and implemented – also as mandato- ry – for the employees and executives whose roles are relevant to the response efforts should such risks materialise (again at the behest of the human resources department). Engaging external consultants with expertise in responding to specific risks (particularly when discussing risks associated with technical/ industrial activities) and with expertise in overall crisis response to develop and implement the training and simulation plans will help ensure In Brazil, crisis management practices have developed considerably over the past few years. Several companies have begun to structure more robust crisis management procedures (including developing measures and plans for preventing or responding to crises) as part of their internal policies, and that is an important step towards stronger governance structure and practice. their adequacy and completeness. 4.6 Policies and Procedures
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