International Network of Human Rights | Europe
Réseau International des Droits Humains | Europe
Red Internacional de Derechos Humanos | Europa

Due diligence and corporate social responsibility in Latin America

What is corporate due diligence?

Our contemporary societies are demanding economic development and business investment, driven by finance, industry and international trade to drain natural resources ever further.

Therefore, even if growth is attributable to human development, it is necessary to impose due diligence on companies to ensure that their activities go hand in hand with the protection of human rights, decent work, the climate and the environment.

Due diligence enables companies to manage their internal and external risks, but also to guarantee sustainable and responsible commercial behaviour throughout the supply chain. Due diligence is encouraged by the OECD and the United Nations, which in 2011 promulgated the Guiding Principles on Business and Human Rights. This voluntary process allows companies to identify, prevent and mitigate actual or potential negative impacts of their activities on human rights, and to report on how they are addressing them.

However, the principles proposed to date are non-binding and insufficient to ensure full respect of the issues they address and build green and equitable economic growth. This approach was reviewed in February 2022 by the European Commission, which inaugurated the first legal framework obliging European companies to guarantee justice and sustainability.

The latin America Context

The European Union is the third-largest trading partner and the largest investor in Latin America and the Caribbean. As such, the institutions have defined their political and economic commitments with the region based on human rights, the rule of law, and sustainability. Although these principles govern relations between the two regions, these values are often subordinated to European companies’ commercial interests or investments, since they are based on voluntary principles.

However, binding principles and sanctions for corporate violations should be put in place to protect the ecosystem of Latin America and the Caribbean, but also to protect environmental defenders and indigenous communities.

Indeed, the region is considered to be the most dangerous part of the world for human rights and indigenous environmental defenders, with an increase in homicides. These communities are essential to guaranteeing respect for the environment and are not protected by any European treaty. Yet their role and expertise are fundamental and consultations must be put in place considering their culture, conception of development and self-determination.

These defenders of the environment are active on the ground, defending daily the populations affected by the activities of multinationals operating, for the most part, in the extractive, agri-food, and hydroelectric sectors. The role of these defenders is to monitor and ensure that the companies’ efforts are effective.

The priorities of RIDHE

  • Advocacy for the application of rules on prevention, monitoring, consultation and compensation for damage caused by certain European investments to local populations.
  • Support for European policies on standards and good practice in corporate responsibility and transparency.
  • Advocacy for equitable relations between the EU and Latin America on green and equitable growth.
  • Participation in intergovernmental working groups to draft and approve an international treaty between multinational companies and human rights.
  • Advocacy for a binding legal framework urging transnational companies to behave sustainably and responsibly throughout the supply chain.