Federal Decree No. 9,571/2018 has been drawing the attention of companies by assuming effective legal rules on liability for the chain of production. The decree stipulates the guidelines on human rights to be adopted by Brazilian and multinational companies of all sizes, in the context of their whole operation.

The regulation deserves attention in labor matters, since current norms and case law are based on the principles of promoting human rights and the dignity of the person for the protection of the worker, such as issues related to safety and occupational medicine, although there is divergence as to the existence of rules effectively based on a law governing corporate liability for the chain of production, as the decree presupposes.

In general, the text seeks to promote human rights in the business environment in compliance with the norms established in the Federal Constitution, infra-constitutional norms, and international conventions to which Brazil is a signatory.

The decree also proposes that companies adopt various measures to contribute to the defense of human rights, among which the following stand out:

  1. monitor respect for human rights in the chain of production linked to the company;
  2. adopt procedures to evaluate respect for human rights in the chain of production;
  3. identify the risks of impact and violation of human rights in the context of their operations;
  4. implement human rights education activities for all employees and partners; and
  5. provides courses, lectures, and evaluations to all employees and partners.

By directing companies to monitor their entire operation, including the chain of production, the decree stipulates that, necessarily, companies should be concerned with the defense of human rights not only within the scope of activities of their employees, but also in relation to all workers who contribute to the preparation of the product or provide it with a service, such as suppliers of raw materials or inputs.

Until then, the justification used by the bodies of control, notably the Labor Prosecutor’s Office, to impute corporate liability for the chain of production was based on principles, encompassing the Federal Constitution, international conventions, the Civil Code, and the Consumer Defense Code, among others. Since the publication of the decree, it is envisaged that, although companies may voluntarily comply with the guidelines provided, the Labor Prosecutor’s Office will begin to use it as a legal basis, and no longer a principle, for imputing liability for the chain of production.

Although the imputation of this liability based on a federal decree is questionable, companies must protect themselves and comply with the guidelines therein, since if the chain of production is not monitored and measures to control suppliers are not adopted, inevitably the company will be liable.

The decree alludes to the liability of companies for the chain of production in the provisions related (i) to the duty to monitor and respect human rights; (ii) identification of risks of impact and violation of human rights in the context of its operations; (iii) adoption of procedures to evaluate respect for human rights in the chain of production; and (iv) adoption of measures to prevent and remedy human rights violations in the chain of production.

To avoid imputation of liability, it is advisable to adopt some measures not only to highlight the company's concern with social responsibility, but also to strengthen its image in the market, especially in the current context of prominence of the compliance culture. Among them are the following:

  1. prepare a check list of the requirements to be fulfilled in contracting with suppliers;
  2. revise agreements for the provision of services with suppliers; and
  3. revise the current code of conduct to implement guidelines suggested by the decree.

As part of this effort to adopt measures to defend human rights and eliminate risks of violation, whether within the company or in the chain of production, we recommend not only preparing or revising internal policies (codes of conduct), but also investing in education on the subject (courses and training) and in supervision (mapping and auditing of partners).