It is a real fact that globalization has allowed changes within companies. After the Second World War, with the reordering of forces in international society, the dominance of nation-states as the principal actor in international relations (within the framework of Public International Law) was consolidated, which was called the state-centric vision. For this reason, during that period, companies as such did not participate in that sphere in which only States acted. Thus, in the 1970s, transnationalist theories became more pronounced, attempting to create a new paradigm in order to insert new social actors into that global sphere, that is, transnational companies. In this way, these companies began creating their own self-regulation in the construction of the production network, not at the local level but beyond the borders of the nation-state. The rules created by international organizations at that time (OECD and ILO) were characterized as soft law rules (without binding legal force) and with a strong content on Corporate Social Responsibility (hereinafter CSR) vis-à-vis the different interest groups or stakeholders, taking into account the risks of that time.
From the approval of the Green Paper in 2001 by the European Commission on CSR to Directive 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence, 25 years passed during which a somewhat timid path toward corporate responsibility in human rights matters through risk prevention could be discerned, influenced by the approval of the United Nations Guiding Principles in 2011. Although it should be remembered that, under Public International Law, responsibility lies with States, which are charged with the obligations to protect, respect, and guarantee the protection of the human rights of persons under their jurisdiction and, moreover, are the only entities with legal personality at the international level. This means that companies are not bound in relation to non-compliance in the international sphere properly so called.
The United Nations Guiding Principles have made it possible to begin a new conception of the responsibility of non-state actors, such as companies, through the Protect, Respect and Remedy Framework, founded on three basic principles. “The first is the State’s duty to protect against human rights abuses by third parties, including business enterprises, through appropriate measures, regulation, and access to justice. The second is the responsibility of companies to respect human rights, which means acting with due diligence so as not to violate the rights of third parties, and to remedy the adverse consequences of their activities. The third is the need to improve victims’ access to effective remedies, both judicial and non-judicial.”
One notable aspect of the Guiding Principles was the reintroduction of the concept of Due Diligence (key to the protection of human rights) and placing it back on the international agenda, especially on the agendas of the United Nations and the European Union, for the promotion, development, and respect of human rights. This is why many international instruments have been updated to include it, as is the case of the ILO, which introduced the concept of due diligence into the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, which generally refers to the Guiding Principles in 2017. Likewise, the OECD did so through the Due Diligence Guidance for Responsible Business Conduct of 2018. These form part of the core of soft law rules regarding corporate responsibility.
Under the concept of due diligence and, in practical terms, for companies from the standpoint of labor risks, companies are now required to have efficient and effective mechanisms for the identification and prevention of such risks.
Therefore, from the recruitment and selection process of candidates to fill a job position, the company must be clear about what risks could affect them, and for that reason it must avoid incurring in acts of discrimination by the person responsible for personnel selection or the application of bias through the use of artificial intelligence in this process. However, this is not the only stage; similar precautions must also be taken in defining hiring conditions, promotions and advancement, performance evaluations, improvement plans, termination of the employment relationship, etc. Always bearing in mind that the ideal approach is proactive, that is, to assess risks before events occur and not afterward. This conception makes it possible to strengthen corporate culture and demonstrate, step by step, the timeline of how the company acted, an aspect that is relevant and essential when it comes to clarifying any conflict that may arise within the company or before the courts of justice.
At Bufete Godínez & Asociados, we can help you:
- Design a Due Diligence policy for labor relations.
- Identify risks in each of the processes managed by the Human Resources area in relation to employees.
- Train Senior Management on the importance of Due Diligence in the company.
At Bufete Godínez & Asociados, specialists in Labor and Employment Law in Costa Rica, we help companies implement labor due diligence processes to prevent risks, strengthen compliance, and reduce contingencies.
We provide advice on recruitment, hiring, promotions, performance evaluations, employment terminations, and internal policies, with a preventive approach aimed at avoiding discrimination, bias, and labor disputes.
Protect your company with practical solutions in labor risk management. Click here to learn more and schedule a consultation with our professionals.
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