It is also noteworthy that Peru has taken significant steps to implement due diligence standards. In this regard, in 2018 it adhered to the OECD Council Recommendation on Due Diligence Guidance for a RBC, which adds to previous accessions to the Council Recommendations on Due Diligence Guidance for the mining sector in 2011 and the textile and footwear sector in 2017.
In particular, the Due Diligence Guidance for a Responsible Business Conduct, published in 2018, in addition to having been agreed by governments, trade unions, companies, and civil society, seeks to promote a consensus on due diligence and also to help companies implement the due diligence recommendations contained in the Guiding Principles. – page 8
CHAPTER I: PROCESS OF ELABORATING THE FIRST NATIONAL ACTION PLAN ON BUSINESS AND HUMAN RIGHTS
Under the OECD Guidelines, the Peruvian NCP is tasked with promoting the Guidelines and related Due Diligence Guidance and handling cases related to potential non-compliance with the Guidelines by a multinational enterprise, through a non-judicial process of mediation and conciliation between the company and the affected parties referred to as “specific instances” (OECD, 2020b, p. 22). – page 12
CHAPTER II: THE BUSINESS AND HUMAN RIGHTS SITUATION IN PERU
Confiep has developed recommendations on the implementation of risk-based due diligence that targets these differentiated processes according to the size and activities of the company. These recommendations refer to the Due Diligence Guidance for a RBC (OECD, 2018) and follow the OECD framework for due diligence, although they are still challenged to include measures regarding remediation mechanisms (cf. OECD, 2020b, p. 23). – page 32
Private sector initiatives have also aimed at shifting towards risk-based approaches to RBC. In this context, mention should be made of the United Nations Global Compact in Peru, whose technical secretariat is provided by Confiep.16 Likewise, bilateral Chambers of Commerce -such as the Spanish Chamber of Commerce and the Nordic Chamber of Commerce- have provided specific support to promote the adoption of RBC practices by Peruvian companies through promotional events on due diligence (OECD, 2020b, p. 23). – page 33
CHAPTER III: DIAGNOSIS AND BASELINE: ACTION AREAS
3.1. General conclusions of the diagnosis and baseline
The State has established frameworks that protect human rights and that directly and indirectly encourage the adoption of business and human rights standards and RBC. However, the effective application of these provisions still presents important challenges that transcend the regulatory sphere, such as that advances in the regulation are implemented in an increasingly uniform manner and all business sectors so that due diligence is progressively and sustainably a practice exercised by the majority of companies. A survey applied by the OECD in the present process to identify the progress of the business sector in the implementation of due diligence mechanisms shows that several companies have developed a human rights policy, but that there is still a long way to go in the implementation in practice of due diligence processes in the universe of companies surveyed. – page 39
In general, both the State and the business sector have shown a firm commitment to incorporate into their activities the postulates of the Guiding Principles and other instruments promoted by the RBC through due diligence. However, these advances, mainly in the regulatory sphere, have yet to be clearly reflected in practice, which is associated with cross-cutting problems of various kinds. – page 40
3.2. Conclusions of the specific issues
(…) there is still a need for training on corporate due diligence, both in business activities and supply chains. Likewise, there is an acceptable level of knowledge on the Guiding Principles, but this needs to be reinforced for the remediation pillar.
Due diligence mechanisms
The findings of the diagnostics show across the board that an important aspect that needs to be incorporated in companies is the adoption of due diligence measures. The OECD (2021) survey22 reports that 43% of respondents require all first-tier suppliers and business partners to meet RBC expectations as part of a contract or agreement. 42% claim to always adopt an enhanced due diligence process when risks are identified in the supply chain and 25% conduct risk assessments beyond Tier 1 in the supply chain or on their products, raw materials, or services.
In this sense, the survey identifies significant progress in the installation of a culture of business and human rights, RBC, and due diligence actions within companies, but at the same time, just over 50% do not apply due diligence processes to risks in the supply chain. This shows the need for a strategic articulation between the State, civil society, and the business sector so that an increasing number of companies incorporate these measures into their activities, as well as strengthen their practical application. In this regard, 57% mentioned the need to receive training on due diligence tools, so that training and advisory services are needed in this area to enable their practical implementation at the operational level. – page 42
There are important practices from the business sector such as the implementation of the Working Committee for the Promotion of Women’s Empowerment in the Business Sector, as well as other initiatives in empowerment for leadership and business, promotion of incursion in traditionally male tasks, rankings, and seals that recognize companies that implement gender equality practices. One of the main demands from civil society is the establishment of a care system, which represents one of the main barriers to women’s equal access to work and other spaces. It is also important to mention that it is necessary to implement due diligence measures. – page 45
Indigenous peoples and prior consultation
(…) With respect to other matters related to indigenous or native peoples, business associations have made progress with respect to corporate due diligence on human rights, with a clear intercultural approach, such as mechanisms for complaints and social claims in accordance with the Guiding Principles, which provide for reporting on the rules of due diligence and respect for human rights to external stakeholders and disseminate it among their contractors. However, public policy does not provide sufficient information on compliance. – page 49
Mining is one of the most important economic activities in the country and, in recent years, due diligence mechanisms have been widely adopted for the formal mining sector. Progress has been made in the negotiation of land transactions due to the dialogue mechanisms and, therefore, it is essential to strengthening them considering the land-use planning policy. In addition, the prevention and management of the environmental impacts of mining activity require improvements, such as better quality information on socio-environmental baselines and strengthening the administrative and legal capacity of the competent environmental oversight entities. Progress has also been made in social conflict prevention mechanisms, although the creation and implementation of a national prevention system is still pending.
The distrust of certain sectors towards mining activity merits a public policy that considers actions to monitor the progress of the business sector in the implementation of due diligence mechanisms, as well as transparency, training and multi-stakeholder dialogue, and greater dissemination of progress. On the other hand, Peruvian legislation has made progress in dealing with environmental mining liabilities; however, problems persist in rehabilitating environmental liabilities generated by informal and illegal activity. Complaints of heavy metal contamination deserve timely attention, a good example being the work of the Temporary Multisectoral Commission on the matter. – page 50
Table 8: NAP strategic guidelines and objectives, and alignment with the axes of the Peru Vision 2050
Strategic guideline No. 2: Design of public protection policies to prevent human rights violations in the business environment. Objective No. 1: Promote regulatory actions to prevent human rights violations in the corporate sphere
Action: Evaluate, taking into account the progress achieved through the NAP in strengthening public policy on GP-RBC, a regulatory proposal on due diligence in the business sector.
Background: In order to progressively strengthen the public policy on Business and Human Rights, based on the incorporation of the RP and other international standards in national public policies, it is convenient to evaluate the relevance of a specific regulation of legal rank that regulates corporate due diligence, the same that has been adopted in other European and Latin American countries. This evaluation should take into account the progress made in the incorporation of standards through the NAP.
Indicator: Assessment report on a regulatory proposal on due diligence in the corporate sector (Action Indicator). – page 77
Objective No. 2: Technical assistance to companies for the observance of human rights in their business activities
Action: Create and implement, within the General Directorate of Human Rights, a program to provide technical assistance to the business sector, both private and public, in the implementation of due diligence mechanisms for GP- RBC.
Background: In order to promote the implementation of due diligence mechanisms for the GP- RBC and other international standards, MINJUSDH will create and implement a technical assistance program for the business sector, both private and public sector, large, medium, small and micro enterprises, according to international standards, the current national and international regulatory framework and good practices in Peru and other countries that can be replicated in the Peruvian context, taking into account, if necessary, the context of the health emergency due to Covid-19.
Indicator: A program created and implemented, and annual progress report (Action Indicator). – page 105
Action: Produce, in coordination with the business sector, organized civil society, the competent state sector, indigenous peoples, and trade unions, specific guides for the business sector for the implementation of due diligence mechanisms.
Background: With the purpose of implementing the principles of the GP-RBC, and adapted to specific business sectors, the MINJUSDH will produce specific guides for special protection groups and issues prioritized in the diagnosis and baseline and others to be prioritized, in order to implement due diligence mechanisms.
Indicator: Follow-up reports on the implementation of the guides (Action Indicator). – page 107
Action: Produce, in coordination with the business sector, organized civil society and the competent state sector, a guide aimed at the micro and small business sector to promote their formalization and, progressively, a culture of due diligence.
Background: The guide will specifically address the principles of GP-RBC in order to promote the formalization of micro and small enterprises and progressively implement a culture of due diligence, taking into account their peculiarities. The guide will be developed with the business sector and civil society, and its implementation and follow-up will be promoted.
Indicator: Due diligence guide for micro and small companies prepared, presented, and implemented. Follow-up reports on the implementation of the guide (Action Indicator). – page 107
Action: Incorporate due diligence mechanisms to guarantee a human rights approach in the activities of the business sector, specifically in consumer relations and advertising.
Background: The activities carried out by the business sector, specifically, consumer relations and advertising must take into account the human rights approach, with special emphasis on groups in need of special protection.
Indicator: Guidelines for suppliers, incorporating recommendations related to due diligence in respecting equality and non- discrimination in consumption and/or advertising (Action Indicator). – page 109
Action: Formulate and implement a guideline for the implementation of due diligence management mechanisms for the RBC, aimed at public companies.
Background: In order to guarantee the implementation of the GP-RBC approach in SOEs, and specifically, of operational due diligence mechanisms, it is necessary that FONAFE, in accordance with its steering role, and with the support of MINJUSDH and other competent bodies, formulate and disseminate guidelines for the incorporation of the aforementioned approach and due diligence mechanisms in SOEs.
Indicator: Policy formulation by portfolios (Action Indicator). – page 114
Action: Formulate and implement a follow- up, monitoring, and evaluation mechanism for the implementation of due diligence mechanisms in public companies.
Background: In order to strengthen the implementation of due diligence mechanisms in SOEs, FONAFE Corporation should also implement a follow-up, monitoring, and evaluation mechanism for the implementation of due diligence mechanisms in order to strengthen its oversight of SOEs.
Indicator: Mechanism for follow-up, monitoring, and evaluation of the implementation of due diligence mechanisms in public companies (Action Indicator). – page 115
Action: Adopt due diligence measures to avoid actual and potential risks of violations to the safety and health of workers.
Background: Adopt due diligence measures to ensure the prevention of situations of violation of the safety and health of workers in business activities that include risk map, index of hazards and risks), documents (internal regulations, records), or institutions (OSH committee) in the company.
Indicator: Number of members of the Occupational Health and Safety Committee in the companies (Action Indicator). – page 116
Action: Provide information and raise awareness on collective labor rights due diligence throughout the supply chain.
Background: There is a need to provide information and raise awareness on the adoption of due diligence measures for the respect of collective labor rights throughout the supply chain. This information should include small and medium-sized enterprises, as well as the context of the Covid-19 pandemic.
Indicator: Information booklet on due diligence measures for respecting collective labor rights throughout the supply chain (Action Indicator). – page 117
Action: Provide technical advice on the implementation of due diligence mechanisms within the framework of GP-RBC, with a focus on occupational safety and health.
Background: In order to promote the implementation of GP-RBC due diligence mechanisms, the MINJUSDH will provide technical assistance to the business sector according to international standards, the national and international regulatory framework in force, and good practices in Peru and other countries that can be replicated in the Peruvian context on issues of due diligence in occupational safety and health.
Indicator: Number of orientations provided (Action Indicator). – page 118
Objective 2: Establish mechanisms for companies to report on their human rights due diligence processes.
Action: To progressively create and implement a mechanism for follow- up, monitoring, and voluntary reporting of the corporate due diligence mechanisms implemented by trade unions and companies in the formal sector, with the participation of the business sector, civil society organizations, indigenous peoples, trade unions, and the competent state sector.
Background: In order to follow up and monitor the implementation of due diligence mechanisms by the business sector, MINJUSDH will progressively create and implement a state mechanism to receive voluntary reports from the business sector reflecting progress in this task.
Indicator: Follow-up and monitoring mechanism for the business sector due diligence mechanisms (Action Indicator). – page 124
Objective 3: Create and strengthen mechanisms at the operational level by companies to redress human rights violations in the corporate sphere.
Action: Create and implement a follow-up and monitoring mechanism for corporate due diligence related to reparations, which are implemented by trade unions and companies in the formal sector, with the participation of the business sector, civil society organizations, indigenous peoples, Andean and Amazonian peoples, trade unions and the relevant state sector.
Background: Businesses should diligently manage complaints and/or claims received from people with disabilities and senior citizens who consider themselves affected by the adverse impacts of business activities, ensuring due process of their complaints and implementing sanctions and redress mechanisms, as appropriate. This action, with emphasis on reparation mechanisms, is implemented within the framework of Action 87.
Indicator: Follow-up and monitoring mechanism for the business sector due diligence mechanisms. – page 125
Action: Produce, in coordination with the business sector, organized civil society, the competent state sector, indigenous or native peoples, Andean and Amazonian peoples, and trade unions, specific guidelines for the business sector for the implementation of due diligence mechanisms that provide comprehensive reparation.
Background: In order to reflect the principles of PR-CER, and adapted to specific business sectors, MINJUSDH will produce specific guides for the groups of species and issues prioritized in the diagnosis and baseline and others to be prioritized, in order to implement due diligence mechanisms.
Indicator: Preparation and public presentation of the guides. – page 125