Business and Human Rights in the New Chilean Constitution? Implications for Chile and Latin America

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It is a pleasure to welcome Moisés Montiel Mogollón and Salvador Herencia-Carrasco to Rights as Usual. Moisés Montiel Mogollón (@MoisesMontielM) is an adjunct professor of International Law at Universidad Iberoamericana and Universidad Panamericana in Mexico and Managing Partner at Lotus Soluciones Legales. Salvador Herencia-Carrasco (@Sherencia77) is the Director of the Human Rights Clinic, HRREC and part-time professor at the Section de Droit Civil at the University of Ottawa. This post is theirs.

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In July 2021, a democratically elected Constitutional Assembly was sworn in Chile. The mandate is to draft a new Constitution to replace the 1980 text adopted under the Pinochet regime. To enter into force, the new Constitution must be approved via referendum, which should take place in the second half of 2022.

Since the Constitutional Assembly began its work, both constituents and the public have tabled proposals of norms to be included in the new Constitutional text. In December 2021, eight members of Chile’s Constitutional Assembly introduced a bill to include a Business & Human Rights (BHR) article in the new Constitution. The proposal seeks to address a high number of socioenvironmental conflicts caused by transnational corporations (TNCs) as well as breaches to privacy caused by the growing control of information and communication technology services by private businesses (paras. 3 and 4).

The bill was made public in January through the social media accounts of Mr. Gaspar Domínguez, the new Vice-President of the Chilean Constitutional Assembly and a co-sponsor of the bill. If approved, this article would raise to a constitutional level the obligations of businesses to respect human rights and the environment and to prevent, mitigate, and remedy the human rights and environmental impacts of their activities on individuals and communities. The proposal states the following:

 “Duties of Businesses. Businesses must respect fundamental rights and prevent, mitigate, and remedy any activities that bring about negative consequences on the full enjoyment of human rights.”

To our understanding, this is the first bill that seeks to include in a Constitution a norm that mirrors the core principles of the UN Guiding Principles on Business and Human Rights (UNGPs). Irrespective of the bill’s outcome, the proposal should be celebrated as an important precedent as it brings the BHR discussion to a Constitutional level. The purpose of this post is to present the bill and explain why it makes sense in the Chilean context, and to explore what this development could mean for Chile’s and Latin American Constitutional law, and particularly for public interest litigation.

BHR legislation in Chile and Latin America: Not much to celebrate

Almost 11 years since the adoption of the UNGPs, no Latin American country has adopted specific BHR legislation. Moreover, only Colombia, Chile and Peru have adopted a National Action Plan (NAP), while Mexico has included a chapter on BHR in its current National Human Rights Plan. In a region with multiple BHR problems related to extractive industries, precarious labour conditions, lack of access to effective legal remedies and attacks on environmental defenders and Indigenous leaders, the situation is rather bleak.

To justify their proposed bill, constituents argue that, despite having had a NAP since 2017, its impact has been minimal (para. 7). In addition, the Chilean Executive has not adopted any legislation implementing the UNGPs and no significant change in environmental, labour, natural resources or Indigenous Peoples regulations have been made (para. 8). The proposal makes specific reference to the UNGPs to ensure that companies operating in the country, particularly TNCs, adopt a responsible business conduct and can be held accountable if they do not (paras. 9-13).

The proposal rests on three main ideas: (i) the growing influence of private actors in strategic sectors of the economy, like mining; (ii) the increasing involvement of the private sector to provide public goods such as health and education; and (iii) the lack of regulations from the government to ensure that business activities do not have a negative impact on human rights and the environment.

For the constituents, including this article in the new Constitution would contribute to achieve a “socially sustainable globalization” (para. 5), while focusing on the need to establish due diligence processes by private and public businesses (para. 13).

 Why Chile? Because “No son 30 pesos, son 30 años”.

In 2016, Chileans protested against the privatization of education, including higher education. Chile has been one of the leading economies in Latin America and it remains a model for the region, but the cut in public spending and the mercantilization of public goods has had adverse impact, mainly on low-income families and vulnerable groups like Indigenous Peoples. In October 2019, the increase of 30 pesos (approximately 40 USD cents at the time) in public transportation fees was the spark that ignited nation-wide protests and resulted in the call for a Constitutional Assembly to broaden the social scope of State activity.

Chile suffers from massive disparities in terms of income, wealth, and well-being. Chile only allocates 11.4% of its GDP to social programs. The only OECD country with a lower allocation is Mexico (7.5% of the GDP), while the average social spending in the OECD is 20%. At the same time, Chile’s combined corporate income rate is one of the lowest of the OECD countries, with an average of 10%.

Recently this blog published a post about the case of Martina Vera that went to the Inter-American Court of Human Rights (IACtHR). Martina is a teenage girl with serious disabilities. Her family hired a private health insurance policy (ISAPRE) to keep her alive. The ISAPRE unilaterally cancelled her policy because of the costs incurred, putting her life at severe risk. The story is more than one about the horrific actions of a cut-throat business. It is about how the laws in force at the time allowed such behavior from private businesses. Stories like Martina’s happen almost daily in Chile (and other countries in Latin America), affecting those that need quality public services the most. Therefore these protests were not just about 30 pesos, but about 30 years of economic growth with indifference and without adequate social safety nets, including BHR regulations.

The Constitutional Authority Argument: An opportunity for Latin America

When it comes to BHR standards at the international level, a problem is that the UNGPs are not legally binding and do not generate new international state obligations. Despite the ongoing negotiation for a BHR treaty, and significant advances in this process (see new draft), there are no legally binding instruments in the field. In the Latin American context, the case law of the IACtHR has contributed to link the UNGPs with the American Convention on Human Rights but that is not enough to usher in necessary legal and policy changes in the continent. That is why the Chilean constitutional proposal is a formidable step. It would create a truly binding UNGPs-inspired norm and elevate the UNGPs from mere soft law to constitutional law.

Including the UNGPs’ language in the Constitution would oblige the state to adopt the necessary measures to prevent, and to protect against, the potential negative human rights’ impacts of businesses (by way of regulation) and have them honor their duties to respect, prevent, mitigate and remedy. In Latin American constitutional tradition, a hierarchical norm of this kind should guarantee the adoption of specific laws, policies and recourse measures.

If adopted, such norm could have a triggering effect in the region. Since the 1990s, Latin American Constitutionalism has developed a rich synergy in the recognition of rights and the adoption of Constitutional recourses like the amparo or tutela (this is a recourse that seeks the protection of fundamental rights not related to personal freedom). In addition to the case law of the IACTHR, it is now a common practice to see Constitutional Courts and Supreme Courts using standards and decisions from other Latin American courts to decide on similar matters. This Ius Constitutionale Commune is a rich tradition that has also had a significant impact on the case law of the IACtHR. Therefore, the adoption of a Constitutional norm on BHR could have a spill-over effect in other Latin American countries, particularly through public interest litigation.

Additionally, should other States follow suit, this norm could signal the emergence of a new customary rule building on the three pillars of the UNGPs, at least at the regional level. Although a new rule of customary law would require general practice and opinio juris and is a long way off, the inclusion of a constitutional level BHR rule would be a precedent too big to ignore in Latin America. The UN International Law Commission in its 2018 Draft Proposal on Identification of Customary International Law attributes significant weight to the inclusion of norms in domestic legislation. After all, what better evidence is there of a norm being “accepted as law” as per the formulation in Article 38 of the ICJ Statute, than its inclusion in domestic legal systems, especially at the constitutional level.

Keeping an eye on the Horizon

The Constitutional Assembly is now deliberating on the text. Constituents have until July 2022 to finalize a proposal and 60 days later, Chileans will have to vote in favour or against the new Constitution by referendum. The new government, led by Mr. Gabriel Boric, will assume office in March 2022, and was elected on a platform of social change. In this context, his party is likely to approve a BHR norm and its corresponding implementing legislation. That said, by no means is this a done deal and it remains to be seen whether the proposed bill will make it into the new Chilean Constitution. If it does, it will probably translate into more responsible business practices and diminish negative impacts on the human rights of Chileans, perhaps bringing about a slightly less unequal society where people come closer to owning their rights. If that is the case, this BHR rule will likely become a banner of a new, responsible, and socially-mindful business paradigm that addresses the prominent root causes that the constitutional renewal.

One thing is clear, in a context of great social inequality, adding a BHR norm to the new Constitution makes sense. If successful, this initiative holds tremendous potential. It could spark a regional conversation on BHR standards beyond the IACtHR. The international normative implications of such a dialogue could very well turn Latin America into a stronghold for the UNGPs and the BHR movement.