Everybody knows public procurement accounts for a significant part of the global economy. In Latin America, it represents an average of 6% of GDP and 17.4% of public spending. But do we know what is the progress and the gaps of procurement laws and policies in relation to human rights in that region?
Our Early Stage Researcher Laura Treviño-Lozano contributed to the Information Note released in May 2022 titled “Integrating Human Rights in Public Procurement: A focus on Latin America and the Caribbean” through which the UN Working Group on Business and Human Rights (UNGW) answers this question with a particular focus in Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama and Peru.
This note unpacks the duty to respect, protect and fulfil human rights in the context of public procurement. Besides, it develops the current legal and policy progress of human rights in procurement in Latin America and offers recommendations to public buyers, state suppliers, National Human Rights Institutions and Civil Society Organizations to advance on human rights respect across government’s supply chains.
The UNWG refers to “human rights-based procurement” which relates to the tripartite obligations of states to respect, protect and fulfil human rights.
The duty to respect entails public buyers’ abstention from interfering with the enjoyment of human rights through procurement activities, and orient contracts to prevent human rights violations in the future. For example, by refraining to include obligations for the supplier, like a tight delivery date, that could involve forced overtime of its workers.
The duty to protect, instead, involves the ways in which states can prevent and redress negative impacts on human rights of rights-holders in the supply chain. For example, preventing child labour in direct suppliers and subcontractors in lower tiers of the supply chain involved in manufacturing purchased goods.
The duty to fulfil includes the ways in which states can facilitate, promote or provide for human rights enjoyment in the supply chain. For example, by favouring in the procurement process businesses which support, employ or are owned by groups at risks of vulnerability and marginalization like people with disabilities or women-owned enterprises. This is related to the ways in which states can pursue further positive social impacts through their acquisitions.
To respect and protect human rights, states should:
1. Incorporate specific actions on public procurement in the National Action Plans on Business and Human Rights (NAPS)
- Chile’s NAP includes an “integrity agreement clause” in which suppliers are obliged to respect human rights and the promotion of the use of a “women business certificate”.
- Colombia’s first NAP included the development of a Guideline on Socially Responsible Public Procurement that includes human rights-based awarding criteria, including human rights due diligence.
- Peru’s NAP explicitly includes undertaking measures to prevent public procurement with businesses that commit severe human rights abuses like child and forced labour.
2. Include voluntary but also mandatory legal requirements that request suppliers to conduct human rights due diligence (HRDD) to identify, mitigate, follow up and disclose potential and real human rights impacts that their operations can cause on human rights.
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Few countries in Latin America have included HRDD requirements for risk identification by suppliers. Some cover all human rights at risk, for example, Colombia through its Guideline for Socially Responsible Public Procurement. Others are focused only on labour rights, for example, Chile establishes in its legal framework as an admissibility criterion that applicants should present evidence of a “labour risks management programme” that complies with legal provisions regulating such risks including the National Policy of Health and Security in the Workplace. However, there are developments on mandatory requisites for suppliers regarding corruption and integrity which can be used as models for HRDD requirements.
3. Exclude, select and reward bidders or suppliers based on the latter’s responsible business conduct. States should consider cascading human rights or social criteria and requirements further down in lower tiers of their supply chains.
- Exclusion: Argentina bans businesses listed in the Public Registry of Employers with Labour Sanctions from participating in public procurement processes during the time they remain in such registry. Likewise, Brazil excludes those sentenced in court for child or forced labour in the five previous years.
- Selection: Costa Rica requests bidders to include in their offers disaggregated costs of workforce, the number and type of workers and the working hours to accomplish the contract’s objective. Similarly, Chile requests them to provide evidence of how many workers will be undertaking the contract so that their working hours and overtime is under the legal limits. Furthermore, Chilean legislation includes conditions of employment and remuneration as a technical criterion in the procurement process.
- Reward: Peru gives additional points to bidders that comply with certain environmental and social criteria a like a certification that combats women discrimination and violence in the workplace. Chile also gives higher score to bidders that provide evidence of better employment conditions and remunerations than the minimum mandated by the law.
4. Conduct human rights risk assessments to ensure respect for human rights in its purchase chain. Contrary to “traditional” risk assessments through which states identify risks for themselves or suppliers, this assessment is to identify and act on risks to individuals and the environment that can derive from the public contract with a focus on groups that can suffer disproportionate impacts like indigenous peoples, LGBTIQ+ and women.
States in the region have focused on identifying integrity and environmental sustainability risks and to a less extent risks associated with human rights abuse. For example, Chile, through Chilecompra, and Peru, through the National Anti-Bribery System, have strengthened transparency and combat corruption, whereas Costa Rica’s Specific System of Risk Assessment manages institutional risks only.
5. Incorporate human rights requirements into policies governing framework agreements, including undertaking a human rights due diligence by suppliers.
Costa Rica has included voluntary sustainable criteria in framework agreements in particular sectors like cleaning and construction materials.
6. Provide or facilitate remediation in case of human rights abuses across the public procurement chain, including creating or improving grievance mechanisms in line with the UNGPs. The National Human Rights Institutions and OECD National Contact Points play critical roles in the range of human rights that can be violated throughout procurement cycles.
Mexico’s NHRI addressed discrimination against persons with disabilities and older persons by contractors in providing public transport services. Other countries have made progress in setting out complaint mechanisms, but they mostly address issues related to transparency, integrity and corruption in procurement like Chile’s Observatory Chile Compra, Ecuador’s National Service of Public Procurement and Colombia’s System of Requests, Complaints, Claims, Suggestions and Reports.
The UNGW stressed these mechanisms should include in addition to transparency and corruption issues, all suppliers-related human rights abuses that could have been caused, contributed or are linked to public contracts. Also, to promote through public procurement the existence of operational-level grievance mechanisms created and managed by businesses, which have had so far little development in the regulatory and policy framework in the region.
7. Ensure human rights and public procurement policy coherence. To that end, the UNWG suggest setting human rights as a procurement objective; mainstream human rights in policies on sustainable public procurement; establish effective inter-institutional coordination between all involved public bodies; and support effective implementation of human rights-based procurement with practical tools and operational guidelines.
Public procurement’s aim in the region has been economically based, focused on competition, value for money, transparency, technology, innovation and integrity. Sustainable consumption and production policies have poorly integrated human rights. Besides, National Programmes on Sustainable Consumption and Production (SCP) aiming to deliver on SDG12.7 of the Agenda 2030 have been often detached from human rights policies like National Action Plans on Business and Human Rights (NAPs) and oriented to the achievement of environmental-only goals. Countries have inter-institutional committees to facilitate or monitor the implementation of both SCP and NAP policies, which would need effective communication and coordination. They have further developed specific guidelines for implementing public buyers’ duty to protect human rights and supplier’s responsibility to respect them like Chile’s Directive 13 and 31, Colombia’s Guideline on Socially Responsible Public Procurement, and Costa Rica’s Guide of Social Criteria and Procurement.
To fulfil human rights, states can:
8. Favour businesses that support, employ or are owned by vulnerable groups like small farmers, ethnic groups, people with disabilities, long-term unemployed and former convicts.
- People with disabilities’ rights have been facilitated in Argentina, Brazil, Chile, Colombia, Mexico and Peru through assessment criteria that favour bidders that have employed a certain number of them within their workforce.
- Women’s rights have been facilitated in Brazil, Chile and Mexico through assessment criteria that request a minimum percentage of the workforce for the execution of a contract to be women, through providing additional points to bidders that have gender equality policies.
- Peasants and marginalized urban groups and MSMEs have been favoured in Mexico and Brazil by enabling direct award of contracts to them under certain conditions.
Finally, the UNWG highlights the importance and need of human-rights related transparency and open data in public procurement; of human rights lens in emergency procurement; and of multi-stakeholder participation in the entire lifecycle of the procurement process, from its early design to the execution and monitoring stages. In the latter, human rights impact assessments and HRDD for suppliers are essential.
Overall, this note informs about human rights integration into public procurement policy and legal frameworks in Latin America, but also current gaps that countries are experiencing, and the ways to cover them. It further brings into the light the ways in which social sustainability is making progress in developing countries, from which developed countries should learn. Particularly regions like Europe that have put many efforts and resources into sustainable public procurement initiatives that are still missing the link with human rights, notably the EU public procurement directives 2014.
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