Recommendations from the perspective of social responsibility in a pandemic context.
The new dynamics and challenges imposed by the current pandemic scenario highlight the importance of partnerships and require collective actions by all sectors of the society, in order to ensure the preservation of the population’s health, without violating human rights and keeping transparency and integrity as reference points. In considering such reality, this Recommendation Guide orient how companies may respond to the challenges imposed, overcome this moment and think of a responsible and sustainable recovery process.
The Guide is intended to all companies. It provides recommendations based on corporate social responsibility in order to facilitate the decision-making process and the implementation of effective responses. The recommendations must be evaluated and followed in accordance with the characteristics and needs of each organization (such as size, maturity level and area of expertise) so that it can exercise its responsibility and support as much as possible mitigation strategies of the adverse impacts of the virus in the society.
We appreciate the contributions made by the team of Mattos Filho, Veiga Filho, Marrey Jr and Quiroga Advogados in the discussions and in the process of building part of the content related to the interactions between companies and public agencies.
The logic of an integrated approach between the Human Rights and Anti-Corruption agendas assumes that controls and monitoring mechanism must exist in order to strengthen the fundamental rights of the individuals. Corruption lengthen the humanitarian crises, increases its social and economic costs and may result in the loss of fundamental rights. The bonds between corruption and abuses of human rights suggest that there should be more coherence in both fields, both in prevention and combat.
The companies need to develop non-discriminatory practices that respect human dignity and that provide transparency to their actions. The point is that it is possible to fully address the social responsibility framework, through transversal agendas.
The companies must at all times seek to contribute towards the sustainable development, particularly in the revenue-generating communities in which they operate. They must be aware of the different transversal challenges and take them into consideration in their responses.
The social and economic consequences are unfair and affect more adversely the population in worse conditions.
The absence of support by the companies and the government put householders in a situation of vulnerability, particularly in a scenario that requires more precautions.
Social distancing increases the weight of the housework, which in majority falls upon women.
With social distancing, there is a concern with an increased risk of school dropout due to the lack of structure to “keep up with” distance learning classes.
With social distancing, there is a concern with an increase in domestic violence, sexual violence and feminicide.1
In general, women are in charge of taking care of sick people and the elderly.
Temporary workers and workers from the informal economy economically suffer in a disproportional manner, due to the loss of their job/employment.
The majority of healthcare professionals are women and, since this is an essential service, they are exposed to risk.
The gender pay gap between men and women holding the same office and/or the same educational degree are exacerbated in virtue of the current economic destabilization and reduction of working hours.
Entrepreneurs and small and medium-sized enterprises do not have sufficient reserves to maintain their business during the pandemic, which implies the decrease of the family income and put them into economic situations that may entail irreparable damages. The context escalates as the racial and gender approach is applied.2
The social and economic inequalities and the precarious access to healthcare services are the main factors putting black people3 into a higher status of vulnerability4 and entails high mortality rates for coronavirus.
The non-operation of support services (such as specialized healthcare), shelters and social welfare is a concern, since such services are fundamental for the protection of the LGBTQ+ community.5
Increased vulnerabilities to which disabled people, homeless people, prison population, indigenous and quilombola communities are subject.
The inequality regarding the access to information becomes much more evident, increasing the level of vulnerability and unawareness of a significant portion of the society.
Micro and small-sized companies are responsible for the majority of formal job openings in Brazil (75%6), which are directly attained by the current economic destabilization.
Murders of women due to their gender are conceptualized as feminicide, classified as a heinous crime and included as aggravated homicide (Brazilian Penal Code).
“Black female entrepreneurs: 79% do not have any reserves to counter the isolation” – Source: Agência Brasil – Accessed on May 12, 2020.
Black people are more exposed to the risks due to the higher rate of use of public transportation, higher number of people per residence, absence of basic sanitation and exposure to jobs which require physical presence and, often, do not provide protection, benefits or assured benefits.
“The impact of institutional racism onto the Covid-19 deaths” – Source: Nexo Jornal – Accessed on May 12, 2020.
“Research maps Covid-19 and social distancing impacts on the LGBTQ+ community” – Source: Observatório (UOL) – Accessed on May 12, 2020.
“Brazilian Support Service to Micro- and Small-Sized Companies” – Source: Sebrae – Accessed on May 17, 2020.
The corporate governance mechanisms are currently challenged amid this emergency period. Principles and good practices of corporate governance in the current scenario are essential in order to influence the improvement of decision-making processes and an effective leadership. Basic principles of corporate governance must guide deliberations and actions of partners, administrators and managers:
The period of social isolation coincided with the timing of general assemblies of different types of organizations (joint stock companies, limited liability companies, cooperatives, associations, foundations, trade unions, among others) for purposes of approving accounts and electing managers. Upon the enactment of the Provisional Decree No. 931/2020 the companies were authorized to postpone their general assemblies to October or to hold them through entirely digital methods, in order to respect the guidelines of the public health authorities and the integrity of stakeholders, employees and external audiences.
The transparency level of the companies shows their commitment with the society and their social responsibility and promotes trust-building in their relationships. People are increasingly valuing companies that act in line with values and causes with which they identify themselves. Providing clarity and visibility on important information, such as the decisions made by the company during the pandemic, enables a healthier connection with its business partners and/or consumers and facilitates the follow-up and monitoring of its activities. The transparency is important both for the internal and external audience.
The compliance programs of the companies are challenged amid the crisis. A number of companies are seeking to reduce costs and cut procedures, which implies an increased risk of compromising integrity, ethics and transparency standards. In addition, the changes of procedures for adjustment to emergency demands also imply new challenges for their integrity programs.
Globally, it is estimated that about 10% to 25% of the resources disbursed in public procurements are lost to corruption.1 At this time of crisis, the relaxation of the rules to execute public contracts increases the risk of corruption and the involvement of companies in questionable contracting processes. In this context, the contracted companies must ensure that their activity preserves the integrity of the process and should cooperate with the monitoring and inspection activities of the emergency expenditures.
The companies may use as reference the items set forth in art. 4, Paragraph 2 of the Law No. 13.979/2020, regarding transparency relating to contracts executed in the scenario of exception.
Donation1 is an important instrument of corporate social responsibility for purposes of combating humanitarian, social and economic crises. Under extraordinary circumstances as the current pandemic, it is natural that the companies seek to exercise its social role through donations of financial resources and goods. At this time of crisis, in which urgency and agility are fundamental, traditional anti-corruption measures may not be sufficient to prevent donations from being used to obtain undue advantages or to prevent future damages to the society.
Conexões Covid-Radar Platform – Accessed on May 29, 2020.
The purpose of the “Monitor de Doações Covid 19” platform is to consolidate and be aware of the numbers of donations made in virtue of the coronavirus pandemic, promote them and inspire even more donations. The update is made by the Brazilian Association of Fundraisers with public data or information submitted to the team. Accessed May 12, 2020.
Frauds can be understood as forgery, tampering, omission or (intentional) non-registration of information about the financial/equity situation of the company (assets, revenues, expenses, debts). In a delicate scenario as the current one, it is fundamental that the professionals involved preserve in their actions the ethics and transparency values and principles.
The public funds provided on an emergency basis, the international aid and funds provided/donated by the companies must be accompanied by anti-corruption controls, primarily the whistleblowing channel.1 In addition to detecting frauds and corruption, the whistleblowing channel enables a transparent environment, which prioritizes ethics and integrity, and acts in the prevention of cases of violation of rights and abuses. If control processes are relaxed, the company must rely even more on whistleblowers to identify any suspicions of irregularities.
The pandemic exposed the existing vulnerabilities in the society. The social inequalities, escalated over the past times, have shown the process of constant violation of human rights to a significant portion of the Brazilian population. The humanitarian dimension for the containment of the crisis must guide the social and economic policies, and this will require the collective support of all players in society, particularly under the optics of social protection. It is fundamental that, in any measure followed, the guarantee of human rights and social protection are pillars.
This attitude is even more compelling in situations in which the companies are the only source of resources of the location.
As aforementioned, the current situation escalated the inequalities in Brazil,1 particularly between black people and women. The black population is the majority among workers in informal and essential services, which poses difficulties in the compliance with social distancing norms without compromising their income. The distancing measures imposed reflect the financial dependence of their partners (the ones that are still economically active). In addition, the lockdown measures in response to Covid-19 increased domestic violence by 30% in some regions in Brazil.2 At the same time, the resources to support women suffering violence are less available and accessible, as a result of the stay-home policy.
More than preparing strategies to combat the crisis, the context requires that the company preserves the promotion of racial and gender equality, reached through policies and investments.
The pandemic impacted the companies and their value chain, which includes SMEs [Small- and Medium-sized Companies]. These are facing an extremely high economic tension, suffering the strongest impacts due to the economic shutdown and their control mechanisms are under pressure, increasing the risks of irregularities, creating an environment prone to frauds and other unlawful acts under the justification of economic survival. In virtue of this scenario, taking measures that seek to preserve the integrity in value chain is fundamental to safeguard not only the company itself, but also suppliers and consumers.
The lack of regulation of the lobby or defense of interests in Brazil and the difficulties of access to information may distort the responses and supports from the government, which may predominantly damage small- and medium-sized companies. For that reason, articulating through associations and federations and acting together are strategic – it is fundamental to assure the highest transparency and integrity standards in such articulations. There must be caution for the company’s name to be included only in articulations with which they fully agree, in order not to be at risk of being involved in actions in disagreement with their activity.
Pocket Guide: No eXcuses! Countering the 10 most common eXcuses for corrupt behaviour – Accessed on May 29, 2020.
It is essential to highlight some key players of the financial sector, such as banks, insurance companies, funding companies and regulators, thinking of possible measures taken to combat the crisis. The current relaxations intensified a scenario that was already prone to frauds, corruptions and violations of fundamental rights. This is also a period in which there is an increase of renegotiations and delinquency rates, which makes it fundamental that such agreements should be performed on non-abusive and accessible bases, also taking into consideration the most vulnerable groups.
Corruption and frauds in the healthcare sector result in losses of more than USD 450 billion per year.1 Previous global health emergencies, such as Ebola crisis and swine influenza, taught that corruption usually increases amid crises, particularly when the institutions are undermined.
In Honduras, Transparency International promoted an Integrity Compact for the healthcare sector in the access to the emergency resources. For further information, visit: https://voices.transparency.org/swift-smart-and-clean-b158c74fb8f7
The current situation evidenced the difficulties on the access to the universal right to health, as set forth in article 6 of the Federal Constitution. For such purpose, Brazil has the Unified Health System (SUS), a program of international reference in public healthcare area, which provides for free-of-charge performance, control and inspection of healthcare and basic sanitation actions and utilities, organized through regional and hierarchical network. Even if the Constitution acknowledges healthcare as a responsibility of the State, it also allows the participation of private entities in the provision of healthcare actions and services.
The situation of humanitarian crisis we are experiencing required measures such as relaxation of the rules and controls. However, this may not serve as a free pass for the companies to perform irregularities and economic abuses.
The United Nations 2030 Agenda provides directions for the world we want to achieve. This Guide highlights the importance of the companies in the construction of this planet, by strengthening their governance mechanisms, inspecting the distribution of resources, donations and contracts, and promoting transparency and the care of vulnerable groups. It is a Guide to manage the pandemic under the view of the Sustainable Development Goal 16.1
At this time, the activity of the business sector in response to the crisis gives the companies a chance to show social responsibility in practice. We may grow stronger after this scenario and build together the world of the 2030 Agenda.
This Guide is a step towards this journey.
The Covid Radar is a collective of organizations with the purpose of working together to minimize the impacts generated by the COVID-19 and contribute to the recovery of Brazil’s economy. Together we are developing solutions to support health institutions, public and private companies, media, and society.