The Regulation of Artificial Intelligence in Brazil

Abstract

Keywords

AI digital technology employment relations innovation labor trade unions Brazil

AI and Labor in Brazil

The use of AI is not yet widespread in Brazilian industry. A survey carried out by the IBGE (2023a) found that although 84.9% of medium- and large-sized businesses (100 or more people) used some form of Industry 4.0 technology, AI was used by only 16.9%, with the areas of administration, project and product development, processes, and services making use of it the most.

A report by the International Monetary Fund (IMF) (2024) identified that 41% of jobs in Brazil are highly vulnerable given the advent of AI. Despite this, the study highlighted that the probability of changing occupation is 43.7% for Brazilian workers with higher education and 38% for those without higher education. Individuals with higher education who work intensively in AI tend to migrate to jobs in the same or similar field, which could enable the level of employment to grow. In the case of workers without higher education, it would be more difficult for them to move into occupations with high AI usage. Research carried out by the Instituto de Pesquisa Econômica Aplicada (IPEA) (2019) pointed out that the probability of job automation in Brazil is 0.5445, suggesting that approximately 30 million jobs could be at risk by 2026 if companies chose to automate professions with a high-risk potential of automation.

Other research carried out in Brazil has shown the impact of AI in specific jobs such as platform work and microtasks. When AI is mentioned, we usually think of skilled workers. However, significant AI-related job growth involves micro-workers who carry out low-complexity, repetitive activities, on demand, and on a pay-as-you-go basis. These workers are responsible for categorizing images, participating in market research, and watching videos, among other tasks (Viana Braz, Tubaro, and Casilli 2023).

Viana Braz et al. (2023), in a survey of approximately 477 micro-workers, pointed out that in Brazil the majority of micro-workers are women, married or cohabiting (60.8%), and have children (53%). In addition, only 31% have any health insurance, 40.5% work part-time, and 72% are in skilled occupations.

A survey carried out by the Getúlio Vargas Foundation identified approximately 100 platforms operating in the country, one of which is Ifood. The app, created in Brazil, is present in more than 1,700 cities and is used by more than 40 million people, who place more than 70 million orders a month. The platform has approximately 250,000 couriers and 5,000 employees and is responsible for generating 52 billion reais for the economy, which represents 0.5% of the country's GDP (Ifood 2024).

For its part, although it refers to statistics in the testing and evaluation phase, research carried out by the IBGE (2023a) identified 1.5 million people working through apps and digital platforms in 2022, with 52.2% working mainly through transportation apps, 39.5% working in food delivery apps, and 13.2% working in apps that provide general or professional services. The majority of platform workers are male (81.3%) with an intermediate level of education—have completed high school or have an incomplete higher education experience (61.3%)—and the prevailing age group was 25 to 39 years old (48.4%). The average workweek was 46 hours with a monthly income of R$2,645.00; only 35.7% contributed to social security.

Although no specific legislation in the country regulates platform work, Rebechi et al. (2023) highlighted provisions in the Consolidation of Labor Laws (CLT) that could be applied to such workers, for example, remote work (Art. 6 of the CLT), teleworking (Art. 75-A to 75-F of the CLT), and intermittent work (Art. 452-A of the CLT). Despite these provisions, President Lula sent a bill on March 1, 2024, to the Brazilian Congress to regulate the transportation of passengers by app or platforms. Because of a lack of understanding between the app companies and the Committee created to draft the bill, the bill does not deal with the work of home delivery apps.

Finally, the lack of regulation of platform work means that the country is facing a clash between Brazilian courts over the existence of an employment relationship between the platform and the service provider. Although no common understanding clarifies the employment relationship, on the occasions when the Superior Labor Court rules that an employment relationship is present between the worker and the company, its decisions have been overturned through constitutional complaints to the Supreme Court (Anamatra 2023), so that protection, if it exists, is left to the discretion of the "employer" company.

The challenges posed by the use of AI also have an impact on work in the countryside. Brazil is considered the largest country in terms of arable land, as well as being one of the top 5 producers of 34 agricultural commodities and the largest net agricultural exporter in the world (Valdes 2022), yet little research has been conducted on the application of new technologies in Brazilian agriculture (Mendes and Viola 2023). The majority of workers are smallholders (meaning a small-scale agriculture model), with few resources and little access to technological resources. Given the heterogeneity of the Brazilian agricultural system, Agriculture 4.0 advances slowly.

Accordingly, so-called Agriculture 4.0 faces challenges related to the use of big data, AI, IoT, digital literacy, and blockchain (Mendes and Viola 2023). In the case of AI, for example, Mendes and Viola (2023) noted that despite existing examples of the development of Agriculture 4.0 in Brazil, they are not always related to protection of the environment. In this sense, few start-ups are developing AI programs that are linked to the notion of sustainability, which is also related to the shortage of information and communication technology (ICT) professionals in Brazil.

It is worth mentioning, however, the existence of cooperatives that disseminate technologies to small producers to improve soil preparation, cultivation, harvesting and post-harvesting, as well as initiatives by public institutions, such as EMATER (Technical Assistance and Rural Extension Company), that work to increase the productivity of rural producers, especially medium- and small-scale ones.

Regulation of Artificial Intelligence Applied to Work in Brazil

In Brazil, regulation of new forms of technology and their relationship with work is still in an incipient stage. In 2014, the Act 12.965/2014, known as the Civil Rights Framework for the Internet, passed both houses of Congress and was signed by the president. This bill fixed principles, guarantees, rights, and duties regarding the use of the internet in Brazil, based on respect for freedom of expression; recognition of the global scale of the network; human rights; the development of personality and the exercise of citizenship in digital media; plurality and diversity; openness and collaboration; and free initiative, free competition, and free access to information.

In 2018, Act 13.709/2018, also known as the General Data Protection Law (LGPD), was approved. The LGPD inaugurates the personal data protection system, establishing principles that should guide the use and sharing of data, as well as the obligations imposed on controllers and those responsible for processing it (Teixeira and Armelin 2020). Its aim is to protect the fundamental rights of privacy and freedom and the free development of the individual’s personality. This objective, however, clashes with the commercial interest in personal data, which challenges the creation of new ways of guaranteeing the data subject's self-determination (Frazão, Oliva, and Abil 2019).

The LGPD contains no specific provision regarding its application to labor law. As such, some observers, such as Maluf (2020), have pointed out that a provision to this effect in the law would guarantee greater legal certainty in employment relationships. Despite the absence of an express provision in Brazilian legislation, a mere reading of Article 1 of the LGPD leads to the conclusion that it would be fully possible to apply it to employment relationships, since the law is aimed at the processing of personal data by natural or legal persons, whether public or private, with the aim of protecting the fundamental rights of freedom and privacy and the development of the individual’s personality (Miranda 2019; Correia and Boldrin 2020). It may be possible to apply it in relation to workers who do not fall within the employment relationship, such as the self-employed.

The LGPD, which establishes the principle of non-discrimination in Art. 6º, IX, and of transparency in its Art. 6º, IV, Art. 9º, §1º, Art. 10, §1º, and Art. 40, suffers from an old-fashioned approach. It disregards the possibility that data collected from employees by systems that monitor their behavior in the workplace could be used for other unforeseen purposes, perhaps negatively if enhanced by prejudiced biases.

In addition, the LGPD provides for human intervention by granting individuals the right to request a review of automated personal data decisions when they affect their interests, including decisions about personal, professional and consumer profiles and other aspects related to the individual's personality (EBIA 2021).

According to a study produced by the Brazilian Academy of Sciences, the start of discussions on the use of data took place within the Brazilian Strategy for Digital Transformation – Decree 9.319/2018 – and Ministry of Science, Technology, Innovation and Communications (MCTI) Ordinance 1.120/2020. In fact, the MCTI defined AI as a priority area for the period 2020 to 2023, which led to the creation of the Brazilian National Strategy for Artificial Intelligence (EBIA). EBIA is the first federal strategy focused on AI, with the ambition of being the main framework for other initiatives and strategies on the subject (OECD 2022), and it was established by MCTI Ordinance 4.617/2021.

EBIA is based on principles defined by the Organisation for Economic Co-operation and Development (OECD 2022), including human-centered values, fairness, transparency, and international co-operation for trustworthy AI.

In the legal field, EBIA (2021: 18) highlights the concern to strike a balance between the protection and safeguarding of rights, the preservation of incentive structures for the development of a technology whose potential has not yet been fully understood, and the establishment of legal parameters that provide legal certainty and responsibilities to the actor—provisions that corroborate what is established in the Bill 2.338/2023 (Legal Framework for Artificial Intelligence in Brazil).

EBIA aims to contribute to the development of ethical principles for the development of AI in a more responsible manner and to promote the training of qualified professionals. The Brazilian Strategy for Digital Transformation, in turn, aims to coordinate initiatives related to the topic to support the digitalization of production processes (Divino 2022).

Bills involving AI are also being drafted. In May 2023, the year of the change of government in Brazil, the current president, Luiz Inácio Lula da Silva, announced that he was open to a dialogue to regulate work on platforms. To this end, a Tripartite Working Group was set up with the participation of workers, companies, and the government. However, no draft bill(s) resulted from this dialogue (Ifood 2024).

Although the use of artificial intelligence is not yet regulated,¹ there are a few bills on the subject. In a search through the pages of the Chamber of Deputies and the Federal Senate, several bills include the expression “artificial intelligence.” Two of them deserve closer attention: Bill 21/2020 and Bill 2.338/2023.

Bill 21/2020 establishes principles, rights, and duties for the use of artificial intelligence in Brazil. Article 5 states that the objective of AI is, among other things, to promote “measures to strengthen human capacity and prepare for the transformation of the labor market as artificial intelligence is deployed.” And, according to Article 10, one of its guidelines is “human capacity building and preparation for the restructuring of the labor market as artificial intelligence is deployed.”

As for Bill 2.338/2023, its justification states that the text defines general foundations and principles for the development and use of systems that make use of artificial intelligence, seeking to reconcile the protection of fundamental rights and freedoms, the valorization of work, and the dignity of the human person. Because of its importance, it will be looked at in more depth below.

Bill 2.338/2023: Legal Framework for Artificial Intelligence in Brazil

The AI Legal Framework has a regulatory approach based on risks and rights, creating an asymmetrical regulation of regulated agents, with stricter obligations for agents and operations with a higher degree of risk, in a similar way to how the subject was addressed in the European Union through the EU AI Act.

The new text establishes that people affected by AI systems have the following rights (Liberman 2023): 1) prior information about their interactions with artificial intelligence systems; 2) an explanation of the decision, recommendation, or prediction made by AI systems; 3) the right to challenge decisions or predictions by these systems that produce legal effects or significantly impact the interests of the person who has been affected; 4) human determination and participation in decisions made using AI; 5) non-discrimination and the correction of direct, indirect, unlawful, or abusive discriminatory biases; and 6) the right to privacy and the protection of personal data.

The text establishes that every AI system must undergo an assessment to indicate the degree of risk. Thus, the competent authority can determine its reclassification, even though the AI Legal Framework does not define who the competent authority will be. Bill 2.338 prohibits the implementation of excessively risky AI systems, which include subliminal techniques that may induce people to behave in a way that is harmful or dangerous to health and safety, that may exploit the vulnerabilities of specific groups, or that are used by the public authorities to classify or rank people.

The bill also states that AI systems used for sensitive purposes, such as infrastructure security, education and vocational training, recruitment and assessments, emergency priority, autonomous vehicles, health care applications, biometric identification systems, criminal investigation and public security, and/or migration management and border control, can be considered high risk. For high-risk AI systems, an algorithmic impact assessment is mandatory, which must be carried out by a technically competent professional who is independent of the system developer/operator and then forwarded to the overseeing authority.

Another relevant point of the AI Legal Framework deals with the civil liability of AI system agents. In this sense, the supplier or operator of the system that causes property, moral, individual, or collective damage will be obliged to make full reparations, regardless of the degree of autonomy of the system. For high-risk or excessive-risk AI systems, the supplier or operator is objectively liable for the damage caused. If the AI system is not high risk, the agent’s fault is presumed, meaning that the injured party must provide proof of the damage.

Article 17 considers artificial intelligence systems to be high risk in certain employment-related applications, including, for example, recruiting, screening, and evaluating candidates.

Although the text mentions the changes to the labor market brought about by AI and the need to protect workers, no provisions are in the aforementioned texts on the social protection of these individuals. These strategies therefore need to be implemented by the public authorities through the adoption of state public policies that provide continuity of projects and infrastructures for the correct implementation of new forms of existing technology. Social dialogue is also critical, both in the creation and execution of such measures.

Role of Workers’ Organizations in Brazil

Before the 2017 Labour Reform, there were 10,817 unions in Brazil in the year of 2015, of which 80.4% were focused on local issues. Furthermore, each union had an average of 9,600 workers, yet only 1,800 unionized, being funded by a mandatory union contribution. After the Reform, despite the emphasis placed on collective bargaining, there was a provision of optional contributions to unions,² which led to a decline in union revenues and in unionization (IBGE 2023b; IPEA 2023).

In the case of app and platform workers, however, there is a dispute between traditional unions, which are not recognized as legitimate representatives by platform workers, and emerging associations, which have less experience in institutional dealings but have greater proximity to workers (Couto 2023). The 2020 "app strike" is one example of an initiative promoted by workers in an attempt to improve working conditions. Delivery workers struck in July 2020, in the context of the COVID-19 pandemic, led by the Entregadores Antifascistas (Antifascist Delivery Workers) (Lourenço Filho 2021). In addition to demands related to the pandemic, such as greater protection against the spread of the disease, this group denounced the precariousness to which they were subjected. They related their employment precarity to the Brazilian political context, in which Jair Bolsonaro was president of the republic, and classified by one of the organizers of the “breque” as fascist and contrary to the rights of app workers.

Thus, we can see configurations of protest that do not make exclusively class-based demands but instead adopt other political, economic, non-partisan, and cultural dimensions. To this end, social networks have become a channel for mobilizing workers, characterized by autonomy, the absence of a single leader, social mobility, and unpredictability (Lazzareschi, Graglia, and Huelsen 2021).

By contrast, a survey on the perspectives of metalworkers' unions, one of the most traditional unions in the country, on Industry 4.0 identified that workers' representatives had little familiarity with the issues arising from Industry 4.0, understanding it in a fragmented way. In addition, concern is growing about the implementation of technologies in the sector, as workers have not participated in its decisions and no effective public policies have been issued in Brazil (Muniz Junior et al. 2023).

Regarding the adoption of Bill 2.338/2023 (Legal Framework for Artificial Intelligence in Brazil), we found a note of support from the Central Única dos Trabalhadores (CUT), with no reservations or suggestions regarding the existing text (CUT 2023). By contrast, a statement made by FecomercioSP (2023) and a group of business entities pointed out the need for balanced regulation, as there would be no need for a race for regulation, but for innovation, pointing to Bill 2.338/2023 as one of the strictest regulations about AI in the world.

In this sense, it is essential to build a project to value and strengthen collective bargaining at all levels, with negotiating spheres linked to the dynamics of the productive sector and the world of work, with the capacity to deal with the issues and conflicts inherent in labor relations, just as the complementary bill regarding app-based drivers and platforms seems to have done, for example, in Art. 4. For this to happen, unions, the basis of the representation system, and the entire structure that makes up the union system, need to be strengthened. Entities with a broad representation base, high representativeness, the capacity for aggregation and unity of action, and legitimized by democratic decisions in assemblies, can negotiate and conclude agreements with the rules that will govern labor relations and labor rights. The union and collective bargaining system must dare to make an institutional leap toward autonomy in terms of self-regulation. Each party must have the autonomy to define the functioning of its union system, and the parties together must define the rules that should govern the negotiation processes.

The challenges in terms of evolution go beyond the legal framework for the new work models, but also include the ethical and transparency debate and, at this time of transition, the need for social dialogue. In other words, trade unions have a fundamental role to play at a time when no specific regulation exists, because they can effectively protect workers’ rights, for example, by creating audits on algorithms to prevent discriminatory practices (in alignment with the Brazil's General Data Protection Law) and negotiating better work conditions (as did the complementary bill regarding app-based drivers and platforms).

Conclusions

The changes brought about by the 4th Industrial Revolution have had an impact on labor law, considering the emergence of new forms of work as platforms and apps, spurring the discussion on the need to regulate artificial intelligence. In the case of Brazil, the impacts of the use of AI on labor relations are debated. On one hand, the study carried out by the IMF cited above highlights the possibility of an increase in employment. On the other hand, research carried out by the IBGE highlighted the possibility of losing 30 million jobs if companies opted to automate professions with a high probability of automation.

The Marco Civil da Internet and the General Data Protection Law were among the first regulatory initiatives responding to digitalization. The Brazilian Artificial Intelligence Strategy is a more recent project of law that aims to contribute to the development of ethical principles for the responsible development of AI. It is part of a broader initiative by the Brazilian state to set some parameters for future regulation.

We have also shown there are initiatives in the country to regulate AI, such as Bill 21/2020 and Bill 2.338/2023, the latter of which has made the most progress in legislative discussions. Note that although the proposed texts mention the changes to the labor market brought about by AI and the need to protect workers, no provisions are in the aforementioned texts on the social protection of these individuals.

Thus, in addition to drafting laws and public policies, social dialogue is an important tool for ensuring that regulation is effective and appropriate for the various sectors, thereby promoting social protection for workers. This type of protection is perhaps the biggest challenge facing the Brazilian state. The majority of organizations representing and defending workers are unions, but their ranks have dwindled in the face of changes in the labor market. This decrease has led to a crisis of representation, spurring the growth of organizations and associations that are closer to the workers, such as the Antifascist Delivery Workers.

Therefore, in addition to the need for regulation, we believe it is necessary to enhance the Brazilian union’s model so that unions become closer to workers, by implementing better work conditions, especially to those who have been made invisible by the advent of new technologies, such as micro-workers and platform delivery workers.

Thus, for example, we can improve mechanisms of social dialogue by participating in negotiations to develop regulations with the federal government, as well as through collective bargaining with companies, until we reach effective implementation of labor laws and beyond.

Footnotes

Antonio Rodrigues de Freitas Júnior

1

At the end of February 2024, the Brazilian Supreme Court, which regulates and oversees elections in the country, passed a Resolution regulating the use of AI, especially generative AI, in the electoral campaign during the 2024 municipal elections. Although it is the first written rule approved by federal authorities, this Resolution does not apply to any use of AI outside the electoral campaign environment. In any case, as it contains detailed ethical restrictions on the use of AI, it could become a normative precedent capable of guiding the legislative debate already underway in the country.

2

The Supreme Court declared the constitutionality of another contribution, called “union assistance contribution,” also to non-unionized workers, if it is established in collective agreements and allows for objection by workers (Supremo Tribunal Federal [STF] 2023).

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