EU Commission releases study on options for regulating due diligence

The research highlights that:

  • The majority of stakeholders responded that the current regimes of voluntary measures have failed to significantly change the way businesses manage their social, environmental and governance impacts, and provide remedy to victims.

  • Only 1/3 of business respondents stated that they currently undertake some form of due diligence which takes into account all human rights and environmental impacts. In their response, civil society is united in its call for mandatory and enforceable EU due diligence rules, while a majority of businesses are recognising the value of enforceable EU rules.
  • A majority of stakeholders favour a cross-sectoral approach for an EU law, which will ensure effective harmonisation, legal certainty, a level playing field, and allow for a non-negotiable standard for business relationships throughout the supply chain.
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Article
24 February 2020

Joint civil society response to the European Commission study into supply chain due diligence

Author: Amnesty, ActionAid, ECCJ, Global Witness, CCC, ECCHR, CISDE, Anti-slavery, Friends of the Earth Europe

The undersigned civil society organisations and networks strongly welcome the release of the findings from the European Commission’s study on due diligence requirements through the supply chain.

The results of this study unequivocally affirm that voluntary measures are failing and that there is urgent need for regulatory action at EU level in order to protect workers, communities, and the environment from systematic, ongoing and worsening human rights and environmental impacts linked to the global supply chains of businesses and financial institutions. It is particularly noteworthy that the results of the study are based on broad consultation with both civil society and business...

We call on the European Commission to act swiftly on the study’s findings and urgently initiate the process toward a legislative proposal on corporate human rights and environmental due diligence, which includes enhanced access to judicial remedy for victims. For such a proposal to effectively address human and environmental rights abuses whilst enhancing remedy for victims, it is crucial that it includes corporate liability for harm caused.

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Article
24 February 2020

The EU must stop importing human rights violations

Author: Anna Cavazzini and Heidi Hautala, on EURACTIV.com

The EU needs to adopt a mandatory due diligence approach to supply chain management to ensure that it stops importing human rights violations, argue Anna Cavazzini and Heidi Hautala...

Today the Commission is publishing a study that looks into the various options for sustainable supply chain management. One option in that study clearly sticks out: a mandatory due diligence approach...

The study confirms that voluntary measures have not led to necessary behavioural change...

Another study launched last week, The State of Corporate Sustainability Reporting in the EU, similarly confirmed that 22.2% of companies report on due diligence processes and only 6.9% provide remedy for harmed people.

[I]ntroducing a mandatory approach [...] is just a logical step in a series of policy discussions and decisions made in recent years...

The European Parliament is a long time promoter of mandatory due diligence... For the Greens, but also many other groups, mandatory due diligence was one of the main points in the hearings for the new Commission.

There are initiatives happening in several committees that push for such legislation, coordinated by the working group on responsible business conduct...

The German government will bring sustainable supply chains on the agenda of their Council presidency...

A lot of business initiatives support the idea as well...

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Article
25 February 2020

Commission study shows the need for EU-level legislation on due diligence throughout the supply chain on #HumanRights and #EnvironmentalImpacts

Author: EU Reporter

...70% of  the 334 business survey respondents agreed that EU-level regulation on a general due diligence requirement for human rights and environmental impacts could provide benefits for business.

Justice Commissioner Didier Reynders said: “Companies told us they believe that EU rules would here provide legal certainty and a harmonized standard for businesses’ duty to respect people and the planet. As working towards climate neutrality is among the top priorities of this Commission, I will make sure the results of this important study are taken into account for future work.”

The study was launched in December 2018, as part of the Commission’s Action Plan on Financing Sustainable Growth. It examines options for regulating due diligence in companies’ own operations and through their supply chains for adverse human rights and environmental impacts, including relating to climate change. This study also feeds into the objectives of the European Green Deal, which highlights that sustainability should be further embedded into the corporate governance rules across the EU, as many companies focus too much on short-term financial performance compared to their long-term development and sustainability aspects. More information on the study can be found here.

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Article
25 February 2020

EU Commission releases study on options for regulating human rights due diligence requirements

Author: British Institute of International and Comparative Law, Civic Consulting & LSE for Directorate-General for Justice and Consumers (European Commission)

24 Feb 2020

The study focuses on due diligence requirements to identify, prevent, mitigate and account for adverse corporate impacts... It examines existing market practices and regulatory frameworks as well as options for regulating due diligence in companies’ own operations and through their supply chain.

Through desk research, country analyses, interviews, case studies and surveys it identifies practices and perceptions regarding regulatory options. The assessment of options, ranging from no intervention to mandatory due diligence as a legal standard of care, considers economic impacts, impacts on public authorities, social, human rights and environmental impacts.

The study shows that while the UN Guiding Principles on Business and Human Rights’ standard of due diligence is increasingly being introduced into legal standards or proposed in Member States, only one in three businesses in the EU are currently undertaking due diligence which takes into account all human rights and environmental impacts. The survey respondents indicated that EU-level regulation on a general due diligence requirement for human rights and environmental impacts may provide benefits for business and the assessment of options looked into the administrative costs and burdens of each approach.

Possible comments can be sent to [email protected]

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Article
25 February 2020

Global Witness briefing on why the EU needs to act to ensure companies are not harming people and planet

Author: Global Witness

It is time for the European Union to match its public commitments (UN 2030 agenda, the Paris climate agreement, and to become world’s first climate-neutral continent by 2050) by acting swiftly to arrest the irreparable destruction and negative impacts that environmental and human rights abuses have on our planet...

Global Witness calls on the European Commission to [...] introduc[e] effective and robust legislation that establishes cross-sectoral mandatory human rights, environmental and governance due diligence obligations for all companies, including finance, operating the EU, including access to remedy for victims of corporate abuse and effective sanctions.

The political momentum is ripe for concrete action. The Commission study on ‘due diligence requirements through the supply chain’ clearly show an emerging consensus from companies and civil society that the EU needs to act... Given that there is a clear support for regulatory action from civil society and that a majority of businesses are recognising the value of enforceable EU rules, the Commission is now well placed to bring forward a legislative proposal this year.

In our briefing we outline the need for regulatory action and why the EU is uniquely placed to introduce a set of harmonised due diligence rules across all member states.

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