EU Commissioner for Justice commits to legislation on mandatory due diligence for companies

On 29 April 2020, the European Commissioner for Justice, Didier Reynders, announced that the Commission commits to introducing rules for mandatory corporate environmental and human rights due diligence. The announcement was made during a high-level online event hosted by the EU Parliament’s Responsible Business Conduct Working Group, during which the Commissioner presented the findings of the Commission study on options for regulating due diligence requirementsYou can watch the webinar here.

MEPs, NGOs and other stakeholders welcomed the annoucement. In December last year, over 100 organisations had launched a campaign calling for EU human rights and environmental due diligence legislation. Further information is available below, on our mandatory due diligence portal, and in this blog piece by BHRRC's Phil Bloomer and ITUC's Sharon Burrow for Open Democracy on the Commission's plans for mandatory due diligence.

Get RSS feed of these results

All components of this story

Article
26 June 2020

HRW outlines key criteria for EU mandatory due diligence legislation in letter to Justice Commissioner & EU Parliament

Author: Arvind Ganesan & Lotte Leicht, Human Rights Watch

"Recommendations For New EU Legislation on Mandatory Human Rights and Environmental Due Diligence", 24 June 2020

We are writing to draw your attention to Human Rights Watch’s key recommendations for elements to be included in new EU legislation on mandatory human rights and environmental due diligence, including on climate change. We welcome the Commission’s and the European Parliament’s commitments and initiatives towards that goal...

[W]e urge you to ensure that the new EU legislation eventually adopted:

- Requires business enterprises to respect internationally recognized human rights...
- Broadly applies to all business entities across all sectors...
- Mandates that business enterprises conduct effective human rights and environmental due diligence, including on climate change...
- Requires full transparency in value chains;
- Includes a European enforcement mechanism, ensuring it has adequate budget and resources to support effective implementation;
- Incentivizes compliance and foresees clear consequences for non-compliance, including penalties; and
- Creates a civil course of action and access to judicial remedies.

Please find our detailed recommendations for the legislation in the annex to this letter...

Read the full post here

Download the full document here

Article
23 June 2020

45 CSOs underline need for robust EU mandatory due diligence & directors' duties legislation in joint letter to Commissioner Reynders

Author: WWF, ECCJ, Global Witness, ShareAction, BHRRC & 40 others

...We, the undersigned organisations, would like to congratulate you for the very important announcement... that the Commission will propose legislation in 2021 on both corporate due diligence and directors’ duties..., taking into account ongoing national-level mandatory due diligence developments...

[T]he COVID-19 crisis has had and will have many societal and economic consequences that the EU needs to tackle. In order to combat these, we strongly believe that robust legislative initiatives on corporate due diligence and directors’ duties in 2021, as part of the European Green Deal, will make a significant difference...

...It is indeed critical for us that the Commission proposes a robust European legal framework consisting of:

- New horizontal legislation on mandatory human rights and environmental corporate due diligence where strong EU rules would help ensure robust, resilient and sustainable value chains and investments... It is necessary in particular to... ensure that there are liability rules for harm arising out of human rights and environmental abuses. Rules should ensure that due diligence processes be developed and conducted, at all stages, with full involvement of all rights- and stakeholders, including trade unions, civil society and women’s organisations, human rights defenders and indigenous peoples. In addition, workers’ information and consultation rights should be respected and the right for trade unions to negotiate at the relevant level with the company the due diligence process should be guaranteed. Rightsholders throughout global value chains must, crucially, have meaningful access to remedy, backed by effective grievance frameworks and including judicial remedy before EU Member States’ courts.

- New sustainable corporate governance legislation focused on directors’ duties – notably requiring sustainability strategies and targets for companies, to ensure that directors move away from short-termism, strengthen democracy at work and workers’ involvement in company matters, and consider all rights- and stakeholders’ interests...

Download the full document here

Article
8 June 2020

EU Justice Commissioner reaffirms commitment & emphasises importance of liability in upcoming EU mandatory due diligence proposal (video)

Author: International Federation for Human Rights

"Towards Effective EU Mandatory Human Rights & Environmental Due Diligence", 8 June 2020

Read the full post here

Article
29 May 2020

European Parliament RBC Working Group letter to EU Justice Commissioner on shape of possible future due diligence legislation

Author: European Parliament Responsible Business Conduct (RBC) Working Group

"EU is well placed to show leadership with its future due diligence legislation", 27 May 2020

The RBC Working Group has now followed up the Commissioner’s commitment with a detailed letter on how such future EU company law should be shaped...

In its letter, the Working Group reminds that the Covid-19 crisis has highlighted the precarious nature of global value chains...

To this end, the Working Group reiterates its support for the Commission to start shaping EU-level mandatory legislation which should be horizontal covering all sectors, and it should have effective enforcement measures and access to remedy for victims and affected communities through liability for harms caused or contributed to by businesses. 

The MEPs outline in their statement key principles to the forthcoming legislation:

  • Applies to all business undertaking of all size across the EU;
  • Includes the obligation to respect human rights and the environment in their own domestic and international activities, and to ensure such respect throughout their global value chains, products, services and business relationships; 
  • Ensures that business enterprises have an obligation to identify, prevent, mitigate, monitor and account for potential and actual human rights abuses and environmental harm​ ​in their entire global value chains;
  • Is supplemented by more specific standards and guidance that provide clarity and certainty to business and stakeholders about the processes and topics expected to be covered.
  • Establishes civil liability for human rights abuses and environmental harm and provide access to remedy for victims;
  • Provides authorities with effective instruments to monitor compliance and ensure enforcement, including through penalties and sanctions.

Read the full post here

Download the full document here

Article
19 May 2020

Business and Human Rights: Mandatory human rights due diligence – European Commission to introduce a legislative initiative by 2021

Author: Sam Eastwood, James Ford, Libby Reynolds, Mayer Brown

On 29 April 2020, the European Commissioner for Justice, Didier Reynders, announced that the European Commission will develop legislation that would require EU companies to carry out human rights and environmental due diligence. The Commissioner confirmed that a legislative initiative would be introduced by 2021. Details of the exact legal mechanism will follow, but according to the Commissioner, any legislation would be "inter-sectorial, mandatory and of course with a lot of possible sanctions"...

Key takeaways

  1. The European Commission's commitment to a legislative initiative on mandatory human rights and environmental due diligence in 2021 is the latest development in an increasing tide of regulation on the topic of business and human rights.
  2. The Study acknowledges a number of non-legal incentives for carrying out due diligence, as well as identifying various benefits associated with introducing mandatory due diligence legislation. 
  3. The COVID-19 pandemic has underlined the importance of businesses carrying out human rights and environmental due diligence...

The Study also illustrated that there is a significant variance in how businesses currently manage human rights and environmental risks in their supply chains... Businesses should take note of emerging best practices to ensure they are adhering to their current and emerging human rights due diligence responsibilities.

Read the full post here

Article
19 May 2020

EU Trade Commissioner Hogan commits to closely collaborating with Justice Commissioner Reynders on due diligence legislation

Author: Phil Hogan, EU Trade Commissioner

'Introductory Remarks by Commissioner Phil Hogan at OECD Global Forum on Responsible Business Conduct'

[W]e realise more than ever in the present crisis that it is important for businesses to integrate the interests of our workers, our society, and our planet into their operations...

[R]ebuilding the economy in an even more sustainable way is not just a plus, it is a necessity...

...I will be working hard with my fellow Commissioners in the coming months to drive different initiatives in the context of the post-coronavirus recovery.

While they have their origin in different policy areas, ...they share a common view that due diligence can be part of the solution for our businesses.

Companies with due diligence policies in place are likely to build more long-term value and resilience – improving their prospects for recovery.

Commissioner Reynders is leading the work on examining options for regulating due diligence, both in companies’ own operations and through their supply chains. He presented the outcome of a due diligence study in the European Parliament a few weeks ago.

His preference is for a mandatory, horizontal due diligence legislation with possible sectoral guidelines. He indicated that subject to the results of consultations with stakeholders, the Commission would table legislative proposals in 2021 and I will work closely with him on this, given the strong trade dimension involved...

The European Union stands ready to maintain its role of global leadership and build stronger partnerships around the world...

Read the full post here

Article
13 May 2020

Milestone promise a positive step toward mandatory due diligence in supply chains

Author: Anti-Slavery International

[O]n April 29th, the European Commissioner for Justice, Didier Reynders made a milestone announcement for corporate responsibility. The Commissioner publicly pledged that the European Commission will introduce a proposal for legislation in 2021...

[T]he EU has considerable potential to take effective action to prevent forced labour in global supply chains. Over 16 million people are estimated to be in forced labour in the private sector, which includes those producing the materials in goods or products exported to the EU, as well as products produced in the EU...

The Covid-19 crisis has sharply exposed the need for this change...

Mandatory human rights and environmental due diligence would level the playing field...

The legislation we are calling for will change the state of play...

[W]e now need to ensure that the legislation proposed is robust and fit for purpose. The European Parliament’s Legal Affairs Commission will soon start work on its long-awaited Corporate Accountability and Due Diligence report... Germany, which will assume the rotating Presidency of the EU in July, should also place this issue high on the its Presidency agenda.

Anti-Slavery International has laid out our vision of the legislation to ensure it is effective in addressing forced and child labour...

Read the full post here

Article
12 May 2020

Ensuring human rights and sustainability in company supply chains

Author: Isabelle Schömann and Claudia Saller, Social Europe

As the Covid-19 pandemic has hit the world—causing devastating impacts to human rights and laying bare the vulnerability of our economic model and uncontrolled supply chains—the European commissioner for justice has recognised the urgent need for corporate justice.

On April 29th, ... the commissioner, Didier Reynders, committed to an early 2021 legislative initiative on mandatory obligations for EU companies on human rights and environmental due diligence. This measure would encompass liability, enforcement and access to remedies for victims of corporate abuse. He said it would form part of the European Green Deal and the European Recovery Plan...

While Brussels has sent an important signal by taking steps in this area, member states retain the key role in EU decision-making. In Germany, the Netherlands, Finland, Luxemburg and others, legislators are looking seriously into human-rights and environmental due-diligence legislation for their country, as well as at the European level...

National governments must recognise their responsibility and their power to act. Any EU legislation will have to be implemented at national level, so governments are well advised to listen to their civil society and trade unions and start preparing such a supply-chain law at home. Work at the national and EU levels must go hand in hand if the result is to be a robust legislative framework, which ensures the protection of human rights and the environment throughout the entire supply chain...

Read the full post here

Article
8 May 2020

Swedwatch welcomes EU human rights due diligence plans

Author: Swedwatch

The recent announcement by European Commissioner for Justice, Didier Reynders, of plans for EU legislation on mandatory corporate environmental and human rights due diligence is very welcome and Swedwatch looks forward to contributing to the process...

It should:

- Ensure that effective due diligence covering all material issues is undertaken by companies and does not become a box-ticking exercise;

- Cover all sectors of the economy and consider both upstream and downstream value chains;

- Ensure that due diligence is conducted with a gender sensitive perspective;

- Ensure access to remedy for rights holders affected by corporate malpractice;

- Establish consequences for companies not complying with the regulation.

- Be aligned and integrated with other regulatory initiatives, including the EU’s sustainable finance strategy, the review of the non-financial reporting directive and the 2030 Climate Target Plan.

In addition, it is crucial that the requirements set forth by the regulation should not become a mere reporting exercise but actually establish a clear legally binding obligation for companies and buyers/procurers to understand, identify, assess, address and mitigate human rights and environmental harm in their value chains...

Read the full post here

Article
7 May 2020

Proposal for an EU wide mandatory human rights due diligence law

Author: Norton Rose Fulbright

On April 29, 2020, the European Commissioner for Justice, Didier Reynders, announced that the European Union plans to develop a legislative proposal by 2021 requiring businesses to carry out due diligence in relation to the potential human rights and environmental impacts of their operations and supply chains. He further indicated that the draft law, once developed, is likely to be cross-sectoral and provide for sanctions in the event of non-compliance.

This announcement [...] comes in the same month as a call by 101 institutional investors [...] for governments to introduce mandatory human rights due diligence laws, and follows the publication of a wide-reaching study commissioned by the EC examining due diligence requirements through the supply chain...

[T]he study ultimately concludes that the introduction of mandatory due diligence requirements would yield the greatest positive impact... A key emphasis [...] was that any new law ought to be cross-sectoral and applicable to all businesses... Based on the Commissioner for Justice’s comments, it would appear the EC is inclined to follow these findings...

Crucially, the “mandatory due diligence requirement” option considered by the study would involve a legal mechanism which imposes a “legal standard of care”, meaning due diligence carried out by a business would need to be objectively sufficient in order to discharge its duty...

Read the full post here