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Article

9 Feb 2022

Author:
Euractiv

EU: Coalition of companies & investors calls for swift adoption of human rights due diligence legislation

"Company coalition calls for robust human rights due diligence laws", 8 February 2022

...More than 100 companies including big names like IKEA, Danone, and Ericsson signed a statement laying down a number of concerns and suggestions while reiterating its importance

“This legislation has the potential to create a level playing field for companies to manage their environmental and human rights impacts,” said Peter van der Werf from Robeco, one of the companies that signed the statement.

They also raised concerns over the repeated delay in tabling the legislation, especially as voluntary approaches to sustainable corporate governance were insufficient, and there was a need for legal consequences to assist those harmed by European companies...

...The signatories argue that several criteria would have to be met for the legislation to be effective. First, it should apply to all businesses in the EU market so that no foreign companies would gain an undue advantage.

Moreover, contrary to the position of the trade association Business Europe, due diligence should be applied to the whole value chain of a company and not just to its most immediate suppliers, according to the signatories of the statement...

...Meanwhile, Johannes Blankenbach of the Business and Human Rights Resource Centre warned of an overly bureaucratic process, saying the due diligence could not just be a tick-boxing exercise. According to him, this could be prevented by adopting a risk-based approach...

Finally, the statement’s signatories called for credible accountability mechanisms, which should include both administrative penalties and provisions for civil liability. This would allow companies to be held liable for human rights violations in their value chains, and victims of these violations could sue for damages in European courts...

The legislative proposal to implement the EU’s sustainable corporate governance initiative was initially expected to be tabled in the summer of 2021. It was then delayed to October, then to December, and is now expected on 23 February.

However, a Commission official said the agenda is indicative and subject to change, potentially leading to further delays...

Timeline