"Legal Brief: Human Rights and Environmental Due Diligence", March 2021
10 years ago, in June 2011, the Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (UNGPs), which represented the first UN-level guidance to both States and companies in relation to business and human rights. The UNGPs are a soft law instrument which does not create legally binding obligations on either States nor companies, but merely provides guidelines. However, they have been extremely influential, and many States and companies have committed to their implementation. As such, they represent a globally recognized and authoritative framework on Business and Human Rights...
..., the UNGPs establish that companies may need to consider additional standards, and should also pay particular attention to the human rights of individuals from groups or populations that are particularly vulnerable (e.g. indigenous peoples; women, national or ethnic, religious and linguistic minorities; children; persons with disabilities; and migrant workers and their families) where they may have adverse human rights impacts on them. The UNGPs clarifies that in order to fulfil this responsibility to respect human rights, companies should have in place policies and processes appropriate to their size and circumstances, including:
(1) A policy commitment;
(2) A human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights;
(3) Processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute...
...→ What does human rights due diligence refer to?
Human rights due diligence consists in a process - or a set of processes - that all companies should implement in order to identify, prevent, mitigate and account for how they address potential and actual adverse human rights impacts with which they may be involved...
...→ What does environmental due diligence refer to?
The concept of human rights due diligence has been incorporated to various international standards and instruments such as the OECD Guidelines for Multinational Enterprises and related materials, and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. In the OECD Guidelines, it was also expended to cover other areas such as the environment. As a result, companies are also expected to exercise environmental due diligence in order identify, prevent, mitigate and account for how they address their adverse impacts on the environment, which includes climate change. In addition, climate change and human rights are intrinsically interrelated as climate change threatens the effective enjoyment of a range of human rights including the right to life, water and sanitation, food, health, housing, self-determination, culture and development...
...→ Why is human rights and environmental due diligence important?
Human rights and environmental due diligence processes have been identified as a core practice of responsible business conduct, key to the fulfilment of the UN Sustainable Development Goals (SDGs). Human rights and environmental due diligence aims to protect the people and the planet by setting out the proactive steps that companies must take in order to avoid infringing on the human rights of others and on the environment, and addressing the adverse impacts with which they are involved. For companies, exercising human rights and environmental due diligence can help manage reputational risks as well as emerging legal risks and improve their relations with stakeholders, such as consumers and investors.
In a recent study for the European Commission which surveyed over 300 companies across Europe, nearly 70% of companies considered that the introduction of an EU-level legislation on mandatory human rights and environmental due diligence legislation would be beneficial for companies insofar as it would level the playing field, increase legal certainty by providing a single harmonised standard and facilitate leverage with business partners on human rights issues. In relation to the COVID-19 pandemic, preliminary studies have suggested that companies who had solid human rights due diligence processes had more resilient and human-rights compatible responses to the COVID-19 pandemic, and were more likely to cope better with the long term negative effects of the pandemic...
"A proposed EU law to prevent environmental and human rights abuses by multinationals has been cautiously welcomed by global Indigenous leaders seeking to highlight the damage done by extractive industries. However they say the text needs to go further if it is to protect Indigenous populations from mining companies."
The EU corporate sustainability due diligence directive represents a key opportunity to advance women’s rights and gender equality in companies’ international value chains. However, the draft text fails to integrate a gender lens and risks leaving women behind.
Even though the Chilean Andina mine is exacerbating the water shortage in the region, numerous European manufacturers of mining machines and mining equipment had business relationships with the mine. The case study shows why the legal regulation of due diligence obligations in downstream value chains is necessary within the framework of the currently discussed Corporate Sustainability Due Diligence Directive.
This report by the Global Business Initiative on Human Rights (GBI) provides key questions for companies to ask when establishing downstream human rights due diligence, and offers an overview of the expectations contained in international standards. Companies are already conducting due diligence in downstream contexts. Yet, in current policy debates at the EU and OECD, the scope of human rights due diligence is being contested
The European Parliament’s environment committee has voted to include an obligation for large companies and SMEs in certain risky sectors to risk-assess their global value chains for abuses like oil spills and pollution, but the improvements are not yet sufficient to prevent and end the vast impacts of companies on climate change, said the European Coalition for Corporate Justice.
In 2016, the Honduran environmental activist Berta Cáceres was killed trying to protect her ancestral lands against the Agua Zarca hydroelectric project, bankrolled by European financial institutions. The CSDDD could stop companies profiting from projects linked to the repression and murder of environmental defenders - but not if it lets investors off the hook, says Global Witness
The study commissioned by The Left in the European Parliament sets out the various ways that subcontracting undermines labour laws in the EU and enables exploitation of workers. It among other things calls for a new European Regulation on decent work in the subcontracting chain and amending the Corporate Sustainability Due Diligence Directive.
In an interview with EURACTIV Lara Wolters highlighted that due diligence is also about downstream activities. According to her, this aspect has become even more relevant after the recent accusations that allege Qatar bribed European lawmakers. The rapporteur asserts that good governance, bribery and corruption should be part of due diligence discussions.
ShareAction, Accountancy Europe, Eurosif, Frank Bold, Finance Watch and WWF, as members of the Informal Group on Sustainable Finance, have released a joint statement on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD).
After the adoption of a position by the Council, Amnesty International criticises that the exclusion of banks and financial institutions and waivers for companies that sell high-risk security equipment and surveillance technologies undermine the directive.
Ahead of Thursday’s (1 December) meeting of EU industry ministers, the fight over whether to include the financial sector in the scope of the Corporate Sustainability Due Diligence Directive (CSDDD) is still ongoing with France, Italy, and Spain threatening to block a common member state position.
The statement outlines four key areas which need particular attention if the Directive is to effectively aid in transforming the tech sector: scope of companies subject to the law; scope of rights; value chains and business relationships; and stakeholder engagement & access to justice and remedy
The letter calls for a General Approach that covers the full value chain including downstream impacts and the full coverage of the financial sector; expands the scope of rights and impacts covered; and strengthens access to justice provisions and addresses barriers to justice often faced by claimants in business-related human rights and environmental cases.
The European Commission’s proposal for a directive on corporate sustainability due diligence includes a dangerous overreliance on industry schemes, multi-stakeholder initiatives, and third-party auditing, a briefing paper by SOMO concludes.
On 24 November, Eurosif, the Investor Alliance for Human Rights and the PRI, supported by 142 signatories, released a statement of support for an ambitious and effective EU directive on corporate sustainability due diligence (CSDDD)
As EU member states close in on a common negotiating position on the Corporate Sustainability Due Diligence Directive (CSDDD), they are fighting over whether companies should do due diligence for their entire value chain or just the supply chain.
Luxembourg, Ireland and Germany have indicated they want to exclude asset managers and institutional investors from scope, with France and Italy going further and calling for the entire financial sector to be left out, an EU diplomat familiar with the negotiations said.
The EU’s long anticipated Directive on Corporate Sustainability Due Diligence is set to fail to hold ICT companies to account for human rights abuses and environmental damage if key shortcomings including on scope and stakeholder consultation are not addressed.
EU-based financiers and their subsidiaries have played central roles in financing projects that have caused human rights violations and environmental damage, and have been linked to land grabbing, deforestation, and violence against communities and land and environmental defenders.
UN Human Rights is concerned about the proposition being advanced by some stakeholders that the requirements of CS3D should not apply to downstream impacts on human rights that a company may be involved in. Such an exclusion would not align with the UNGPs and could undermine the international consensus about the scope of the Corporate Responsibility to Respect Human Rights.
On this page, you will find selected responses in support of effective legislation aligned with international standards from companies and business associations/initiatives who submitted feedback along with other respondents.
This piece argues that for legislation to succeed in advancing the rights of the most affected and to lead to better human rights outcomes for rights-holders, it is crucial to anchor such laws and regulations with not only the perspective of rights-holders but their ongoing involvement.
The in-depth analysis requested by the European Parliament's Subcommittee on Human Rights compares the Draft Directive proposed by the European Commission with the positions adopted by the European Parliament and by the Foreign Affairs Committee. It recommends various changes to the Draft Directive, for example in regards to the scope of human rights and environmental standards and the corporate due diligence duty and process.
An alliance of over 60 companies and initiatives are calling on the European Parliament, Commission and EU member states to ensure that living wages and incomes are included in the final corporate sustainability due diligence directive (EU CSDDD) and that their definitions should not be compromised.
OHCHR highlights five areas where they believe further attention and discussion are needed in
order to improve alignment with the UNGPs, and to create an EU regulatory framework that is capable of meeting the EU’s stated goals, including: company scope; subject-matter scope; taking action; compliance, enforcement and remedy; and stakeholder engagement.
While the draft directive has promising elements, we highlight considerable gaps that must be closed to ensure the law can fulfil its historic potential and bring tangible benefits for workers and communities along global value chains (also includes an overview of relevant resources).
The EU's directive on Corporate Sustainability Due Diligence could represent a landmark step forward, but the proposal contains significant flaws which risk preventing its urgently-needed positive impact for people, planet and climate. We join 220+ organisations calling for an effective law.
After a thorough internal analysis of the Directive’s content, as well as external consultations, ASI is now releasing a comprehensive analysis of the proposal for a directive on due diligence, with specific recommendations for the European Parliament and the European Council to strengthen it.
The briefing addresses shortcomings in the parts of the proposal that relate to corporate governance, directors’ obligations and the responsibilities of the financial sector and makes recommendations for appropriate changes.
The coalition successfully campaigned for a supply chain law in Germany. However, due to resistance from the business lobby, this law still has gaps and weaknesses, which is why an even stronger EU supply chain law is needed.
To close women’s month, 82 civil society organizations from across Europe sent an open letter to European Commissioners, Members of Parliament and Permanent Representations involved in the co-legislation of human rights and environmental due diligence legislation, urging them to make sure the gender-responsiveness gap is addressed.
DIHR examines foundational aspects such as personal and material scope, business relationships and the scope of due diligence across the value chain, use of contractual assurances as well as enforcement and liability. It then goes on to consider each element of the due diligence obligation.
This two-part blog explores in detail the EU's draft Directive on Corporate Sustainability Due Diligence, arguing it provides a strong legal basis to enhance corporate accountability and to create a standard for responsible and sustainable business conduct.
Letter sent to President von der Leyen and Commissioners Breton and Reynders by the International Labour Organization, the Organisation for Economic Co-operation and Development (OECD), and the Office of the UN High Commissioner for Human Rights (OHCHR).
With the right framing, a Directive could advance better outcomes for people and planet. However, for these significant opportunities to be realized, and for the Directive to meet its stated ambition, it is critical that the Directive is firmly grounded in the key international standards on sustainability due diligence adopted by the UN and the OECD.
ActionAid International raises concerns about the European Commission's proposal for a Sustainable Corporate Due Diligence Directive, specifically on the lack of inclusion of any reference to women and other marginalised groups
The newly published Corporate Sustainability Due Diligence Directive falls short on involving workers and trade unions in shaping and monitoring sustainable business due diligence strategies, says the European Trade Union Confederation
The EU's proposal falls short on a number of fronts in its promise to promote sustainable business and investor practices and ensure accountability for harms, says the Investor Alliance for Human Rights
Frank Bold argues that the EU's legislative proposal on corporate accountability presents just some elements that foster integration of sustainability and long-term thinking in corporate governance rules, creating the risk of a tick-the-box exercise
The Escazú Agreement and its principles must be integrated into the list of relevant international conventions that companies must comply with as part of the due diligence measures prescribed in the regulation, the organisations write.
Europe needs a Copernican Revolution in corporate behaviour to tackle the climate crisis and social disparities. To do that, the EU should start with clarifying the fundamentals of corporate law, the authors argue.
This compendium contains the contributions of experts that participated in a series of webinars exploring the topic of due diligence and its connections to civil liability, private international law, and sustainable finance, among other topics
The request, made on the 15th December 2021, asked for all correspondence and (e)meetings with stakeholders and members of the RSB, related to the proposal, as well as the RSB opinion and the Commission Impact Assessment.
14 industry associations and responsible business initiatives express their support for the EU’s objective to ensure respect for human rights and the environment through an EU-harmonised regulatory approach to due diligence.
MEPs Lara Wolters, Heidi Hautala, Manon Aubry and Pascal Durand have sent an access to document request to the Commission, requesting access to the 2 opinions of the Commission’s internal quality control body, the Regulatory Scrutiny Board and communication between interest groups and the RSB on the Commission’s Sustainable Corporate Governance initiative.
The European Commission should keep its promises and uphold corporate human rights obligations according to an open letter sent to President Ursula von der Leyen on 8 December signed by 47 civil society and trade union organisations.
In a debate in Parliament Dutch Minister for Foreign Trade and Development Cooperation announced that due to the "very disappointing" and "indefinite" delays at the European Commission, the Dutch government will immediately start work on ambitious national binding due diligence legislation.
On International Women Human Rights Defenders Day, over 60 civil society organisations sent an open letter to European Commissioners, Members of Parliament, and Council of the European Union Representatives, urging them to make the forthcoming corporate human rights and environmental due diligence law gender-responsive.
While the discussions on sustainable corporate governance and supply chain due diligence continue at EU level and a proposal for a directive has been postponed several times, Germany is sending a strong signal.
The struggle of the Lenca people, of Bertha and her daughter, is only one example of the daily struggle of indigenous and peasant communities to protect land, water sources, forests and our human family from the negative impacts of corporate activities. The upcoming Sustainable Corporate Governance proposal could be a game-changer for communities faced with corporate abuse worldwide.
Campaign calls on Commission Vice-President Věra Jourová, Commissioner for Justice Didier Reynders and Commissioner for the Internal Market Thierry Breton to introduce an ambitious legislative proposal on mandatory human rights and environmental due diligence.
In a letter to President von der Leyen, and Commissioners Reynders and Breton, MEPs stressed the importance of addressing barriers to justice for victims of corporate abuse in the upcoming due diligence law proposal
To effectively stop human rights violations and negative environmental impacts in global supply chains, EU policymakers should ensure the upcoming legislation leads to positive impacts for rightsholders and improves the situation and the livelihoods of smallholders.
In her letter to the presidents of EPP, S&D, Renew, GreensEFA and the Left political groups, President Von der Leyen stresses the importance of ensuring consistency in developing a sustainable framework for economic operators, and that the initiative will be adopted in 2021
"By passing world-leading legislation now to ensure transparency, liability for environmental and human rights abuses and remedy for the individuals affected, the EU can point the way to a safer, more sustainable planet, and establish frontrunner status in sustainability and justice" - MEP Toine Manders, European People's Party, and Steve Trent, Environmental Justice Foundation
The note provides recommendations in light of the European Parliament's resolution of 10 March 2021 on corporate due diligence and corporate accountability, focusing in particular on issues connected with the translation of human rights due diligence into a binding legal standard, and on corporate accountability and remedy.
The undersigned Members of the European Parliament sent a letter to President von der Leyen and 13 commissioners reiterating some of the key demands of the European Parliament’s legislative own-initiative resolution regarding the upcoming proposal on Sustainable Corporate Governance.
The briefing follows a public letter sent by NGOs to DG Justice Commissioner Didier Reynders and Executive Vice-President Frans Timmermans in support of the EU Commission plans on Sustainable Corporate Governance.
The fate of the proposals on (i) minimising the risk of deforestation and forest degradation associated with products placed on the EU market and (ii) sustainable corporate governance is now unclear, raising concerns among civil society.
Ferrero, Mars Wrigley, Mondelez International, Nestlé, Tony’s Chocolonely & Unilever shared a joint letter to Commissioners Reynders, Breton and Sinkevičius, calling for the adoption of a legislative proposal without further delay.
Eight years on from the Rana Plaza building collapse, many European fashion companies are still linked to human rights abuses on a daily basis. For an EU due diligence law to make a difference, it can’t just be a list of boxes companies must tick.
The organisations call on the EU to ensure that its upcoming legislative measures are effective and fully uphold their rights as set out in international law, and in line with the EU’s own commitments.
EU Financial Stability Commissioner Mairead McGuiness and Justice Commissioner Didier Reynders explain the importance of aligning the due diligence law proposal with reforms to the non-financial reporting directive (NRFD) if companies are to effectively be held to account
Over half a million people around the globe have demanded a strong EU law to hold corporations accountable for their impact on human rights, including trade union and workers’ rights, and the environment. These demands were made as part of the public consultation launched by the EU Commission.
John Ruggie voices three reservations: (1) directors are not the main driver of short-termism; (2) opposition to addressing directors’ duties may jeopardize the initiative; and (3) doing so may be largely unnecessary, as properly designed mandatory due diligence will itself change directors’ duties, he writes.
The European Commission hold a virtual exchange with three business & human rights advocates from the Global South as part of a public consultation for the proposed corporate human rights and environmental due diligence law
The European Commission is considering a new law to hold businesses accountable for their impact on people and the planet. To support people in participating in the EU's consultation on mandatory due diligence, Friends of the Earth, the European Trade Union Confederation, Arbeiterkammer Europa (AK Europa), Österreichischer Gewerkschaftsbund (OGB) and the European Coalition for Corporate Justice (ECCJ) have launched a new website.
As the European Parliament begins developing proposals for a new – and momentous – law to hold business to account for its impact on people and planet, Richard Gardiner from Global Witness sets out how this process came about and what needs to happen now to ensure this really delivers results.