EU is well placed to show leadership with its future due diligence legislation

EU Commissioner for Justice, Didier Reynders, made a landmark announcement last month in a webinar organized by European Parliament’s Responsible Business Conduct (RBC) Working Group. The group represents the key MEPs working on Business and Human Rights across political groups and parliamentary committees.

Mr. Reynders declared that in 2021 he will propose a Mandatory Human Rights and Environmental Due Diligence legislation. The announcement was much welcomed by the MEPs and the many stakeholders from civil society to progressive companies who have been anxious about the EU inaction on Business and Human Rights.

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. It calls the forthcoming EU legislation on due diligence a ”historic and meaningful contribution to the European Green Deal and sustainable economic recovery” in its letter to Commissioner Reynders sent this week.

Heidi Hautala, MEP and Chair of the RBC Working Group says: ”We cannot wait longer to create a level playing field in which responsible instead of irresponsible businesses will be rewarded. With our response we MEPs want to give our full support to the Commission to develop this long awaited and much needed piece of legislation. Through constructive and open dialogue we want to help build majorities and overcome obstacles in EU institutions and among Member States.”

In its letter, the Working Group reminds that the Covid-19 crisis has highlighted the precarious nature of global value chains; whilst the subsequent health, economic and social crises have reinforced the need to ensure their resilience and sustainability.

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 letter to Commissioner Reynders.