In May 2020, the EU Commissioner for Justice, Mr. Didier Reynders, announced for the first time that the European Commission would propose a legislative initiative on mandatory human rights and environmental due diligence in 2021, as part of its effort to promote sustainable corporate governance.
Effective EU legislation, which would establish a corporate duty to respect human rights and the environment – requiring companies to identify, prevent, mitigate and account for abuses and harm in their domestic and global operations – has been backed by civil society for many years. The current COVID-19 health and economic crises have been stark reminders that a model of corporate regulation based on corporate self-regulation, voluntary commitments, and soft law instruments is simply not robust enough to protect fundamental rights and the environment.
Not any legislation
While the launch of the legislative initiative is a positive step, the authors of the brief call the attention of the stakeholders involved in this process, and particularly of lawmakers, to the fact that for EU legislation to constitute a meaningful advancement towards a better protection of people and the planet, three key conditions need to be met:
• the law needs to apply to all companies operating in the EU market, not only to those
headquartered in the EU, and their operations in Europe and abroad;
• it should extend to the entire value chain, and contain specific provisions for companies
operating in conflict and high-risk areas; and
• it needs to clearly establish that companies should be liable both for not complying with due diligence requirements and for the harm that they or the entities they de facto control either cause or contribute to.
Any legislation that fails to take into account all three of these key aspects would fall short of achieving its objective. Worse, it would risk turning due diligence into a dangerous “box-ticking” exercise that would make it even more difficult for affected individuals, communities, and their representatives to make meaningful advancements towards effective prevention of human rights abuses in global value chains.
Stakes go beyond EU borders
In order to illustrate the reasons for this firm warning, The authors have worked on a brief which provides real life examples from their daily work with communities affected by economic projects in different countries around the world. Their views, grounded in these experiences, emphasize that the EU can do much better to protect human rights and the environment, within but also outside its borders. The publication also calls European stakeholders to take into account the voice of those directly affected by economic projects and the challenges they face when accessing courts, if it wants to enact effective legislation. Individuals, human rights defenders and civil society organisations from the Global South are the first to be impacted by the abuses of European businesses and supply chains: they must be duly consulted in the drafting of the legislation.