European Parliament Report on « corporate social responsibility: a new partnership »

The International Federation for Human Rights (FIDH) welcomes the report of the Committee on Employment and Social Affairs of the European Parliament on Corporate social responsibility: a new partnership (A6-999/2006) to be voted by the European Parliament during its plenary session from 12 to 15 March 2007.

The report calls for a depolarised debate on CSR, recognising the complementarity of voluntary and regulatory approaches to CSR, and proposes ways forward. This goes beyond the weak position taken by EU Commission in its March 2006 Communication, which backs a voluntary and business only approach to CSR, which left disappointed the majority of stakeholders1 (see joint FIDH and Amnesty International press release 24/03/2006). FIDH has always underlined that CSR practices and public intervention are not opposed to one another but may be mutually supportive, and thus welcomes a number of proposals made by the report, which do reflect FIDH’s and other NGOs’ concerns (See http://www.fidh.org/article.php3?id_article=3878).

First, FIDH welcomes the proposals for increased transparency and credibility of CSR initiatives. The report supports mandatory integrated social, environmental and financial reporting (27) by companies, which would be an important step towards transparency of CSR initiatives. It insists on the integration of existing internationally agreed standards and principles into voluntary CSR initiatives and application of independent monitoring and verification, and recommends the creation of such a mechanism at the European level (6). Such a mechanism that should encompass the activities of companies and those of their subcontractors outside the European Union. Further, the report insists on the application of Directives on misleading advertising and unfair commercial practices to adherence by companies to their voluntary CSR codes of conduct (40). FIDH believes these measures would ensure an enhanced transparency for consumers and socially responsible investors and will constitute a serious incentive for companies to implement credible CSR initiatives, since the most responsible companies will be rewarded by the market.

Second, the report states that CSR must not be separated from questions of corporate accountability and suggests a number of mechanisms : a mechanism by which victims, including third-country nationals can seek redress against European companies in the national courts of the Member States (34); an EU ombudsman on CSR to undertake independent enquiries on CSR-related issues at the request of companies or any stakeholder group (39); the extension of the responsibility of directors of companies to minimise any harmful social and environmental impact of companies’ activities. Further, the report recommends the improvement of the OECD national contact points, including by conducting a review of their effectiveness (70). The FIDH considers that these measures would be important ways to increase the accountability of companies that may be harming human rights and would constitute an important signal to victims of human rights violations by companies. Indeed, European States today do not offer adequate remedies to victims of violations committed by European companies in third states.

Finally, the FIDH welcomes the suggested use of public procurements to favor environmentally and socially responsible business. The public authorities of the EU member states and the Commission should indeed use the opportunities of provided by the revised Public Procurement Directives of 2004 to advance CSR by applying social and environmental clauses to their contract (15, 42).

The FIDH considers the report as an attempt to put back on track the debate on CSR and calls upon the European Parliament to adopt it during its plenary session in order to send a positive message to the European Commission and encourage it to move the debate beyond the present deadlock.

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