The coalition is calling on the European Commission to introduce legislation establishing a corporate duty to respect human rights, the environment, and provide access to justice for victims of potential abuses. Such legislation could help companies and financial institutions prevent potential risks and ensure fair competition for European companies who act responsibly.
A so-called mandatory due diligence law would make companies and financial institutions legally obliged to identify, prevent, and mitigate, as well as hold them to account for potential abuses and harm in their domestic and global supply chains and operations.
Companies are already urged expected to do so under the United Nations Guiding Principles for Business and Human Rights and the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct. Yet, despite a growing trend towards hard law at the national level, there are still no cross-sectoral laws in the EU requiring companies and financial institutions to act. Such a law could build on similar legislation already passed or under discussion in individual member states such as France, Finland, Germany, Netherlands and Italy. However, an EU-wide law would be crucial to hold all companies accountable to the same standard.
Ben Vanpeperstraete, at Clean Clothes Campaign, said: “The coalition observes that decades of voluntary corporate social responsibility initiatives have failed to adequately protect human rights and the environment from problems such as forced labour and deforestation. Services and goods linked to environmental damage and human rights abuses have been continuously found in products and services in the EU.”
“It’s only fair to create a level-playing field for everyone, so that companies taking responsibility for their supply chains are not undercut by the race to the bottom.” said Chloe Cranston, Business and Human Rights Manager at Anti-Slavery International. “It’s time we create an economy where business is not carried out at the expense of vulnerable people exploited in the production of goods we buy in Europe.”
“The tide is turning and we’re glad to see the growing call for EU-wide legislation that would have a truly global impact”, she added.
Rachel Owens, Head of EU Office at Global Witness: “The case for a mandatory EU law to ensure European companies and financiers are accountable for their environmental and human rights impacts globally is crystal clear. The EU has a golden opportunity to show global leadership by taking steps to get its own house in order and to ensure that business and finance work for people and planet”.
In addition to the one hundred civil society organisations calling on the EU to introduce mandatory corporate environmental and human rights due diligence, there is an increasing number of leading companies in favour of EU-wide legislation. The absence of such a law systematically undermines individual responsible business efforts, leaving them at a competitive disadvantage while continuing to incentivise an unsustainable business race to the bottom.
Heidi Hautala, European Parliament Vice-President and attending the Finnish Presidency event states that, “the level playing field is not just about rights for companies but also obligations. Citizens and victims of human rights violations have rights too! When the EU acts, the impact is felt beyond its borders. The EU must now show global leadership with mandatory due diligence legislation.”
The call can be found here.