24/02/2022
The European Commission has presented its long-awaited proposal for a Directive on due diligence for companies on human rights and the environment. The aim is to impose obligations on companies to verify and prevent the negative impacts of their activities on workers, consumers, vulnerable communities and ecosystems (so-called due diligence).
The proposal certainly represents a significant breakthrough, but it is still not enough to contribute to the respect of human rights and the environment in the world, warns the Impresa2030 campaign.
Giosuè De Salvo, head of Advocacy, Education and Campaigns at Mani Tese and co-spokesperson for Impresa2030, says: “This is certainly a step forward, but there are a number of obvious critical issues. The law, as it is conceived, stipulates that only large companies – i.e. those with a turnover in excess of €150 million and more than 500 employees – will be held legally responsible for violations generated directly or indirectly by their activities. In particularly high-risk sectors such as agriculture, textiles/clothing and mining, the threshold drops to 250 employees with revenues of more than EUR 40 million, but this is not enough to extend the legislation to the vast majority of European companies, 99% of which are small and medium-sized, including those in high-risk sectors. The number of staff employed and the annual turnover are not figures that necessarily tell the story of how a company can create damage to the environment and people. If the directive were to affect only 0.2% of European companies, we would miss a historic opportunity to use due diligence as a strategic lever to change the corporate culture that has always put and still puts profit before respect for fundamental rights and nature”.
Martina Rogato, co-spokesperson for Impresa2030, says: “The proposal also leaves plenty of room for circumvention. Large companies, for example, could add new conduct clauses in their contracts with smaller supplier partners and, in doing so, free themselves from the obligation to supervise by transferring it to them”.
While the proposal provides for the introduction of civil liability for failure to comply with due diligence obligations, the text does not take into account a number of obstacles in victims’ access to justice. “There is no remedy for a number of factors that often deny victims a fair trial – explained De Salvo – such as high legal fees, excessively short reporting deadlines, a disproportionate burden of proof compared to the strength of the opposing parties. Imagine, for example, an indigenous Nigerian community accusing a multinational oil company”.
“The Commission’s draft directive promises a new path to justice and compensation for exploited, traumatised and injured communities and workers. But,’ Rogato illustrates, ‘unless it makes it easier for victims to sue companies, it is unlikely to make a difference. And this lack of substantive accountability risks perpetuating major problems such as the exploitation of labour, including child labour, access to land and forests, the destruction of biodiversity and CO2 emissions into the atmosphere”.
On the subject of global warming,” De Salvo explains, “the European Commission wants companies to adopt a climate transition plan in line with the 1.5 degree target of the Paris Climate Agreement. However, the proposal does not foresee specific consequences for breaching this obligation”.
The proposal, which has been awaited and postponed from June 2021 until now, will now be negotiated by the European Parliament and the Council: “We now call on the European Parliament and the Council to strengthen the text and fill in the gaps, in order to adapt it to the obvious and urgent need to protect people and the planet,” Rogato concludes.
