With forced labour and environmental destruction high on their minds, MEPs have endorsed proposed legislation on corporate due diligence.
The European Commission must now follow the European Parliament’s lead and set the legislative process in motion, activists demand.
In a landmark decision, the European Parliament came out yesterday in support of EU legislation to hold companies accountable for human rights abuses and environmental damage along the length of their entire supply chain.
With 504 votes for, 79 against and 112 abstentions, MEPs endorsed the report led by rapporteur Lara Wolters which calls for corporate due diligence and accountability to be embedded in law, rather than the current voluntary schemes.
The vote coincides with growing awareness and concern about abuses along the supply chain, including credible reports of mass forced labour in China which is part of what has been described by human rights groups as a genocidal campaign against the country’s Uighur minority.
“This new law on corporate due diligence will set the standard for responsible business conduct in Europe and beyond. We refuse to accept that deforestation or forced labour are part of global supply chains,” Wolters said. “Companies will have to avoid and address harm done to people and planet in their supply chains.The new rules will give victims a legal right to access support and to seek reparations, and will ensure fairness, a level playing field and legal clarity for all businesses, workers and consumers.”
The binding rules proposed by the parliament would oblige companies operating in EU markets, whether they are based in Europe or elsewhere in the world, to safeguard that they and their suppliers do not violate human rights, do not harm the environment, and do not undermine good governance through such malpractices as enabling corruption or bribery.
On the rights track
Although the European Parliament does not possess the power to initiate legislation, civil society has also welcomed this symbolic milestone.
“The approval of this legislative initiative report sets the EU on the right track towards sustainability grounded in justice,” says Eva Izquierdo, the EEB’s Policy Officer for Global Climate Justice. “MEPs are responding to a profound change in mentality amongst voters who no longer want to selfishly prosper if this prosperity is based on the suffering of the world’s most vulnerable people and at the expense of nature.”
In light of the vital importance of ensuring the goods we consume in Europe are made to the highest ethical and environmental standards, the EEB and its partners in the Climate of Change project mobilised across the EU to urge MEPs to do the right thing and vote in favour of this law.
“The COVID-19 pandemic has revealed the fragility of global value chains whilst also dramatically increasing human rights risks such as forced and child labour,” the letter stated. “Corporate due diligence will help ensure that the private sector does not cause or contribute to future crises and is better prepared for global shocks.”
“The vote is a strong signal from the Parliament to the European Commission that there is a groundswell of support for a due diligence law,” observes Francesca Carlsson, the EEB’s Legal Officer and lead on due diligence. “This should prod the Commission to include robust due diligence rules in its draft legislation on sustainable corporate governance, which is expected to be published in June.”
All of our business
Pushback and opposition are expected from some segments of the business community but this should not stop the EU from doing the right thing. “In a world where inequality is soaring, we cannot neglect other key aspects of sustainability like human rights and social justice,” notes EEB Circular Economy Policy Officer Jean-Pierre Schweitzer.
For the Commission’s proposal to be meaningful and robust, the draft legislation must apply to all businesses operating in the EU market, including SMEs, and it must not only be binding but also enforceable to ensure that it does not become another dead letter law.
In addition, there must be mechanisms for victims and affected communities to demand remedial action and access justice, Carlsson explains. More details of the EEB’s demands are available in this joint statement from civil society.