BEERG Newsletter - EU: 2023 – the year of due diligence

2023 will see the EU’s proposed Directive on corporate due diligence work its way through the Brussels legislative process, with both the Council of Ministers and the Parliament picking over details of the law. France has had a law on “corporate vigilance” in place for some years, and on January 1 next, the German law on corporate responsibility for supply chain adherence to human and labour rights comes into force. Spain and the Netherlands are also looking at passing national laws.

According to EurActiv as EU Member States close in on a common position on the Directive, which will form the basis of negotiations between the Council of Ministers and the Parliament, “they are fighting over whether companies should do due diligence for their entire value chain or just the supply chain.”

The Directive initially proposed by the Commission on 23 February 2022 would require member states to introduce legislation making companies responsible for violations of human rights and environmental standards along its entire value chain. This would mean that a company would have to conduct due diligence on its suppliers and clients, and it could also be held liable for how its product is used and disposed of.

However, according to EurActiv, “a coalition of member states, including France, Italy, Spain, and Portugal, are trying to prevent this in a last-minute push to narrow the scope of the directive to the supply chain of a company.”

“We believe that the focus should be on the upstream and not on the downstream [of the value chain],” an EU member state diplomat told EurActiv, arguing that due diligence of the supply chain was already ambitious. Others, such as Germany and the Netherlands are pushing back on this. Meanwhile, trade unions see the proposed EU law as a platform for global organising. As Oliver Roethig of UNI Europa writes 

For too long, the global operations and value chains from which multinationals draw their profits have been a wild west. Companies have been allowed to overlay human-rights abuses with complexity, obscurity and soft ‘corporate social responsibility’ pledges, without accepting real accountability for the conditions of their workers, and those of their suppliers, around the world.

Ending corporations’ unilateral oversight over human-rights due diligence is key. For the adoption of legislation to truly shift practices to safeguard human rights, including workers’ rights, we must embed accountability throughout the process by creating a seat at the table for those representing rightsholders—including trade unions at national and international levels. (BEERG underlining)

We will be reporting on the progress of the due diligence Directive as it makes its way through the system. It will also be on the agenda for out BEERG Network Meeting in Brussels on Wednesday/Thursday, February 1 and 2.