BEERG Newsletter – EU: Legislation on supply chain due diligence in 2021

Last week, EU Justice Commissioner Didier Reynders announced, in a webinar hosted by Greens/EFA MEP Heidi Hautala, that the Commission will introduce legislation next year on mandatory due diligence in global supply chains for companies.

Hautala. Greens/EFA Coordinator in the International Trade Committee, and the chair of the European Parliament’s Responsible Business Conduct Working Group said:

“I am delighted at the commitment Commissioner Reynders showed towards protection of human rights and environment through EU-wide and mandatory due diligence legislation with an enforcement mechanism, applicable across all sectors. I welcome the Commissioner’s view that sustainable corporate governance and due diligence are an essential part of the EU’s recovery package. We should not rebuild the old economy, but a new one that is greener, more sustainable and more resilient.”

On 24 February 2020, the EU Commission published a Study on Due Diligence Requirements Through the Supply Chains. The study suggested that voluntary measures have not been effective in encouraging companies to identify, account and mitigate negative human rights and environmental impacts in their supply chains.

Meanwhile, the coronavirus crisis “has sharpened the need to bolster the resilience of industrial supply chains”, the EU’s internal market commissioner Thierry Breton has warned. The bloc must review the reliability of its supply chains, diversify its sources and cut the risk of interruption while building domestic capacity in crucial sectors including pharmaceuticals, he said.

“In a crisis of this magnitude everything that we predicted will probably be accelerated,” Mr Breton said, referring to efforts under way before the pandemic to deal with supply vulnerabilities. This meant looking “extremely carefully at the behaviour of every country where we have a supply chain”.

Mr Breton said a pharmaceutical strategy to be published this year would seek to address the “vulnerability, sustainability and security of supplies”.