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EU: Due diligence proposal “a missed opportunity”

Responding to the publication of the European Commission’s proposal for a Directive on corporate sustainability due diligence, Patrick Wilcken, Head of Business and Human Rights at Amnesty International said: 

The EU Commission’s decision to develop a directive marks a milestone on the road to greater corporate accountability across the EU. However, the narrow scope of the draft means that this is a missed opportunity, as in its current form only 1% of all EU companies would be required to check that their business complies with human rights and environmental standards

Patrick Wilcken, Head of Business and Human Rights at Amnesty International

“The EU Commission’s decision to develop a directive marks a milestone on the road to greater corporate accountability across the EU. However, the narrow scope of the draft means that this is a missed opportunity, as in its current form only 1% of all EU companies would be required to check that their business complies with human rights and environmental standards.”
 

The UN Guiding Principles on Business and Human Rights, on which this proposed legislation is modelled, explicitly states that due diligence responsibilities apply to “all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.”  

The proposal also threatens to restrict access to remedy for victims of corporate human rights abuses by allowing companies to shift their responsibilities on to business partners using contractual assurances. 

The draft nevertheless represents an important first step towards establishing key principles in law: that companies must conduct human rights and environmental due diligence across their global value chains; and that they can be taken to court for harms resulting from a failure to meet these due diligence obligations. 
 

“EU co-legislators must strengthen this proposal, extending it to as broad a range of businesses as possible and eliminating loopholes for avoiding liability. Only then will we see businesses across the EU held to account for the human rights and environmental impact of what they do.” 

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Background  

The EU Commission proposal on corporate due diligence will only impact businesses with more than 500 employees and €50 million net turnover and companies in “high-impact” sectors with more than 250 employees and €40 million turnover. Small and medium-sized enterprises (SMEs) would be entirely excluded. 
 
Amnesty International has joined calls for the EU to establish clear, robust and enforceable cross-sectoral requirements on business enterprises to respect human rights and the environment and to carry out due diligence.