Credit: European External Action Service – https://creativecommons.org/licenses/by-nc-nd/2.0/
ECCJ and AMNESTY INTERNATIONAL
PRESS RELEASE
15 April 2014
Today, the European Parliament (EP) adopted a reform to strengthen corporate accountability and transparency regarding the impact of businesses’ activities on human rights, the environment and society. The new legislation will require companies to disclose information about the policies and due diligence processes that businesses have in place to assess risks and to prevent adverse impacts of their operations.
“This is an important step forward. The reform recognises that the environmental and human rights impacts of companies are of key concern for society as a whole. It will empower people to access information on how they might be affected by business operations, and enable shareholders to hold the management accountable for negative impact” said Jerome Chaplier from ECCJ, “However, we regret that the original proposal has been weakened so much.”
In the course of intense negotiations between the European Council and the EP to finally agree on the legislation, the number of affected companies was significantly lowered.
The legislation will now apply to about 6,000 European listed companies, credit institutions and insurance enterprises of more than 500 employees – only about a third of the number of companies foreseen in the European Commission’s original proposal. It further allows member states to grant exemptions from the reporting requirement.
For affected companies, the disclosure of non-financial information will be part of their annual management report and will include issues arising from their supply chains.
“In cases such as the collapsed garment factory Rana Plaza in Bangladesh in April last year, proper reporting of risks could have rung the alarm bell in time. European business must take appropriate measures when collaborating with suppliers which display such disrespect for human rights.” said Nicolas Beger, Director of Amnesty International’s European Institutions Office.
Guidelines for companies on how to report under the new reform are expected from the Commission within the next two years. EU member states will also have two years to implement this reform in their national legislation.
“This reform sends a strong signal to the future Commission and Parliament that tangible changes are needed to ensure better corporate accountability. The EU’s agenda on business and human rights must be more ambitious. The Commission and member states must start monitoring companies’ reporting, and if they mislead the public they must be sanctioned”, said Paul de Clerck from Friends of the Earth Europe and board member of ECCJ.
For more information, please contact:
Jerome Chaplier, coordinator European Coalition for Corporate Justice: 0032 (0)477 184753, [email protected]
Paul de Clerck, Friends of the Earth Europe and ECCJ board member: 0032 (4)943 80959, [email protected]
Iverna McGowan, Amnesty International: 0032 (2)5482766, [email protected]