The European Commission publishes its draft proposal for human rights due diligence legislation
Corporate watchdogs offer a cautious welcome to the EU’s due diligence directive, the European Migrant Smuggling Centre releases its annual report, and Walk Free assesses the modern slavery statements of garment manufacturers to highlight good practice and identify reporting gaps.
Last week, the European Commission published its highly anticipated draft legislation on sustainable supply chains, in a bid to minimize the destructive impact on workers, communities and the environment caused by business activities. The highly anticipated Draft Directive on Corporate Sustainability Due Diligence aims to foster sustainable and responsible corporate behavior throughout global value chains and will require companies to identify and prevent adverse impacts of their operations on human rights, including child labour and the exploitation of workers.
The proposal asks businesses to integrate due diligence into policies; identify actual or potential adverse human rights impacts and prevent, mitigate or end them; establish a complaints procedure; monitor the effectiveness of its due diligence measures; and publicly communicate on due diligence. It also provides for civil remedies for victims, sets out provisions in relation to voluntary-model contractual clauses, and introduces duties for directors to set up and oversee the implementation of due diligence frameworks and integrate them into corporate strategy.
The draft law would apply to EU companies with more than 500 employees and a turnover of €150 million. In industries with a higher exploitation risk, companies with more than 250 employees and a turnover of €40 million would also be required to comply, while SMEs would be exempt. Non-EU companies in the single market that exceed these turnover thresholds would further be included.
The Investor Alliance for Human Rights welcomed the proposal but cautioned that significant gaps remain in relation to international frameworks such as the UN Guiding Principles on Business and Human Rights. Furthermore, it points out, although the legislation allows for companies to be held civilly and administratively liable for harms committed by their subsidiaries, contractors and suppliers, numerous barriers to accessing justice for people harmed by business activities remain unresolved in relation to time limitations, access to evidence, legal standing and burden of proof.
According to the European Trade Union Confederation, the directive also falls short on the concrete involvement of workers and unions in shaping and monitoring sustainable business due diligence strategies, at “a time of rising human rights violations including abuse of labour and trade union rights by major European countries”.
Mary Lawlor, the UN Special Rapporteur on the situation of Human Rights Defenders, welcomed the publication but noted the absence of specific clauses for the protection of HRDs, saying, “HRDs are going to be vital to ensuring that this Directive… proves effective in practice. They will be the ones raising the alarm where due diligence isn’t being carried out effectively and will run great risks when doing so.” The NGO Business and Human Rights Resource Centre documented 604 attacks against HRDs working on business-related human rights issues in 2020, while the UN Secretary General has also highlighted attacks against HRDs who report alleged business abuses to the UN.
The proposal is a turning point in the battle to end corporate impunity, according to The European Coalition for Corporate Justice (ECCJ), but it warned it was riddled with flaws and exemptions. It notes the draft legislation applies to less than 0.2 per cent of EU companies, and that staff size and annual turnover are not reliable indicators of a company’s impact on the lives of workers and communities. It also points out that the text implies that companies could fulfil their obligations by adding clauses to their contracts with suppliers and offloading the verification process to third parties.
ECCJ director Claudia Saller said, “…the future law must be victim-based. If the law doesn’t make it easier for victims to hold businesses accountable, then it is unlikely to make very much difference. And this lack of accountability will perpetuate some of the most pressing issues in the world today, like child labour, pollution and the destruction of nature.”
The Commission proposal will be subject to amendments and approval by the European Parliament and governments over the coming months and years, and labour protection groups say they will work with MEPs to fight for a more far-reaching directive that addresses these gaps and truly holds business to account for human rights violations.
Here’s a round-up of other noteworthy news and initiatives:
Europol’s European Migrant Smuggling Centre’s sixth annual report provides an overview of the changing face of human trafficking and migrant smuggling – including new emerging routes, new technologies and new modus operandi that are forcing law enforcement agencies to be better prepared and more vigilant than ever.
This policy paper discusses challenges and gaps in the implementation of the EU’s 2011 Anti-Trafficking Directive, ten years after its adoption. The authors highlight the lack of sufficient resources for anti-trafficking institutions and organizations and how, in many countries, political and legal anti-trafficking measures focus mainly on criminalization and are conflated with restrictive migration policies, increasing victims’ vulnerability to exploitation.
Legislation such as Modern Slavery Acts (MSAs) place obligations on companies in all sectors to report on how they are addressing the risks of modern slavery in their direct operations and supply chains. To gain an understanding of how the garment industry is complying with these obligations, Walk Free and WikiRate have assessed the statements of the largest garment companies reporting under the UK and Australian MSAs, providing a snapshot of their level of disclosure of modern slavery risks, identifying good practice, and highlighting gaps in reporting quality.
An online panel of human rights experts has offered workable solutions for addressing online sexual exploitation and abuse (OSEA), based on the findings of a report from Equality Now, produced in partnership with the Thomson Reuters Foundation. The experts noted that not only is identifying, arresting, and prosecuting online sexual offenders difficult or almost impossible, but that financial institutions must get involved in order to make real progress.
Re:structure Lab, which brings together representatives from Stanford, Yale, Simon Fraser and Michigan universities, is hosting a webinar on 10 March to describe the ways in which existing business models drive labour exploitation and how they must be altered to ensure a more equitable path forward.
Human Trafficking Institute is seeking a Legal and Development Research Analyst to help provide analytical and detail-oriented research and assistance to improve operations and advance its mission. This is a remote position and applications will be accepted until the position is filled.
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