Important step towards greater corporate accountability as European Commission commits to new EU rules to regulate supply chains

29 April 2020, Brussels – Global Witness strongly welcomes the announcement today from the European Commissioner for Justice, Didier Reynders, that the Commission commits to introducing rules for mandatory cross sectoral corporate due diligence for all environmental, human rights and governance impacts next year.

The announcement came during a high level online event hosted by the European Parliament’s Responsible Business Conduct Working Group, during which the Commissioner presented the findings of the Commission study on due diligence requirements through supply chains.

This encouraging announcement is the result of a sustained campaign by civil society, including Global Witness, for the EU to introduce binding cross-sectoral laws requiring companies and financial institutions to identify, prevent, mitigate and account for human rights abuses and environmental damage linked to their operations, subsidiaries or value chains.

We urge Commissioner Reynders to follow through on this commitment, act quickly and introduce legislation which:

• Mandates businesses, including financial institutions, to respect human rights, the environment and governance, such as corruption, in their own operations, their global value chains and within their business relationships.
• Applies to businesses, both public and private, including financial institutions, of all sizes and across all sectors, domiciled or based in, operating, or offering a product or service within the EU.
• Puts in place effective measures and procedures to ensure full compliance, effective access to remedy for victims and affected communities and liability for harms caused by businesses.
• Builds on international standards such as the OECD Guidelines for Multinational Enterprises, which provide a robust and effective framework for practical implementation for businesses.

Global Witness has consistently advocated for the introduction of due diligence legislation at EU level. We have demonstrated how European companies and financial institutions have been complicit in corruption, land grabbing, deforestation, human rights violations, such as threats and violence against land and environmental defenders, and the fuelling of conflict and instability.

Our latest briefing clearly outlines the need for regulatory action and explains why the EU is uniquely placed to introduce a set of harmonised due diligence rules across all its member states. 

The EU needs to propose ambitious legislation if it is to meet its target to become climate neutral by 2030, and to ensure that companies operating in the EU are not profiting from human rights abuses, environmental destruction and corruption.

The German Ministry for Labour and Social Affairs was today very supportive of EU action, stating: “you have our support from Berlin, Commissioner.”

Rachel Owens, Head of EU Office and Corporate Accountability Campaign Lead, Global Witness, said:

“Today’s announcement has the potential to be a real game changer in how companies protect people and planet. Now it must be followed up by a meaningful legislative proposal. During this period of uncertainty and economic turbulence, such legislation would help to ensure robust and sustainable supply chains and help companies address their environmental, social and governance issues related to the Covid-19 crisis. It would also ensure that such responses do not create further risks to people, planet and society.

Strong EU action on corporate due diligence would send a clear signal that the EU is a global leader in protecting human rights and the environment. This leadership is needed more than ever.  We are facing a global pandemic, and the existential threat of climate breakdown is looming. Both are crisis’ are leading to increased precariousness and suffering for people around the world. Corporations must do their part to mitigate this in their operations and along their supply chains.

The European Commission study on due diligence has shown broad consensus across both civil society and companies that mandatory EU rules would have the greatest impact to tackle these threats.

The Commissioner must make good on his pledge today and on the EU’s Green Deal commitments, by swiftly introducing binding rules requiring companies to ensure their supply chains are not linked to environmental, human rights abuses and corruption.”