February 23 is the date on which the European Commission should publish its proposal for a directive on corporate due diligence in the field of human rights. This proposal, already expected in 2021 and postponed to 2022, will then be discussed and approved by the European Parliament and the Council of the EU. What is it about?
What “Corporate Due Diligence” means
Due diligence refers to the investigation and deepening of information in order to identify any risks or problems related to business activity. In relation to human rights, due diligence should be exercised, therefore, to identify, prevent, mitigate and compensate for human rights violations such as, for example, workers' rights.
Principle 17 of the UN Guiding Principles on Business and Human Rights, requiring due diligence, includes “the assessment of the actual and potential impact on human rights, the integration of the results of that assessment, the measures to be taken accordingly, the monitoring of responses, and the communication on how these impacts have been addressed."
Why we need a European directive
The need for legislation regulating the activity of the enterprise was even more evident following two tragedies that occured seven months apart. In 2012 in Pakistan, Karachi, a fire in a factory caused around 250 deaths. In 2013 in Bangladesh, the collapse of Rana Plaza caused around 1134 deaths.
The victims were workers in the clothing industry and they died as a result of non-compliance with certain standards for the protection of workers, despite the fact that certifications were also obtained. In fact, the auditing activities, control activities carried out by external companies, also multinational, and the related certifications have proved to be ineffective and insufficient to ensure compliance with certain standards. Some of the brands these people worked for are Benetton, Primark e Walmart.
As a result of these tragedies, some governments have started to adopt laws that impose different obligations on companies: from the obligation of transparency, to the obligation to act. An example of this is the French law on duty of vigilance of 2017.
A directive at European level would lead to greater standardisation. In fact, the laws of the European States are heterogeneous in content and in recipients: they impose obligations of different nature in different sectors and to companies of different sizes, and not all take into account the entire value chain.
Rahul Talukder, COLLAPSE OF RANA PLAZA, 25 April 2013
What the demands are
With the resolution of 10 March 2021 the European Parliament stressed the need for European legislation, considering that "the Union should urgently adopt binding requirements for businesses to identify, assess, prevent, stop, mitigate, monitor, communicate, account for, address and correct potential and/or actual negative impacts on human rights, on the environment and good governance in their value chain".
What is required is for the directive to include obligations relating to the monitoring of the entire value chain, and therefore of suppliers, subcontractors and related companies. In addition, it is required that the scope be as broad as possible, namely that obligations be imposed not only on large companies, but at least also on small and medium-sized high-risk companies, including non-European ones operating in the internal market. Together, it is required that undertakings be required to demonstrate compliance with the due diligence obligation in a transparent manner.
An essential element is also the inclusion of effective mechanisms for the handling of complaints at company and sectoral level and their monitoring by independent authorities.
What YOU can do
Already now, but especially when the debate begins following the publication of the proposal, we can follow and support those organizations that are engaging in an advocacy campaign in order to obtain legislation that protects human rights as effectively as possible. You can, for example, sign the appeal Impresa 2030 – Diamoci una regolata and follow and support the Fair Trade Advocacy Office.
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