EU Justice Commissioner Didier Reynders promised on Wednesday 29 April a legislative initiative in 2021 requiring European companies to monitor respect for human rights and mitigate any negative environmental impacts they may have in their supply chains, at an online conference organised by the European Parliament’s working party on corporate accountability.
The need for a mandatory ‘due diligence’ requirement had been clear since the study by the British Institute of International and Comparative Law, published at the end of February (see EUROPE 12432/9), which pointed to the ineffectiveness of voluntary measures and recognised the need for European regulation, he explained.
Many companies are themselves in favour of it, he said. A few days ago, about 100 investors representing a total of 5 trillion dollars in assets under management called on governments to make due diligence mandatory for companies.
But this need has become even more urgent recently, so much so that the failings of companies in terms of their duty of vigilance have been brought to light by the Covid-19 crisis, Didier Reynders stressed. In doing so, he assured MEPs that the legislative initiative would not be postponed because of the crisis and even considered that sustainable corporate governance should be part of the European recovery plan.
While the outlines of the future legislative proposal have yet to be drawn, the Commissioner confirmed that the Commission is considering a cross-sectoral approach.
Asked by several MEPs, including Manon Aubry (GUE/NGL, France), about the need to ensure compliance with the text and access to remedies for victims, he agreed that a series of sanctions should be provided for.
The Commission is also working on a second element: sustainable corporate governance. A study on the duties of corporate executives is expected to be finalised in May, Mr Reynders said.
The Commissioner’s announcements have been welcomed by MEPs. Due diligence in corporate supply chains is indeed a long-standing demand of the European Parliament, which has called for it in no less than 15 different resolutions, recalled MEP Heidi Hautala (Greens/EFA, Finland), who moderated the conference.
These initiatives are also supported by Germany, which will hold the Presidency of the EU Council from 1 July. Berlin supports a mandatory, cross-sectoral approach and appropriate access to justice for victims, said Carsten Stender of the German Federal Ministry of Labour and Social Affairs.
Nevertheless, the discussion has only just begun, recalled Commissioner Reynders, who expects complicated discussions within the Commission, but above all in the European Parliament and the EU Council. The Commission will launch a public consultation very soon on this issue. (Original version in French by Marion Fontana)