The European Parliament’s Committee on Legal Affairs (JURI) on Monday 26 October reviewed the amendments tabled to the draft own-initiative reports on the sustainable corporate governance and due diligence (see EUROPE 12569/20)
In total, more than 800 amendments have been tabled at draft report by Lara Wolters (S&D, Netherlands) on human rights and environmental due diligence in the supply chain of companies.
The first meeting between the shadow rapporteurs last week highlighted different approaches, but was nonetheless constructive, she said.
Most groups agree with the starting point that companies should have a duty to respect human rights, the environment and good governance, she said. But the EPP Group felt that due diligence should be an obligation of means and not an obligation of results. This issue risks dividing the political groups.
On the scope of application, there seems to be a consensus that non-European companies should also be covered by the legislation. However, some groups, including the ECR, believe that SMEs should be excluded from the scope.
The Identity and Democracy and ECR groups would also like the due diligence not to apply to the entire value chain, but only to “those parts that the company is in a position to reasonably control”.
Sustainable governance
Discussions on the draft text on sustainable governance (see EUROPE 12554/20), drawn up by Pascal Durand (Renew Europe France) seem more consensual. Over 180 amendments have been tabled to the report, but for the most part, Mr Durand believes that there is a convergence of views on the importance of the EU being able to legislate on this issue.
“Where we are still debating is the line between ‘soft law’ and standardisation”, he explained.
Emil Radev (EPP, Bulgaria), who tabled 20 amendments, said that administrative obstacles and overloads that would have a negative impact on business competitiveness should be avoided. Rather than imposing restrictions, Mr Radev spoke in favour of incentives.
His group also opposes the inclusion of SMEs in the scope of the Non-Financial Reporting Directive and considers “disproportionate” the obligation for companies to involve all stakeholders when developing their sustainable governance strategy.
For her part, Manon Aubry (GUE/NGL, France) expressed disappointment at the second draft report sent to the political groups. While the first version was, in her view, heading in the right direction, the second, on the other hand, deleted several important elements, in particular the request to the Commission to propose employee representation on the board of directors and the mention of maximum wage differentials between managers and employees.
Furthermore, she criticised the drafting of this second version without a political meeting at the level of the shadow rapporteurs. A criticism to which Pascal Durand replied by invoking the impossibility of organising such meetings last week during the intense plenary session period.
The political groups still have a lot of work to do in order to reach agreement before the vote in the JURI Committee, scheduled for 16 November on the ‘Durand’ report and 2-3 December on the ‘Wolters’ report.
On Monday, the European Commission has additionally launched a public consultation on sustainable corporate governance, open until 8 February 2021. (Original version in French by Marion Fontana)