In the face of intense lobbying by multinationals and internal divisions within the European Commission, the European Parliament is mobilising to keep up the pressure for ambitious due diligence, which would require companies to prevent and reduce the social and environmental impacts of their activities throughout their supply chains.
On Tuesday 22 June, the Presidents of the EPP, S&D, Renew Europe, Greens/EFA and The Left groups wrote to the President of the European Commission, Ursula von der Leyen, asking her to respect the level of ambition proposed by Parliament in its own-initiative report, adopted by an overwhelming majority in March (see EUROPE 12675/10). A second letter from the members of the Parliament Working Group on Corporate Accountability was sent on the same day to Ms von der Leyen and 13 European Commissioners.
The call from Parliament comes on the eve of a discussion on this legislative proposal, expected on Wednesday 23 June in the College of Commissioners. When asked about this discussion, the Commission had not replied by the time of going to press.
Reluctant commissioners
“We have information that gives us reason to be worried”, the co-president of The Left group, Manon Aubry, told EUROPE on Wednesday.
The proposal, which was initially to be presented in June, has indeed been delayed and will only be released in October. At the end of May, the Regulatory Scrutiny Board, which advises the College of Commissioners, rejected the impact assessment prepared for the future legislation. It is now trying to “block the most progressive elements of the proposal”, according to the French MEP.
Ms Aubry is also concerned about the involvement of some European Commissioners in the drafting of this text. The initiative is no longer the exclusive responsibility of the Commissioner for Justice, Didier Reynders, who has publicly made strong commitments on due diligence (see EUROPE 12705/14), but has also been entrusted to the Commissioner for the Internal Market, Thierry Breton, to reassure companies. As a result of this transfer, there is a behind-the-scenes battle between DG JUST and DG GROW, which calls into question all the work that has been carried out over the last 2 years on this issue.
On the other hand,former Commissioner for Justice Věra Jourová, who now holds the portfolio for values and transparency, is reportedly hostile to the proposal and is, according to Ms Aubry, trying to “torpedo” the text.
“With the involvement of these reluctant Commissioners, we have reason to be concerned about the scope of the supply chain, the liability regime, and the sanctions”, said the MEP. In her estimation, these commissioners would support due diligence that would only apply to the first tier of suppliers in the supply chain, which would allow companies to absolve themselves of any responsibility by inserting a supplier.
However,in their letter, the Presidents of the political groups are clear. They want “all large companies, publicly listed small and medium-sized undertakings, and high-risk small and medium-sized undertakings operating on the EU market, in a manner proportionate to their size, capacity, resources [...] be made accountable, in accordance with national law, for the harm they have caused or contributed to”.
The mobilisation of civil society in favour of this text is not weakening either. “This is a really significant moment in the journey towards strong corporate accountability rules in the EU. MEPs across the political spectrum, including the EPP, have put the Commission on notice—they must not give in to demands of the corporate lobby, but instead produce a law that delivers for people and planet”, said Richard Gardiner, campaigner for Global Witness.
Lobbying continues
MEPs and supporters of EU due diligence are concerned that the postponement of the presentation of the legislative initiative leaves more time for lobbies to try to unravel the text.
A recent report by the NGOs Friends of the Earth France, Friends of the Earth Europe, European Coalition for Corporate Justice and Corporate Europe Observatory has highlighted the different strategies of multinationals to assert their interests.
The report targets in particular the practices of BusinessEurope, which has made no secret of its opposition to the text from the outset, but also those of the European Brands Association (AIM), which brings together Coca-Cola, Danone, Mars, Nestlé, Nike, and Unilever, among others, and which, according to the NGOs, has been lobbying DG JUST for legislative mechanisms to “incentivise” companies to respect human rights, such as rewards in terms of “trade preferences and development policies”.
See the letter from the Presidents of the political groups: https://bit.ly/2Sjy3IC and of the European Parliament working group: https://bit.ly/3j2tYne
See the NGO report (in French): https://bit.ly/3vKx2XO (Original version in French by Marion Fontana)