Big business makes joint call for legal duty of care for human rights and the environment

BY BUSINESS & HUMAN RIGHTS RESOURCE CENTRE

September 10, 2020

London, United Kingdom – 26 companies, business associations, and initiatives have called for mandatory human rights and environmental due diligence legislation at EU level in a joint statement released today. The group includes several large multinationals with a combined annual turnover of almost 350 billion EUR. Several signatories have already supported calls for mandatory due diligence at a national level through previous statements and ongoing campaigns. This is the first pan-European, international as well as cross-sectoral business statement to call for the legal duty of care.

The statement says:

'Mandatory human rights and environmental due diligence legislation has already been introduced, or is under discussion, in a number of EU member states and other countries around the world and has gained substantive public support by businesses. Mandatory legislation can contribute to a competitive level-playing field, increase legal certainty about the standards expected from companies to respect human rights and the environment, clarify legal consequences for when responsibilities are not met, promote engagement and impactful actions between supply chain partners and, above all, trigger and incentivise impactful and effective actions on the ground. EU-wide cross-sectoral legislation, reflecting national developments and with clear accountability, should harmonise these expectations towards companies, ultimately enhancing outcomes for people and the planet.
We therefore welcome the European Union and its member states’ efforts to introduce new mandatory human rights and environmental due diligence legislation, as an integral part of the move to build back a more resilient economy that works for all.’

The EU Commission committed to introduce legislation on mandatory due diligence for companies earlier this year and has just launched a formal “sustainable corporate governance” initiative with an Inception Impact Assessment mentioning possible legislation.

In its 2020 ICT Benchmark, KnowTheChain found Europe-based companies scored lower than their North American counterparts when it came to addressing forced labour risks in their supply chains, with top-scoring Asian and North American companies ranking higher the top-scoring European company.

During the COVID-19 pandemic, Business Human Rights Resource Centre have been tracking the actions and commitments of 35 global fashion brands and the impact on workers in their global supply chains through several different evidence-based indicators and survey responses. Only 14 of the 26 European companies monitored have publicly committed to paying suppliers in full for completed and in-production orders - actions which determine whether their supply chain workers are paid.

At the same time, EU companies have been linked to human rights and environmental abuses worldwide including employing exploitative working conditions in electronics factories in Malaysia, on farms in Brazil, UK, and Sri Lanka, and in apparel and textile factories in Ethiopia and China.

The rise of mandatory human rights due diligence legislation in European countries, including France, Germany and the Netherlands, as well as in the EU could change this.

The Resource Centre’s Executive Director, Phil Bloomer said:

“This statement demonstrates welcome leadership from major European and international companies to make markets work for shared prosperity and climate security. This legislation will change the calculation of risk in board rooms regarding abuse of workers, harm to communities and pollution. With worsening inequality and climate breakdown upon us, it is urgent that reckless and irresponsible companies are made to reform and show a duty of care. This company statement will help embolden the European Commission, and the German Government’s European Presidency to move decisively forward.”

Over 100 civil society organisations and trade unions called on the EU last year to develop effective human rights and environmental due diligence legislation.