It is a “duty of care” that the European Commission wants to set in stone. This Wednesday, February 23, Brussels is indeed presenting a legalization project intended for large companies. The European body wants to force them to account for environmental damage but also for violations of rights, within their production chain, including by subcontractors, reports Le Figaro† A way to encourage companies to take action against climate change, but also to fight against forced labor that particularly, but not only, affects the Uyghur population.
“If a company identifies potential negative impacts on human rights or the environment, it must take appropriate action to prevent and minimize them”, we can read in this project, which AFP was able to consult. How? ‘Or what? Through “contractual guarantees” with its regular subcontractors or business partners.
It’s up to companies to set this up “appropriate measures to monitor compliance with these commitments” : such as external auditors, a financial contribution, or even the termination of all relationships with the subcontractors or partners involved. An annual report should also be published detailing the impact of their activities.
This legislation should cover: European companies with more than 500 employees and an annual turnover of more than 150 million euros. For companies outside the EU, they will also fall under this legislation if their turnover also exceeds 150 million euros within the EU.
Concerning European and Non-European Companies more than 250 employees, with a turnover of more than 40 million eurosand comes for half of the so-called sectors “at risk”such as textiles, leather, minerals or even agriculture: “simplified due diligence obligations” will be requested.
Small and medium-sized enterprises will be exempted, the Commission proposes to give them a “burden” financial and administrative.
In total highlights Le Figaro† 13,000 European companies and 4,000 from other countries would be affected by these new measures.
A bill that is not unanimous
This bill is only at an embryonic stage. It has yet to be discussed by MEPs and Member States, recalls Le Figaro† Especially since not everyone is convinced of its potential effectiveness. For example, the German elected Anna Cavazzini (Greens) is suing AFP “lack of ambition” † “The complete exclusion of SMEs means that 99% of European companies will continue their activities as if nothing had happened”†
“This excludes many companies in the food and textile industry. † If the authorities just wait for each group’s annual report, it’s not going to work† †
Richard Gardiner, expert from the NGO GlobalWitness
On the employers side, the BusinessEurope association fears “decision paralysis” driven by these potential new regulations and “endless lawsuits”†
If this proposal is adopted, the future will confirm its effectiveness or not.