NGOs are seething. And after yet another delay to proposals at the European Commission for new laws imposing mandatory human rights due diligence, that frustration has spilled over into an angry letter demanding to know what’s going on.
Led by organisations including Amnesty International, Oxfam, Friends of the Earth and the Business & Human Rights Resource Centre, 47 NGOs have written to Commission president Ursula von der Leyen demanding progress.
“It is unacceptable that such a crucial new law that can help millions of people to demand justice against human rights violations can help safeguard our environment our environment and the climate, is delayed for a third time,” the letter says.
They may well be justified in their frustration. Brussels had made promises that concrete proposals would appear at the end of the summer, then in the autumn and, lastly, by the end of the year. Now it seems the measures have been put off until “early” next year.
Delays to due diligence legislation
It was in March that parliamentarians handed commissioners the challenge of creating mandatory due diligence legislation for companies. At the time they said efforts to encourage voluntary due diligence had failed and that compliance with a new law should be a condition of entry to the single market.
A parliamentary statement said the EU should urgently adopt “binding requirements” for companies “to identify, assess, prevent, cease, mitigate, monitor, communicate, account for, address and remediate potential and/or actual adverse impacts on human rights, the environment and good governance in their value chain…”.
Johannes Blankenbach, a senior researcher with the Business & Human Rights Resource Centre, says there is a great deal of concern with delays given the promises made by EU leaders and the reliance placed upon it by campaigners in the global south.
“Every delay is unfortunate and not really understandable because there’s big public support for this agenda and political support, as well as business support,” says Blankenbach.
Reasons for the delay are opaque. Some observers believe the impact assessment that must accompany a new piece of EU law had not convinced commissioners. There is also substantial concern about the liabilities for companies and board members that the legislation might create. Law firms have warned clients to check their D&O (director and officer) insurance as part preparations for the new rules.
A legislative imbalance
Earlier this year suggestions emerged that the Commission was struggling to find agreement on the content of the legislation. There were concerns that imposing a rule for due diligence throughout the “value chain” would be either an impossible task or, as one business consultant told Board Agenda, involve considerable cost.
But delays may also be caused by practical considerations. The Commission is also pushing ahead with a new Corporate Sustainability Reporting Directive—detailing corporate disclosure requirements and replacing the existing Non-Financial Reporting Directive—which has also proved highly sensitive. Commissioners may want to resolve one piece of legislation before forging ahead with another.
However, the case for European-level due diligence law seems solid from an administrative standpoint. Member states including France, Germany and the Netherlands have already forged their own requirements creating a legislative imbalance across the union.
Plus, the United Nations has recently restated its belief that the introduction of due diligence is a core part of spreading the UN Guiding Principles on Business and Human Rights—a signal that would be difficult to ignore.
Blankenbach’s hope is that the Commission uses the extra time to come up with a sturdier piece of law-making. “If it’s delayed let’s at least make sure it’s bold and ambitious and reflects all the demands from civil society.”