Today, the EU agreed on a new European law to make companies accountable for the damage they cause to people and the planet - the Corporate Due Diligence Directive (CSDDD).
In response, Oxfam EU’s Economic Justice Policy Lead, Marc-Olivier Herman, said:
"This deal marks a significant milestone as the largest of companies will finally have to clean up their act. But it did not get through unscathed with the regressive business lobby and a group of EU countries led by France and Germany punching holes in the law.
"Firstly, the law will leave 99 percent of companies off the hook - ignoring too many companies in sectors rife with labour exploitation. Secondly, France shielded banks and investors so they can continue bankrolling human rights violations and environmental destruction. Thirdly, Germany made it harder for survivors of corporate abuse to stand a chance in court with the scales tipped in favour of companies."
Notes aux rédactions
Marc-Olivier Herman is available for comment and interview.
Oxfam calls for EU due diligence rules that:
- Apply to all companies. The law only covers large companies. For EU companies, only those with more than 500 employees and over 150 million euro in turnover. The scope is only extended to companies with 250 employees and 40 million euros in turnover from a restricted set of high-risk sectors, including textile, agriculture, mining, and construction.
- Apply to the entire value chain. This means it should cover all those affected by the company’s business, including those using their products and services. The deal reached today covers suppliers (upstream). Clients (downstream) are only covered to a very limited extent as it does not include the sale or use of products and services.
- Include the financial sector. Banks and investors bankrolling environmental destruction and human rights violations must not be left off the hook. As a result of French pressure, the deal does not make financial players accountable for the impacts of their investments on human rights and the climate. However, large banks and investors will have to adopt a climate transition plan.
- Force companies to adopt and implement a climate transition plan in line with the Paris Agreement and tie the remuneration of company directors with its implementation. The new law obliges companies to draw up a climate transition plan and “make best efforts” to implement it without being held accountable if they don’t. Very large companies (with more than 1,000 employees) will have to introduce financial incentives for their management to promote the implementation of the plan.
- Remove obstacles for survivors of corporate abuse to access justice, give trade unions and organisations the possibility to bring claims to court and put the responsibility on companies to prove that they respected their due diligence obligations. The deal foresees the possibility for survivors to hold companies liable if they fail to comply with their due diligence obligations but obstacles to their claims were added under Germany’s pressure. Trade unions and other organisations working in the public interest will be able to go to court on behalf of survivors, but the burden of proof remains on the survivors.
- Hold companies accountable for all forms of child labour in their supply chains. The deal leaves the door open for exceptions for children as young as 12.
- Require companies to ensure workers in their supply chains earn a living wage or living income. The deal reached today requires companies to adapt their business plans, strategies, operations and purchasing practices, to address the risk that workers in their supply chain do not receive a living wage or a living income.
Contact
Julia Manresa | Brussels, Belgium | julia.manresa@oxfam.org | mobile +32 473 87 44 26
Jade Tenwick I Brussels, Belgium | jade.tenwick@oxfam.org | mobile +32 473 562260
For updates, please follow @OxfamEU. You can also find us on LinkedIn.
Marc-Olivier Herman is available for comment and interview.
Oxfam calls for EU due diligence rules that:
- Apply to all companies. The law only covers large companies. For EU companies, only those with more than 500 employees and over 150 million euro in turnover. The scope is only extended to companies with 250 employees and 40 million euros in turnover from a restricted set of high-risk sectors, including textile, agriculture, mining, and construction.
- Apply to the entire value chain. This means it should cover all those affected by the company’s business, including those using their products and services. The deal reached today covers suppliers (upstream). Clients (downstream) are only covered to a very limited extent as it does not include the sale or use of products and services.
- Include the financial sector. Banks and investors bankrolling environmental destruction and human rights violations must not be left off the hook. As a result of French pressure, the deal does not make financial players accountable for the impacts of their investments on human rights and the climate. However, large banks and investors will have to adopt a climate transition plan.
- Force companies to adopt and implement a climate transition plan in line with the Paris Agreement and tie the remuneration of company directors with its implementation. The new law obliges companies to draw up a climate transition plan and “make best efforts” to implement it without being held accountable if they don’t. Very large companies (with more than 1,000 employees) will have to introduce financial incentives for their management to promote the implementation of the plan.
- Remove obstacles for survivors of corporate abuse to access justice, give trade unions and organisations the possibility to bring claims to court and put the responsibility on companies to prove that they respected their due diligence obligations. The deal foresees the possibility for survivors to hold companies liable if they fail to comply with their due diligence obligations but obstacles to their claims were added under Germany’s pressure. Trade unions and other organisations working in the public interest will be able to go to court on behalf of survivors, but the burden of proof remains on the survivors.
- Hold companies accountable for all forms of child labour in their supply chains. The deal leaves the door open for exceptions for children as young as 12.
- Require companies to ensure workers in their supply chains earn a living wage or living income. The deal reached today requires companies to adapt their business plans, strategies, operations and purchasing practices, to address the risk that workers in their supply chain do not receive a living wage or a living income.
Julia Manresa | Brussels, Belgium | julia.manresa@oxfam.org | mobile +32 473 87 44 26
Jade Tenwick I Brussels, Belgium | jade.tenwick@oxfam.org | mobile +32 473 562260
For updates, please follow @OxfamEU. You can also find us on LinkedIn.