Business and human rights event in the European Parliament, March 2017
By Jérôme Chaplier, Coordinator of the European Coalition for Corporate Justice (ECCJ) and Isabelle Brachet, Europe Advocacy Coordinator of ActionAid
It is not frequent nowadays to share good news about what’s happening in the European Union… But right now, lines seem to be moving – not on a small issue, but on a systemic one: Putting people and the planet ahead of profit.
Yes, we know it is hard to believe. But this is what civil society organisations and social movements have been working on and asking for the last twenty years – from Hong Kong to Seattle, from Porto Alegre to Genoa. And the change would come from Europe? Yes, somehow… A number of initiatives across Europe are witnessing a U-turn after years of meandering.
The European Parliament adopted this week a report on Palm Oil and Deforestation of Rainforests. The Parliament calls for the EU to establish a binding regulatory framework to ensure that all agricultural commodity importers’ supply chains are traceable back to the origin of the raw material, and to prevent the sale of socially and environmentally unsustainable palm oil in the EU. It notes that palm oil companies should be subject to binding rules and a mandatory certification scheme. The Parliament calls on Member States to introduce obligatory requirements favouring sustainable palm oil in all national public procurement procedures. It also calls on the Commission to include binding commitments in the sustainable development chapters of its trade agreements with a view to preventing deforestation.
This means that the European Parliament acknowledges that human rights violations and environmental degradation in the palm oil sector cannot be addressed by voluntary approaches alone. Beyond palm oil, the challenge applies to all agricultural commodities.[i] Now, in order for the EU to legislate, the European Commission has to make a proposal, but that is not automatic. We need several member state governments to ask the Commission to propose legislation along the lines of the Parliament’s call to really open the way for hard law.
The Palm Oil report follows a series of legal reforms that provide growing evidence of a shift in the approach to corporate accountability.
What has already been achieved?
The EU has regulated the supply chains of timber (2010), fish (2013) and conflict minerals (2017). It has reformed its biofuels policy to mitigate its impacts on the rights to food, land and water in developing countries (2015). Those European laws on specific sectors of the economy address the issue of the impact of the European consumption model on people living in the Global South and on the environment. Imperfectly, with gaps, but it is a starting point that should be improved over time.
The EU has also imposed on 8000 large companies a certain degree of transparency about the human rights risks and impacts of their operations, including in their supply chain (2014). While transparency is not the panacea, it’s a major step towards putting these issues at the heart of business strategies, and allowing those affected to hold companies to account.
But there are more reasons for optimism, coming from member states. In France, after two year of relentless efforts driven by committed MPs and a coalition of civil society organisations, a law on the corporate “duty of vigilance was adopted in February 2017. This law establishes a legally binding obligation for parent companies to develop plans to identify and prevent adverse human rights and environmental impacts resulting from their own activities, from activities of companies they control and of their subcontractors and suppliers. The largest French companies will assess and address the risks of serious harms to people and the planet under annual, public vigilance plans. Interested parties can ask judicial authorities to order a company to establish and make public the vigilance plan and account for its effective implementation. Victims of businesses failing to comply with their vigilance plan can seek damages.
In the UK, the Modern Slavery Act (2015) seeks to address the role of businesses in preventing modern slavery from occurring in their supply chains via transparency obligations. In the Netherlands, the Parliament is currently debating a law on Child Labour Due Diligence. If adopted, the law will require companies to examine whether child labour occurs in their production chain and in that case, to develop a plan of action. In other countries, the door is open for future legislative initiatives. For example, a legislative proposal inspired by the French duty of vigilance law is about to be presented to the Spanish Parliament. The National Action Plans on business and human rights recently adopted in Germany and Italy also include some openings in terms of future due diligence legislation.
Time for hope…
Eight national Parliaments from EU member countries have sent a “green card” to the European Commission in June 2016. It’s an informal process through which national parliaments can jointly ask the European Commission to take new initiatives. The response letter from the Commission’s Vice-President Franz Timmermans and Commissioner Elżbieta Bienkowska was justifying the status quo, in spite of the many calls for action received by the Commission over the last few months.[ii] In the coming months, the European Parliament will have the opportunity to reiterate calls to regulate at EU level to ensure companies operating abroad respect human rights and the environment and contribute to sustainable development, by embedding due diligence requirements into a legal duty of care obligation.[iii]
Even if high level officials in the European Commission still don’t want to see it, the belief that markets will naturally deliver for all with minimal state intervention is out of favour. And there are signs that even the Commission feels it can’t remain deaf and blind anymore: The EU leaders meeting in Rome last month to celebrate the 60th anniversary of the EU said, “In the ten years to come we want a Union that is (…) sustainable and socially responsible, and with the will and capacity of playing a key role in the world and of shaping globalisation”. After the Summit, it has been announced that the European Commission is starting to work on a Communication about Further Harnessing Globalisation. Making globalisation fair, ensuring it leaves nobody behind and is socially and environmentally sustainable is THE challenge of this century. And seriously regulating corporate behaviour is an important part of the solution.
[i] The Parliament has already urged the Commission to enhance corporate social responsibility and due diligence initiatives that complement the existing EU timber regulation for other sectors - http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A8-2017-0020&format=XML&language=EN, para 67.
[ii] All these are calling on the Commission and Member States to take stronger action to ensure responsible business conduct: EU Council Conclusions on global value chains (May 2016), EU Council Conclusions on Business and Human Rights (June 2016), EP report on corporate liability for serious human rights abuses in third countries (October 2016) and the Recommendations on Human Rights and Business adopted by 47 Ministers of the Council of Europe (March 2016).