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EU legislative initiative on mandatory due diligence for companies

“The COVID-19 crisis painfully exposed the vulnerabilities of our economy and of unregulated global supply chains. Many argue that we should rethink our supply chains and dependency on third countries for some key products. … We need to make sure that responsible business conduct and sustainable supply chains become the norm, a strategic orientation for businesses.”

The one who expressed himself in this way is Didier Reynders, European Commissioner for Justice, on April 29, 2020 in a webinar on due diligence hosted by the European Parliament’s Responsible Business Conduct Working Group.

During that same webinar, Didier Reynders announced a legislative initiative on mandatory human rights and environmental due diligence for EU companies that will be part of the EU’s COVID-19 recovery package, and will feed into the European Green Deal.

The Commissioner’s announcement builds on a European Commission-commissioned study on due diligence requirements through the supply chain conducted by the BIICL,  which highlighted a need for EU-wide mandatory legislation because voluntary measures have not been effective in encouraging companies to identify, account and mitigate negative human rights and environmental impacts in their supply chains.

A group of 101 investors, representing over US$4.2 trillion in assets under management “believe that governments have a duty to protect against human rights abuse by business through effective regulatory measures, particularly where voluntary corporate measures continue to leave significant gaps in human rights protections.”

Reynders’ initiative is likewise supported by Germany which is due to hold the Presidency of the EU Council from the beginning of July. Carsten Stender of the German Federal Ministry of Labour and Social Affairs said  “you have our support”.

Photo: fdecomite

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