162 Amendments of Tomas TOBÉ related to 2022/0051(COD)
Amendment 20 #
Proposal for a directive
Recital 5
Recital 5
(5) EWell-established existing international standards on responsible business conduct like the United Nations Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, and the OECD Due Diligence Guidance for Responsible Business Conduct specify that companies should protect human rights and set out how they should address the protection of the environment across their operations and value chains. The United Nations Guiding Principles on Business and Human Rights79 recognise the responsibility of companies to exercise human rights due diligence by identifying, preventing and mitigating the adverse impacts of their operations on human rights and by accounting for how they address those impacts. Those Guiding Principles state that businesses should avoid infringing human rights and should address adverse human rights impacts that they have caused, contributed to or are linked with in their own operations, subsidiaries and through their direct and indirect business relationships. These guidelines should be the basis for this Directive. __________________ 79 United Nations’ “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework”, 2011, available at https://www.ohchr.org/documents/publicati ons/guidingprinciplesbusinesshr_en.pdf.
Amendment 23 #
Proposal for a directive
Recital 6
Recital 6
(6) The concept of human rights due diligence was specified and further developed in the OECD Guidelines for Multinational Enterprises80 which extended the application of due diligence to environmental and governance topics. The OECD Guidance on Responsible Business Conduct and sectoral guidance81 are internationally recognised frameworks setting out practical due diligence steps to help companies identify, prevent, mitigate and account for how they address actual and potential impacts in their operations, valuesupply chains and other business relationships. The concept of due diligence is also embedded in the recommendations of the International Labour Organisation (ILO) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.82direct business relationships. __________________ 80 OECD Guidelines for Multinational Enterprises, 2011 updated edition, available at http://mneguidelines.oecd.org/guidelines/.h ttps://mneguidelines.oecd.org/mneguidelin es/ 81 OECD Guidance on Responsible Business Conduct, 2018, and sector- specific guidance, available at https://www.oecd.org/investment/due- diligence-guidance-for-responsible- business-conduct.htm. 82 The International Labour Organisation’s “Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, Fifth Edition, 2017, available at: https://www.ilo.org/empent/Publications/ WCMS_094386/lang--en/index.htm.
Amendment 24 #
Proposal for a directive
Recital 8
Recital 8
Amendment 25 #
Proposal for a directive
Recital 9
Recital 9
Amendment 26 #
Proposal for a directive
Recital 10
Recital 10
Amendment 27 #
Proposal for a directive
Recital 11
Recital 11
Amendment 28 #
Proposal for a directive
Recital 13
Recital 13
(13) The European Parliament, in its resolution of 10 March 2021 calls upon the Commission to propose Union rules for a comprehensive corporate due diligence obligation100. The Council Conclusions on Human Rights and Decent Work in Global Supply Chains of 1 December 2020 called upon the Commission to table a proposal for a Union legal framework on sustainable corporate governance, including cross- sector corporate due diligence obligations along global supply chains.101 The European Parliament also calls for clarifying directors` duties in its own initiative report adopted on 2 December 2020 on sustainable corporate governance. In their Joint Declaration on EU Legislative Priorities for 2022102 , the European Parliament, the Council of the European Union and the Commission have committed, to deliver on an economy that works for people, and to improve the regulatory framework on sustainable corporate governance. __________________ 100 European Parliament resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability (2020/2129(INL)), P9_TA(2021)0073, available at https://oeil.secure.europarl.europa.eu/oeil/p opups/ficheprocedure.do?lang=en&referen ce=2020/2129(INL). 101 Council Conclusions on Human Rights and Decent Work in Global Supply Chains, 1 December 2020 (13512/20). 102 Joint declaration of the European Parliament, the Council of the European Union and the European Commission on EU Legislative Priorities for 2022, available at https://ec.europa.eu/info/sites/default/files /joint_declaration_2022.pdf.
Amendment 31 #
Proposal for a directive
Recital 14
Recital 14
(14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and value chains.supply chains. (This amendment applies throughout the text and is related to the amendment of the definition in Article 3(1), point (g). Adopting it will necessitate corresponding changes throughout.)
Amendment 32 #
Proposal for a directive
Recital 14 a (new)
Recital 14 a (new)
(14a) In line with relevant Union and national law, all companies in the Union need to adhere to the protection of human rights and environmental standards. If that is not the case, Member States and their relevant authorities are required to enforce the legislation. Thus, there is no need for companies within the Union to control each other’s conduct. The goal of due diligence is to tackle risks in cases where human rights and environmental standards are not or cannot be enforced. Therefore, tracing activities in the upstream supply chain shall be focused on direct business relationships outside of the European Union.
Amendment 33 #
Proposal for a directive
Recital 15
Recital 15
(15) Companies should take appropriate steps within their means to set up and carry out risk-based due diligence measures, with respect to their own operations, their subsidiaries, as well as their established direct and indirect business relationships with entities from third countries throughout their valuesupply chains in accordance with the provisions of this Directive. This Directive should not require companies to guarantee, in all circumstances, that adverse impacts will never occur or that they will be stopped. For example with respect to business relationships where the adverse impact results from State intervention, the company might not be in a position to arrive at such results. Therefore, the main obligations in this Directive should be ‘obligations of means’. While companies can be asked to prevent or mitigate adverse impacts through due diligence policies, it is still in the responsibility of states to actually combat human rights violations worldwide. The company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. Account should be taken of the specificitiesThe measures should be proportionate and commensurate to the likelihood and severity of the company’'s value chain, sector or geographical area in which its value chain partners operate, the company’s power to influence its direct and indirect business relationships, and whether the company could increase its power of influencpotential or actual adverse impacts and its specific circumstances, particularly its sector of activity, the size and length of its supply chain, the size of the company, its capacity, resources and leverage.
Amendment 37 #
Proposal for a directive
Recital 17
Recital 17
Amendment 39 #
Proposal for a directive
Recital 17 a (new)
Recital 17 a (new)
(17a) Companies should be allowed to set up a prioritisation strategy based on a risk assessment and a risk-based monitoring methodology for identifying potential adverse impacts. Companies should consider the level of severity, likelihood and urgency of the different adverse impacts, the nature and context of their operations, including geography, the scope of the risks, their scale and how irremediable they might be, and if necessary, use the prioritisation policy in dealing with them.
Amendment 41 #
Proposal for a directive
Recital 18
Recital 18
(18) The valuesupply chain should cover activities related todirectly necessary for the production of a good or provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of establisheddirect business relationships of the company. It should encompass direct upstream established direct and indirect business relationshipsbusiness relationships with direct business partners from a third country that design, extract, manufacture, transport, store and supply raw material, products, parts of products, or provide services to the company that are directly necessary to carry out the company’s activities, and also downstream relationships, including established direct and indirect business relationships, that use or receive products, parts of products or services from the company up to the end of life of the product, including inter alia the distribution of the product to retailers, the transport and storage of the product, dismantling of the product, its recycling, composting or landfilling.
Amendment 45 #
Proposal for a directive
Recital 19
Recital 19
(19) As regards regulated financial undertakings providing loan, credit, or other financial services, “value chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considethe financial services industry is already subject to several provisions and obligations under existing legislation such as the Sustainable Finance Disclosure Regulation (SFDR) or the Capital Requirements Directive (CRD), the risk of overlap, lack of clarity and undue burden is evident. Furthermored to be part of the value chain. The activities of the companies or other legal entities that are included in the value chain of that client should not be coveredhe risk of limited financing to the European economy should not be underestimated. A possible future inclusion should therefore be preceded by a proper impact assessment.
Amendment 50 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to allow companies to properly identify and prioritise the adverse impacts in their value chainsupply chain based on a risk assessment and risk-based monitoring and to make it possible for them to exercise appropriate leverage, the due diligence obligations should be limited in this Directive to establisheddirect business relationships. For the purpose of this Directive, established business relationships should mean such direct and indirect businesscontractual relationships which are, or which are expected to be lasting, in view of ith a contractor, subcontractor or any otheir intlegal enstity and duration and which do not represenies from a third country that are negligible or ancillary partcessary for the supply of goods ofr the value chain. The nature of business relationships as “established” should be reassessed periodically, and at least every 12 months. If the direct business relationship of a company is established, then all linked indirect business relationships should also be considered as established regarding that companyprovision of services that are necessary for the production of the companies' product or the provision of and use of the relevant service, with whom the company has a commercial agreement, and that does not represent a negligible or merely ancillary part of the supply chain.
Amendment 51 #
Proposal for a directive
Recital 20 a (new)
Recital 20 a (new)
(20a) In order to offset of the regulatory burdens for citizens, administrations and businesses introduced by this Directive, the Commission should, in the framework of its annual burden survey conducted pursuant to paragraph 48 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making, review the regulatory framework for the affected sectors and companies in line with the “one in, one out” principle, as set out in the Commission communication of 29 April 2021 entitled “Better Regulation: Joining forces to make better laws”, and, where appropriate, present legislative proposals for the amendment or deletion of provisions in other Union legislative acts that generate compliance costs in those sectors and for those companies.
Amendment 55 #
Proposal for a directive
Recital 21
Recital 21
(21) Under this Directive, EU companies with more than 5000 employees on average and a worldwide net turnover exceeding EUR 150 million in the financial year preceding the last financial year should be required to comply with due diligence. As regards cCompanies which do not fulfil those criteria, but which had more than 253000 employees on average and more than EUR 450 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors, due diligence should apply 2 years after the end of the transposition period of this directive, in order to provide for a longer adaptation period. In order to ensure a proportionate burden, companies operating in such high- impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. Temporary agency workers, including those posted under Article 1(3), point (c), of Directive 96/71/EC, as amended by Directive 2018/957/EU of the European Parliament and of the Council103 , should be included in the calculation of the number of employees in the user company. Posted workers under Article 1(3), points (a) and (b), of Directive 96/71/EC, as amended by Directive 2018/957/EU, should only be included in the calculation of the number of employees of the sending company. __________________ 103 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (OJ L 173, 9.7.2018, p. 16).
Amendment 56 #
Proposal for a directive
Recital 22
Recital 22
(22) In order to reflect the priority areas of international action aimed at tackling human rights and environmental issues, the selection of high-impact sectors for the purposes of this Directive should be based on existing sectoral OECD due diligence guidance. The following sectors should be regarded as high-impact for the purposes of this Directive: the manufacture of textiles, leather and related products (including footwear), and the wholesale trade of textiles, clothing and footwear; agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum, natural gas, coal, lignite, metals and metal ores, as well as all other, non-metallic minerals and quarry products), the manufacture of basic metal products, other non-metallic mineral products and fabricated metal products (except machinery and equipment), and the wholesale trade of mineral resources, basic and intermediate mineral products (including metals and metal ores, construction materials, fuels, chemicals and other intermediate products). As regards the financial sector, due to its specificities, in particular as regards the value chain and the services offered, even if it is covered by sector-specific OECD guidance, it should not form part of the high-impact sectors covered by this Directive. At the same time, in this sector, the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liability.
Amendment 58 #
Proposal for a directive
Recital 23
Recital 23
(23) In order to achieve fully the objectives of this Directive addressing human rights and adverse environmental impacts with respect to companies’ operations, subsidiaries and valuesupply chains, third-country companies with significant operations in the EU should also be covered. More specifically, the Directive should apply to third-country companies which generated a net worldwide turnover of at least EUR 150 million in the Union in the financial year preceding the last financial year of which at least EUR 50 million was generated in the Union or a net turnover of more than EUR 40 million but less than EUR 150 million of which at least EUR 50 million was generated in the Union in the financial year preceding the last financial year in one or more of the high- impact sectors, as of 2 years after the end of the transposition period of this Directive. This Directive should also apply to those companies which do not meet the criteria mentioned above if that company is part of a group of companies whose parent company is registered in a third country and which has more than 5000 employees on average or had a net worldwide turnover of more than EUR 150 million in the last financial year for which annual financial statements have been prepared. A group of companies refers to a parent company and all its subsidiaries.
Amendment 62 #
Proposal for a directive
Recital 24
Recital 24
(24) For defining the scope of application in relation to non-EU companies the described turnover criterion should be chosen as it creates a territorial connection between the third-country companies and the Union territory. Turnover is a proxy for the effects that the activities of those companies could have on the internal market. In accordance with international law, such effects justify the application of Union law to third-country companies. To ensure identification of the relevant turnover of companies concerned, the methods for calculating net turnover for non-EU companies as laid down in Directive (EU) 2013/34 as amended by Directive (EU) 2021/2101 should be used. To ensure effective enforcement of this Directive, an employee threshold should, in turn, not be applied also be applied as a benchmark to determine which third-country companies fall under this Directive, as to create a level- playing field, while taking into account that the notion of “employees” retained for the purposes of this Directive is based on Union law and could not be easily transposed outside of the Union. In the absence of a clear and consistent methodology, including in accounting frameworks, to determine the employees of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. The definition of turnover should be based on Directive 2013/34/EU which has already established the methods for calculating net turnover for non-Union companies, as turnover and revenue definitions are similar in international accounting frameworks too. With a view to ensuring that the supervisory authority knows which third country companies generate the required turnover in the Union to fall under the scope of this Directive, this Directive should require that a supervisory authority in the Member State where the third country company’s authorised representative is domiciled or established and, where it is different, a supervisory authority in the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this Directive.
Amendment 63 #
Proposal for a directive
Recital 24 a (new)
Recital 24 a (new)
(24a) Companies that are part of a group, including subsidies and parent companies, may not always have the same supply chain. However, it may be that due diligence processes and actions are conducted at the level of the group. In this regard, subsidiaries and companies which are part of the same group may refer to the responsibilities pursuant to the obligations of this directive taken on by their parent company or other group members.
Amendment 64 #
Proposal for a directive
Recital 25
Recital 25
(25) In order to achieve a meaningful contribution to the sustainability transition, due diligence under this Directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrine and, at the same time, to limit the regulatory and fin the international conventions as listed in the Annex toancial burden for companies under the scope of thise Directive. In order to ensure a comprehensive coverage of human rights, a violation of a prohibition or right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this Directive, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this Directive, taking into account all relevant circumstances of their operations, such as the sector and operational context., due diligence under this Directive should be carried out with respect to adverse human rights impact and adverse environmental impacts resulting from the violation of one of the principles set out in the OECD Due dDiligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex to this DirectiveGuidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as regards the environment or human rights.
Amendment 69 #
Proposal for a directive
Recital 26
Recital 26
(26) Companies should have guidance at their disposal that illustrates how their activities may impact human rights and which corporate behaviour is prohibited in accordance with internationally recognised human rights. Such guidance is included for instance in The United Nations Guiding Principles Reporting Framework104 and the United Nations Guiding Principles Interpretative Guide105 and should be made easily accessible to companies. Using relevant international guidelines and standards as a reference, the Commission should be able to issue additional guidance that will serve as a practical tool for companies. __________________ 104 https://www.ungpreporting.org/wp- content/uploads/UNGPReportingFramewor k_withguidance2017.pdf. 105 https://www.ohchr.org/Documents/Issues/ Business/RtRInterpretativeGuide.pdf.https: //www.ohchr.org/Documents/Issues/Busine ss/RtRInterpretativeGuide.pdf.
Amendment 71 #
Proposal for a directive
Recital 27
Recital 27
(27) In order to conduct appropriate human rights, and environmental due diligence with respect to their operations, their subsidiaries, and their value chains, companies covered by this Directive should integrate due diligence into corporate policies, identify, prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts, establish and maintain a complaintsnotification procedure, monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this Directive and communicate publicly on their due diligence. In order to ensure clarity for companies, in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end, or when this is not possible, minimising actual adverse impacts should be clearly distinguished in this Directive.
Amendment 73 #
Proposal for a directive
Recital 28
Recital 28
(28) In order to ensure that due diligence forms part of companies’ corporate policies, and in line with the relevant international framework, companies should integrate due diligence into all their corporate policies where necessary and have in place a risk-based due diligence policy. The risk- based due diligence policy should contain a description of the company’s approach, including in the long term, to due diligence, a code of conduct describing the rules and principles to be followed by the company’s employees and subsidiaries; a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. The code of conduct should apply in all relevant corporate functions and operations, including procurement and purchasing decisions. Companies should also update their due diligence policy annuallyregularly update and publish their due diligence policy, taking a risk-based approach in accordance with the OECD Due Diligence Guidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, but at least every five years.
Amendment 76 #
Proposal for a directive
Recital 29
Recital 29
(29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts. An ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. In this context, in line with international frameworks, the company’s influence over a business relationship should include, on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control, market power, pre-qualification requirements, linking business incentives to human rights and environmental performance, etc.) and, on the other hand, the degree of influence or leverage that the company could reasonably exercise, for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact. Severity means the scale, scope and irremediably character of the adverse impact, taking into account the gravity of the impact on the rights holder, the number of individuals that could be affected and the possibility of occurrence
Amendment 77 #
Proposal for a directive
Recital 30
Recital 30
(30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification of adverse impacts, such identification should be based on quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically, at least every 12 months, throughout the life of an activity or relationship. Regulated financial undertakings providing loan, credit, or other financial services should identify the adverse impacts only at the inception of the contract. When identifying adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including trading, procurement and pricing practices. Where the company cannot prevent, bring to an end or minimize all its adverse impacts at the same time, it should be able to prioritize its action, provided it takes the measures reasonably available to the company, taking into account the specific circumstances.
Amendment 80 #
Proposal for a directive
Recital 34
Recital 34
(34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following actions, where relevant. Where necessary due to the complexity of prevention and mitigation measures, companies should develop and implement a prevention or mitigation action plan. Companies are encouraged to develop their action plans in cooperation with sectoral initiatives and industry schemes. Companies should seek to obtain contractual assurances from a direct partner with whom they have an established direct business relationship outside of the European Union that it will ensure compliance with the code of conduct or the prevention or mitigation action plan, including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ valuesupply chain. The contractual assurances should be accompanied by appropriate measures to verify compliance. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also make investments which aim to prevent adverse impacts, provide targeted and proportionate support for an SME with which they have an established direct business relationship such as financing, for example, through direct financing, low- interest loans, guarantees of continued sourcing, and assistance in securing financing, to help implement the code of conduct or prevention action plan, or technical guidance such as in the form of training, management systems upgrading, and collaborate with other companies.
Amendment 86 #
Proposal for a directive
Recital 36
Recital 36
(36) In order to ensure that prevention and mitigation of potential adverse impacts is effective, companies should prioritize engagement with business relationships in the valuesupply chain, instead of terminating the business relationship, as a last resort action after attempting at preventing and mitigating adverse potential impacts without success, taking into consideration the best interest of those affected by the adverse impact and taking into account potential supply chain disruptions. However, the Directive should also, for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures, refer to the obligationpossibility for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, to either temporarily suspend commercial relationships with the partner in question, while pursuing prevention and minimisation efforts, if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. It is possible that prevention of adverse impacts and if these measures would be in the best interest of the potential victims. Companies should not be required to refrain from entering into new or extending existing relations with the direct business partner or temporarily suspend the commercial relationship or terminate the level of indirect business relationships requires collaboration with another company, for example a company which has a direct contractual relationship with the supplier. In some instances, such collaboration could be the only realistic way of preventing adv where there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated or wherse impacts, in particular, where the indirect business relationship is not ready to enter into a contract with the company. In these instances, the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competitionno available alternative to that business relationship, that provides a product or service essential to the company’s production of goods or provision of services, exists. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.
Amendment 88 #
Proposal for a directive
Recital 37
Recital 37
(37) As regards direct and indirect business relationships, industry cooperation, industry schemes and multi- stakeholder initiatives can help create additional leverage to identify, mitigate, and prevent adverse impacts. Therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. CompaniMember States cshould assess, at their own initiative, the alignment of these schemes and initiatives with the obligations under this Directive. In order to ensure full information on such initiatives, the Directive should also refer to the possibility for the Commission and the Member States toshould facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, mayshould issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 94 #
Proposal for a directive
Recital 39
Recital 39
(39) So as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this Directive, companies should be required to take the following actions within their means, where relevant. They should neutralise the adverse impact or minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvementindicators for monitoring. Companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established direct business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chaior mitigation action plan. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for an SMEs with which they have an established direct business relationship and collaborate with other entities, including through multi-stakeholder initiatives, where relevant, to increase the company’s ability to bring the adverse impact to an end.
Amendment 98 #
Proposal for a directive
Recital 41
Recital 41
(41) In order to ensure that bringing actual adverse impacts to an end or minimising them is effective, companies should prioritize engagement with business relationships in the valuesupply chain, instead of terminating the business relationship, as a last resort action after attempting at bringing actual adverse impacts to an end or minimising them without success, taking into consideration the best interest of those affected by the adverse impact and taking into account potential supply chain disruptions. However, this Directive should also, for cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, refer to the obligationpossibility for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, to either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe and if these measures would be in the best interest of the potential victims. Companies should not be required to refrain from entering into new or extending existing relations with the direct business partner or temporarily suspend the commercial relationship or terminate the business relationship where there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated or where no available alternative to that business relationship, that provides a product or service essential to the company’s production of goods or provision of services, exists. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.
Amendment 102 #
Proposal for a directive
Recital 43
Recital 43
(43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out periodic assessments of their own operations, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their establisheddirect business relationships with third country entities, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitigation of human rights and environmental adverse impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to- date, they should be carried out at least every 12 months and be revised in- betweenregularly, for example if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen, but at least every five years.
Amendment 108 #
Proposal for a directive
Recital 46
Recital 46
(46) In order to provide support and practical tools to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, using relevant international guidelines and standards as a reference, and in consultation with Member States and stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Agency for Small and Medium enterprises and where appropriate with international bodies having expertise in due diligence, should have the possibility to issue guidelines, including for specific sectors or specific adverse impacts. issue guidelines in digital, free of charge and easily accessible format, including for specific sectors or specific adverse impacts, an overview of applicable industry initiatives, and practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas. Furthermore, the guidelines should include a list of risk and non-risk areas whether sectoral or geographic such as regions and countries where adverse human rights impacts and/or environmental adverse impacts are unlikely or likely to occur. Companies should not be required to perform due diligence on parts of the supply chain linked to non-risk areas where adverse impacts are unlikely to occur. Countries or regions, where adverse impacts are unlikely to occur, could be the European Economic Area, the United States of America, the United Kingdom, Canada, Australia, New Zealand, and Japan. One criteria for this list should be a free-trade agreement between the European Union and the third country or region. The guidelines should be made available no later than 18 months after the date of entry into force of this Directive. The Commission should regularly review the relevance of its guidelines and adapt them to new best practices. Country factsheets should be updated regularly by the Commission and made publicly available in order to provide up-to-date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission should collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub-sectors, and products.
Amendment 115 #
Proposal for a directive
Recital 50
Recital 50
Amendment 117 #
Proposal for a directive
Recital 51
Recital 51
Amendment 119 #
Proposal for a directive
Recital 53
Recital 53
(53) In order to ensure the monitoring of the correct implementation of companies’ due diligence obligations and ensure the proper enforcement of this Directive, Member States should designate one or more national supervisory authorities. These supervisory authorities should be of a public nature, independent from the companies falling within the scope of this Directive or other market interests, and free of conflicts of interest. In accordance with national law, Member States should ensure appropriate financing of the competent authority. They should be entitled to carry out investigations, on their own initiative or based on complaints or substantiated concerns raised under this Directive. Where competent authorities under sectoral legislation exist, Member States could identify those as responsible for the application of this Directive in their areas of competence. They could designate authorities for the supervision of regulated financial undertaking also as supervisory authorities for the purposes of this Directive.
Amendment 120 #
Proposal for a directive
Recital 54
Recital 54
(54) In order to ensure effective enforcement of national measures implementing this Directive, Member States should provide for dissuasive, proportionate and effective sanctions for infringements of those measures. In order for such sanction regime to be effective, administrative sanctions to be imposed by the national supervisory authorities should include pecuniary sanctionsMember States should fully align and harmonize sanctions to allow for a level-playing field. Where the legal system of a Member State does not provide for administrative sanctions as foreseen in this Directive, the rules on administrative sanctions should be applied in such a way that the sanction is initiated by the competent supervisory authority and imposed by the judicial authority. Therefore, it is necessary that those Member States ensure that the application of the rules and sanctions has an equivalent effect to the administrative sanctions imposed by the competent supervisory authorities.
Amendment 121 #
Proposal for a directive
Recital 56
Recital 56
Amendment 123 #
Proposal for a directive
Recital 57
Recital 57
Amendment 127 #
Proposal for a directive
Recital 58
Recital 58
Amendment 128 #
Proposal for a directive
Recital 59
Recital 59
Amendment 131 #
Proposal for a directive
Recital 60
Recital 60
Amendment 133 #
Proposal for a directive
Recital 61
Recital 61
Amendment 134 #
Proposal for a directive
Recital 62
Recital 62
Amendment 136 #
Proposal for a directive
Recital 63
Recital 63
Amendment 137 #
Proposal for a directive
Recital 64
Recital 64
Amendment 140 #
Proposal for a directive
Recital 70
Recital 70
Amendment 142 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a
Article 1 – paragraph 1 – subparagraph 1 – point a
(a) on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own core business operations, the operations of their subsidiaries, and the valuesupply chain operations carried out by third country entities with whom the company has an established direct business relationship and.
Amendment 145 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point b
Article 1 – paragraph 1 – subparagraph 1 – point b
Amendment 150 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
Amendment 156 #
Proposal for a directive
Article 1 – paragraph 3
Article 1 – paragraph 3
3. This Directive shall be without prejudice to obligations in the areas of human rights, and protection of the environment and climate change under other Union legislative acts. If the provisions of this Directive conflict with a provision of another Union legislative act pursuing the same objectives and providing for more extensive or more specific obligations, the provisions of the other Union legislative act shall prevail to the extent of the conflict and shall apply to those specific obligations.
Amendment 162 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 5000 employees on average and had a net worldwide turnover of more than EUR 150 million in the last financial year for which annual financial statements have been prepared;
Amendment 168 #
Proposal for a directive
Article 2 – paragraph 1 – point b – introductory part
Article 2 – paragraph 1 – point b – introductory part
(b) the company did not reach the thresholds under point (a), but had more than 253000 employees on average and had a net worldwide turnover of more than EUR 450 million in the last financial year for which annual financial statements have been prepared, provided that at least 50% of this net turnover was generated in one or more of the following sectors:
Amendment 192 #
Proposal for a directive
Article 2 – paragraph 1 a (new)
Article 2 – paragraph 1 a (new)
1a. This Directive shall also apply to a company that does not meet the criteria set out in paragraph 1, points (a) and (b) if that company is part of a group of companies whose parent company is registered in a third country and which has more than 5000 employees on average or had a net worldwide turnover of more than EUR 150 million in the last financial year for which annual financial statements have been prepared.
Amendment 195 #
Proposal for a directive
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
(a) generated a net worldwide turnover of more than EUR 150 million in the Union in the financial year preceding the last financial year of which at least 40 million was generated in the Union;
Amendment 200 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
(b) generated a net worldwide turnover of more than EUR 450 million but not more than EUR 150 million of which at least 40 million was generated in the Union in the financial year preceding the last financial year, provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1, point (b).
Amendment 203 #
Proposal for a directive
Article 2 – paragraph 2 – subparagraph 1 (new)
Article 2 – paragraph 2 – subparagraph 1 (new)
If the company is a parent company, the criteria of paragraph 1, points (a) and (b), shall be calculated based on the consolidated net turnover of all its controlled subsidiaries.
Amendment 207 #
Proposal for a directive
Article 2 – paragraph 4 a (new)
Article 2 – paragraph 4 a (new)
4a. Companies within the scope of this directive that are part of a group, including subsidies and parent companies, may also commit to take on the responsibilities of other group members pursuant to the obligations set out in this directive, under the obligation to deliver at least an equal commitment to due diligence. These other group members will then be relieved from their responsibilities in this regard.
Amendment 214 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv
Article 3 – paragraph 1 – point a – point iv
Amendment 236 #
Proposal for a directive
Article 3 – paragraph 1 – point b
Article 3 – paragraph 1 – point b
(b) ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex, Part II;inciples set out in the OECD Due Diligence Guidance for Responsible Business Conduct and the OECD Guidelines for Multinational Enterprises.
Amendment 240 #
Proposal for a directive
Article 3 – paragraph 1 – point c
Article 3 – paragraph 1 – point c
(c) ‘adverse human rights impact’ means an adverse impact on protected persons resulting from the violation of one of the rights or prohibitions listed in the Annex, Part I Section 1, as enshrined in the international conventions listed in the Annex, Part I Section 2principles set out in the OECD Due Diligence Guidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as regards human rights;
Amendment 241 #
Proposal for a directive
Article 3 – paragraph 1 – point d a (new)
Article 3 – paragraph 1 – point d a (new)
(da) 'group of companies' means a parent company and all its subsidiaries;
Amendment 242 #
Proposal for a directive
Article 3 – paragraph 1 – point e – introductory part
Article 3 – paragraph 1 – point e – introductory part
(e) ‘direct business relationship’ means a relationship with a contractor, subdirect contractual relationship with any other legal entity from a third countractor or any other legal entities (‘partner’)y (‘direct business partner’) for the supply of goods or the provision of services that are necessary for the production of the company’s product or the provision and use of the relevant service
Amendment 244 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point i
Article 3 – paragraph 1 – point e – point i
(i) with whom the company has a commercial agreement or to whom the company provides financing, insurance or reinsurance, or, and
Amendment 245 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii
Article 3 – paragraph 1 – point e – point ii
Amendment 246 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii a (new)
Article 3 – paragraph 1 – point e – point ii a (new)
(iia) that does not represent a negligible or merely ancillary part of the supply chain
Amendment 249 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
Amendment 256 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘valuesupply chain’ means activities related todirectly necessary for the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of direct upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities;(This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)
Amendment 266 #
Proposal for a directive
Article 3 – paragraph 1 – point h a (new)
Article 3 – paragraph 1 – point h a (new)
(ha) ‘leverage’ means the ability of a company to effect change in the wrongful practices of the entity that causes or contributes to the adverse impact.
Amendment 272 #
Proposal for a directive
Article 3 – paragraph 1 – point n
Article 3 – paragraph 1 – point n
(n) ‘stakeholders’ means the company’s employees, the employees of its subsidiaries, employees within its supply chain and other individuals, groups, communities or entities whose rights or interests are or could be affdirectly affected by the potential and actual adverse human rights and environmental impacts connected byto the products, services and operations of that company, its subsidiaries and its direct business relationships;
Amendment 275 #
Proposal for a directive
Article 3 – paragraph 1 – point o
Article 3 – paragraph 1 – point o
Amendment 277 #
Proposal for a directive
Article 3 – paragraph 1 – point p
Article 3 – paragraph 1 – point p
Amendment 280 #
Proposal for a directive
Article 3 – paragraph 1 – point q
Article 3 – paragraph 1 – point q
(q) ‘appropriate measure’ means a measure that is capable of achieving the objectives of risk-based due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. as well as the size of the company, its capacity, resources and leverage. Severity means the scale, scope and irremediably character of the adverse impact, taking into account the gravity of the impact on the rights holder, the number of individuals that could be affected and the possibility of occurrence;
Amendment 282 #
Proposal for a directive
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
1. Member States shall ensure that companies conduct human rights and environmental due diligence on the basis of a risk approach as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions:
Amendment 283 #
Proposal for a directive
Article 4 – paragraph 1 – point b
Article 4 – paragraph 1 – point b
(b) identifying and prioritising actual or potential adverse impacts in accordance with Article 6;
Amendment 285 #
Proposal for a directive
Article 4 – paragraph 1 – point c
Article 4 – paragraph 1 – point c
(c) preventing andor mitigating potential adverse impacts, and, if possible, bringing actual adverse impacts to an end andor minimising their extent in accordance with Articles 7 and 8;
Amendment 287 #
Proposal for a directive
Article 4 – paragraph 1 – point d
Article 4 – paragraph 1 – point d
(d) establishing and maintaining a complaintsnotification procedure in accordance with Article 9;
Amendment 289 #
Proposal for a directive
Article 4 – paragraph 2
Article 4 – paragraph 2
2. Member States shall ensure that, for the purposes of due diligence, companies are entitled to share resources and information within their respective groups of companies and with other legal entities in compliance with applicable competition law. Companies within the scope of this directive that are part of a group, including subsidies and parent companies, may also commit to take on the responsibilities of other group members pursuant to the obligations set out in this directive, under the obligation to deliver at least an equal commitment to due diligence. These other group members will then be relieved from their responsibilities in this regard.
Amendment 291 #
Proposal for a directive
Article 5 – paragraph 1 – introductory part
Article 5 – paragraph 1 – introductory part
1. Member States shall ensure that companies integrate due diligence into all their corporate policies where necessary and have in place a risk-based due diligence policy. The risk-based due diligence policy shall contain all of the following:
Amendment 295 #
Proposal for a directive
Article 5 – paragraph 1 – point c
Article 5 – paragraph 1 – point c
(c) a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships.
Amendment 299 #
Proposal for a directive
Article 5 – paragraph 2
Article 5 – paragraph 2
2. Member States shall ensure that the companies review and update their due diligence policy annuallyregularly, taking a risk- based approach in accordance with the OECD Due Diligence Guidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, but at least every five years.
Amendment 303 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2a. Member States shall ensure that companies carry out a risk-based due diligence policy which is proportionate and commensurate to the likelihood and severity of their potential or actual adverse impacts and their specific circumstances, particularly their sector of activity, the size and length of their supply chain, its size, capacity, resources and leverage.
Amendment 305 #
Proposal for a directive
Article 5 – paragraph 2 b (new)
Article 5 – paragraph 2 b (new)
2b. Member States shall not require companies to perform Due Diligence on parts of the supply chain linked to non- risk areas where adverse impacts are unlikely to occur according to the Commission guidelines under Article 13.
Amendment 308 #
Proposal for a directive
Article 6 – title
Article 6 – title
Identifying and prioritising actual and potential adverse impacts
Amendment 312 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures within their means to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, where related to their valuesupply chains, from their establisheddirect business relationships with third country entities, in accordance with paragraph 2, 3 and 4.
Amendment 322 #
Proposal for a directive
Article 6 – paragraph 2 a (new)
Article 6 – paragraph 2 a (new)
2a. Member States shall ensure that companies are able to identify actual and potential adverse impacts based on a risk assessment and risk-based monitoring methodology, taking into account the likelihood, severity and urgency of adverse impacts, the nature and context of their operations, including sector and geographic location, the scope of the risks, their scale and how irremediable they might be, and if necessary, use the prioritisation policy in dealing with them.
Amendment 324 #
Proposal for a directive
Article 6 – paragraph 2 b (new)
Article 6 – paragraph 2 b (new)
2b. The priorisation laid out under paragraph 2 a (new) shall allow companies to determine which identified potential adverse impacts companies prevent or mitigate as a priority under Article 7 and which actual adverse impacts companies bring to an end or minimise as a priority under Article 8.
Amendment 325 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
Amendment 330 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information made available by the Member States, companies are entitled to make use of appropriate resources, including independent reports and information gathered through the complaintsnotification procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 333 #
Proposal for a directive
Article 7 – title
Article 7 – title
Preventing and mitigating potential adverse impacts
Amendment 338 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate measureand commensurate measures within their means to prevent, or where prevention is not possible or not immediately possible, adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been, or should have been, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article.
Amendment 341 #
Proposal for a directive
Article 7 – paragraph 2 – point a
Article 7 – paragraph 2 – point a
(a) where necessary due to the nature or complexity of the measures required for prevention or mitigation, develop and implement a prevention action plan, with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuonitoring improvement. The prevention or mitigation action plan shall be developed in consultation with affected stakeholders; where relevant; companies are encouraged to develop their action plans in cooperation with sectoral initiatives and industry schemes;
Amendment 345 #
Proposal for a directive
Article 7 – paragraph 2 – point a a (new)
Article 7 – paragraph 2 – point a a (new)
(aa) set up a prioritisation strategy, taking into account the level of severity, likelihood and urgency of the different potential adverse human rights and adverse environmental impacts, the nature and context of their operations, including geographic, the scope of the risks, their scale and how irremediable they might be, and use the prioritisation policy in dealing with them. When prioritising their response to risks to human rights, companies shall treat the severity of an adverse impact, such as where a delayed response would make the impact irremediable, as the predominant factor.
Amendment 351 #
Proposal for a directive
Article 7 – paragraph 2 – point b
Article 7 – paragraph 2 – point b
(b) seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and, as necessary, a prevention or mitigation action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chain (contractual cascading). When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 360 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) provide targeted and proportionate support for an SME with which the company has an established direct business relationship, where compliance with the code of conduct or the prevention or mitigation action plan would jeopardise the viability of the SME;
Amendment 362 #
Proposal for a directive
Article 7 – paragraph 2 – point e
Article 7 – paragraph 2 – point e
(e) in compliance with Union law including competition law, collaborate with other entities, sectoral approaches or industry schemes, including, where relevant, to increase the company’s ability to bringprevent or mitigate the adverse impact to an end, in particular where no other action is suitable or effective.
Amendment 364 #
Proposal for a directive
Article 7 – paragraph 2 – point e a (new)
Article 7 – paragraph 2 – point e a (new)
(ea) engage with the affected stakeholders in order to provide meaningful opportunities for their views to be considered for the determination of the preventive or mitigating measures.
Amendment 377 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – introductory part
Article 7 – paragraph 5 – subparagraph 1 – introductory part
As regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2, 3 and 4, the company shall be requiredmay decide as a last resort to refrain from entering into new or extending existing relations with the partner in connection with or in the valuesupply chain of which the impact has arisen and shallmay, where the law governing their relations so entitles them to, take the following actions if they are in the best interest of the potential victims of the potential adverse human rights and adverse environmental impacts, in line with responsible disengagement, also taking into account proportionality and the consequences of disrupting supply chains:
Amendment 381 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 a (new)
Article 7 – paragraph 5 – subparagraph 1 a (new)
As a derogation from Article 7(5), companies shall not be required to refrain from entering into new or extending existing relations with the direct business partner or temporarily suspend the commercial relations or terminate the direct business relationship where: (a) there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated, or (b) no available alternative to that direct business relationship, that provides a product or service essential to the company’s production of goods or provision of services, exists.
Amendment 384 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
Amendment 385 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Member States shall ensure that companies take appropriate measuresand commensurate measures within their means to try to bring actual adverse impacts that have been, or should have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article. Those measures should be reasonable in the context of the involvement of the company in the actual adverse impact and the significance of the adverse impact itself.
Amendment 389 #
Proposal for a directive
Article 8 – paragraph 3 – point a
Article 8 – paragraph 3 – point a
(a) neutralise the adverse impact or minimise its extent, including, where reasonable and applicable, by the payment of damages to the affected persons and of financial compensation to the affected communities. The action shall be proportionate and commensurate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact as well as to its resources and leverage;
Amendment 390 #
Proposal for a directive
Article 8 – paragraph 3 – point a a (new)
Article 8 – paragraph 3 – point a a (new)
(aa) set up a prioritisation strategy, taking into account the level of severity, likelihood and urgency of the different actual adverse impacts, the nature and context of their operations, including geographic, the scope of the risks, their scale and how irremediable they might be, and use the prioritisation policy in dealing with them. When prioritising their response to risks to human rights, companies shall treat the severity of an adverse impact, such as where a delayed response would make the impact irremediable, as the predominant factor.
Amendment 394 #
Proposal for a directive
Article 8 – paragraph 3 – point b
Article 8 – paragraph 3 – point b
(b) where necessary due to the fact that the adverse impact cannot be immediately brought to an end, develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuonitoring improvement. Where relevant, the corrective action plan shall be developed in consultation with relevant stakeholders;
Amendment 402 #
Proposal for a directive
Article 8 – paragraph 3 – point d
Article 8 – paragraph 3 – point d
(d) make, where necessary and applicable, investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3;
Amendment 405 #
Proposal for a directive
Article 8 – paragraph 3 – point e
Article 8 – paragraph 3 – point e
(e) provide targeted and proportionate support for an SME with which the company has an established direct business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME;
Amendment 408 #
Proposal for a directive
Article 8 – paragraph 3 – point f a (new)
Article 8 – paragraph 3 – point f a (new)
(fa) engage, where relevant, with the affected stakeholders in order to provide meaningful opportunities for their views to be considered for the determination of action to be taken.
Amendment 416 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
Article 8 – paragraph 6 – subparagraph 1 – introductory part
As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shallmay refrain as a last resort from entering into new or extending existing relations with the partner in connection to or in the valuesupply chain of which the impact has arisen and shallmay, where the law governing their relations so entitles them to, take one of the following actions if they are in the best interest of the potential victims of the potential and actual adverse impacts, in line with responsible disengagement, also taking into account proportionality and the consequences of disrupting supply chains:
Amendment 420 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 a (new)
Article 8 – paragraph 6 – subparagraph 1 a (new)
Amendment 424 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
Amendment 426 #
Proposal for a directive
Article 8 – paragraph 7 a (new)
Article 8 – paragraph 7 a (new)
7a. The possibility to refrain from entering into new or extending existing relating relations with the business partner according to paragraph 5 shall not apply to commercial agreements concluded by the company before the expiry of the transposition period in accordance with Article 30.
Amendment 428 #
Proposal for a directive
Article 9 – title
Article 9 – title
Amendment 430 #
Proposal for a directive
Article 9 – paragraph 1
Article 9 – paragraph 1
1. Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints tonotify them where they have legitimate concernsinformation, which must be reasonable documented and factually justified, regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chaindirect business relationships. This can be done in cooperation with industry schemes or multi-stakeholder initiatives.
Amendment 433 #
Proposal for a directive
Article 9 – paragraph 1 a (new)
Article 9 – paragraph 1 a (new)
1a. Companies shall be allowed to deal with notifications as a group, for example within a sectoral initiative, an industry programme or multi-stakeholder initiatives.
Amendment 434 #
Proposal for a directive
Article 9 – paragraph 2 – introductory part
Article 9 – paragraph 2 – introductory part
2. Member States shall ensure that the complaintsnotification may be submitted by:
Amendment 436 #
Proposal for a directive
Article 9 – paragraph 2 – point a
Article 9 – paragraph 2 – point a
(a) persons who are directly affected or have reasonable grounds to believe that they mightwill be affdirectedly by an adverse impact,
Amendment 437 #
Proposal for a directive
Article 9 – paragraph 2 – point b
Article 9 – paragraph 2 – point b
(b) trade unions and other workers’ representatives representing individuals working in the value chain concernedcompany, its subsidiaries or direct business partners,
Amendment 440 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
Amendment 443 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
3. Member States shall ensure that the companienotifications establish a procedure for dealing with complaints referred to in paragraph 1, including a procedure when the company considers the complaintinformation to be unfounded, and inform the relevant workers and trade unions of those procedures. Member States shall ensure that where the complaintinformation is well-founded, the adverse impact that is the subject matter of the complaintnotification is deemed to be identified within the meaning of Article 6. This can be done in cooperation with industry schemes or multi-stakeholder initiatives.
Amendment 444 #
Proposal for a directive
Article 9 – paragraph 4 – introductory part
Article 9 – paragraph 4 – introductory part
4. Member States shall ensure that complainants are entitledinformants are entitled to request appropriate follow-up on the notification from the company with which they have filed a notification pursuant to paragraph 1.
Amendment 445 #
Proposal for a directive
Article 9 – paragraph 4 – point a
Article 9 – paragraph 4 – point a
Amendment 446 #
Proposal for a directive
Article 9 – paragraph 4 – point b
Article 9 – paragraph 4 – point b
Amendment 453 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies carry out periodic assessments of their own operations and measures regularly, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their establisheddirect business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. Such risk-based assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 monthsregularly and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy shall be updated in accordance with the outcome of those assessments.
Amendment 455 #
Proposal for a directive
Article 11 – paragraph 1
Article 11 – paragraph 1
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in a language customary in the sphere of international business. TWhen changes occur, the statement shall be published by 30 April each year, covering the previous calendar yearupdated.
Amendment 456 #
Proposal for a directive
Article 11 – paragraph 2
Article 11 – paragraph 2
The Commission shall adopt delegated acts in accordance with Article 28 concerning the content and criteria for such reporting under paragraph 1, specifying information on the description of due diligence, potential and actual adverse impacts and actions taken on those. The Commission shall ensure that reporting is possible via a simplified reporting form.
Amendment 457 #
Proposal for a directive
Article 11 – paragraph 2 a (new)
Article 11 – paragraph 2 a (new)
The companies referred to in paragraph 1 may rely on the consolidated reporting of the group to which they belong in order to fulfil their reporting requirements under this Article.
Amendment 458 #
Proposal for a directive
Article 11 – paragraph 2 b (new)
Article 11 – paragraph 2 b (new)
Member States shall ensure that a company or other legal entity shall not be obliged to disclose information that is deemed to be a trade secret as defined in Article 2(1) of Directive (EU) 2016/943 of the European Parliament and of the Council. while fulfilling the duties of this Directive.
Amendment 460 #
Proposal for a directive
Article 12 – paragraph 1
Article 12 – paragraph 1
In order to provide support to companies to facilitate their compliance with Article 7(2), point (b), and Article 8(3), point (c), the Commission shall adopt guidance aboutand publish voluntary model contract clauses no later than 18 months after entry into force of this Directive.
Amendment 461 #
Proposal for a directive
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Agency for Small and Medium enterprises, and where appropriate with international bodies having expertise in due diligence, mayshall issue guidelines, including for specific sectors or specific adverse impactsclear and easily understandable guidelines, in digital, free of charge and easily accessible format, taking into account the need of SMEs, including the following: (a) for specific sectors or specific adverse impacts; (b) an overview on applicable industry initiatives, multi-stakeholder initiatives and industry schemes; (c) practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas, may be applied to due diligence obligations depending on the size and sector of the company; (e) lists of risk areas and non-risk areas whether sectoral or geographic such as a list of regions and countries where adverse human rights impacts and/or environmental adverse impacts are unlikely or likely to occur. Countries or regions, where adverse impacts are unlikely to occur, might be the European Economic Area, the United States of America, the United Kingdom, Canada, Australia, New Zealand, and Japan. One criteria for this list shall be a free-trade agreement between the European Union and the third country or region.
Amendment 464 #
Proposal for a directive
Article 13 – paragraph 1 a (new)
Article 13 – paragraph 1 a (new)
Lists of non-risk areas and risk areas shall be updated continuously by the Commission and made publicly available, for example, in order to provide up-to- date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission shall collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub- sectors, and products.
Amendment 465 #
Proposal for a directive
Article 13 – paragraph 1 b (new)
Article 13 – paragraph 1 b (new)
The guidelines shall be made available no later than 18 months after the date of entry into force of this Directive. The Commission shall regularly review the relevance of its guidelines and adapt them to new best practices.
Amendment 467 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. Member States shall, in order to provide information and support to companies and the partners with whom they have establisheddirect business relationships in their valuesupply chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly dedicated helpdesks, websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs that are present in the valuesupply chains of companies.
Amendment 474 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The Commission mayshall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and mayshall devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations.
Amendment 475 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States mayshall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, may shall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 476 #
Proposal for a directive
Article 14 a (new)
Article 14 a (new)
Article 14a Single Point of Contact 1. Each Member State shall designate a national single point of contact on corporate sustainability due diligence. Member States may assign this role to an existing authority. Where a Member State designates only one competent authority, that competent authority may also be the single point of contact. 2. Companies may seek guidance and obtain further support and information about how best to fulfil their due diligence obligations through this portal. 3. The single point of contact may also exercise a liaison function to ensure cross-border cooperation of Member State authorities and with the relevant authorities in other Member States via cooperation with the European Supervisory Network established in Article 21.
Amendment 478 #
Proposal for a directive
Article 15
Article 15
Amendment 492 #
Proposal for a directive
Article 17 – paragraph 1
Article 17 – paragraph 1
1. Each Member State shall designate one or more supervisory authorities to supervise compliance with the obligations laid down in national provisions adopted pursuant to Articles 6 to 11 and Article 15(1) and (2) (‘supervisory authority’).
Amendment 493 #
Proposal for a directive
Article 17 – paragraph 5
Article 17 – paragraph 5
Amendment 494 #
Proposal for a directive
Article 18 – paragraph 3
Article 18 – paragraph 3
3. Inspections shall be conducted in compliance with the national law of the Member State in which the inspection is carried out and with prior warning to the company, except where prior notification hinders the effectiveness of the inspection. Where, as part of its investigation, a supervisory authority wishes to carry out an inspection on the territory of a Member State other than its own, it shall seek assistance from the supervisory authority in that Member State pursuant to Article 21(2).
Amendment 495 #
Proposal for a directive
Article 18 – paragraph 4 – subparagraph 2
Article 18 – paragraph 4 – subparagraph 2
Taking remedial action does not preclude the imposition of administrative sanctions or the triggering of civil liability in case of damages, in ain Accordance with Articles 20 and 22, respectively.
Amendment 497 #
Proposal for a directive
Article 18 – paragraph 5 – point c a (new)
Article 18 – paragraph 5 – point c a (new)
(ca) to decide on an exemption for companies in line with Article. 7(5a) and Article 8(6), subparagraph (1a).
Amendment 498 #
Proposal for a directive
Article 18 – paragraph 7
Article 18 – paragraph 7
7. Without prejudice to Member State rules on companies’ right to court appeal and other relevant safeguards Member States shall ensure that each natural or legal person has the right to an effective judicial remedy against a legally binding decision by a supervisory authority concerning them in accordance with national law.
Amendment 500 #
Proposal for a directive
Article 19 – paragraph 1
Article 19 – paragraph 1
1. Member States shall ensure that natural and legal personsstakeholders as referred to in Article 9(2) are entitled to submit substantiated concerns to any supervisory authority when they have reasons to believe, on the basis of objective circumstances, that a company is failing to comply with the national provisions adopted pursuant to this Directive (‘substantiated concerns’) if the notification procedure referred to in Article 9 did not have a satisfactory outcome.
Amendment 502 #
Proposal for a directive
Article 20 – paragraph 1
Article 20 – paragraph 1
1. Member States shall lay down the rules on sanctions applicable to infringements of national provisions adopted pursuant to this Directive, shall align the sanctions, and shall take all measures necessary to ensure that they are implemented. The sanctions provided for shall be effective, proportionate and dissuasive.
Amendment 504 #
Proposal for a directive
Article 20 – paragraph 2
Article 20 – paragraph 2
2. In deciding whether to impose sanctions and, if so, in determining their nature and appropriate level, due account shall be taken of the legal framework applicable in the country where the adverse impact occurred, the company’s efforts to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided pursuant to Articles 7 and 8, cumulative effects of the different measures and sanctions already imposed on the company as well as the collaboration with other entities to address adverse impacts in its valuesupply chains, as the case may be.
Amendment 508 #
Proposal for a directive
Article 20 – paragraph 3
Article 20 – paragraph 3
Amendment 511 #
Proposal for a directive
Article 20 – paragraph 4
Article 20 – paragraph 4
Amendment 513 #
Proposal for a directive
Article 21 – paragraph 2 a (new)
Article 21 – paragraph 2 a (new)
2a. Supervisory authorities shall share relevant information with the single point of contact as a means of ensuring that the single point of contact has the necessary information to perform its tasks.
Amendment 515 #
Proposal for a directive
Article 22
Article 22
Amendment 542 #
Proposal for a directive
Article 25
Article 25
Amendment 550 #
Proposal for a directive
Article 26
Article 26
Amendment 556 #
Proposal for a directive
Article 29 – paragraph 1 – introductory part
Article 29 – paragraph 1 – introductory part
No later than … [OP please insert the date = 78 years after the date of entry into force of this Directive], the Commission shall submit a comprehensive report to the European Parliament and to the Council on the implementation and effectiveness of this Directive. The report shall evaluate the effectiveness and feasibility of this Directive in reaching its objectives and also assess the following issues:
Amendment 557 #
Proposal for a directive
Article 29 – paragraph 1 – point a
Article 29 – paragraph 1 – point a
(a) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be lowermodified;
Amendment 559 #
Proposal for a directive
Article 29 – paragraph 1 – point b
Article 29 – paragraph 1 – point b
(b) whether the list of sectors in Article 2(1), point (b), needs to be changed, including in order to align it to guidance from the Organisation for Economic Cooperation and Development;
Amendment 560 #
Proposal for a directive
Article 29 – paragraph 1 – point b a (new)
Article 29 – paragraph 1 – point b a (new)
(ba) whether the impact of the Directive was justified and reached the targeted goals, including the associated indirect costs and the economic, social and environmental benefits thereof, and the costs on SMEs.
Amendment 561 #
Proposal for a directive
Article 29 – paragraph 1 – point c
Article 29 – paragraph 1 – point c
Amendment 562 #
Proposal for a directive
Article 29 – paragraph 1 – point d
Article 29 – paragraph 1 – point d
Amendment 564 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 1
Article 30 – paragraph 1 – subparagraph 1
Member States shall adopt and publish, by … [OJ to insert: 25 years from the entry into force of this Directive] at the latest, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.
Amendment 566 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point a
Article 30 – paragraph 1 – subparagraph 2 – point a
(a) from… [OJ to insert: 25 years from the entry into force of this Directive] as regards companies referred to in Article 2(1), point (a), and Article 2(2), point (a);
Amendment 568 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point b
Article 30 – paragraph 1 – subparagraph 2 – point b
(b) from … [OJ to insert: 47 years from the entry into force of this Directive] as regards companies referred to in Article 2(1), point (b), and Article 2(2), point (b).
Amendment 570 #
Proposal for a directive
Annex I
Annex I