203 Amendments of Ralf SEEKATZ related to 2022/0051(COD)
Amendment 65 #
Proposal for a directive
Recital 32
Recital 32
(32) Where the company cannot prevent, mitigate, bring to an end or minimise all the identified actual and potential adverse impacts at the same time to the full extent, it should be allowed to prioritise them based on the severity and likelihood of the adverse impact. In line with the relevant international framework, the severity of an adverse impact should be assessed based on its gravity (scale of the adverse impact), the number of persons or the extent of the environment affected (scope of the adverse impact), its irreversibility, and difficulty to restore the situation prevailing prior to the impact (irremediable character of the adverse impact). In line with international standards, prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. In order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts, this Directive should ensure that disengagement is a last-resort action, used only in cases of severe or repeated infringements of obligations under this Directive, after repeated attempts at measures of risk mitigation have failed and only if it is in the best interest of those impacted (responsible disengagement), also in line with the Union`s policy of zero-tolerance on child labour. Terminating a business relationship in which child labour was found could expose the child to even more severe adverse human rights impacts. This should therefore be taken into account when deciding on the appropriate action to take. Moreover, responsible disengagement should also take into account possible impacts for those depending on the product or affected by disruptions of supply chains.
Amendment 76 #
Proposal for a directive
Recital 42
Recital 42
(42) Companies should provide the possibility for persons and organisations to submit complaintsinformation directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. Organisations who could submit such complaintsinformation should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have substantiated and documented knowledge about a potential or actual adverse impact. Companies should establish a procedure for dealing with those complaints and inform workers, trade unions and other workers’ representatives, where relevant, about such processes. Recourse to the complaints and remediation mechanism should not prevent the complaininformant from having recourse to judicial remedies. In accordance with international standards, complaiinformants should be entitled to request from the company appropriate follow-up on the complaint andnotification. This can include to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaintnotification. This access should not lead to unreasonable solicitations of companies nor to sanctions. Companies may deal with notifications as a group, for example within a sectoral initiative, an industry programme or multi-stakeholder initiatives.
Amendment 124 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 53000 employees on average and had a net worldwide turnover of more than EUR 15900 million in the last financial year for which annual financial statements have been prepared;
Amendment 129 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 168 #
Proposal for a directive
Article 3 – paragraph 1 – point c
Article 3 – paragraph 1 – point c
(c) (c)‘adverse human rights impact’ means an adverse impact on protected persons that may impair the full enjoyment of human rights resulting from the violation of one of the prights or prohibitions listed in the Annex, Part I Section 1, as enshrinnciples set out in the OECD Due Diligence Guidance for Responsible Business Conduct and Guidance for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. (ca)‘adverse impact’ means adverse environmental impact and adverse human rights impact; (cb)‘to cause an adverse impact’ means a company’s own actions or omissions that directly led into the international conventions listed in the Annex, Part I Section 2; adverse impact. (cc)‘to contribute to an adverse impact’ means a company’s own actions in combination with the activities of other entities cause an adverse impact, or if the activities of a company cause, facilitate or incentivise another entity to cause an adverse impact. (cd) being ‘linked to an adverse impact’ means a company’s direct or indirect business relationship caused the adverse impact.
Amendment 184 #
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 value chain and other individuals, groups, communities or entities whose rights or interests are or could be directly affected by the potential and actual adverse environmental and human rights impacts connected to the products, services and operations of that company, its subsidiaries and its business relationships;
Amendment 224 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying and prioritising the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, 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 engage with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 229 #
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, 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 action plan shall be developed in consultationmeaningful engagement with affected stakeholders where relevant; companies are encouraged to develop their action plans in cooperation with industry initiatives;
Amendment 255 #
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 262 #
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, tThe corrective action plan shall be developed in consultationthrough meaningful engagement with stakeholders;
Amendment 265 #
Proposal for a directive
Article 8 – paragraph 3 – point b a (new)
Article 8 – paragraph 3 – point b a (new)
Amendment 269 #
Proposal for a directive
Recital 4
Recital 4
(4) The behaviour of companies across all sectors of the economy is key to success in the Union’s sustainability objectives as Union companies, especially large ones, rely on global valuesupply chains. It is also in the interest of companies to respect and protect human rights and the environment, in particular given the rising concern of consumers and investors regarding these topics. Several initiatives fostering enterprises which support value-oriented transformation already exist on Union77 , as well as national78 level. Further, binding due diligence legislation has been implemented in several Member States such as France and Germany, which gives rise to the need for a level playing field for companies in order to avoid fragmentation and to provide legal certainty for businesses operating in the single market. _________________ 77 ‘Enterprise Models and the EU agenda’, CEPS Policy Insights, No PI2021-02/ January 2021. 78 E.g. https://www.economie.gouv.fr/entreprises/ societe-mission
Amendment 273 #
Proposal for a directive
Recital 5
Recital 5
(5) EWell-established existing international standards on responsible business conduct such as the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises clarified in the OECD Due Diligence Guidance for Responsible Business Conduct specify that companies should respect and protect human rights and set out how they should address the protection of the environment across their operations and valuesupply 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 international standards 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 278 #
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.82, which should form the basis for this Directive. _________________ 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 285 #
Proposal for a directive
Recital 8
Recital 8
(8) International agreements under the United Nations Framework Convention on Climate Change, to which the Union and the Member States are parties, such as the Paris Agreement84 and the recent Glasgow Climate Pact85 , set out precise avenues to address climate change and keep global warming within 1.5 C degrees for states as signatory parties. Besides specific actions being expected from all signatory Parties, the role of the private sector, in particular its investment strategies, is also considered central to achieve these objectives. _________________ 84 https://unfccc.int/files/essential_backgroun d/convention/application/pdf/english_paris _agreement.pdf. 85 Glasgow Climate Pact, adopted on 13 November 2021 at COP26 in Glasgow, https://unfccc.int/sites/default/files/resourc e/cma2021_L16_adv.pdf.https://unfccc.int/ sites/default/files/resource/cma2021_L16_ adv.pdf.
Amendment 290 #
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 293 #
Proposal for a directive
Recital 10
Recital 10
(10) According to the Commission Communication on forging a climate- resilient Europe89 presenting the Union Strategy on Adaptation to climate change, new investment and policy decisions should be climate-informed and future- proof, including for larger businesses managing valuesupply chains. This Directive should be consistent with that Strategy. Similarly, there should be consistency with the Commission Directive […] amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (Capital Requirements Directive)90 , which sets out clear requirements for banks’ governance rules including knowledge about environmental, social and governance risks at board of directors level. _________________ 89 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Forging a climate-resilient Europe – the new EU Strategy on Adaptation to Climate Change (COM/2021/82 final), available at https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=COM:2021:82:FIN. 90 OJ C […], […], p. […].
Amendment 295 #
Proposal for a directive
Recital 11
Recital 11
Amendment 296 #
Proposal for a directive
Recital 12
Recital 12
(12) This Directive is in coherence with the EU Action Plan on Human Rights and Democracy 2020-202499 . This Action Plan defines as a priority to strengthen the Union’s engagement to actively promote the global implementation of the United Nations Guiding Principles on Business and Human Rights and other relevant international guidelines such as the OECD Guidelines for Multinational Enterprises, including by advancing relevant due diligence standards OECD Guidelines for Multinational Enterprises as clarified in the OECD Due Diligence Guidance for Responsible Business Conduct as the relevant guidelines, including by advancing relevant due diligence standards. Therefore, these international standards should form the basis for the obligations on due diligence for companies set out in this Directive. _________________ 99 Joint Communication to the European Parliament and the Council on the EU Action Plan on Human Rights and Democracy 2020-2024 (JOIN/2020/5 final).
Amendment 299 #
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 304 #
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 chainssupply chains. This Directive is without prejudice to the responsibility of Member States to respect and protect human rights and the environment under international law.
Amendment 307 #
Proposal for a directive
Recital 14 a (new)
Recital 14 a (new)
(14a) In line with relevant EU and national law, all companies in the EU 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 EU 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. Thus, tracing activities in the supply chain shall be focused on upstream level business relationships outside the EU.
Amendment 309 #
Proposal for a directive
Recital 14 b (new)
Recital 14 b (new)
(14b) This Directive is without prejudice to obligations in the areas of human rights, 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 should prevail to the extent of the conflict and should apply to those specific obligations. Examples of these obligations in Union legislative acts include obligations in the Conflict Minerals Regulation, the proposal for a Batteries Regulation or the proposal for a Regulation on deforestation-free supply chains.
Amendment 310 #
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 anddirect business relationships outside the EU and in case of substantiated knowledge of risks, indirect business relationships throughoutoutside the EU in 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’. The company should take the appropriate measureMoreover, administering information on a large number of business relationships is difficult. Therefore, the main obligations in this Directive should be ‘obligations of means’. In addition, while companies can be asked to prevent or mitigate adverse impacts that they caused or contributed to, it is still the responsibility of states to combat human rights violations worldwide. Companies should take the appropriate proportionate and commensurate measures within their means 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 specificities of the respective company’s valuesupply chain, sector or geographical area in which its value chain partners operate, the company’s power to influence its direct and indirect business relationships,ize, risk factors including the sector and geographical area of activity, the likelihood and severity of the company's potential or actual adverse impacts and its specific circumstances, the company’s power, resources and leverage to influence its business relationships, whether they caused or contributed to the adverse impact or are directly linked to it and whether the company could increase its power of influencleverage.
Amendment 317 #
(16) The risk-based due diligence process set out in this Directive should cover the six steps defined by the OECD Due Diligence Guidance for Responsible Business Conduct, which include due diligence measures for companies to identify and address adverse human rights and environmental impacts. This encompasses the following steps: (1) integrating due diligence into policies and management systems, (2) identifying and, assessing and prioritising adverse human rights and environmental impacts, (3) preventing, ceasing or minimising actual and potential adverse human rights, and environmental impacts, (4) assessing the effectiveness of measures, (5) communicating, (6) providing remediation.
Amendment 321 #
Proposal for a directive
Recital 17
Recital 17
(17) Adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their value chains, in particulaaspects particularly occur at the level of raw material sourcing, and manufacturing, or at the level of product or waste disposal in the upstream supply chain operating outside the EU. In order for the due diligence to have a meaningful impact, it should cover human rights and environmental adverse impacts generated throughout the life-cycle of production and use and disposal of product or provision of servicthe level of companies’ own operations, operations of their subsidiaries, atnd the level of own operations, subsidiaries and in valueir business relationships outside the EU in their upstream supply chains.
Amendment 323 #
Proposal for a directive
Recital 17 a (new)
Recital 17 a (new)
(17a) Secondary raw materials can only be traced until the point where the recycled material is returned to the immediate supplier of the recycler and where the information is obtained and retained to demonstrate that the material is recycled. Therefore, due diligence obligations should not go beyond that point.
Amendment 330 #
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, including from third countries, 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, may issue guidelines, including for specific sectors or specific adverse impashall issue clear and easily understandable guidelines in the form of targeted guidance where applicable to facilitate compliance; a) in digital, free of charge and easily accessible format; b) including for specific sectors or specific adverse impacts; c) including lists of risk areas whether sectoral or geographic; d) including an overview on applicable industry initiatives; e) including 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; f) including taking into account SMEs needs 2. The guidelines shall be made available no later than ... [18 months after the date of entry into force of this Directive]. The Commission shall periodically review the relevance of its guidelines and adapt them to new best practices. 3. Country fact-sheets shall 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 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 330 #
Proposal for a directive
Recital 18
Recital 18
(18) The valuesupply chain should cover activities related to 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 established business relationships of the company. It should encompass upstream established direct anddirect and, in cases of substantiated knowledge of adverse impacts, indirect business relationships, both outside the EU that design, extract, manufacture, transport, store and supply raw material, products, parts of products, or provide services to the company that are 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.directly necessary to carry out the company’s activities;
Amendment 336 #
Proposal for a directive
Recital 19
Recital 19
Amendment 341 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to allow companies to properly identify the adverse impacts in their value chainsupply chain that it caused or contributed to 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 business relationships which are, or which are expected to be lasting, in view of their intensity and duration and which do not represent a negligible or ancillary part of 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 company outside the EU. In cases when there is substantiated knowledge of adverse impacts and the company has the means and leverage to influence those, meaning being directly linked to the adverse impact, companies should include indirect business relationships outside the EU.
Amendment 347 #
Proposal for a directive
Recital 20 a (new)
Recital 20 a (new)
(20a) The concept of a company’s involvement in an adverse impact should clarify that the actions to be taken to address potential or actual adverse impacts depend on the level of involvement of a company in an adverse impact. The company’s involvement in an adverse impact should be in the form of the company causing the adverse impact, contributing to the adverse impact, or the company being directly linked to the adverse impact, meaning it was caused by its direct or indirect business relationship in the company’s supply chain without the company causing or contributing to it. Although the concepts of the company’s involvement in an adverse impact of ‘contributing to’ and ‘being directly linked to’ also exist in international standards, they should receive an autonomous definition in the Directive. With a view to ensure an effective protection of human rights and the environment, ‘causing’ should be understood as the companies own sole activities, and ‘contributing to’ should be understood as a company’s own activities in combination with or intervention of the activities of business relationships or facilitating or incentivising a business relationship to cause an adverse impact.
Amendment 349 #
Proposal for a directive
Recital 21
Recital 21
(21) Under this Directive, EU companies established in the Union with more than 53000 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 companies which do not fulfil those criteria, but which had more than 250 employees on average and more than EUR 40 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 impacts900 million in the financial year preceding the last financial year should be required to comply with due diligence. 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 353 #
Proposal for a directive
Recital 22
Recital 22
Amendment 358 #
Proposal for a directive
Recital 23
Recital 23
(23) In order to fully 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 turnover of at least EUR 150 million in the Union in the financial year preceding the last financial year or a net turnover of more than EUR 40 million but less thanhave a branch or subsidiary in the EU, had 3000 employees on average and generated a net worldwide turnover of at least EUR 15900 million in the last 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.
Amendment 360 #
Proposal for a directive
Annex I
Annex I
Amendment 361 #
Proposal for a directive
Recital 24
Recital 24
(24) For defining the scope of application in relation to non-EUthird-country companies the describcompany in question needs turnover criterion should be choseno have a branch or subsidiary in the EU as it creates a territorial connection between the third- country companies and the Union territory. TIn addition, 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-EUthird-country 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 employThat is why the nexus to the EU needs of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authoritiesto be ensured through having a branch or subsidiary in the EU. 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 363 #
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 enshrined in the international conventions as listed in the Annex to this 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 contextOECD Due Diligence Guidelines for Multinational Enterprises as clarified in the OECD Guidance for Responsible Business Conduct, as well as the UN Guiding Principles for Business and Human Rights. Due diligence 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 DirectiveOECD Due Diligence Guidelines for Multinational Enterprises as clarified in the Guidance for Responsible Business Conduct as regards the environment.
Amendment 365 #
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 . Using relevant international guidelines and standards as a and should be made easily accessible to companies. Therefeorence, the Commission should be able to issue additionalissue 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 367 #
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 valuesupply 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 that they cause or contribute to, 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 line with competition law. 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 372 #
(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 relevant corporate policies and have in place a risk- based due diligence policy. The 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 establishedits direct business relationships outside the EU. 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 annuallwhen relevant, meaning after a significant change occurs, such as operating in or sourcing from a new country.
Amendment 377 #
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 that it caused or contributed to. 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 influencleverage 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.
Amendment 379 #
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 meaningful stakeholder engagement and 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 valuesupply 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 respoWhen identifying adverse impacts that they caused or contributed to, the company should be able to first map areas of their operations, the operations of their subsidiaries and, where related to their supply chainse, to or anticipation of changesheir direct business relationships outside the EU inf they operating environment; and periodically, at least every 12 me in risk areas, and based on ths, 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 ae results, carry out an in-depth risk assessment prioritising the areas where the adverse impacts are most likely to be present or most significant. Indirect business relationship’s business model and strategies, including trading, procurement and pricing pshall be taken into account then there is substantiated knowledge of risks in those operactices. Whereons that 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 circumstancesis directly linked to, e.g. based on information gathered in the notification procedure. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way after a significant change occurs, throughout the life of an activity or relationship.
Amendment 384 #
Proposal for a directive
Recital 30 a (new)
Recital 30 a (new)
(30a) Where the company cannot prevent, mitigate, bring to an end or minimise all the identified actual and potential adverse impacts at the same time to the full extent, it should be allowed to prioritise them based on the severity and likelihood of the adverse impact. In line with the relevant international framework, the severity of an adverse impact should be assessed based on its gravity (scale of the adverse impact), the number of persons or the extent of the environment affected (scope of the adverse impact), its irreversibility, and difficulty to restore the situation prevailing prior to the impact (irremediable character of the adverse impact).
Amendment 385 #
Proposal for a directive
Recital 31
Recital 31
Amendment 388 #
Proposal for a directive
Recital 32
Recital 32
(32) Where the company cannot prevent, mitigate, bring to an end or minimise all the identified actual and potential adverse impacts at the same time to the full extent, it should be allowed to prioritise them based on the severity and likelihood of the adverse impact. In line with the relevant international framework, the severity of an adverse impact should be assessed based on its gravity (scale of the adverse impact), the number of persons or the extent of the environment affected (scope of the adverse impact), its irreversibility, and difficulty to restore the situation prevailing prior to the impact (irremediable character of the adverse impact). In line with international standards, prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. In order to enable continuous engagement with the valuesupply chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts, this Directive should ensure that disengagement is a last-resort action, used only in cases of severe or repeated misconduct, after repeated attempts of bringing an actual adverse impact to an end have failed and only if it is in the best interest of those impacted (responsible disengagement), also in line with the Union`s policy of zero-tolerance on child labour. Terminating a business relationship in which child labour was found could expose the child to even more severe adverse human rights impacts. This should therefore be taken into account when deciding on the appropriate action to take. Moreover, responsible disengagement should also take into account possible impacts for those depending on the product or affected by disruptions of supply chains.
Amendment 392 #
Proposal for a directive
Recital 33
Recital 33
(33) Under the due diligence obligations set out by this Directive, if a company identifies potential adverse human rights or environmental impacts, it should take appropriate measureproportionate and commensurate measures within their means to prevent andor adequately mitigate them. To provide companies with legal clarity and certainty, this Directive should set out the actions companies should becan be reasonably expected to take for prevention and mitigation of potential adverse impacts where relevant depending on the circumstances. and leverage. Companies should be obliged to take measures within their means to prevent or mitigate the adverse impacts that they cause or to which they contribute. When companies are not causing nor contributing to the adverse impacts occurring in their supply chain (so called ‘being directly linked to’ the adverse impact), they should use their influence to prevent or mitigate the adverse impact caused by their subsidiaries or business partners or to increase their influence to do so.
Amendment 397 #
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 depending on the circumstances and their leverage. Where necessary due to the complexity of prevention measures, companies should develop and implement a prevention action plan. Companies shouldmay seek to obtain contractual or other assurances from a direct partner with whom they have an established direct business relationship outside the EU that it will ensure compliance with the code of conduct or the prevention action plan, including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. The contractual assurances should besupply chain where possible. The assurances may be, where appropriate, 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, and, where appropriate, collaborate with other companies to that extent. Companies should also provide targeted and proportionate support for an SME with which they have an established direct business relationship outside the EU 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 402 #
Proposal for a directive
Recital 35
Recital 35
(35) In order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measuresthere is substantiated knowledge of severe adverse impacts in indirect business relationships outside the EU, this Directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partnerrelationship, with a view to achieving compliance with the company’s code of conduct or a prevention action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. This possibility should be taken into account on an ad-hoc basis and following the engagement with stakeholders.
Amendment 405 #
Proposal for a directive
Recital 36
Recital 36
Amendment 409 #
Proposal for a directive
Recital 37
Recital 37
(37) As regards direct andor where applicable 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 and assess their feasibility. However, membership of such schemes should complement, not replace company due diligence efforts. In order to ensure full information on such initiatives, the Directive should also refer to the possibilityquire for the Commission and the Member States to facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, may should issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 413 #
Proposal for a directive
Recital 38
Recital 38
(38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights or environmental adverse impacts that it caused or contributed to, it should take appropriate measures to bring those to an end. It can be expected that a company is able to bring to an end actual adverse impacts in theirits own operations and inthose of its subsidiaries. However, it should be clarified that, as regards established business relationships, where adverse impacts cannot be brought to an end, companies should minimise the extent of such impacts. Minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. To provide companies with legal clarity and certainty, this Directive should define which actions companies shcould be reasonably required to take within their means for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent, where relevant depending on the circumstances. When companies are neither causing nor contributing to the adverse impacts, meaning they are directly linked to the adverse impact, they should be obliged to use their influence to bring to an end or minimise the extent of the adverse impact caused by their subsidiaries or business relationships or to increase their influence to do so.
Amendment 418 #
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, where relevant within their means, where relevant depending on the circumstances. 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 measuonitoring improvement. Companies should alsomay also, where possible and where deemed necessary following engagement with stakeholders, seek to obtain contractual or other assurances from a direct business partner with whom they have an established 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 valuesupply chain. The contractual assurances should beassurances may be, where appropriate, 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 industry initiatives, where relevant, to increase the company’s ability to bring the adverse impact to an end.
Amendment 423 #
Proposal for a directive
Recital 40
Recital 40
(40) In order to reflect the full range of options for the company in cases where actual impacts could not be addressed by the described measures, this Directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner, where appropriate, with a view to achieving compliance with the company’s code of conduct or a corrective action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract.
Amendment 425 #
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 ato bringing actual adverse impacts to an end or minimising them without success. 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 obligation 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 commercialbusiness 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 only if this is in the best interest of those impacted (responsible disengagement). 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 426 #
Proposal for a directive
Recital 42
Recital 42
(42) Companies should provide the possibility for persons and organisations to submit complaintsinformation directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. Organisations who could submit such complaintsinformation should include trade unions and other workers’ representatives representing individuals working in the valuesupply chain concerned and civil society organisations active in the areas related to the valuesupply chain concerned where they have substantiated and documented knowledge about a potential or actual adverse impact. Companies should establish a procedure for dealing with those complaintnotifications and inform workers, trade unions and other workers’ representatives, where relevant, about such processes. Recourse to the complaints and remedinotification mechanism should not prevent the complaininformant from having recourse to judicial remedies. In accordance with international standards, complaiinformants should be entitled to request from the company appropriate follow-up on the complaint andnotification. This can include to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaintnotification. This access should not lead to unreasonable solicitations of companies nor to sanctions. Companies may deal with notifications as a group, for example within an industry initiative.
Amendment 431 #
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 periodiccontinuous assessments of their own operations, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their established business relationships outside the EU, 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 if 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- betweenwhen deemed necessary after a significant change occurs, such as operating in or sourcing from a new country or if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen.
Amendment 439 #
Proposal for a directive
Recital 44
Recital 44
(44) Like in the existing international standards set by the United Nations Guiding Principles on Business and Human Rights and the OECD framework, it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies, processes and activities conducted to identify and address actual or potential adverse impacts, including the findings and outcomes of those activities. The proposal to amend Directive 2013/34/EU as amended regardsing corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. In order to avoid duplicating reporting obligations, this Directive should therefore not introduce any new reporting obligations in addition to those under Directive 2013/34/EU for the companies covered by that Directive as well as the reporting standards that should be developed under it. As regards companies that are within the scope of this Directive, but do not fall under Directive 2013/34/EU, in order to comply with their obligation of communicating as part of the due diligence under this Directive, they should publish on their website an annual statement in a language customary in the sphere of international businessone of the official languages of the Union.
Amendment 442 #
Proposal for a directive
Recital 45
Recital 45
(45) In order to facilitate companies’ compliance with their due diligence requirements throughas regards their valuesupply chain and limiting shifting compliance burden on SME business partners, in particular SMEs, the Commission should provide guidance on model contractual clauses.
Amendment 448 #
Proposal for a directive
Recital 47
Recital 47
(47) Although SMEs are not included in the scope of this Directive, they could be heavily impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate the immense financial or administrative burden on SMEs, many of which are already struggling in the context of the global economic and sanitary crisis. In order to support companies in the implementation, including SMEs, Member States should set up and operate, either individually or jointly, dedicated websites, portals or platforms, to provide information and support to companies, and Member States cshould also financially support SMEs specifically and help them build capacity. Such support should also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME, are also encouraged tshould also support them to comply with due diligence measures, in case such requirements would jeopardize the viability of the SME and use fair, reasonable, non-discriminatory and proportionate requirements vis-a-vis the SMEs.
Amendment 450 #
Proposal for a directive
Recital 48
Recital 48
(48) In order to complement Member State support to companies in their implementation, including SMEs, the Commission mayshould build on existing EU tools, projects and other actions helping with the due diligence implementation in the EU and in third countries. It may set up new support measures that provide help to companies, including SMEs on due diligence requirements, including an observatory for valuesupply chain transparency and the facilitation and assessment of joint stakeholder initiatives.
Amendment 452 #
Proposal for a directive
Recital 49
Recital 49
(49) The Commission and Member States should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships, paying specific attention to the challenges faced by smallholders. They should use their neighbourhood, development and international cooperation instruments, including Free Trade Agreements, to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. This could include working with partner country governments, the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts.
Amendment 455 #
Proposal for a directive
Recital 50
Recital 50
(50) In order to ensure that this Directive effectively contributes to combating climate change, companies should adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement. In case climate is or should have beenin case climate is identified as a principal risk for or a principal impact of the company’s operations, the company should include emissions reduction objectives in its planclimate objectives in its due diligence policy regarding environmental adverse impacts.
Amendment 457 #
Proposal for a directive
Recital 51
Recital 51
Amendment 460 #
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 462 #
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 administrative 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 sanctions. 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 464 #
Proposal for a directive
Recital 55
Recital 55
(55) In order to ensure consistent application and enforcement of national provisions adopted pursuant to this Directive, national supervisory authorities should actively cooperate and coordinate their action. For that purpose a European Network of Supervisory Authorities should be set up by the Commission and the supervisory authorities should assist each other in performing their tasks and provide mutual assistance.
Amendment 470 #
Proposal for a directive
Recital 56
Recital 56
(56) In order to ensure effective compensation of victims of adverse impacts, Member States should be required to lay down rules governing the civil liability of companies for damages arising due to its intentional or gross negligent failure to comply with the due diligence process. The company should be liable for damages if thethat they directly caused if they intentionally or gross negligently failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent, and as a result of this failure an adverse impact that it directly caused and that should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures occurred and led to damage.
Amendment 474 #
Proposal for a directive
Recital 57
Recital 57
Amendment 479 #
Proposal for a directive
Recital 59
Recital 59
(59) As regards civil liability rules, the civil liability of a company for damages arising due to its failure to carry out adequate due diligencethat it directly caused should be without prejudice to civil liability of its subsidiaries or the respective civil liability of direct and indirect business partnerbusiness in the valuesupply chain. Also, the civil liability rules under this Directive should be without prejudice to Union or national rules on civil liability related to adverse human rights impacts or to adverse environmental impacts that provide for liability in situations not covered by or providing for stricter liability than this Directive.
Amendment 483 #
Proposal for a directive
Recital 61
Recital 61
Amendment 484 #
Proposal for a directive
Recital 62
Recital 62
Amendment 485 #
Proposal for a directive
Recital 63
Recital 63
Amendment 486 #
Proposal for a directive
Recital 64
Recital 64
Amendment 493 #
Proposal for a directive
Recital 70
Recital 70
Amendment 495 #
Proposal for a directive
Recital 71
Recital 71
(71) The objective of this Directive, namely better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights and environmental adverse impacts in companies’ value chains, cannot be sufficiently achieved by the Member States acting individually or in an uncoordinated manner, but can rather, by reason of the scale and effects of the actions, be better achieved at Union level. In particular, addressed problems and their causes are of a transnational dimension, as many companies are operating Union wide or globally and value chains expand to other Member States and to third countries. Moreover, individuala growing number of individual and different Member States’ measures risk being ineffective, unworkable for companies to comply with, and lead to fragmentation of the internal market. Therefore, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.
Amendment 501 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – introductory part
Article 1 – paragraph 1 – subparagraph 1 – introductory part
This DirectiveRegulation lays down rules
Amendment 506 #
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 that they caused, contributed to or are directly linked to, with respect to their own operations, the operations of their subsidiaries, and the valuesupply chain operations carried out by entities with whom the company has an establishedtheir business relationships outside the EU and
Amendment 512 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point b
Article 1 – paragraph 1 – subparagraph 1 – point b
(b) on liability for violations of the obligations mentioned abovedamages that occurred in the operations described above which a company directly intentionally or gross negligently caused.
Amendment 519 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
Amendment 528 #
2a. Member States shall not introduce, in their national law, more stringent provisions than those laid down in this Directive, unless otherwise provided for in this Directive.
Amendment 536 #
Proposal for a directive
Article 2 – paragraph 1 – introductory part
Article 2 – paragraph 1 – introductory part
1. This Directive shall apply to companies which are formed in accordance with the legislation of a Member State and which fulfil one of the following conditions:had more than 3000 employees on average and had a net worldwide turnover of more than EUR 900 million in the last financial year for which annual financial statements have been prepared;
Amendment 540 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
Amendment 549 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 596 #
Proposal for a directive
Article 2 – paragraph 2 – introductory part
Article 2 – paragraph 2 – introductory part
2. This Directive shall also apply to companies which are formed in accordance with the legislation of a third country, and fulfil one of the following conditions:have a domestic branch office or subsidiary in a Member State and which had at least 3000 employees and had a net worldwide turnover of more than EUR 900million in the last financial year for which annual financial statements have been prepared;.
Amendment 602 #
Proposal for a directive
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
Amendment 611 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
Amendment 635 #
Proposal for a directive
Article 2 – paragraph 4 a (new)
Article 2 – paragraph 4 a (new)
4a. In case of a group of companies: (a) the parent company, whether or not it meets the thresholds mentioned in paragraphs 1 or 2, may perform the Due Diligence obligations laid down in this Directive on behalf of any or all its subsidiaries which meet the thresholds in paragraph 1 or 2; (b) any subsidiary shall be deemed in compliance with the obligations laid down in this Directive where their parent company includes those subsidiaries in its due diligence corporate policy.
Amendment 649 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv
Article 3 – paragraph 1 – point a – point iv
Amendment 667 #
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 Guidelines for Multinational Enterprises as clarified in the OECD Guidance for Responsible Business Conduct as regards the environment and climate.;
Amendment 676 #
(c) ‘adverse human rights impact’ means an adverse impact on protected persons that may impair the full enjoyment of human rights resulting from the violation of one of the prights or prohibitions listed in the Annex, Part I Section 1, as enshrined in the international conventions listed in the Annex, Part I Section 2nciples set out in the OECD Due Diligence Guidelines for Multinational Enterprises as clarified in the OECD Guidance for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights;
Amendment 682 #
Proposal for a directive
Article 3 – paragraph 1 – point c a (new)
Article 3 – paragraph 1 – point c a (new)
(ca) ‘adverse impact’ means an adverse environmental impact and adverse human rights impact;
Amendment 684 #
Proposal for a directive
Article 3 – paragraph 1 – point c b (new)
Article 3 – paragraph 1 – point c b (new)
(cb) ‘to cause an adverse impact’ means a company’s own actions that directly led to the adverse impact.
Amendment 685 #
Proposal for a directive
Article 3 – paragraph 1 – point c c (new)
Article 3 – paragraph 1 – point c c (new)
(cc) ‘to contribute to an adverse impact’ means a company’s own actions in combination with the activities of other entities cause an adverse impact, or if the activities of a company cause, facilitate or incentivise another entity to cause an adverse impact. Contribution must be substantial, meaning that it does not include minor or trivial contributions. The substantial nature of the contribution and understanding when the actions of the enterprise may have caused, facilitated or incentivised another entity to cause an adverse impact may involve the consideration of multiple factors. The following factors can be taken into account: – the extent to which an enterprise may encourage or motivate an adverse impact by another entity, i.e. the degree to which the activity increased the risk of the impact occurring. – the extent to which an enterprise could or should have known about the adverse impact or potential for adverse impact, i.e. the degree of foreseeability. – the degree to which any of enterprise’s activities actually mitigated the adverse impact or decreased the risk of the impact occurring. The mere existence of a business relationship or activities which create the general conditions in which it is possible for adverse impacts to occur does not necessarily represent a relationship of contribution. The activity in question should substantially increase the risk of adverse impact.
Amendment 687 #
Proposal for a directive
Article 3 – paragraph 1 – point c d (new)
Article 3 – paragraph 1 – point c d (new)
(cd) being ‘directly linked to an adverse impact’ means that there is a relationship between the adverse impact and the company’s products, services or operations through another business relationship. Directly linked is not defined by direct contractual relationships. Also, a direct linkage does not imply that the responsibility shifts from the entity causing an adverse impact to the enterprise with which it has a linkage.
Amendment 690 #
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 business relationship with a direct contractor, subcontractor or any other legal entities (‘partner’)ual relation for the supply of goods or the provision of services whose supplies are necessary for the production of the enterprise’s product or the provision and use of the relevant service, which is relevant based on the severity and likelihood of adverse impacts and is outside the European Union.
Amendment 697 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point i
Article 3 – paragraph 1 – point e – point i
Amendment 700 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii
Article 3 – paragraph 1 – point e – point ii
Amendment 711 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
(f) ‘establishedindirect business relationship’ means a business relationship, whether direct or indirect, which is, or which is expected to be lasting, in view of its intensity or duration and which does not represent a negligible or merely ancillary part of the value chaiich is not a direct supplier and whose supplies are necessary for the production of the enterprise’s product or the provision and use of the relevant service, which is relevant based on the severity and likelihood of adverse impacts and is outside the European Union;
Amendment 718 #
Proposal for a directive
Article 3 – paragraph 1 – point f a (new)
Article 3 – paragraph 1 – point f a (new)
Amendment 727 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘valuesupply chain’ means activities related to the production and supply 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 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, c as far as these activities are dit, 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;rectly necessary for the production of the goods or the provision of the services.
Amendment 734 #
Proposal for a directive
Article 3 – paragraph 1 – point g a (new)
Article 3 – paragraph 1 – point g a (new)
(ga) ‘leverage’ means the ability of a company, depending on size and importance to supplier’s revenue or the functioning of its business operations, to affect change in the wrongful practices of the entity that causes or contributes to the adverse impact in the supply chain;
Amendment 746 #
Proposal for a directive
Article 3 – paragraph 1 – point h a (new)
Article 3 – paragraph 1 – point h a (new)
(ha) For the purposes of point (h), the Commission shall adopt a delegated act in accordance with Article 28 to specify the minimum standards for the independent third-party verification;
Amendment 753 #
Proposal for a directive
Article 3 – paragraph 1 – point j a (new)
Article 3 – paragraph 1 – point j a (new)
(ja) For the purposes of point (j), the Commission shall adopt a delegated act in accordance with Article 14b and 28 to specify the minimum standards for the industry initiative to be recognised by one Member States as feasible;
Amendment 754 #
Proposal for a directive
Article 3 – paragraph 1 – point l
Article 3 – paragraph 1 – point l
Amendment 765 #
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 relevant individuals, groups, communities or entities whose rights or vested interests are or could be directly affected by the potential and actual adverse environmental and human rights impacts connected to the products, services and operations of that company, its subsidiaries and its business relationships;
Amendment 776 #
Proposal for a directive
Article 3 – paragraph 1 – point o
Article 3 – paragraph 1 – point o
Amendment 781 #
Proposal for a directive
Article 3 – paragraph 1 – point p
Article 3 – paragraph 1 – point p
Amendment 785 #
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 due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and proportionate to the size, reasonably available tources and capacities of 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 actionleverage in that relationship, and the principle of risk-based prioritisation of action. Companies are not required to guarantee, in all circumstances, that adverse impacts will never occur or that they will be stopped. The main obligations in this Directive are obligations of means;
Amendment 795 #
Proposal for a directive
Article 3 – paragraph 1 – point q c (new)
Article 3 – paragraph 1 – point q c (new)
(qc) ‘risk factors’ means enterprise- level risk factors, geographic risk factors, and sectoral risk factors. The Commission shall prepare a list of risk factors with accompanying guidance as described in Article 13;
Amendment 796 #
Proposal for a directive
Article 3 – paragraph 1 – point q d (new)
Article 3 – paragraph 1 – point q d (new)
(qd) ‘Group’ means a parent company and all its subsidiary undertakings as defined by Article 2 of the Directive 2013/34/EU of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and83/349/EE;
Amendment 802 #
Proposal for a directive
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
1. Member States shall ensure that companies conduct risk-based human rights and environmental due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions:
Amendment 804 #
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 that they caused or contributed to or are directly linked to in accordance with Article 6;
Amendment 808 #
Proposal for a directive
Article 4 – paragraph 1 – point c
Article 4 – paragraph 1 – point c
(c) preventing andor mitigating potential adverse impacts that they caused or contributed to, and bringing actual adverse impacts to an end andhat they caused or contributed to an end or minimising their extent in accordance with Articles 7 and 8;
Amendment 812 #
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 835 #
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 relevant corporate policies and have in place a due diligence policy. The due diligence policy shall contain all of the following:
Amendment 848 #
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, where relevant, the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships;
Amendment 860 #
Proposal for a directive
Article 5 – paragraph 2
Article 5 – paragraph 2
2. Member States shall ensure that the companies continuously update their due diligence policy annuallywhen significant changes occur.
Amendment 865 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2a. Companies shall carry out a due diligence policy which is proportionate and commensurate to the likelihood and severity of their potential or actual adverse impacts and their specific circumstances and risk factors, particularly their sector and location of activity, the size and length of their supply chain, the size of the company, its capacity, resources and leverage.
Amendment 872 #
Proposal for a directive
Article 6 – title
Article 6 – title
Identifying and prioritising actual and potential adverse impacts
Amendment 876 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to identifywithin their means to identify whether they cause or contribute to or are directly linked to actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, w in their business relationships. Where related to their valuesupply chains, from their established business relationships, in accordance with paragraph 2, 3 and 4companies shall assess adverse impacts arising from their direct business relationships located outside the EU that they cause or contribute to. In case of substantiated knowledge, companies shall assess adverse impacts arising from their indirect business relationships outside the EU that they are directly linked to, in accordance with paragraph 2, 3 and 4. In cases where an enterprise has structured a direct business relationship in an improper manner or has engaged in a transaction in order to circumvent the due diligence obligations with regard to the direct supplier, an indirect business relationship is deemed to be a direct business relationship.
Amendment 884 #
Proposal for a directive
Article 6 – paragraph 1 a (new)
Article 6 – paragraph 1 a (new)
1a. Companies shall identify whether they cause, contribute to or are directly linked to actual and potential adverse human rights impacts and adverse environmental 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 based on the Commission guidelines set out in Article 13. Companies only need to assess business relationships outside the EU and only where risk factors are likely.
Amendment 888 #
Proposal for a directive
Article 6 – paragraph 1 b (new)
Article 6 – paragraph 1 b (new)
1b. Where a company is not in a position to identify all potential or actual adverse impacts that it caused, contributed to or is directly linked to at the same time, it shall prioritise risk factors based on their severity. Risk assessments under this article shall take into account the perspective of stakeholders where relevant.
Amendment 891 #
Proposal for a directive
Article 6 – paragraph 1 c (new)
Article 6 – paragraph 1 c (new)
1c. If a company concludes that it does not cause, contribute to, or that it is not directly linked to any potential or actual adverse impact, it shall publish a statement to that effect on its website (in accordance with Art. 11) and shall thus be considered in compliance with the Directive. In particular, that company may conclude that it has encountered no adverse impacts on human rights or the environment if its impacts identification determines that its direct suppliers perform due diligence in line with this directive. That statement shall be reviewed in the event that new risks emerge or in the event of that company entering into new business relationships that can pose risks.
Amendment 892 #
Proposal for a directive
Article 6 – paragraph 1 d (new)
Article 6 – paragraph 1 d (new)
1d. Companies are encouraged to take these measures in cooperation with industry initiatives.
Amendment 895 #
Proposal for a directive
Article 6 – paragraph 2
Article 6 – paragraph 2
Amendment 902 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
Amendment 909 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying and prioritising the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, 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 engage with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 916 #
Proposal for a directive
Article 6 – paragraph 4 a (new)
Article 6 – paragraph 4 a (new)
4a. In the event that not all the necessary information regarding its supply chain is available, the parent company shall explain the efforts made to obtain the necessary information about its supply chain, the reasons why not all of the necessary information could be obtained, and its plans to obtain the necessary information in the future.
Amendment 925 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate proportionate and commensurate measures 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 shouldthey cause or contribute to and that have been, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article. Companies that are directly linked to potential adverse impacts without causing or contributing to them are required to make use of their leverage to the extent possible to mitigate adverse impacts.
Amendment 933 #
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, 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 action plan shall be developed in consultationmeaningful engagement with affected stakeholders where relevant; companies are encouraged to develop their action plans in cooperation with industry initiatives;
Amendment 937 #
Proposal for a directive
Article 7 – paragraph 2 – point a a (new)
Article 7 – paragraph 2 – point a a (new)
Amendment 940 #
Proposal for a directive
Article 7 – paragraph 2 – point a b (new)
Article 7 – paragraph 2 – point a b (new)
(ab) Companies shall apply best efforts to develop and use purchase policies that do not encourage potential adverse impacts on human rights the environment.
Amendment 945 #
Proposal for a directive
Article 7 – paragraph 2 – point b
Article 7 – paragraph 2 – point b
(b) seekmay seek, where appropriate, contractual or other assurances, from a business partner with whom it has a direct business relationship located outside the EU that it 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 chain ( and by requesting information on their suppliers if possible; Member States shall ensure that the general due diligence duty prevails over contractual cascading).surances; When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 956 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) provide targeted and proportionate supportfinancial and administrative support, especially for an SME with which the company has an established business relationship, where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME outside the EU;
Amendment 962 #
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 initiatives, including, where relevant, to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective;
Amendment 972 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
3. As regards potential adverse impacts that could not be prevented or adequately mitigated by the measures in paragraph 2, the company that is directly linked to the adverse impact may seek to conclude a contract with a partner with whom it has an indirect relationship outside the EU that was identified in accordance with Article 6 due to substantiated knowledge of potential adverse impacts, with a view to achieving compliance with the company’s code of conduct or a prevention action plan. When such a contract is concluded, paragraph 4 shall apply.
Amendment 979 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 1
Article 7 – paragraph 4 – subparagraph 1
Amendment 984 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 2
Article 7 – paragraph 4 – subparagraph 2
When contractual assurancesassurances, including contractual, are obtained from, or a contract is entered into, with an SME outside the EU, the terms used shall be fair, reasonable and non-discriminatory. Where measures are carried out to verify compliance are carried out in relation to SMEs, the company shall bearof assurances obtained from SMEs outside the EU, the cost of the independent third- party verification should be provided by public funds.
Amendment 990 #
Proposal for a directive
Article 7 – paragraph 5
Article 7 – paragraph 5
Amendment 1015 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
Amendment 1019 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to bring actual adverse impacts that have been, or shouldproportionate and commensurate measures within their means to bring actual adverse impacts that they have caused or contributed to and that have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article. Companies that are directly linked to the actual adverse impact without causing or contributing to it are required to make use of their leverage to the extent possible to bring actual adverse impacts to an end.
Amendment 1027 #
Proposal for a directive
Article 8 – paragraph 2
Article 8 – paragraph 2
2. Where the adverse impact cannot be brought to an end, Member States shall ensure that companies take measures within their means to minimise the extent of such an impact.
Amendment 1037 #
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 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 1045 #
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, tThe corrective action plan shall be developed in consultationthrough meaningful engagement with stakeholders;
Amendment 1047 #
Proposal for a directive
Article 8 – paragraph 3 – point b a (new)
Article 8 – paragraph 3 – point b a (new)
(ba) set up a prioritisation strategy on the basis of Principle 17 of the UN Guiding Principles on Business and Human Rights based on risk factors. Companies shall consider the level of severity, likelihood and urgency of the different actual adverse impacts on human rights or the environment, 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 1052 #
Proposal for a directive
Article 8 – paragraph 3 – point c
Article 8 – paragraph 3 – point c
(c) seekmay seek, where appropriate, contractual or other assurances from a direct partner with whom it has an established direct business relationship outside the EU that it will ensure compliance with the code of conduct and, as necessary, a corrective action plan, including by seeking corresponding contractual assurances from its partners, to the extent that they are part of the value chain ( and by requesting information on their suppliers if possible. Member States shall ensure that the general due diligence duty prevails over contractual cascading)surances. When such contractual assurances are obtained, paragraph 5 shall apply.
Amendment 1057 #
Proposal for a directive
Article 8 – paragraph 3 – point d
Article 8 – paragraph 3 – point d
(d) make necessary, where appropriate, investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3;
Amendment 1063 #
Proposal for a directive
Article 8 – paragraph 3 – point e
Article 8 – paragraph 3 – point e
(e) provide targeted and proportionate supportfinancial and administrative support, especially 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 outside the EU;
Amendment 1069 #
Proposal for a directive
Article 8 – paragraph 3 – point f
Article 8 – paragraph 3 – point f
(f) in compliance with Union law including competition law, collaborate with other entities, sectoral approaches or industry initiatives, including, where relevant, to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective.
Amendment 1076 #
Proposal for a directive
Article 8 – paragraph 4
Article 8 – paragraph 4
4. As regards actual adverse impacts that could not be brought to an end or adequately mitigated by the measures in paragraph 3, the company that is directly linked to the impact may seek to conclude a contract, where appropriate, with a partner with whom it has an indirect relationship outside the EU that was identified in accordance with Article 6 due to substantiated knowledge of actual adverse impacts, with a view to achieving compliance with the company’s code of conduct or a corrective action plan. When such a contract is concluded, paragraph 5 shall apply.
Amendment 1080 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 1
Article 8 – paragraph 5 – subparagraph 1
Amendment 1084 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 2
Article 8 – paragraph 5 – subparagraph 2
When contractual assurancesassurances, including contractual, are obtained from, or a contract is entered into, with an SMEother company, the terms used shall be fair, reasonable and non- discriminatory. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third- party verification should be provided by public funds.
Amendment 1091 #
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 the company caused or contributed to and 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 and despite repeated efforts, the company shall refrain 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 shall, as a measure of last resort, where the law governing their relations so entitles them to, take one of the following actions and where the impact is considered extremely severe or irreversible, take the following actions, in line with responsible disengagement, taking into account the best interest of those impacted:
Amendment 1098 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point b
Article 8 – paragraph 6 – subparagraph 1 – point b
(b) if suspension does not lead to a sufficient result, terminate the business relationship with respect to the activities concerned, if the adverse impact is consid. Member States shall provide for the availability of an option to terminate the business relationship in contracts governed severeby their laws.
Amendment 1118 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
Amendment 1134 #
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 regarding actual or potential adverse human rights impacts and adverseand environmental impacts with respect to their own operations, the operations of their subsidiaries and their valuesupply chains. This can be done in cooperation with industry initiatives.
Amendment 1142 #
Proposal for a directive
Article 9 – paragraph 1 a (new)
Article 9 – paragraph 1 a (new)
1a. Member States shall ensure that notification procedures are legitimate, accessible, predictable, equitable, transparent, rights compatible and a source of continuous learning based on engagement and dialogue.
Amendment 1154 #
Proposal for a directive
Article 9 – paragraph 2 – introductory part
Article 9 – paragraph 2 – introductory part
2. Member States shall ensure that the complaintnotifications may be submitted by:
Amendment 1164 #
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 valuesupply chain concerned,
Amendment 1171 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
(c) civil society organisations active in the areas related to the valuesupply chain concerned.
Amendment 1177 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
3. Member States shall ensure that the companies establish a procedure for dealing with complaintnotifications 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 initiatives.
Amendment 1183 #
Proposal for a directive
Article 9 – paragraph 4 – introductory part
Article 9 – paragraph 4 – introductory part
4. Member States shall ensure that complainants are entitledIn case the notification proves to be well founded, Member States shall ensure that informants 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 1192 #
Proposal for a directive
Article 9 – paragraph 4 – point a
Article 9 – paragraph 4 – point a
Amendment 1195 #
Proposal for a directive
Article 9 – paragraph 4 – point b
Article 9 – paragraph 4 – point b
Amendment 1214 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies carry out periodiccontinuous assessments of their own operations and measures, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their established 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 assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 monthscontinuously 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 1223 #
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 tone of the official languages of the Union. When sphere of international business. The statement shall be published by 30 April each year, covering the previous calendar yearignificant changes occur, the statement shall be updated.
Amendment 1230 #
Proposal for a directive
Article 11 – paragraph 1 a (new)
Article 11 – paragraph 1 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 1238 #
Proposal for a directive
Article 11 – paragraph 2
Article 11 – paragraph 2
The Commission shall adopt delegated acts in accordance with Article 14b and 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.
Amendment 1262 #
Proposal for a directive
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to provide support to companies or 1. to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, including from third countries, the European Union Agency for Fundamental Rights, the European Environment Agency, the External Action Service, the European Innovation Council and Small and Medium-sized Enterprises Executive Agency (EISMEA) and where appropriate with the OECD and other international bodies having expertise in due diligence, may issue guidelines, including for specific sectors or specific adverse impacts. shall issue clear and easily understandable guidelines in the form of targeted guidance where applicable to facilitate compliance in a practical manner: (a) in digital, free of charge and easily accessible format; (b) including on existing digital solutions to be used for the due diligence process and on the development of digital solutions; (c) including on the implementation of the human rights and environmental standards applicable to businesses based on the OECD Guidelines for Multinational Enterprises as clarified in the Due Diligence Guidance as well as the UNGPs; (d) including lists of risk factors and accompanying guidance, including enterprise-level risk factors, geographic risk factors and sectoral risk factors; (e) including an overview on applicable industry initiatives; (f) including 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; (g) including taking into account SMEs needs. 2. The guidelines shall be made available no later than ... [18 months after the date of entry into force of this Directive]. The Commission shall periodically review the relevance of its guidelines and adapt them to new best practices. 3. Country fact-sheets shall 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 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 1278 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. The Commission in cooperation with Member States shall, in order to provide information and support to companies and the partners with whom they have established 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 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 1282 #
Proposal for a directive
Article 14 – paragraph 1 a (new)
Article 14 – paragraph 1 a (new)
1a. The Commission in cooperation with Member States shall undertake efforts in order to provide information and support to stakeholders and their representatives to exercise their involvement in due diligence. This shall include setting up and operating individually or jointly dedicated websites, platforms or portals.
Amendment 1288 #
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 may devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations.
Amendment 1290 #
Proposal for a directive
Article 14 – paragraph 3 a (new)
Article 14 – paragraph 3 a (new)
3a. The Commission may rely on its cooperation and trade instruments to support the development of the enabling environment in third countries, through capacity building and expertise that will reinforce their economic sector to comply with due diligence obligations as set out in this Directive.
Amendment 1299 #
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 and the OECD as well as relevant stakeholders, shall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiativesinitiatives in line with Article 14c.
Amendment 1307 #
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 additional guidance and obtain further support and information about how best to fulfil their due diligence obligations through this point of contact. 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 1309 #
Proposal for a directive
Article 14 c (new)
Article 14 c (new)
Amendment 1313 #
Proposal for a directive
Article 15
Article 15
Amendment 1344 #
Proposal for a directive
Article 17 – paragraph 3 – subparagraph 1
Article 17 – paragraph 3 – subparagraph 1
As regards companies referred to in Article 2(2), the competent supervisory authority shall be that of the Member State in which the company has a branch. If the company does not have a branch in any Member State, or has branches located in different Member States, the competent supervisory authority shall be the supervisory authority of 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 before the date indicated in Article 30 or the date on which the company first fulfils the criteria laid down in Article 2(2), whichever comes last or subsidiary.
Amendment 1400 #
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 para.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’)Articles 6 to 11 and Article 15(1) and (2) of this Directive (‘substantiated concerns’), if the notification procedure referred to in Article 9 did not have a satisfactory outcome.
Amendment 1417 #
Proposal for a directive
Article 20 – title
Article 20 – title
Amendment 1419 #
Proposal for a directive
Article 20 – paragraph 1
Article 20 – paragraph 1
1. Member States shall lay down the rules on administrative sanctions applicable to infringements of national provisions adopted pursuant to this Directive, and shall take all measures necessary to ensure that they are implemented. The sanctions provided for shall be effective, proportionate and dissuasive. At least the following administrative measures and sanctions shall be provided for: (a) a public statement indicating company responsible and the nature of the infringement; (b) an order requiring the company responsible to cease the conduct constituting the infringement and to desist from any repetition of that conduct; (c) administrative pecuniary sanctions.
Amendment 1430 #
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 may occur or has occurred, the gravity and duration of the infringement, the importance of profits gained or losses avoided by the company, in so far as they can be determined 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, any previous infringements, 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.; any other aggravating or mitigating factors applicable to the circumstances of the case;
Amendment 1462 #
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 1463 #
Proposal for a directive
Article 21 – paragraph 2 b (new)
Article 21 – paragraph 2 b (new)
2b. The ENSA shall also support the Commission in developing the Single- Reporting-Instrument.
Amendment 1476 #
Proposal for a directive
Article 22 – paragraph 1 – point a
Article 22 – paragraph 1 – point a
(a) they intentionally or gross negligently failed to comply with the obligations laid down in Articles 7 and 8 and;
Amendment 1483 #
Proposal for a directive
Article 22 – paragraph 1 – point b
Article 22 – paragraph 1 – point b
(b) as a result of this failure an actual adverse impact that they caused and that should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures laid down in Articles 7 and 8 occurred and led to damage.
Amendment 1495 #
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1
Article 22 – paragraph 2 – subparagraph 1
Amendment 1509 #
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 2
Article 22 – paragraph 2 – subparagraph 2
In the assessment of the existence and extent of liability under this paragraph, due account shall be taken of the company’s efforts, insofar as they relate directly to the damage in question, 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, as well as any collaboration with other entities to address adverse impacts in its valuesupply chains.
Amendment 1528 #
Proposal for a directive
Article 22 – paragraph 4
Article 22 – paragraph 4
4. The civil liability rules under this Directive shall be without prejudice to Union or national rules on civil liability related to adverse human rights impacts or to adverse environmental impacts that provide for liability in situations not covered by or providing for stricter liability than this Directive.
Amendment 1535 #
Proposal for a directive
Article 22 – paragraph 5
Article 22 – paragraph 5
5. Member States shall ensure that the liability provided for in provisions of national law transposing this Article is of overriding mandatory application in cases whmitation period for bringing civil liability claims concerning harm arising out of adverse the law applicable to claims to that effect is not the law of a Member Stateimpacts on human rights and the environment is five years.
Amendment 1551 #
Proposal for a directive
Article 24
Article 24
Amendment 1559 #
Proposal for a directive
Article 25
Article 25
Amendment 1571 #
Proposal for a directive
Article 26
Article 26
Amendment 1596 #
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 report to the European Parliament and to the Council on the implementation of this Directive. The report shall evaluate the effectiveness of this Directive in reaching its objectives and assess the following issues:
Amendment 1598 #
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 loweredimpact of the Directive was justified and reached the targeted goals, including the associated indirect costs and the economic, social and environmental benefits thereof, including on SMEs;
Amendment 1600 #
Proposal for a directive
Article 29 – paragraph 1 – point a a (new)
Article 29 – paragraph 1 – point a a (new)
(aa) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be modified;
Amendment 1607 #
Proposal for a directive
Article 29 – paragraph 1 – point c
Article 29 – paragraph 1 – point c
Amendment 1620 #
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 1622 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – introductory part
Article 30 – paragraph 1 – subparagraph 2 – introductory part
They shall apply those provisions as follows:from four years after national transposition as regards companies referred to in Article 2(1), point (a), and Article 2(2), point (a);
Amendment 1626 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point a
Article 30 – paragraph 1 – subparagraph 2 – point a
Amendment 1632 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point b
Article 30 – paragraph 1 – subparagraph 2 – point b
Amendment 1635 #
Proposal for a directive
Annex I
Annex I