Activities of Geert BOURGEOIS related to 2022/0051(COD)
Shadow opinions (1)
OPINION on the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937
Amendments (110)
Amendment 43 #
Proposal for a directive
Recital 15
Recital 15
(15) Companies should take appropriate steps to set up and carry out due diligence measures, with respect to their own operations, their subsidiaries, as well as their established direct and indirect business relationships throughoutin the first link of 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 measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. Account should be taken of the specificities of the company’s value chain,, the sector or the geographical area in which its value chain partners operate, the company’s power to influence its direct and indirect business relationships in the first link, and whether the company could increase its power of influence. In addition, this Directive adopts a risk- based approach, which means that companies can set priorities in their diligence activities based on a previous analysis, taking account in particular of the nature and extent of adverse impacts and the urgency and likelihood with which these effects arise.
Amendment 48 #
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 particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal. In order for the due diligence to have a meaningful impact,to achieve effective and workable due diligence, in a first phase it should cover only human rights and environmental adverse impacts generated throughout the life-cycle of production and use and disposal of product or provision of services, at the level of own operations, subsidiaries and in valueby the first link in the supply chain. Following evaluation of the impact of this Directive, taking account in particular of the consequences for SMEs, the economy, human rights and the environment, it may be appropriate to broaden the due diligence requirements to further links in the supply chains.
Amendment 50 #
Proposal for a directive
Recital 17 a (new)
Recital 17 a (new)
(17a) Intra-EU relationships should be excluded from the scope of this Directive, as very high standards already apply with respect to human rights and the environment in the EU.
Amendment 51 #
Proposal for a directive
Recital 18
Recital 18
Amendment 56 #
Proposal for a directive
Recital 19
Recital 19
(19) As regards rRegulated financial undertakings providing loan, credit, or other financial services, “value chain” with respect to the provision of such services should be limited to the activities of the clients should be excluded from the scope of this Direcetiving such servicese, ands the subsidiaries thereof whose activities are linked to the cony are already subject to straict in question. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considered to be part of the value chain. The activities of the companies or other legal entities that are included in the value chain of that client should not be coveredregulation in the field of sustainability.
Amendment 62 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage, the due diligence obligations should be limited in this Directive to established 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.
Amendment 67 #
Proposal for a directive
Recital 21
Recital 21
(21) Under this Directive, EU companies with more than 500 employees on average and a worldwide net turnover in the Union 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 Union in the financial year preceding the last financial year and which operate in one or more high-impact sectors, due diligence should apply 2 years after the end of the transposition period of this directive, in order to provide for a longer adaptation period. In order to ensure a proportionate burden, companies operating in such high- impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. Temporary agency workers, including those posted under Article 1(3), point (c), of Directive 96/71/EC, as amended by Directive 2018/957/EU of the European Parliament and of the Council103, should be included in the calculation of the number of employees in the user company. Posted workers under Article 1(3), points (a) and (b), of Directive 96/71/EC, as amended by Directive 2018/957/EU, should only be included in the calculation of the number of employees of the sending company. _________________ 103 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (OJ L 173, 9.7.2018, p. 16).
Amendment 69 #
Proposal for a directive
Recital 22
Recital 22
(22) In order to reflect the priority areas of international action aimed at tackling human rights and environmental issues, the selection of high-impact sectors for the purposes of this Directive should be based on existing sectoral OECD due diligence guidance. The following sectors should be regarded as high-impact for the purposes of this Directive: the manufacture of textiles, leather and related products (including footwear), and the wholesale trade of textiles, clothing and footwear; agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum, natural gas, coal, lignite, metals and metal ores, as well as all other, non-metallic minerals and quarry products), the manufacture of basic metal products, other non-metallic mineral products and fabricated metal products (except machinery and equipment), and the wholesale trade of mineral resources, basic and intermediate mineral products (including metals and metal ores, construction materials, fuels, chemicals and other intermediate products). As regards the financial sector, due to its specificities, in particular as regards the value chain and the services offered, even if it is covered by sector-specific OECD guidance, it should not form part of the high-impact sectors covered by this Directive. At the same time, in this sector, the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liabilityThe Commission should, no later than two years after the entry into force of this Directive, issue guidance describing in more detail which high-risk parts of the stated sectors are considered to be high- impact.
Amendment 74 #
Proposal for a directive
Recital 23
Recital 23
(23) In order to achieve fully the objectives of this Directive addressing human rights and adverse environmental impacts with respect to companies’ operations, subsidiaries and value 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 than EUR 150 million in the financial year preceding the last financial year in one or more of the high- impact sectors, as of 2 years after the end of the transposition period of this Directive.
Amendment 77 #
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, aDue diligence should further encompass adverse environmental impacts resulting from the violation of aone of the prohibition or right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this Directive, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this Directive, taking into account all relevant circumstances of their operations, such as the sector and operational context. Due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to thes and obligations pursuant to the international environmental conventions listed in the Annex to this Directive. There is a need for standards to be clear and applicable so that companies have sufficient legal certainty. Particular account should be taken here of the fact that most international environmental conventions listed in the Annex to this Directiveare addressed to governments.
Amendment 79 #
Proposal for a directive
Recital 27
Recital 27
(27) In order to conduct appropriate human rights, and environmental due diligence with respect to their operations, their subsidiaries, and their value chains, companies covered by this Directive should integrate due diligence into corporate policies, identify, prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts, establish and maintain a complaints procedure, monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this Directive and communicate publicly on their due diligence. In order to ensure clarity for companies, in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end, or when this is not possible, minimising actual adverse impacts should be clearly distinguished in this Directive.
Amendment 81 #
Proposal for a directive
Recital 27 a (new)
Recital 27 a (new)
(27a) This Directive is aimed at creating a level playing field and is intended to put an end to fragmentation in the internal market. It is crucial to the effectiveness of this Directive that uniform rules apply to businesses in the internal market. Therefore, Member States should not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of diligence.
Amendment 83 #
Proposal for a directive
Recital 29
Recital 29
(29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts. An ‘appropriate measure’ should mean a proportionate measure that is capable of achieving the objectives of risk-based due diligence, commensurate inter alia with the degree of severity, the extent and the likelihood of the adverse impact, the degree to which the company has contributed with its own operations, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. In this context, in line with international frameworks, the company’s influence over a business relationship should include, on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control, market power, pre-qualification requirements, linking business incentives to human rights and environmental performance, etc.) and, on the other hand, the degree of influence or leverage that the company could reasonably exercise, for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact.
Amendment 88 #
Proposal for a directive
Recital 31
Recital 31
(31) In order to avoid undue burden on the smallermedium-sized companies operating in high- impact sectors which are covered by this Directive, those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector.
Amendment 93 #
Proposal for a directive
Recital 34
Recital 34
(34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following actions, where relevant. Where necessary due to the complexity of prevention measures, companies should develop and implement a prevention action plan. Companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship 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 be accompanied by the appropriate measures to verify compliance. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also make investments which aim to prevent adverse impacts, provide targeted and proportionate support for an SME with which they have an established business relationship such as financing, for example, through direct financing, low-interest loans, guarantees of continued sourcing, and assistance in securing financing, to help implement the code of conduct or prevention action plan, or technical guidance such as in the form of training, management systems upgrading, and collaborate with other companies.
Amendment 97 #
Proposal for a directive
Recital 35
Recital 35
Amendment 99 #
Proposal for a directive
Recital 36
Recital 36
(36) In order to ensure that prevention and mitigation of potential adverse impacts is effective, companies should prioritize engagement with business relationships in the value chain, instead of terminating the business relationship, as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. However, the Directive should also, for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures, refer to the 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 commercial relationships with the partner in question, while pursuing prevention and minimisation efforts, if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. It is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company, for example a company which has a direct contractual relationship with the supplier. In some instances, such collaboration could be the only realistic way of preventing adverse impacts, in particular, where the indirect business relationship is not ready to enter into a contract with the company. In these instances, the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law.
Amendment 102 #
Proposal for a directive
Recital 37
Recital 37
(37) As regards direct and indirect business relationships, industry cooperation, industry schemes and multi- stakeholder initiatives can help create additional leverage to identify, mitigate, and prevent adverse impacts. Therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. Companies could assess, at their own initiative, the alignment of these schemes and initiatives with the obligations under this Directive. In order to ensure full information on such initiatives, the Directive should also refer to the possibility for the Commission and the Member States toshould facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, mayshould issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. In addition, the Commission should develop a system in which industry schemes and multi-stakeholder initiatives can be formally recognised. Compliance with these recognised industry schemes and multi-stakeholder initiatives should lead to presumption of conformity with the diligence requirements imposed by this Directive.
Amendment 107 #
Proposal for a directive
Recital 39
Recital 39
(39) So as to comply with the obligation of taking appropriate measures for 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. They should endeavour to neutralise the adverse impact or to minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s own conduct to the actual adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. Companies should also seek to obtain contractual 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 value chain. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for an SMEs with which they have an established business relationship and collaborate with other entities, including, where relevant, to increase the company’s ability to bring the adverse impact to an end.
Amendment 110 #
Proposal for a directive
Recital 40
Recital 40
Amendment 112 #
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 value chain, instead of terminating the business relationship, as a last resort action after attempting at bringing actual adverse impacts to an end or minimising them without success. 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 commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe. 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 114 #
Proposal for a directive
Recital 42
Recital 42
(42) Companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. Organisations who could submit such complaints 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 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 processesdirectly and individually affected by a negative impact to submit complaints directly to them. Recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. In accordance with international standards, complaints should be entitled to request from the company appropriate follow-up on the complaint and 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 complaint. This access should not lead to unreasonable solicitations of companies.
Amendment 120 #
Proposal for a directive
Recital 43
Recital 43
(43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out periodic assessments of their own operations, those of their subsidiaries and, where related to the value chafirst linsk of the companyir supply chain, those of their established business relationships, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitigation of human rights and environmental adverse impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to- date, they should be carried out at least every 12 months and be revised in-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen.
Amendment 126 #
Proposal for a directive
Recital 45
Recital 45
(45) In order to facilitate companies’ compliance with their due diligence requirements through their value chain and limiting shifting compliance burden on SME business partners, the Commission should provide guidance on model contractual clauses. In so doing, it should develop model contracts in close collaboration with industry, in particular with SMEs.
Amendment 130 #
Proposal for a directive
Recital 46
Recital 46
(46) In order to provide support and practical tools to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, using relevant international guidelines and standards as a reference, and in consultation with Member States and, industry and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, and where appropriate with international bodies having expertise in due diligence, should have the possibility to issue guidelines, including for specific sectors or specific adverse impacts and paying particular attention to SMEs.
Amendment 132 #
Proposal for a directive
Recital 47
Recital 47
(47) Although SMEs are not included in the scope of this Directive, they could be impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate 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 SMEs, Member States should set up and operate, either individually or jointly, dedicated websites, portals or platforms, and Member States could also financially support SMEs and help them build capacity. Such support shouldThe Member States should provide for at least one unique help desk in order to inform and support companies, in particular SMEs. The Commission should coordinate the Member State initiatives and provide a unique portal which is simple to consult in all official languages of the EU. The Commission should also provide for adequate information on the human rights and environmental situation globally on this portal, paying particular attention to high-impact sectors. Such support can also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME areshould also be encouraged to support themis SME to comply with due diligence measures, in case such requirements would jeopardise the viability of the SME, and use fair, reasonable, non- discriminatory and proportionate requirements vis-a-vis the SMEs.
Amendment 136 #
Proposal for a directive
Recital 50
Recital 50
Amendment 137 #
Proposal for a directive
Recital 51
Recital 51
Amendment 138 #
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 140 #
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 failure to comply with the due diligence process. The company should be liable for damages if they 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 should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures occurred and led to damagecaused by the company’s own actions. The three classic conditions for civil liability should be respected, namely fault, damages and causal connection.
Amendment 143 #
Proposal for a directive
Recital 57
Recital 57
Amendment 147 #
Proposal for a directive
Recital 58
Recital 58
(58) The liability regimis Directive does not regulate who should prove that the company’s action was reasonably adequate under the circumstances of the case, therefore this question is left to national lawthe burden of proof on civil liability.
Amendment 149 #
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 diligence should be without prejudice to civil liability of its subsidiaries or the respective civil liability of direct and indirect business partners in the value 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 152 #
Proposal for a directive
Recital 61
Recital 61
Amendment 153 #
Proposal for a directive
Recital 62
Recital 62
(62) The civil liability regime under this Directive should be without prejudice to the Environmental Liability Directive 2004/35/EC. This Directive should not prevent Member States from imposing further, more stringent obligations on companies or from otherwise taking further measures having the same objectives as that Directive.
Amendment 154 #
Proposal for a directive
Recital 63
Recital 63
Amendment 156 #
Proposal for a directive
Recital 64
Recital 64
Amendment 164 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a
Article 1 – paragraph 1 – subparagraph 1 – point a
(a) on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own operations, the operations of their subsidiaries, and the valuefirst link of their supply chain operations carried out by entities with whom the company has an established business relationship and
Amendment 181 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 500 employees on average and had a net worldwide turnoverturnover in the Union of more than EUR 150 million in the last financial year for which annual financial statements have been prepared;
Amendment 186 #
Proposal for a directive
Article 2 – paragraph 1 – point b – introductory part
Article 2 – paragraph 1 – point b – introductory part
(b) the company did not reach the thresholds under point (a), but had more than 250 employees on average and had a net worldwide turnoverturnover in the Union of more than EUR 40 million in the last financial year for which annual financial statements have been prepared, provided that at least 50% of this net turnover was generated in one or more of the high-risk parts of the following sectors:
Amendment 206 #
Proposal for a directive
Article 2 – paragraph 4 a (new)
Article 2 – paragraph 4 a (new)
4a. Intra-EU relationships shall be excluded from scope of this Directive.
Amendment 207 #
Proposal for a directive
Article 2 – paragraph 4 b (new)
Article 2 – paragraph 4 b (new)
4b. For the application of paragraph 1(b) and paragraph 2(b), the Commission shall, no later than two years after entry into force of this Directive, establish guidance describing in more detail which high-risk parts of the stated sectors are meant.
Amendment 208 #
Proposal for a directive
Article 2 – paragraph 4 c (new)
Article 2 – paragraph 4 c (new)
4c. Financial services shall be excluded from the scope of this Directive.
Amendment 222 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
(f) ‘established business relationship’ means a direct business relationship, whether direct or indirect, in the first link of the supply chain 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 valuesupply chain;
Amendment 225 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
Amendment 232 #
Proposal for a directive
Article 3 – paragraph 1 – point g a (new)
Article 3 – paragraph 1 – point g a (new)
(ga) ‘risk-based approach’: this approach makes it possible to set priorities for the diligence activities of the company based on a previous analysis, taking account in particular of the nature and extent of the adverse impacts, the urgency and the likelihood of these impacts arising.
Amendment 236 #
Proposal for a directive
Article 3 – paragraph 1 – point h
Article 3 – paragraph 1 – point h
(h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value chain, with human rights and environmental requirements resulting from the provisions of this Directive by an auditor which is independent from the company, free from any conflicts of interests, has the necessary experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit;
Amendment 238 #
Proposal for a directive
Article 3 – paragraph 1 – point i
Article 3 – paragraph 1 – point i
(i) ‘SME’ means a micro, small or a medium-sized enterprise, irrespective of its legal form, that is not part of a large group, as those terms are defined in Article 3(1), (2), (3) and (7) of Directive 2013/34/EU;
Amendment 245 #
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, and other individuals, groups, communities or entities whose rights or interests are or could be affected byaffected by adverse human rights impacts and adverse environmental impacts arising from the products, services and operations of that company, its subsidiaries and its business relationships, as defined by this Directive;
Amendment 255 #
Proposal for a directive
Article 3 – paragraph 1 – point o
Article 3 – paragraph 1 – point o
Amendment 258 #
Proposal for a directive
Article 3 – paragraph 1 – point p
Article 3 – paragraph 1 – point p
Amendment 261 #
Proposal for a directive
Article 3 – paragraph 1 – point q
Article 3 – paragraph 1 – point q
(q) ‘appropriate measure’ means a proportionate measure that is capable of achieving the objectives of risk-based due diligence, commensurate inter alia with the degree of severity, the nature and the likelihood of the adverse impact and the degree to which the company has contributed to 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 thereofn, and the need to ensure prioritisation of action.
Amendment 265 #
Proposal for a directive
Article 3 a (new)
Article 3 a (new)
Article 3a Level of harmonisation Member States shall not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of diligence, unless otherwise provided for in this Directive.
Amendment 277 #
Proposal for a directive
Article 4 – paragraph 2 a (new)
Article 4 – paragraph 2 a (new)
2a. Member States shall ensure that parent companies falling under the scope of this Directive may fulfil the diligence obligations provided for in Articles 6 to 11 on behalf of companies which are their subsidiaries and which fall under the scope of this Directive.
Amendment 278 #
Proposal for a directive
Article 4 – paragraph 2 b (new)
Article 4 – paragraph 2 b (new)
2b. Member States shall ensure that companies consider the due diligence referred to in Articles 6 to 11 on the basis of a risk-based approach.
Amendment 282 #
Proposal for a directive
Article 5 – paragraph 1 – introductory part
Article 5 – paragraph 1 – introductory part
1. Member States shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. The due diligence policy shall be proportionate and risk- based and shall contain all of the following:
Amendment 302 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures, proportionate and risk-based, to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, where related to their valuesupply chains, from their established business relationships in the first link, in accordance with paragraph 2, 3 and 4.
Amendment 312 #
Proposal for a directive
Article 6 – paragraph 2
Article 6 – paragraph 2
2. By way of derogation from paragraph 1, companies referred to in Article 2(1), point (b), and Article 2(2), point (b), shall only be required to take appropriate measures to identify actual and potential severe adverse impacts relevant to the respective sector mentioned in Article 2(1), point (b).
Amendment 317 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
Amendment 326 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate, proportionate and risk-based 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 should have been, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article.
Amendment 336 #
Proposal for a directive
Article 7 – paragraph 2 – point b
Article 7 – paragraph 2 – point b
(b) seek contractual assurances from a business partner with whom it has a direct business relationship at the first tier in the supply chain 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 (contractual cascading). When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 345 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) provide targeted and proportionate support for an SME with which the company has an established business relationship, whein order to ensure compliance with the prevention action plan would jeopardise the viability of the SMEcode of conduct or with the code of conduct or the prevention action plan;
Amendment 353 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
Amendment 358 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 1
Article 7 – paragraph 4 – subparagraph 1
The contractual assurances or the contract shall be accompanied by the appropriate, proportionate and risk-based measures to verify compliance. For the purposes of verifying compliance, the company may refer to suitable industry initiatives or independent third-party verification.
Amendment 359 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 2
Article 7 – paragraph 4 – subparagraph 2
When contractual assurances are obtained from, or a contract is entered into, with an SME, the terms used shall be fair, reasonable and non-discriminatory, with particular attention being paid to the different bargaining power and more limited resources of SMEs. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification.
Amendment 365 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – introductory part
Article 7 – paragraph 5 – subparagraph 1 – introductory part
As regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2, 3 and 4, the company shall be required to refrain from entering into new or extending existing relations with theat partner in connection with or in the value chain of which the impact has ariseat the first tier in the supply chain and shall, where the law governing their relations so entitles them to, take the following actions:
Amendment 371 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 2
Article 7 – paragraph 5 – subparagraph 2
Amendment 373 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 2 a (new)
Article 7 – paragraph 5 – subparagraph 2 a (new)
Companies shall disengage as a last resort only, particular account being taken of the fact that disengagement may exacerbate adverse effects.
Amendment 374 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
Amendment 378 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Member States shall ensure that companies take appropriate, proportionate and risk-based measures to bring actual adverse impacts that have been, or should have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article.
Amendment 383 #
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 seek to minimise the extent of such an impact.
Amendment 389 #
Proposal for a directive
Article 8 – paragraph 3 – point a
Article 8 – paragraph 3 – point a
(a) seek to neutralise the adverse impact or to 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 to the significance and scale of the adverse impact and to the contribution of the company’s own conduct to the actual adverse impact;
Amendment 395 #
Proposal for a directive
Article 8 – paragraph 3 – point c
Article 8 – paragraph 3 – point c
(c) seek contractual assurances from a direct partner with whom it has an established business relationship at the first tier in the supply chain 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 (contractual cascading). When such contractual assurances are obtained, paragraph 5 shall apply.
Amendment 404 #
Proposal for a directive
Article 8 – paragraph 3 – point e
Article 8 – paragraph 3 – point e
(e) provide targeted and proportionate support for an SME with which the company has an established business relationship, whein order to ensure compliance with the corrective action plan would jeopardise the viability of the SMEde of conduct or with the code of conduct or the corrective action plan;
Amendment 409 #
Proposal for a directive
Article 8 – paragraph 4
Article 8 – paragraph 4
Amendment 412 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 1
Article 8 – paragraph 5 – subparagraph 1
The contractual assurances or the contract shall be accompanied by the appropriate, proportionate and risk-based measures to verify compliance. For the purposes of verifying compliance, the company may refer to suitable industry initiatives or independent third-party verification.
Amendment 413 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 2
Article 8 – paragraph 5 – subparagraph 2
When contractual assurances are obtained from, or a contract is entered into, with an SME, the terms used shall be fair, reasonable and non-discriminatory, with particular attention being paid to the different bargaining power and more limited resources of SMEs. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification.
Amendment 417 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
Article 8 – paragraph 6 – subparagraph 1 – introductory part
As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shall refrain from entering into new or extending existing relations with theat partner in connection to or in the value chain of which the impact has ariseat the first tier in the supply chain and shall, where the law governing their relations so entitles them to, take one of the following actions:
Amendment 422 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2
Article 8 – paragraph 6 – subparagraph 2
Amendment 424 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2 a (new)
Article 8 – paragraph 6 – subparagraph 2 a (new)
Companies shall disengage as a last resort only, particular account being taken of the fact that disengagement may exacerbate adverse effects.
Amendment 425 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
Amendment 433 #
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 to them where they have legitimate concerns regarding actual or potentialare directly and individually affected by an adverse human rights impacts and adverseor environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chainfirst-tier suppliers.
Amendment 474 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies carry out periodic assessments of their own operations and measures, those of their subsidiaries and, where related to the value chains of the companyfirst tier of their supply chain, 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 months 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 481 #
Proposal for a directive
Article 11 – paragraph 2
Article 11 – paragraph 2
The Commission shall adopt delegated acts in accordance with Article 28 concerning the content and criteria for such reporting under paragraph 1, specifying information on the description of due diligence, potential and actual adverse impacts and actions taken on those. The Commission shall develop simplified reporting requirements, in particular for companies referred to in Article 2(1)(b) and (2)(b).
Amendment 484 #
Proposal for a directive
Article 12 – paragraph 1
Article 12 – paragraph 1
In order to provide support to companies to facilitate their compliance with Article 7(2), point (b), and Article 8(3), point (c), the Commission shall adopt guidance about voluntary model contract clauses. In the process, the Commission shall develop model contracts in close cooperation with industry, and in particular SMEs, no later than six months after the entry into force of this Directive.
Amendment 488 #
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 appropriate consultation with Member States and, industry and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, and where appropriate with international bodies having expertise in due diligence, mayshall issue guidelines, including for specific sectors or specific adverse impacts and focusing on SMEs.
Amendment 490 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. Member States shall, in order to provide information and support to companies and the partners with whom they have established business relationships inat the first tier of 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. Member States shall provide at least one one-stop shop to take on this support and information role. Companies shall be given appropriate advice and guidance at that one-stop shop. Specific consideration shall be given, in that respect, to the SMEs that are present in the value chains of companiespect, to the needs of SMEs.
Amendment 493 #
Proposal for a directive
Article 14 – paragraph 1 a (new)
Article 14 – paragraph 1 a (new)
1a. The Commission shall coordinate the Member State initiatives referred to in paragraph 1 and shall provide a single portal that is easily accessible in all official languages of the EU. On that portal the Commission shall also provide appropriate information on the global human rights and environmental situation, focusing on the sectors referred to in Article 2(1)(b) and (2)(b).
Amendment 500 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States mayshall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, may and industry, shall issue guidance for assessing the fitness of industry schemes and multi- stakeholder initiatives. The Commission shall develop a system for formally recognising industry schemes and multi- stakeholder initiatives. Compliance with recognised industry schemes and multi- stakeholder initiatives shall create a presumption of compliance with the due diligence requirements under Articles 5 to 11. The Commission shall publish a schedule of recognised industry schemes and multi-stakeholder initiatives no later than one year after the entry into force of this Directive, and shall keep that schedule up to date.
Amendment 504 #
Proposal for a directive
Article 15 – paragraph 1
Article 15 – paragraph 1
Amendment 507 #
Proposal for a directive
Article 15 – paragraph 2
Article 15 – paragraph 2
Amendment 508 #
Proposal for a directive
Article 15 – paragraph 3
Article 15 – paragraph 3
Amendment 512 #
Proposal for a directive
Article 17 – paragraph 1
Article 17 – paragraph 1
1. Each Member State shall designate one or more supervisory authorities to supervise compliance with the obligations laid down in national provisions adopted pursuant to Articles 6 to 11 and Article 15(1) and (2) (‘supervisory authority’).
Amendment 521 #
Proposal for a directive
Article 18 – paragraph 2 a (new)
Article 18 – paragraph 2 a (new)
2a. Supervisory authorities shall take a proportionate and risk-based approach to exercising their powers. In doing so, they shall abide by the right to property and the freedom to conduct a business which are recognised by the Charter.
Amendment 522 #
Proposal for a directive
Article 18 – paragraph 4 – subparagraph 2
Article 18 – paragraph 4 – subparagraph 2
Amendment 527 #
Proposal for a directive
Article 19 – paragraph 1
Article 19 – paragraph 1
1. Member States shall ensure that natural and legal persons affected by an adverse impact 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 Articles 6 to 11 of this Directive (‘substantiated concerns’).
Amendment 542 #
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 company’s efforts to comply with any remedial action required of them by a supervisory authority, any, where appropriate, of the following non-exhaustive and indicative criteria: (a) the nature, seriousness and duration of the infringement, (b) intent, (c) the nature and extent of the harm caused, (d) the company’s efforts to limit the harm, rectify matters and comply with any remedial action required of them by a supervisory authority, (e) previous infringements of provisions adopted pursuant to this Directive, (f) investments made and any targeted support provided pursuant to Articles 7 and 8, as well as(g) the cumulative effect of all sanctions, financial penalties, remedial action and compensation measures, (h) suspending or terminating a commercial relationship that has led to a loss of income and/or increased costs for replacing a supplier, and (i) collaboration with other entities to address adverse impacts in its value chains, as the case may be. supply chain.
Amendment 545 #
Proposal for a directive
Article 20 – paragraph 3
Article 20 – paragraph 3
Amendment 548 #
Proposal for a directive
Article 20 – paragraph 3 a (new)
Article 20 – paragraph 3 a (new)
3a. Any decision by a supervisory authority shall be reasonable, non- discriminatory and proportionate. The 'non bis in idem' principle shall be observed.
Amendment 550 #
Proposal for a directive
Article 20 – paragraph 4 a (new)
Article 20 – paragraph 4 a (new)
4a. Member States shall notify the Commission of the provisions referred to in paragraph 1 by (two years after the entry into force of this Directive) at the latest and shall inform it without delay of any amendments to them.
Amendment 557 #
Proposal for a directive
Article 22 – paragraph 1 – point a
Article 22 – paragraph 1 – point a
(a) they failed to comply with the obligations laid down in Articl harm was caused by the company’s own activities 7 and 8 and;
Amendment 560 #
Proposal for a directive
Article 22 – paragraph 1 – point b
Article 22 – paragraph 1 – point b
(b) as a result of this failure an adverse impact 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 damagethe three classic conditions for civil liability have been met: fault, harm and causal connection.
Amendment 563 #
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1
Article 22 – paragraph 2 – subparagraph 1
Amendment 574 #
Proposal for a directive
Article 22 – paragraph 3
Article 22 – paragraph 3
Amendment 581 #
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 582 #
Proposal for a directive
Article 22 – paragraph 5
Article 22 – paragraph 5
Amendment 586 #
Proposal for a directive
Article 24
Article 24
Amendment 590 #
Proposal for a directive
Article 25
Article 25
Amendment 593 #
Proposal for a directive
Article 26
Article 26
Amendment 609 #
Proposal for a directive
Annex I – Part I – point 21
Annex I – Part I – point 21