Activities of Frances FITZGERALD 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 (78)
Amendment 109 #
Proposal for a directive
Recital 5
Recital 5
(5) Existing international standards on responsible business conduct specify that companies should protect human rights and set out how they should address the protection of the environment across their operations and value chains. The United Nations Guiding Principles on Business and Human Rights79 recognise the responsibility of companies to exercise human rights due diligence by identifying, preventing and mitigating the adverse impacts of their operations on human rights and by accounting for how they address those impacts. Those Guiding Principles state that businesses should avoid infringing human rights and should address adverse human rights impacts that they have caused, contributed to or are linked with in their own operations, subsidiaries and through their direct and indirect business relationships. __________________ 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 112 #
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, value chains and other business relationships, including with recognition of international humanitarian law and a higher standard of conflict-sensitive due diligence in conflict-affected areas. 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 __________________ 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 129 #
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 throughout their value 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, sector or geographical area in which its value chain partners operate, the company’s power to influence its direct and indirect business relationships, and whether the company could increase its power of influence.
Amendment 137 #
Proposal for a directive
Recital 18
Recital 18
(18) The value 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 and indirect business relationships 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.
Amendment 149 #
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 direct 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 165 #
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, value chains and other business relationships , including with recognition of international humanitarian law and a higher standard of conflict-sensitive due diligence in conflict-affected areas. 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 _________________ 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 168 #
Proposal for a directive
Recital 13 a (new)
Recital 13 a (new)
(13a) It is fundamental to ensure that human rights due diligence is implemented in a gender-responsive manner. Human rights violations are not gender neutral and should not be treated as such. Women are often disproportionately affected by adverse business practices, which requires a due diligence process that responds to their specific needs. Member States should ensure that companies actively support gender equality. Companies should work with suppliers to set up a social auditing system in a gender-sensitive way. Furthermore, Member States should ensure that gender-responsive remediation processes and mechanisms are to be designed to ensure equal access and equal outcomes for all genders. To achieve this, corporate grievance mechanisms should be accessible, efficient, safe and fair to women, taking account of barriers women are more likely to face.
Amendment 172 #
Proposal for a directive
Recital 14 a (new)
Recital 14 a (new)
(14a) This Directive must ensure that companies carry our due diligence in a risk based approach, in line with international standards, to ensure that they comply with its requirements, meaning that this directive must set a minimum set of mandatory requirements for all sectors to identify where the severe impacts are most likely to occur and to prioritise how to mitigate and address these risks once identified.
Amendment 179 #
Proposal for a directive
Recital 30
Recital 30
(30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification of adverse impacts, such identification should be based on quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically, at least every 12 months, throughout the life of an activity or relationship. Regulated financial undertakings providing loan, credit, or other financial services should identify the adverse impacts only at the inception of the contract as part of the on-boarding processes for new relevant clients and subject to an annual update. When identifying adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including trading, procurement and pricing practices. Where the company cannot prevent, bring to an end or minimize all its adverse impacts at the same time, it should be able to prioritize its action, provided it takes the measures reasonably available to the company, taking into account the specific circumstances.
Amendment 180 #
Proposal for a directive
Recital 19
Recital 19
(19) As regards regulated financial undertakings providing loan, credit, or other financial servifinancing (loans and other forms of credit), insurance or reinsurances, “value chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be 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 covered.
Amendment 186 #
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-impactthe Commission should be empowered to draft sector-specific guidelines in line with the OECD guidance, to ensure that the sectors covered byan properly adhere to the requirements in this Directive. . At the same time, in this sector, the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liability.
Amendment 190 #
Proposal for a directive
Recital 35
Recital 35
Amendment 192 #
Proposal for a directive
Recital 25 a (new)
Recital 25 a (new)
(25a) In order to carry out meaningful and impactful due diligence, companies must carry out meaningful engagement with affected and potentially affected stakeholders. The standards for “meaningful engagement” are outlined in OECD Guidelines for Multinational Enterprises: effective engagement between stakeholders should involve interactive processes; ongoing two-way communication; good faith of the participants on both sides. Meaningful stakeholder engagement must ensure the safety and protection of stakeholders, and companies must address risks of retaliation and reprisal faced by stakeholders. Vulnerable stakeholders should be defined on the basis of intersecting and possibly overlapping factors, including among others sex, gender, age, education, migration status, disability, as well as social and economic status, and should take into account the context of the situation of vulnerability. These individuals and right-holders groups suffer from differentiated and often disproportionate adverse impacts and often face discrimination and additional barriers to participation and access to justice. They can include among others women and girls, children, indigenous people, migrant workers, seasonal workers, home workers, illiterate workers, people of lower-castes or ethnic minorities.
Amendment 196 #
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 203 #
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 to facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 204 #
Proposal for a directive
Recital 30
Recital 30
(30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification of adverse impacts, such identification should be based on quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically, at least every 12 months, throughout the life of an activity or relationship. RThere should be appropriate guidance to ensure that regulated financial undertakings providing loan, credit, or other financial services shouldcan appropriately identify the adverse impacts onlyf their activities at the inception of the contract as part of the on-boarding processes for new relevant clients and subject to an annual update. . When identifying adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including trading, procurement and pricing practices. Where the company cannot prevent, bring to an end or minimize all its adverse impacts at the same time, it should be able to prioritize its action, provided it takes the measures reasonably available to the company, taking into account the specific circumstances.
Amendment 211 #
Proposal for a directive
Recital 40
Recital 40
Amendment 223 #
Proposal for a directive
Recital 45 a (new)
Recital 45 a (new)
(45a) The Commission shall establish an expert advisory group to provide information and answer questions on CSDD once adopted in order to minimise implementation costs for those entities within the scope and outside of it. This will ensure that the quality of information obtained in the summation of the due diligence report is accurate and timely in its delivery. This will also decrease red tape for companies.
Amendment 240 #
Proposal for a directive
Recital 64
Recital 64
(64) Responsibility for due diligence should be assigned to the company’s directors, in line with the international due diligence frameworks. Directors should therefore be responsible for putting in place and overseeing the due diligence actions as laid down in this Directive and for adopting the company’s due diligence policy, taking into account the input of stakeholders and civil society organisations identified as relevant by the company’s directors and integrating due diligence into corporate management systems. Directors should also adapt the corporate strategy to actual and potential impacts identified and any due diligence measures taken.
Amendment 245 #
Proposal for a directive
Recital 57
Recital 57
Amendment 250 #
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 the risk based approach to addressing their actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own operations, the operations of their subsidiaries, and the value chain operations carried out by entities with whom the company has an established business relationship and
Amendment 255 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
Amendment 257 #
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 280 #
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 value chain operations carried out by entities with whom the company has an established business relationship using a risk-based approach and
Amendment 299 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
Amendment 302 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘value chain’ means activities related to the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of 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 servifinancing, insurance or reinsurances shall only include the activities of the clients receiving such loan, credit, and other financial servicesfinancing, insurance or reinsurance and of other companies belonging to the same group whose activities are linked to the contractservice in question. The value chain of such regulated financial undertakings does not cover SMEs and natural persons receiving loan, credit, financing, insurance or reinsurance of such entities; The downstream value chain of such regulated financial undertakings does only cover clients that are direct business partners;
Amendment 320 #
Proposal for a directive
Article 3 – paragraph 1 – point q a (new)
Article 3 – paragraph 1 – point q a (new)
(qa) ‘meaningful engagement’ means an ongoing process of interaction and dialogue between a company and affected stakeholders that enables the company to hear, understand and respond to their interests and concerns in good faith, including through collaborative approaches in line with the OECD Guidelines;
Amendment 331 #
Proposal for a directive
Article 4 – paragraph 2
Article 4 – paragraph 2
2. Member States shall ensure that, for the purposes of due diligence, companies are entitled to share resources and information within their respective groups of companies and with othe Directive, for groups of companies, parent companies, shall have the possibility to fulfil the obligations set out in Articles 4 to 11 as well as in Articles 15 and 16, on behalf of their subsidiaries that would fall within the scope of the directive, in compliance with applicable competition law. If a parent company makes use of this possibility, ther legal entities in compliance with applicable competition lawaw applicable to the parent company shall also apply for all subsidiaries for which the parent fulfils the obligations. Any reference in this paragraph to a subsidiary shall apply also to credit institutions affiliated to a central body within the meaning of Article 10 of the Regulation (EU) No 575/2013 and any reference to a parent company to a central body within the meaning of that article.
Amendment 337 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv – indent 2
Article 3 – paragraph 1 – point a – point iv – indent 2
Amendment 338 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv – indent 3
Article 3 – paragraph 1 – point a – point iv – indent 3
Amendment 340 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv – indent 4
Article 3 – paragraph 1 – point a – point iv – indent 4
Amendment 344 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv – indent 9
Article 3 – paragraph 1 – point a – point iv – indent 9
Amendment 347 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv – indent 10
Article 3 – paragraph 1 – point a – point iv – indent 10
Amendment 349 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2a. Member States shall lay down rules to ensure that management or supervisory bodies as the case maybe depending on national laws of the companies referred to in Article 2(1) put in place and oversee the due diligence actions referred to in Article 4 and in particular the due diligence policy referred to in this Article, with due consideration for relevant input from stakeholders.
Amendment 350 #
Proposal for a directive
Article 5 – paragraph 2 b (new)
Article 5 – paragraph 2 b (new)
2b. Developing and applying common standards and principles for a code of conduct within and across industries, to support efficient compliance with this directive shall not constitute a breach of applicable competition law.
Amendment 351 #
Proposal for a directive
Article 3 – paragraph 1 – point a a (new)
Article 3 – paragraph 1 – point a a (new)
(a a) 'investee company' means a company in which an institutional investor or asset manager invests through transferable securities or money market instruments as defined in Section C Annex I of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, which is not a controlled undertaking;
Amendment 354 #
Proposal for a directive
Article 3 – paragraph 1 – point a c (new)
Article 3 – paragraph 1 – point a c (new)
(a c) 'institutional investor' means an entity as defined by Article 2(e)of Directive 2007/36/EC, within the scope of Article 2 of this Directive;
Amendment 355 #
Proposal for a directive
Article 3 – paragraph 1 – point a b (new)
Article 3 – paragraph 1 – point a b (new)
(a b) 'asset manager' means an entity as defined by Article 2(f) of Directive 2007/36/EC, within the scope of Article 2 of this Directive;
Amendment 355 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to identify actual and potential severe adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, where related to their value chains, from their established business relationships, according to a risk- based approach, in accordance with paragraph 2, 3 and 4.
Amendment 360 #
Proposal for a directive
Article 6 – paragraph 1 a (new)
Article 6 – paragraph 1 a (new)
1a. Severity of an adverse impacts shall be assessed based on its gravity, its high likelihood to occur, the number of persons or the extent of the environment affected, its irreversibility, and difficulty to provide remedy considering the measures necessary to restore the situation prevailing prior to the impact.
Amendment 369 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point i
Article 3 – paragraph 1 – point e – point i
(i) with whom the company has a commercial agreement or to whom the companyan agreement to provides financing, insurance or reinsurance,, or
Amendment 369 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
3. When companies referred to in Article 3, point (a)(iv), provide credit, loan or other financial services, identification of actual and potential adverse human rights impacts and adverse environmental impacts shall be carried out according to appropriate risk based measures only before providing that service..
Amendment 372 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, companies are entitled to make use of appropriate resources, including independent reports and information gathered through the complaints procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. This approach in the financial services sector will be informed by clear financial sector guidelines.
Amendment 375 #
Proposal for a directive
Article 3 – paragraph 1 – point e – subparagraph 1 a (new)
Article 3 – paragraph 1 – point e – subparagraph 1 a (new)
Amendment 381 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate 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, using a risk-based approach, in accordance with paragraphs 2, 3, 4 and 5 of this Article.
Amendment 385 #
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, 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 chain;.
Amendment 386 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
(f) ‘established 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 chain the value of which is judged based on a risk-based approach judged according to appropriate financial sector guidelines.;
Amendment 386 #
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 measuring improvement. The prevention action plan shall be developed in consultation with affected stakeholders the company identifies as affected by its products, services and operations, its subsidiaries and its business relationships;
Amendment 387 #
Proposal for a directive
Article 3 – paragraph 1 – point f a (new)
Article 3 – paragraph 1 – point f a (new)
Amendment 393 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘value chain’ means activities related to the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of 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 direct clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entitiesfinancing, insurance or reinsurance. The value chain of such regulated financial undertakings does not cover SMEs, natural person and suppliers, neither the relationship between an investee company and an asset manager and/or an institutional investor;
Amendment 394 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘value chain’ means activities related to the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of 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 servifinancing, insurance or reinsurances shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. Thefinancing, insurance or reinsurance. The value chain of such regulated financial undertakings does not cover SMEs and natural persons receiving financing, insurance or reinsurance of such entities. The downstream value chain of such regulated financial undertakings does not only cover SMEs receiving loan, cclients that are dit, financing, insurance or reinsurance of such entitierect business partners;
Amendment 398 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) consider provideing targeted and proportionate support 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;
Amendment 416 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
6. By way of derogation from paragraph 5, point (b), when companies referred to in Article 3, point (a)(iv), provide credit, loan, statutory insurance cover, or other financial services, they shall not be required to terminate the credit, loan or other financial service contract when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided.
Amendment 419 #
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 should have been, identified pursuant to Article 6 to an end, using a risk-based approach, in accordance with paragraphs 2 to 6 of this Article.
Amendment 447 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
7. By way of derogation from paragraph 6, point (b), when companies referred to in Article 3, point (a)(iv), provide credit, loan, statutory insurance cover, or other financial services, they shall not be required to terminate the credit, loan or other financial service contract, when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided.
Amendment 481 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2 a. Member States shall lay down rules to ensure that management or supervisory bodies as the case maybe depending on national laws of the companies referred to in Article 2(1) put in place and oversee the due diligence actions referred to in Article 4 and in particular the due diligence policy referred to in this Article, with due consideration for relevant input from stakeholders.
Amendment 484 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2 a. Paragraph 1 and 2 shall not apply to a regulated financial undertaking complying with Article 4(1) of Regulation(EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability- related disclosures in the financial services sector pursuant to Article 4(3), Article 4(4) or on a voluntary basis.
Amendment 486 #
Proposal for a directive
Article 5 – paragraph 2 b (new)
Article 5 – paragraph 2 b (new)
2 b. Developing and applying common standards and principles for a code of conduct within and across industries, to support efficient compliance with this directive shall not constitute a breach of applicable competition law. This shall also include measures to extend the application of such a code of conduct to established business relationships.
Amendment 486 #
Proposal for a directive
Article 11 – paragraph 2 a (new)
Article 11 – paragraph 2 a (new)
The Commission is empowered to provide Delegated Acts on how this communication and reporting can be integrated into the European Single Access Point in order to reduce burden for companies and competent authorities.
Amendment 489 #
Proposal for a directive
Article 11 – paragraph 2 b (new)
Article 11 – paragraph 2 b (new)
Amendment 497 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures 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 value chains, from their established business relationships, according to a risk-based approach, in accordance with paragraph 2, 3 and 4.
Amendment 497 #
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 stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, and where appropriate with international bodies having expertise in due diligence, may issue guidelines, including for specific sectors or specific adverse impacts. Adherence to the guidelines by companies shall be legally deemed to fulfil the requirements of this Directive to which the guidelines refer.
Amendment 499 #
Proposal for a directive
Article 13 a (new)
Article 13 a (new)
Article 13 a In particular the Commission is empowered to draft without delay guidelines on how financial undertakings can comply should this Directive, including with regard to the concepts of value chain and the risk based approach.
Amendment 501 #
Proposal for a directive
Article 6 – paragraph 1 a (new)
Article 6 – paragraph 1 a (new)
1 a. Severity of an adverse impacts shall be assessed based on its gravity, its high likelihood to occur, the number of persons or the extent of the environment affected, its irreversibility, and difficulty to provide remedy considering the measures necessary to restore the situation prevailing prior to the impact.
Amendment 529 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, companies are entitled to make use of appropriate resources, including independent reports and information gathered through the complaints procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. This approach in the financial services sector will be informed by clear financial sector guidelines.
Amendment 537 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate 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, using a risk-based approach, in accordance with paragraphs 2, 3, 4 and 5 of this Article.
Amendment 566 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) consider provideing targeted and proportionate support 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;
Amendment 574 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
Amendment 588 #
Proposal for a directive
Article 26 – paragraph 2 a (new)
Article 26 – paragraph 2 a (new)
2 a. The Commission shall establish an expert advisory group on due diligence to support and advise entities on implementation and best practice.
Amendment 600 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
6. By way of derogation from paragraph 5, point (b), when companies referred to in Article 3, point (a)(iv), provide credit, loan, statutory insurance cover, or other financial services, they shall not be required to terminate the credit, loan or other financial service contract when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided.
Amendment 607 #
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 should have been, identified pursuant to Article 6 to an end, using a risk-based approach, in accordance with paragraphs 2 to 6 of this Article.
Amendment 649 #
Proposal for a directive
Article 8 – paragraph 4
Article 8 – paragraph 4
Amendment 679 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
7. By way of derogation from paragraph 6, point (b), when companies referred to in Article 3, point (a)(iv), provide credit, loan, statutory insurance cover, or other financial services, they shall not be required to terminate the credit, loan or other financial service contract, when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided.
Amendment 740 #
Proposal for a directive
Article 11 – paragraph 2 a (new)
Article 11 – paragraph 2 a (new)
This Article shall not apply to a regulated financial undertaking complying with Article 4(1) of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector pursuant to Article 4(3), Article 4(4) or on a voluntary basis.
Amendment 750 #
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 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.
Amendment 882 #
Proposal for a directive
Article 22 – paragraph 3
Article 22 – paragraph 3
3. The civil liability of a company for damages arising under this provision shall be without prejudice to the civil liability of its subsidiaries or of any direct and indirect business partners in the value chain.
Amendment 894 #
Proposal for a directive
Article 22 – paragraph 5 a (new)
Article 22 – paragraph 5 a (new)
5a. This Article will not apply to institutional investors and asset managers regarding adverse impacts caused or contributed to by investee companies. This Article will also not apply to services within the meaning of section A (1) to (5) and section B of Annex I of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.
Amendment 906 #
Proposal for a directive
Article 25
Article 25