77 Amendments of Kathleen VAN BREMPT related to 2022/0051(COD)
Amendment 29 #
Proposal for a directive
Recital 4
Recital 4
(4) The behaviour of companies across all sectors of the economy is key to success in the Union’s sustainability objectives as many Union companies, especially large ones, rely on global value chains. It is also in the interest of companies to protect human rights and the environment, and uphold good governance, in particular given the rising concern of consumers and investors regarding these topics. Several initiatives fostering enterprises which support value- oriented transformation already exist on Union77 , as well as national78 level. _________________ 77 ‘Enterprise Models and the EU agenda’, CEPS Policy Insights, No PI2021-02/ January 2021. 78 E.g. https://www.economie.gouv.fr/entreprises/ societe-mission
Amendment 30 #
Proposal for a directive
Recital 5
Recital 5
(5) Existing international standards on responsible business conduct specify that companies have a responsibility to respect and 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, products and services 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. The UN Guiding Principles state that businesses should have in place processes to enable the remediation of any adverse human right impacts they cause or to which they contribute. _________________ 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 33 #
Proposal for a directive
Recital 5 a (new)
Recital 5 a (new)
(5 a) The United Nations Guiding Principles on Business and Human Rights further recognise, as part of their duty to protect against business-related human rights abuses, that States should take appropriate steps to ensure, through judicial, administrative and legislative means, that those affected have access to an effective remedy.
Amendment 35 #
Proposal for a directive
Recital 6 a (new)
Recital 6 a (new)
(6 a) All companies have the responsibility to respect human rights, as enshrined in the international conventions listed in the Annex, Part I, Section 2, regardless of their size, sector, operational context, ownership and structure, and therefore under this Directive they should be required to conduct due diligence and should take appropriate measures to identify and address adverse human rights impacts along their value chain. The extent and nature of due diligence can vary according to the size, sector, operating context, and risk profile of the company.
Amendment 37 #
Proposal for a directive
Recital 13
Recital 13
(13) The European Parliament, in its resolution of 10 March 2021 calls upon the Commission to propose Union rules for a comprehensive corporate due diligence obligations, applicable to all large companies and SMEs listed in stock exchanges or operating in high-risk sectors, with consequences up to and including civil liability for those companies that cause or contribute to harm by failing to carry out due diligence100 . The Council Conclusions on Human Rights and Decent Work in Global Supply Chains of 1 December 2020 called upon the Commission to table a proposal for a Union legal framework on sustainable corporate governance, including cross- sector corporate due diligence obligations along global supply chains.101. The European Parliament also calls for clarifying directors` duties in its own initiative report adopted on 2 December 2020 on sustainable corporate governance. In their Joint Declaration on EU Legislative Priorities for 2022102 , the European Parliament, the Council of the European Union and the Commission have committed, to deliver on an economy that works for people, and to improve the regulatory framework on sustainable corporate governance. _________________ 100 European Parliament resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability (2020/2129(INL)), P9_TA(2021)0073, available at https://oeil.secure.europarl.europa.eu/oeil/p opups/ficheprocedure.do?lang=en&referen ce=2020/2129(INL). 101 Council Conclusions on Human Rights and Decent Work in Global Supply Chains, 1 December 2020 (13512/20). 102 Joint declaration of the European Parliament, the Council of the European Union and the European Commission on EU Legislative Priorities for 2022, available at https://ec.europa.eu/info/sites/default/files/j oint_declaration_2022.pdf.
Amendment 38 #
Proposal for a directive
Recital 14
Recital 14
(14) This Directive aims to ensure that companies active in the internal market respect human rights and contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or of potential and actual adverse human rights, environmental and good governance impacts and through bringing to an end and providing for remediation of actual adverse impacts on human rights and, the environmental impacts and good governance connected with companies’ own operations, subsidiaries and value chains.
Amendment 41 #
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, products and services, those of 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. In such a situation, the company should be required to terminate the harmful business relationship and to modify the structure of its value chain in order to ensure that the value chain no longer contributes to or can be a cause of the adverse impact. 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 44 #
Proposal for a directive
Recital 16
Recital 16
(16) The due diligence process set out in this Directive should cover the six steps defined by the OECD Due Diligence Guidance for Responsible Business Conduct, which include due diligence measures for companies to identify and address adverse human rights and environmental impacts. This encompasses the following steps: (1) integrating due diligence into policies and management systems, (2) identifying and assessing adverse human rights and environmental impacts, (3) preventing, ceasing or minimising actual and potential adverse human rights, and environmental impacts, (4)and good governance impacts, (4) verifying, monitoring and assessing the effectiveness of measures, (5) communicating, (6) providing remediation.
Amendment 45 #
Proposal for a directive
Recital 17
Recital 17
(17) Adverse human rights and, environmental and good governance impacts occur in companies’ own operations, subsidiaries, products, services, 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, it should cover human rights and ,environmental and good governance 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 value chains.
Amendment 49 #
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 50 #
Proposal for a directive
Recital 19
Recital 19
(19) As regards regulated financial undertakings providing loan, credit, or other financial services, “value chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question. Cclients 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 52 #
Proposal for a directive
Recital 20
Recital 20
Amendment 56 #
Proposal for a directive
Recital 21
Recital 21
(21) Under this Directive, EU companies with more than 2500 employees on average and a worldwide net turnover exceeding EUR 1540 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 million700 000 worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors, due diligence should apply 2 years after the end of the transposition period of this directive, in order to provide for a longer adaptation period. In order to ensure a proportionate burden, companies operating in such high- impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. Temporary agency workers, including those posted under Article 1(3), point (c), of Directive 96/71/EC, as amended by Directive 2018/957/EU of the European Parliament and of the Council103 , should be included in the calculation of the number of employees in the user company. Posted workers under Article 1(3), points (a) and (b), of Directive 96/71/EC, as amended by Directive 2018/957/EU, should only be included in the calculation of the number of employees of the sending company. _________________ 103 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (OJ L 173, 9.7.2018, p. 16).
Amendment 58 #
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 and good governance 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, wearing apparel, fur, leather and related products (including footwear), and the wholesale trade and retail 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, animal products, wood, food, and beverages; energy, the extraction, transport and handling 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 cha construction and related activities and the provision of fin and thecial 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 compani, such as loans, credits, financing, pensions, market funding, risk management, payment services, securitisation, insurance or reinsurance services, in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liabilityvestment services and activities, and other financial services.
Amendment 60 #
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, environmental and good governance adverse impacts with respect to companies’ operations, products and services, and those of its 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 1540 million in the Union in the financial year preceding the last financial year or a net turnover of more than EUR 40 million700 000 but less than EUR 1540 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 62 #
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 andany action which removes or reduces the ability of an individual or group to enjoy the rights or to be protected by the prohibitions as enshrined in the international conventions and instruments listed in the Annex to this Directive, which include trade union, workers’ and social rights. In order to ensure a comprehensive coverage of human rights, a violation of a prohibition ornegative impact on the enjoyment of a right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions and instruments 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 on air, water, soil, biodiversity, animal welfare, climate mitigation and adaptation, the transition to a circular economy and impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex to this Directive. Due diligence should also be carried out in relation to adverse good governance impacts, such as on the proper functioning of public administration and services, the rule of law, and democratic electoral systems, and impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international good governance conventions listed in the Annex to this Directive
Amendment 63 #
Proposal for a directive
Recital 27
Recital 27
(27) In order to conduct appropriate human rights, and environmental and good governance 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, remediate as well as bring to an end and minimistigate the extent of potential and actual adverse human rights and, environmental and good governance impacts, establish and maintaor participate in a complaints procedure, monitor and verify the effectiveness of the taken measures taken in accordance with the requirements that are set up in this Directive and, communicate publicly on their due diligence and consult with affected stakeholders throughout this entire process. 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 65 #
Proposal for a directive
Recital 28
Recital 28
(28) In order to ensure that due diligence forms part of companies’ corporate policies, and in line with the relevant international framework, companies should integrate due diligence into all their corporate policies and have in place a due diligence policy. The due diligence policy should contain a description of the company’s approach, including in the long term, to due diligence, a code of conduct describing the rules and principles to be followed by the company’s employees and subsidiaries; a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. The code of conduct should apply in all relevant corporate functions and operations, including procurement and purchasing decisions. Companies should also update and publish their due diligence policy annually.
Amendment 66 #
Proposal for a directive
Recital 29
Recital 29
(29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts. An ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. In this context, in line with international frameworks, the company’s influence over a business relationship should include, on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control, market power, pre-qualification requirements, linking business incentives to human rights and, environmental and good governance 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 67 #
Proposal for a directive
Recital 30
Recital 30
(30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification of adverse impacts, such identification should be based on meaningful stakeholder engagement and quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically, at least every 12 months, throughout the life of an activity or relationship. Regulated financial undertakings providing loan, credit, or other financial services should identify the adverse impacts only at the inception of the contract. When identifying adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including trading, procurement and pricing practices. Where the company cannot prevent, bring to an end or minimize all its adverse impacts at the same time, it should be able to prioritize its action, provided it takes the measures reasonably available to the company, taking into account the specific circumstances.
Amendment 69 #
Proposal for a directive
Recital 31
Recital 31
Amendment 72 #
Proposal for a directive
Recital 33
Recital 33
(33) Under the due diligence obligations set out by this Directive, if a company identifies potential adverse human rights or, environmental or good governance impacts, it should take appropriate measures to prevent and adequately mitigate them. To provide companies with legal clarity and certainty, this Directive should set out the actions companies should be expected to take for prevention and mitigation of potential adverse impacts where relevant depending on the circumstances.
Amendment 73 #
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, c. Companies should develop and implement a prevention action plan. Companies should seek to obtain contractual assurances from a directengage and support business partners with whom they have an established business relationship that it willroughout their ensutire 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. Thvalue chains in order to obtain assurance, contractual or otherwise, of implementation of the prevention action plan of the company concerned. Possible contractual assurances should be accompanied by appropriate measures to verify compliance. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also adapt their business models and strategies, including trading, procurement, purchasing and pricing practices, and make investments which aim to prevent adverse impacts, provide targeted and proportionate support for an SME with which they have an established business relationshippartners, suppliers, including SMEs 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 78 #
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, fFor cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures, refer tocompanies should have 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. In such a situation, companies should take one of the following actions: 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-termtigation efforts; or to terminate the business relationship with respect to the activities concerned if the potential adverse impactmitigation and ceasing of the impact is made impossible, in particular due to its seveystemic or state-imposed nature. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws. The suspension or termination of harmful business relationships should be without prejudice to the civil liability of the company for previous damage arising from its failure to comply with the due diligence obligations under this Directive. 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 81 #
Proposal for a directive
Recital 38
Recital 38
(38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights or, environmental or good governance adverse impacts, it should take appropriate measures to bring those to an end. It can be expected that a company is able to bring to an end actual adverse impacts in their own operations and in subsidiaries. However, it should be clarified that, as regards established business relationships, where adverse impacts cannot be brought to an end, companies should minimistigate the extent of such impacts, whilst pursuing efforts to bring the adverse impact to an end, and implementing a corrective action plan, developed in consultation with affected stakeholders. Minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. To provide companies with legal clarity and certainty, this Directive should define which actions companies should be required to take for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent, where relevant depending on the circumstances.
Amendment 82 #
Proposal for a directive
Recital 39
Recital 39
(39) So as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this Directive, companies should be required to take the following actions, where relevant. They should neutralise the adverse impact or minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, cCompanies 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 direcengage and support business partners with whom they have an established business relationship that they willroughout their ensutire 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. Thvalue chains in order to obtain assurance, contractual or otherwise, of implementation of the company’s corrective action plan. Possible contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimistigating the extent of adverse impact, provide targeted and proportionate support for anpartners and suppliers, including 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 86 #
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, fFor cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, refer tocompanies should have 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. In such situations, companies should take one of the following actions: either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent oftigate the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered sevemitigation and ceasing of the impact is made impossible, in particular due to its systemic or state-imposed nature. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws. The suspension or termination of a harmful business relationship should be without prejudice to the civil liability of the company for previous damage arising from its failure to comply with the due diligence obligations under this Directive.
Amendment 88 #
Proposal for a directive
Recital 42
Recital 42
(42) Companies should provide the possibility forestablish or participate in effective mechanisms that can be used by persons and organisations to easily submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and, environmental and good governance 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, and legal and natural persons defending human rights and the environment. Companies should establish a procedure for dealing with those complaints and inform workers, trade unions and other workers’ representatives, where relevant, about such processes. Companies should provide the possibility of submitting complaints through collaborative agreements with other companies or organisations, by participating in multi- stakeholder grievance mechanisms or joining a global framework agreement. Recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies, nor should the former be a prerequisite before seeking judicial remedies. In accordance with international standards, complainants should be entitled to requestceive 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. Companies should also be responsible for ensuring that any complainants are protected from potential retaliation and retribution, for instance by ensuring anonymity or confidentiality in the complaints process. The complaints procedure should be legitimate, accessible, predictable, safe, equitable, transparent, rights-compatible and adaptable asset out in the effectiveness criteria for non-judicial grievance mechanisms in Principle 31 of the United Nations Guiding Principles on Business and Human Rights and the United Nations Committee on the Rights of the Child General Comment No 16.
Amendment 92 #
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 periodongoing and dynamic assessments of their own operations, those of their subsidiaries and, where related to the value chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitig, mitigation and remediation of human rights and environmental adverse impacts. Such assessments should verify that potential or actual 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 94 #
Proposal for a directive
Recital 46
Recital 46
(46) In order to provide support and practical tools to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, using relevant international guidelines and standards as a reference, and in consultation with Member States and stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, 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 impacthe following aspects: specific adverse impacts, including adverse impacts on good governance; full mapping of companies’ value chains and efficient processes to monitor partners’ behaviours throughout the entire value chain; responsible and sustainable trading, purchasing and pricing policies; facilitation of access to justice for victims, including regarding collective redress, representative actions, non-discriminatory costs of proceedings and appropriate limitation periods; prevention and mitigation of retaliation risks faced by stakeholders, including human rights and environmental rights defenders, as a result of their participation; implementation of heightened due diligence in conflict-affected areas, occupation situations, and non-self- governing territories; responsible disengagement from harmful business relationships; methodology and criteria to be used by supervisory authorities to make decisions related to administrative sanctions and nature and harmonisation of effective, proportionate and dissuasive sanctions; assessing the integrity and fitness of industry schemes and multi- stakeholder initiatives, in particular the inclusion of the perspectives of civil society and stakeholders in audits.
Amendment 96 #
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 should also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME, are also encouraged to support them to comply with due diligence measures, in case such requirements would jeopardize the viability of the SME and use fair, reasonable, non-discriminatory and proportionate requirements vis-a-vis the SMEs.
Amendment 99 #
Proposal for a directive
Recital 49
Recital 49
(49) The Commission and Member States should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and, environmental and good governance impacts of their operations and business relationships, paying specific attention to the challenges faced by smallholders. They should use their neighbourhood, development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and, environmental and good governance impacts of their operations and upstream business relationships. This could include working with partner country governments, the local private sector and stakeholders on addressing the root causes of adverse human rights and, environmental and good governance impacts.
Amendment 104 #
Proposal for a directive
Recital 57
Recital 57
(57) As regards damages occurring at the level of established indirect business relationships, the liability of the company should be subject to specific conditions. The company should not be liable if it carried out specific due diligence measures. However, it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken, including as regards verifying compliance, would be adequate to prevent, mitigate, bring to an end or minimise the adverse impact. In addition, in the assessment of the existence and extent of liability, due account is to be taken of the company’s efforts, insofar as they relate directly to the damage in question, to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains.
Amendment 107 #
Proposal for a directive
Recital 61
Recital 61
(61) In order to ensure that victims of human rights and, environmental and good governance harms can bring an action for damages and claim compensation for damages arising due to a company’s failure to comply with the due diligence obligations stemming from this Directive, even where the law applicable to such claims is not the law of a Member State, as could be for instance be the case in accordance with international private law rules when the damage occurs in a third country, this Directive should require Member States to ensure that the liability provided for in provisions of national law transposing this Article is of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State.
Amendment 110 #
(71) The objective of this Directive, namely, to promote the respect for and protection of human rights, the environment and good governance worldwide, in line with the Treaty on European Union and the Treaty on the Functioning of the European Union and making sure that products and services placed in the market have not involved violations of human right, environmental rights and good governance and better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights and, environmental and good governance adverse impacts in companies’ value chains, cannot be sufficiently achieved by the Member States acting individually or in an uncoordinated manner, but can rather, by reason of the scale and effects of the actions, be better achieved at Union level. In particular, addressed problems and their causes are of a transnational dimension, as many companies are operating Union wide or globally and value chains expand to other Member States and to third countries. Moreover, individual Member States’ measures risk being ineffective and lead to fragmentation of the internal market. Therefore, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.
Amendment 118 #
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 impactson human rights, the environment and good governance, with respect to their own operations, the operationsproducts and services and those of their subsidiaries, and the value chain operations carried out by entities with whom the company has an established business relationship and
Amendment 119 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a a (new)
Article 1 – paragraph 1 – subparagraph 1 – point a a (new)
(a a) The rules provided for under this Directive are aimed at ensuring that companies fulfill their duty to respect human rights, the environment and good governance and that those affected by a failure to respect this duty have access to justice.
Amendment 123 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
Amendment 131 #
Proposal for a directive
Article 1 – paragraph 3
Article 1 – paragraph 3
3. This Directive shall be without prejudice to obligations in the areas of human rights, good governance, protection of the environment and climate change under other Union legislative acts. If the provisions of this Directive conflict with a provision of another Union legislative act pursuing the same objectives and providing for more extensive or more specific obligations, the provisions of the other Union legislative act shall prevail to the extent of the conflict and shall apply to those specific obligations.
Amendment 139 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 2500 employees on average and had a net worldwide turnover of more than EUR 1540 million in the last financial year for which annual financial statements have been prepared;
Amendment 147 #
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 turnover of more than EUR 40 million700 000 in the last financial year for which annual financial statements have been prepared, provided that at least 50% of this net turnover was generated in one or more of the following sectors:
Amendment 152 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point i
Article 2 – paragraph 1 – point b – point i
(i) the manufacture of textiles, wearing apparel, fur, leather and related products (including footwear), and the wholesale trade and retail of textiles, clothing and footwear;
Amendment 156 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point ii
Article 2 – paragraph 1 – point b – point ii
(ii) agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, animal products, wood, food, and beverages;
Amendment 161 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii
Article 2 – paragraph 1 – point b – point iii
(iii) energy, the extraction, transport and handling of mineral resources regardless from where they are extracted (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).
Amendment 164 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii a (new)
Article 2 – paragraph 1 – point b – point iii a (new)
(iii a) construction and related activities;
Amendment 166 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii b (new)
Article 2 – paragraph 1 – point b – point iii b (new)
(iii b) the provision of financial services, such as loans, credits, financing, pensions, market funding, risk management, payment services, securitisation, insurance or reinsurance, investment services and activities and other financial services;
Amendment 190 #
Proposal for a directive
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
(a) generated a net turnover of more than EUR 1540 million in the Union in the financial year preceding the last financial year;
Amendment 194 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
(b) generated a net turnover of more than EUR 40 million700 000 but not more than EUR 1540 million in the Union in the financial year preceding the last financial year, provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1, point (b).
Amendment 215 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘value chain’ means activities related toll upstream and downstream activities, operations, including marketing and advertising, related to, and entities involved in, the production and supply of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities;
Amendment 221 #
Proposal for a directive
Article 3 – paragraph 1 – point j
Article 3 – paragraph 1 – point j
Amendment 226 #
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, workers and their representatives, trade unions, local communities, indigenous people, human rights and environmental rights defenders, civil society organisations, company’s shareholders and other individuals, groups, communities or entities whose rights or interests are or could be affected by the potential or actual adverse impacts on human rights, the environment and good governance caused by the products, services and operations of that company, its subsidiaries and its business relationships; across the entire value chain;
Amendment 233 #
Proposal for a directive
Article 3 – paragraph 1 – point q
Article 3 – paragraph 1 – point q
(q) ‘appropriate measure’ means a measure that is capable of achieving the objectives of due diligence, commensurate with in a manner proportionate to the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including the nature of the adverse impact, 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, the nature of the company’s specific activities, products and services, and the specific business relationship.
Amendment 274 #
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 minimistigated by the measures provided for in paragraphs 3, 4 and 5 or any other means and where there is no reasonable prospect of change, the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the value chain of which the impact has arisen and shall, where the law governing their relations so entitles them to, take one of the following actions:
Amendment 279 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point a
Article 8 – paragraph 6 – subparagraph 1 – point a
(a) temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimistigate the extent of the adverse impact, or
Amendment 280 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point a a (new)
Article 8 – paragraph 6 – subparagraph 1 – point a a (new)
(a a) engage in a timely manner, efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the relationship before reaching such decision;
Amendment 283 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point b
Article 8 – paragraph 6 – subparagraph 1 – point b
(b) terminate the business relationship with respect to the activities concerned, if the adverse impact is considered sevewhere mitigation and ceasing of the impact is made impossible, in particular by its systemic or state-imposed nature.
Amendment 285 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point b a (new)
Article 8 – paragraph 6 – subparagraph 1 – point b a (new)
(b a) provide for remediation of past adverse impacts pursuant to paragraph 3, point (a)
Amendment 286 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point b b (new)
Article 8 – paragraph 6 – subparagraph 1 – point b b (new)
(b b) identify, prevent and mitigate the potential or actual adverse impacts related to the suspension or termination of the relationship and cooperate to remediate the impact arising from disengagement.
Amendment 290 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2
Article 8 – paragraph 6 – subparagraph 2
Member States shall provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws.
Amendment 293 #
Proposal for a directive
Article 9 – paragraph 1
Article 9 – paragraph 1
1. Member States shall ensure that companies provide the possibility forestablish or participate in effective mechanisms that can be used by persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental, environmental impacts or good governance impacts with respect to their own operations, the operations of their subsidiaries and their value chains. Member States shall ensure that companies are able to provide such a possibility to submit complaints through collaborative arrangements with other companies or organisations, by participating in multi-stakeholder grievance mechanisms or joining a Global Framework Agreement. The complaint procedure shall be safe, legitimate, accessible and equitable, and shall provide for the possibility to raise complaints anonymously and confidentially. Recourse to such procedures shall not preclude claimants from having access to judicial mechanisms.
Amendment 312 #
Proposal for a directive
Article 9 – paragraph 2 – point a
Article 9 – paragraph 2 – point a
(a) persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impactindividuals, groups, communities or entities whose rights or interests are or could be affected by the products, services and operations of that company, its subsidiaries and its business relationships throughout the entire value chain,
Amendment 317 #
Proposal for a directive
Article 9 – paragraph 2 – point b
Article 9 – paragraph 2 – point b
(b) the company’s employees, the employees of its subsidiaries, workers; trade unions and other workers’ representatives, including those representing individuals working in the value chain concerned,
Amendment 326 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
(c) civil society organisations active in the areas related to the value chain concerned., and
Amendment 327 #
(c a) legal or natural persons defending human rights, good governance and the environment.
Amendment 331 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
3. Member States shall ensure that the companies establish a safe procedure for dealing with complaints referred to in paragraph 1, including a procedure when the company considers the complaint to be unfounded, by ensuring that complaints are anonymous and confidential; and inform the relevant workers and trade unions of those procedures. Member States shall ensure that where the complaint is well-founded, the adverse impact that is the subject matter of the complaint is deemed to be identified within the meaning of Article 6.
Amendment 333 #
Proposal for a directive
Article 9 – paragraph 4 – point a
Article 9 – paragraph 4 – point a
(a) to requestceive timely and appropriate follow-up on the complaint from the company with which they have filed a complaint pursuant to paragraph 1, providing substantiated reasoning as to whether a claim has been considered founded or unfounded, and
Amendment 334 #
Proposal for a directive
Article 9 – paragraph 4 – point a a (new)
Article 9 – paragraph 4 – point a a (new)
(a a) Member States shall ensure that supervisory authorities are empowered to issue guidance to companies and other actors responsible for developing and administering complaints mechanisms, including in relation to their compliance with the criteria set out in this Article, in line with relevant international standards.
Amendment 343 #
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, representative SME organisations, business organisations and stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Labour Authority and where appropriate with international bodies having expertise in due diligence, mayshall issue guidelines, including for specific sectors or specific adverse impacts or contexts, such as situations of conflict or occupation. The Commission may also issue guidelines on responsible and sustainable trading, purchasing and pricing practices, as well as responsible disengagement from harmful business relationships, assessing the integrity and fitness of industry schemes and multi-stakeholder initiatives and implementation of heightened due diligence in conflict-affected areas, occupation situations, and non-self- governing territories.
Amendment 357 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The Commission mayshall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and mayshall devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations and enable stakeholders to exercise their rights. The Commission and Member States shall develop and strengthen cooperation and partnership mechanisms with third countries to address the root causes of adverse impacts on human rights, the environment and good governance, and build the capacity of upstream economic actors to comply with the requirements under this Directive.
Amendment 360 #
Proposal for a directive
Article 14 – paragraph 3 a (new)
Article 14 – paragraph 3 a (new)
3 a. The Commission and European Union delegations in third countries shall complement Member States’ support measures in order to help stakeholders exercise their rights, including the submission of substantiated concerns pursuant to Article 19 and of civil claims pursuant to Article 22. Union Delegations shall be mandated to and provided with adequate resources to fulfil that facilitation and support role.
Amendment 366 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Companies may rely onuse credible 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 may facilitate the dissemination of information on the precise scope, alignment with this Directive, and credibility of such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, mayshall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. The company shall be responsible for assessing the reliability and quality of any industry initiative that they use.
Amendment 374 #
Proposal for a directive
Article 22 – paragraph 1 – point a
Article 22 – paragraph 1 – point a
(a) they or a company under their control failed to comply with the obligations laid down in Articles 7 and 8this Directive and;
Amendment 377 #
Proposal for a directive
Article 22 – paragraph 1 – point b
Article 22 – paragraph 1 – point b
(b) as a result of this failure the company or a company under their control caused or contributed to an adverse impact that should have been identified, prevented, mitigated, brought to an end, remedied or its extent minimised through the appropriate measures laid down in Articles 7 and 8 occurredthis Directive and led to damage.
Amendment 411 #
Proposal for a directive
Article 29 – paragraph 1 – introductory part
Article 29 – paragraph 1 – introductory part
No later than … [OP please insert the date = 75 years after the date of entry into force of this Directive], the Commission shall submit a report to the European Parliament and to the Council on the implementation of this Directive. The report shall evaluate the effectiveness of this Directive in reaching its objectives and assess the following issues:
Amendment 416 #
Proposal for a directive
Article 29 – paragraph 1 – point a
Article 29 – paragraph 1 – point a
(a) whether the thresholds regarding the number of employeeworkers and net turnover laid down in Article 2(1) need to be lowered;
Amendment 425 #
Proposal for a directive
Article 29 – paragraph 1 – point d
Article 29 – paragraph 1 – point d
(d) whether Articles 4 to 14 should be extended to adverse climatditional adverse environmental, climate, biodiversity, human rights or animal welfare impacts.
Amendment 427 #
Proposal for a directive
Article 29 – paragraph 1 – point d a (new)
Article 29 – paragraph 1 – point d a (new)
(d a) the achievement of the objectives of this Directive, including the convergences in the implementation of measures between the Member States.