opinion parliamentary committee draft, 12 October 2022
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
Document DEVE-PA-736709 · (COM(2022)0071 – C90050/2022 – 2022/0051(COD))
Committee on Development · Rapporteur: Pierfrancesco Majorino
Full text
Jump to an amendment (159)
- Amendment 1
- Amendment 2
- Amendment 3
- Amendment 4
- Amendment 5
- Amendment 6
- Amendment 7
- Amendment 8
- Amendment 9
- Amendment 10
- Amendment 11
- Amendment 12
- Amendment 13
- Amendment 14
- Amendment 15
- Amendment 16
- Amendment 17
- Amendment 18
- Amendment 19
- Amendment 20
- Amendment 21
- Amendment 22
- Amendment 23
- Amendment 24
- Amendment 25
- Amendment 26
- Amendment 27
- Amendment 28
- Amendment 29
- Amendment 30
- Amendment 31
- Amendment 32
- Amendment 33
- Amendment 34
- Amendment 35
- Amendment 36
- Amendment 37
- Amendment 38
- Amendment 39
- Amendment 40
- Amendment 41
- Amendment 42
- Amendment 43
- Amendment 44
- Amendment 45
- Amendment 46
- Amendment 47
- Amendment 48
- Amendment 49
- Amendment 50
- Amendment 51
- Amendment 52
- Amendment 53
- Amendment 54
- Amendment 55
- Amendment 56
- Amendment 57
- Amendment 58
- Amendment 59
- Amendment 60
- Amendment 61
- Amendment 62
- Amendment 63
- Amendment 64
- Amendment 65
- Amendment 66
- Amendment 67
- Amendment 68
- Amendment 69
- Amendment 70
- Amendment 71
- Amendment 72
- Amendment 73
- Amendment 74
- Amendment 75
- Amendment 76
- Amendment 77
- Amendment 78
- Amendment 79
- Amendment 80
- Amendment 81
- Amendment 82
- Amendment 83
- Amendment 84
- Amendment 85
- Amendment 86
- Amendment 87
- Amendment 88
- Amendment 89
- Amendment 90
- Amendment 91
- Amendment 92
- Amendment 93
- Amendment 94
- Amendment 95
- Amendment 96
- Amendment 97
- Amendment 98
- Amendment 99
- Amendment 100
- Amendment 101
- Amendment 102
- Amendment 103
- Amendment 104
- Amendment 105
- Amendment 106
- Amendment 107
- Amendment 108
- Amendment 109
- Amendment 110
- Amendment 111
- Amendment 112
- Amendment 113
- Amendment 114
- Amendment 115
- Amendment 116
- Amendment 117
- Amendment 118
- Amendment 119
- Amendment 120
- Amendment 121
- Amendment 122
- Amendment 123
- Amendment 124
- Amendment 125
- Amendment 126
- Amendment 127
- Amendment 128
- Amendment 129
- Amendment 130
- Amendment 131
- Amendment 132
- Amendment 133
- Amendment 134
- Amendment 135
- Amendment 136
- Amendment 137
- Amendment 138
- Amendment 139
- Amendment 140
- Amendment 141
- Amendment 142
- Amendment 143
- Amendment 144
- Amendment 145
- Amendment 146
- Amendment 147
- Amendment 148
- Amendment 149
- Amendment 150
- Amendment 151
- Amendment 152
- Amendment 153
- Amendment 154
- Amendment 155
- Amendment 156
- Amendment 157
- Amendment 158
- Amendment 159
Short justification 836 paragraphs
The way in which companies operate in developing countries is a key factor for respect for human rights, the environment and the rule of law and good governance systems of these countries and towards the achievement of their sustainable development goals in line with United Nations Agenda 2030. Therefore, it is important to ensure that companies behave responsibly, avoid harm and contribute to the economic, social and environmental development of developing countries.
This Directive represents a very important step forward in this line. The Rapporteur welcomes the proposal, however believes that significant improvements are needed to ensure a responsible behaviour of companies in developing countries.
A holistic approach needs to be ensured by means of strengthening the respect for the rule of law and good governance systems in the countries, regions or territories where the company operates. Business success depends very much on the sustainability of the societies where they operate and business could play an important role in advancing the rule of law and good governance. In this sense companies should refrain from corruption and other bad practices that could undermine the weak institutional and legal frameworks existing in many developing countries and support existing structures, complying with laws and regulations throughout the company’s operations and value chain including tax laws and policies, honouring contractual obligations and commercial agreements and the dispute resolution procedures and decisions at all levels
The scope should be expanded to include as many companies as possible and some key sectors should be added such as oil and gas productions and oil refining sector or constructions, logistics and infrastructures. Definitions have to be strengthened in order to include the adverse rule of law and good governance impacts, to provide some guidance on adverse environmental impacts as well as to reinforce the stakeholder definition, including by adding a new category of vulnerable stakeholders.
Given the crucial role that stakeholders are called to play throughout the whole process of due diligence a new article is proposed in order to define their meaningful involvement in the process as well as improvements in other legal provisions.
Some amendments have been introduced in order to ensure that companies map their value chain and publicly disclose relevant information, that any decision to suspend or terminate a business is done with the meaningful engagement of relevant stakeholders and that it addresses the adverse impacts that it might cause.
In accordance with international standards, non-judicial remedies represent useful mechanisms to provide remedies and compensation to victims or people with legitimate interest or contribute to repair the damaged cause. However, to ensure that they can fulfil their objectives, they must comply with a series of requirements as set out in the United Nations Guiding Principles on Business and Human Rights.
Notwithstanding reporting requirements under Directive 2013/34, Member States should ensure that companies report on matters covered by this Directive as well as related information key to support companies and its subsidiaries and business partners operating in developing countries to identify, prevent and effectively address actual or potential adverse impacts.
The Rapporteur has also suggested some guidelines the Commission should provide in order to support companies and Member States authorities on how companies should fulfil their due diligence obligations, such as on impacts on rule of law and good governance, on the implementation of enhanced due diligence in conflict affected areas, on safety, effective and meaningful engagement with stakeholders in all due diligence processes or regarding the mapping of companies value chain and efficient process to monitor business partners behaviour through the value chain.
The accompanying measures have also been reinforced to take into account the need to step up the support to be provided in developing countries to build an enabling environment and protecting civic space, to raise awareness and capacity building for communities and stakeholders, including trade unions, NGOs or local associations , to monitor companies behaviour and impacts or to support access to justice for victims and persons and groups with legitimate interest.
Finally, it is essential to reinforce the civil liability ensuring that Member States take the necessary measures to make access to justice a reality, including by addressing the existing barriers to it and reversing the burden of proof towards companies.
AMENDMENTS
Read the rest (824 paragraphs)
The Committee on Development calls on the Committee on Legal Affairs, as the committee responsible, to take into account the following amendments:
Amendment 1
Proposal for a directive
Recital 13 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (13a) Along with respect for human rights, the environment and the rule of law, the due diligence process should also include good governance. Good governance refers to rules, processes, and behaviour by which interests are articulated, resources are managed, and power is exercised in society. It includes the process whereby public institutions conduct public affairs and manage public resources in a manner that promotes the rule of law and the realisation of human rights (civil, political, economic, social and cultural rights). Core elements of good governance are transparency, integrity, lawfulness, sound policy, participation, accountability, responsiveness, and the absence of corruption and wrongdoing. Good governance has to be considered as key to achieving sustainable development and human well-being. This is, in particular, related to the control of corruption, which has been demonstrated to affect well-being both directly and indirectly. |
Or. en
Amendment 2
Proposal for a directive
Recital 13 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (13b) 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 apply gender lens throughout all of the steps and activities of the due diligence process and encourage them to actively support gender equality. A gender lens would entail recognising the specific needs of different genders and analyses how business activities could contribute to gender-based inequalities. Companies should assume a strong commitment and adapt their policies accordingly. In order to understand the outcomes of companies’ actions and operations gender-disaggregated data should be collected where possible. 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. |
Or. en
Amendment 3
Proposal for a directive
Recital 14
| Text proposed by the Commission | Amendment |
|---|---|
| (14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and value chains. | (14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or actual adverse human rights, environmental, rule of law and good governance impacts connected with companies’ own operations, subsidiaries and value chains. |
Or. en
Amendment 4
Proposal for a directive
Recital 15
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (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 direct and indirect business relationships throughout their value chains in accordance with the provisions of this Directive. When companies are not in a position to avoid adverse impacts from the value chains, they should be required to terminate the harmful business relationships and to modify the structure of their value chains in order to ensure that that no longer contributes to or can be a cause of the adverse impact. 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. |
Or. en
Amendment 5
Proposal for a directive
Recital 18
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (18) The value chain should cover activities related to the production, distribution and sale of a good or provision of services by a company, and any of its directly and indirectly-owned subsidiaries and branches including inter alia the development of the product or the service and the use and disposal of the product as well as the related activities of business relationships of the company. It should encompass upstream 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 and any of its directly and indirectly-owned subsidiaries and branches that are necessary to carry out the company’s activities, and also downstream relationships, including direct and indirect business relationships, that use or receive products, parts of products or services from the company and any of its directly- and indirectly-owned subsidiaries and branches up to the end of life of the product, including inter alia the distribution of the product to retailers, the sale of products or provisions of services to consumers whatever the means (e.g. franchising, licensing), the transport and storage of the product, dismantling of the product, its recycling, composting or landfilling. As pointed out in the OECD Guidelines for Multinational Enterprises, the value chain should cover the various structures that the company and any of its directly and indirectly-owned subsidiaries and branches use to operate including inter alia franchising, licensing and subcontracting. |
Or. en
Amendment 6
Proposal for a directive
Recital 20
| Text proposed by the Commission | Amendment |
|---|---|
| (20) In order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage, the due diligence obligations should be limited in this Directive to established business relationships. For the purpose of this Directive, established business relationships should mean such direct and indirect business relationships which are, or which are expected to be lasting, in view of their intensity and duration and which do not represent a negligible or ancillary part of the value chain. The nature of business relationships as “established” should be reassessed periodically, and at least every 12 months. If the direct business relationship of a company is established, then all linked indirect business relationships should also be considered as established regarding that company. | (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 cover all business relationships. For the purpose of this Directive, business relationships should mean direct and indirect business relationships. |
Or. en
Amendment 7
Proposal for a directive
Recital 21
| Text proposed by the Commission | Amendment |
|---|---|
| (21) Under this Directive, EU companies with more than 500 employees on average and a worldwide net turnover exceeding EUR 150 million in the financial year preceding the last financial year should be required to comply with due diligence. As regards companies which do not fulfil those criteria, but which had more than 250 employees on average and more than EUR 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors, due diligence should apply 2 years after the end of the transposition period of this directive, in order to provide for a longer adaptation period. In order to ensure a proportionate burden, companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse 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. | (21) Under this Directive, EU companies with more than 50 employees on average and a worldwide net turnover exceeding EUR 8 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 the employee criterion, but which had more than 8 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors, due diligence should apply 2 years after the end of the transposition period of this directive, in order to provide for a longer adaptation period. In order to ensure a proportionate burden, companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. Temporary agency workers, including those posted under Article 1(3), point (c), of Directive 96/71/EC, as amended by Directive 2018/957/EU of the European Parliament and of the Council103 , should be included in the calculation of the number of employees in the user company. Posted workers under Article 1(3), points (a) and (b), of Directive 96/71/EC, as amended by Directive 2018/957/EU, should only be included in the calculation of the number of employees of the sending company. |
| 103 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (OJ L 173, 9.7.2018, p. 16). | 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). |
Or. en
Amendment 8
Proposal for a directive
Recital 22
| Text proposed by the Commission | Amendment |
|---|---|
| (22) In order to reflect the priority areas of international action aimed at tackling human rights and environmental issues, the selection of high-impact sectors for the purposes of this Directive should be based on existing sectoral OECD due diligence guidance. The following sectors should be regarded as high-impact for the purposes of this Directive: the manufacture of textiles, leather and related products (including footwear), and the wholesale trade of textiles, clothing and footwear; agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum, natural gas, coal, lignite, metals and metal ores, as well as all other, non-metallic minerals and quarry products), the manufacture of basic metal products, other non-metallic mineral products and fabricated metal products (except machinery and equipment), and the wholesale trade of mineral resources, basic and intermediate mineral products (including metals and metal ores, construction materials, fuels, chemicals and other intermediate products). As regards the financial sector, due to its specificities, in particular as regards the value chain and the services offered, even if it is covered by sector-specific OECD guidance, it should not form part of the high-impact sectors covered by this Directive. At the same time, in this sector, the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liability. | (22) In order to reflect the priority areas of international action aimed at tackling human rights, environmental, rule of law 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, leather and related products (including footwear), 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 and sale to consumers; the energy; 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); construction, logistics and infrastructures; oil and gas production and oil refining sector. As regards the financial sector, due to its specificities, in particular as regards the value chain and the services offered, even if it is covered by sector-specific OECD guidance, it should not form part of the high-impact sectors covered by this Directive. At the same time, in this sector, the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liability. |
Or. en
Amendment 9
Proposal for a directive
Recital 23
| Text proposed by the Commission | Amendment |
|---|---|
| (23) In order to achieve fully the objectives of this Directive addressing human rights and adverse environmental impacts with respect to companies’ operations, subsidiaries and value chains, third-country companies with significant operations in the EU should also be covered. More specifically, the Directive should apply to third-country companies which generated a net turnover of at least EUR 150 million in the Union in the financial year preceding the last financial year or a net turnover of more than EUR 40 million but less than EUR 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors, as of 2 years after the end of the transposition period of this Directive. | (23) In order to achieve fully the objectives of this Directive addressing adverse human rights, environmental, rule of law and good governance impacts with respect to companies’ operations, subsidiaries and value chains, third-country companies with significant operations in the EU should also be covered. More specifically, the Directive should apply to third-country companies which generated a net turnover of at least EUR 8 million in the Union in the financial year preceding the last financial year. Business enterprises may have various structures resulting in a single company having a net turnover below the threshold. As mentioned in the Interpretative Guide to the United Nations Guiding Principles on Business and Human Rights, companies may operate inter alia through various subsidiaries or follow a franchise model. Companies may also outsource or subcontract significant activities. Therefore, net turnover generated by the company in the Union should include net turnover generated directly in the Union by the company and the net turnover generated in the Union by its directly and indirectly-owned subsidiaries and branches, as well as the net turnover generated in the Union through third party undertakings with whom the company or its directly and indirectly-owned subsidiaries and branches have entered into a vertical agreement in return for payment of royalties or an outsourcing agreement. |
Or. en
Amendment 10
Proposal for a directive
Recital 24
| Text proposed by the Commission | Amendment |
|---|---|
| (24) For defining the scope of application in relation to non-EU companies the described turnover criterion should be chosen as it creates a territorial connection between the third-country companies and the Union territory. Turnover is a proxy for the effects that the activities of those companies could have on the internal market. In accordance with international law, such effects justify the application of Union law to third-country companies. To ensure identification of the relevant turnover of companies concerned, the methods for calculating net turnover for non-EU companies as laid down in Directive (EU) 2013/34 as amended by Directive (EU) 2021/2101 should be used. To ensure effective enforcement of this Directive, an employee threshold should, in turn, not be applied to determine which third-country companies fall under this Directive, as the notion of “employees” retained for the purposes of this Directive is based on Union law and could not be easily transposed outside of the Union. In the absence of a clear and consistent methodology, including in accounting frameworks, to determine the employees of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. The definition of turnover should be based on Directive 2013/34/EU which has already established the methods for calculating net turnover for non-Union companies, as turnover and revenue definitions are similar in international accounting frameworks too. With a view to ensuring that the supervisory authority knows which third country companies generate the required turnover in the Union to fall under the scope of this Directive, this Directive should require that a supervisory authority in the Member State where the third country company’s authorised representative is domiciled or established and, where it is different, a supervisory authority in the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this Directive. | (24) For defining the scope of application in relation to non-EU companies the described turnover criterion should be chosen as it creates a territorial connection between the third-country companies and the Union territory. Turnover is a proxy for the effects that the activities of those companies could have on the internal market. In accordance with international law, such effects justify the application of Union law to third-country companies. To ensure identification of the relevant turnover of companies concerned, the methods for calculating net turnover for non-EU companies as laid down in Directive (EU) 2013/34 as amended by Directive (EU) 2021/2101 should be used. To ensure effective enforcement of this Directive, an employee threshold should, in turn, not be applied to determine which third-country companies fall under this Directive, as the notion of “employees” retained for the purposes of this Directive is based on Union law and could not be easily transposed outside of the Union. In the absence of a clear and consistent methodology, including in accounting frameworks, to determine the employees of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. The definition of turnover should be based on Directive 2013/34/EU which has already established the methods for calculating net turnover for non-Union companies, as turnover and revenue definitions are similar in international accounting frameworks too. Third-country companies are to be considered as generating net turnover in the Union even if they do not operate directly in the Union but through various structures including inter alia subsidiaries and branches and vertical agreements in return for payment of royalties - as pointed out in the Interpretative Guide of the United Nations Guiding Principles on Business and Human Rights – as well as outsourcing agreements or subcontracting agreements. With a view to ensuring that the supervisory authority knows which third country companies generate the required turnover in the Union to fall under the scope of this Directive, this Directive should require that a supervisory authority in the Member State where the third country company’s authorised representative is domiciled or established and, where it is different, a supervisory authority in the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this Directive. |
Or. en
Amendment 11
Proposal for a directive
Recital 25
| Text proposed by the Commission | Amendment |
|---|---|
| (25) In order to achieve a meaningful contribution to the sustainability transition, due diligence under this Directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the Annex to this Directive. In order to ensure a comprehensive coverage of human rights, a violation of a prohibition or right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this Directive, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this Directive, taking into account all relevant circumstances of their operations, such as the sector and operational context. Due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex to this Directive. | (25) In order to achieve a meaningful contribution to the sustainability transition, due diligence under this Directive should avoid any negative impact on the enjoyment of human rights of a person or group of persons, as enshrined in the international conventions and should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the Annex to this Directive. In order to ensure a comprehensive coverage of human rights, a violation of a prohibition or right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this Directive. Due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex to this Directive, or adverse impacts on air quality, air pollution and atmosphere, water pollution, water contamination, access to water and depletion of freshwater, soil, such as soil pollution, soil contamination, soil erosion, and land degradation, biodiversity, including damage to wildlife, seabed and marine environment, flora, fauna, natural habitats and ecosystems, human health in accordance with the 'One Health' approach, climate, including through greenhouse gas emissions and the destruction or degradation of sinks. |
Or. en
Amendment 12
Proposal for a directive
Recital 25 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (25a) Companies’ behaviour could have negative impact on rule of law and good governance systems, in particular in developing countries. They could take advantage of the existing weaknesses in the institutional and legal systems to do business by violating existing international or regional frameworks, in particular when rules are not respected, including the non-payment of their taxes, when their democratic, executive, administrative or judicial processes are influenced using corrupt practices, violence or intimidation with the serious consequences that that entails for those countries and their communities. Corruption and insufficient rule of law greatly undermine respect for human rights and the environment. Corruption enables companies to avoid responsibility for their impact on human rights and the environment, endangers human rights and environmental defenders, weakens the quality, frequency and trust for enforcement activities of public authorities (e.g. labour inspection and environmental authorities) and for judicial proceedings. |
Or. en
Amendment 13
Proposal for a directive
Recital 27
| Text proposed by the Commission | Amendment |
|---|---|
| (27) In order to conduct appropriate human rights, and environmental due diligence with respect to their operations, their subsidiaries, and their value chains, companies covered by this Directive should integrate due diligence into corporate policies, identify, prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts, establish and maintain a complaints procedure, monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this Directive and communicate publicly on their due diligence. In order to ensure clarity for companies, in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end, or when this is not possible, minimising actual adverse impacts should be clearly distinguished in this Directive. | (27) In order to conduct appropriate human rights, environmental, rule of law 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 as well as bring to an end and minimise the extent of potential and actual adverse human rights, environmental, rule of law and good governance impacts, establish and maintain a grievance mechanism, monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this Directive and report on their due diligence and related information in order to support companies, their subsidiaries and business partners operating in developing countries to identify, prevent and effectively address actual or potential adverse impacts on human rights, the environment and the rule of law and good governance systems. 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 and providing for remediation of actual adverse impacts should be clearly distinguished in this Directive. |
Or. en
Amendment 14
Proposal for a directive
Recital 28
| Text proposed by the Commission | Amendment |
|---|---|
| (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 their due diligence policy annually. | (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, subsidiaries and entities with whom the company or any of its subsidiaries have business relationships; a description of the processes put in place to implement due diligence; a description of the measures aimed at preventing and mitigating potential adverse impacts, and bringing actual adverse impacts to an end and minimising their extent; a description of the corrective measures taken over the preceding year following any allegation of violation of the code of conduct and any new adverse impact; a description of the grievance mechanisms provided in this Directive; a description of the results of the assessments of the processes, measures and procedures. The code of conduct should apply in all relevant corporate functions and operations, including procurement and purchasing decisions. Companies should also update their due diligence policy annually. |
Or. en
Amendment 15
Proposal for a directive
Recital 29
| Text proposed by the Commission | Amendment |
|---|---|
| (29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts. An ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. In this context, in line with international frameworks, the company’s influence over a business relationship should include, on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control, market power, pre-qualification requirements, linking business incentives to human rights and environmental performance, etc.) and, on the other hand, the degree of influence or leverage that the company could reasonably exercise, for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact. | (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, environmental, rule of law 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. |
Or. en
Amendment 16
Proposal for a directive
Recital 30
| Text proposed by the Commission | Amendment |
|---|---|
| (30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification of adverse impacts, such identification should be based on quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically, at least every 12 months, throughout the life of an activity or relationship. Regulated financial undertakings providing loan, credit, or other financial services should identify the adverse impacts only at the inception of the contract. When identifying adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including trading, procurement and pricing practices. Where the company cannot prevent, bring to an end or minimize all its adverse impacts at the same time, it should be able to prioritize its action, provided it takes the measures reasonably available to the company, taking into account the specific circumstances. | (30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights, environmental, rule of law and good governance 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. |
Or. en
Amendment 17
Proposal for a directive
Recital 31
| Text proposed by the Commission | Amendment |
|---|---|
| (31) In order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this Directive, those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector. | (31) In order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this Directive, those companies should only be obliged to identify those actual or potential adverse impacts that are relevant to the respective sector. |
Or. en
Amendment 18
Proposal for a directive
Recital 32
| Text proposed by the Commission | Amendment |
|---|---|
| (32) In line with international standards, prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. In order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts, this Directive should ensure that disengagement is a last-resort action, in line with the Union`s policy of zero-tolerance on child labour. Terminating a business relationship in which child labour was found could expose the child to even more severe adverse human rights impacts. This should therefore be taken into account when deciding on the appropriate action to take. | (32) In line with international standards, prevention, mitigation and remediation as well as bringing to an end and minimisation of adverse impacts should fully take into account the interests of those adversely impacted and should be designed and determined on the basis of meaningful engagement with them. Companies should engage in a timely manner, efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the adverse impacts before reaching that decision, and shall address the adverse impacts derived from those actions. |
Or. en
Amendment 19
Proposal for a directive
Recital 33
| Text proposed by the Commission | Amendment |
|---|---|
| (33) Under the due diligence obligations set out by this Directive, if a company identifies potential adverse human rights or environmental impacts, it should take appropriate 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. | (33) Under the due diligence obligations set out by this Directive, if a company identifies potential adverse human rights, environmental, rule of law and 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. |
Or. en
Amendment 20
Proposal for a directive
Recital 34
| Text proposed by the Commission | Amendment |
|---|---|
| (34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following actions, where relevant. Where necessary due to the complexity of prevention measures, companies should develop and implement a prevention action plan. Companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan, including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. The contractual assurances should be accompanied by appropriate measures to verify compliance. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also make investments which aim to prevent adverse impacts, provide targeted and proportionate support for an SME with which they have an established business relationship such as financing, for example, through direct financing, low-interest loans, guarantees of continued sourcing, and assistance in securing financing, to help implement the code of conduct or prevention action plan, or technical guidance such as in the form of training, management systems upgrading, and collaborate with other companies. | (34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following actions. Companies should develop and implement a prevention action plan. Companies should obtain contractual assurances from a direct partner with whom they have a business relationship that it will ensure compliance with the code of conduct or the prevention action plan, including by obtaining corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. The contractual assurances should be accompanied by 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 a business relationship such as financing, for example, through direct financing, low-interest loans, guarantees of continued sourcing, and assistance in securing financing, to help implement the code of conduct or prevention action plan, or technical guidance such as in the form of training, management systems upgrading, and collaborate with other companies. |
Or. en
Amendment 21
Proposal for a directive
Recital 35
| Text proposed by the Commission | Amendment |
|---|---|
| (35) In order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures, this Directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner, with a view to achieving compliance with the company’s code of conduct or a prevention action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. | (35) In order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures, this Directive should also refer to the requirement for the company to seek to conclude a contract with the indirect business partner, with a view to achieving compliance with the company’s code of conduct or a prevention action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. |
Or. en
Amendment 22
Proposal for a directive
Recital 36
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (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 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 or if the adverse impact is repeated. 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. |
Or. en
Amendment 23
Proposal for a directive
Recital 38
| Text proposed by the Commission | Amendment |
|---|---|
| (38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights or environmental 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 minimise the extent of such impacts. Minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. To provide companies with legal clarity and certainty, this Directive should define which actions companies 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. | (38) Under the due diligence obligations set out by this Directive, if a company identifies actual adverse human rights, environmental, rule of law and good governance 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 and to require partners to do so. However, it should be clarified that, as regards established business relationships, where adverse impacts cannot be brought to an end, companies should minimise such impacts, to the greatest extent possible. 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 adverse human rights, environmental, rule of law and good governance impacts to an end and minimisation of their extent, where relevant depending on the circumstances. |
Or. en
Amendment 24
Proposal for a directive
Recital 39
| Text proposed by the Commission | Amendment |
|---|---|
| (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, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. Companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chain. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for an SMEs with which they have an established business relationship and collaborate with other entities, including, where relevant, to increase the company’s ability to bring the adverse impact to an end. | (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 it to the greatest extent possible, with an action proportionate to the significance and scale of the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. Companies should also obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by obtaining corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chain. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the adverse impact to the greatest extent possible, provide targeted and proportionate support for an SMEs with which they have an established business relationship and collaborate with other entities, including to increase the company’s ability to bring the adverse impact to an end. |
Or. en
Amendment 25
Proposal for a directive
Recital 40
| Text proposed by the Commission | Amendment |
|---|---|
| (40) In order to reflect the full range of options for the company in cases where actual impacts could not be addressed by the described measures, this Directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner, with a view to achieving compliance with the company’s code of conduct or a corrective action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. | (40) In order to reflect the full range of options for the company in cases where actual impacts could not be addressed by the described measures, this Directive should also refer to the possible requirement for the company to seek to conclude a contract with the indirect business partner, with a view to achieving compliance with the company’s code of conduct or a corrective action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. |
Or. en
Amendment 26
Proposal for a directive
Recital 41
| Text proposed by the Commission | Amendment |
|---|---|
| (41) In order to ensure that bringing actual adverse impacts to an end or minimising them is effective, companies should prioritize engagement with business relationships in the value chain, instead of terminating the business relationship, as a last resort action after attempting at bringing actual adverse impacts to an end or minimising them without success. However, this Directive should also, for cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, to either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. | (41) In order to ensure that bringing actual adverse impacts to an end or minimising them is effective, companies should prioritize engagement with business relationships in the value chain, instead of terminating the business relationship, as a last resort action after attempting at bringing actual adverse impacts to an end or minimising them without success. However, this Directive should also, for cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and to either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe or the adverse impact repeated. 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. |
Or. en
Amendment 27
Proposal for a directive
Recital 42
| Text proposed by the Commission | Amendment |
|---|---|
| (42) Companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. Organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. Companies should establish a procedure for dealing with those complaints and inform workers, trade unions and other workers’ representatives, where relevant, about such processes. Recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. In accordance with international standards, complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. This access should not lead to unreasonable solicitations of companies. | (42) Companies should provide the possibility for persons and organisations to submit grievances directly to them in case of legitimate concerns regarding actual or potential adverse human rights, environmental, rule of law and good governance impacts. Organisations who could submit such grievances should include trade unions and other workers’ representatives representing individuals working in the value chain concerned, civil society organisations and human rights, environmental and rule of law and good governance defenders. Companies should establish a procedure for dealing with those grievances and inform all relevant stakeholders, including workers, trade unions and other workers’ representatives about such processes. Recourse to the grievances and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. In accordance with international standards, grievances should be entitled to request from the company appropriate follow-up on the grievance 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 grievance. |
Or. en
Amendment 28
Proposal for a directive
Recital 43
| Text proposed by the Commission | Amendment |
|---|---|
| (43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out periodic assessments of their own operations, those of their subsidiaries and, where related to the value chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitigation of human rights and environmental adverse impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to-date, they should be carried out at least every 12 months and be revised in-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen. | (43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out periodic assessments of their own operations, those of their subsidiaries and, where related to the value chains of the company, those of their business relationships, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitigation of adverse human rights, environmental, rule of law and good governance impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to-date, they should be carried out at least every 12 months and be revised in-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen. |
Or. en
Amendment 29
Proposal for a directive
Recital 44
| Text proposed by the Commission | Amendment |
|---|---|
| (44) Like in the existing international standards set by the United Nations Guiding Principles on Business and Human Rights and the OECD framework, it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies, processes and activities conducted to identify and address actual or potential adverse impacts, including the findings and outcomes of those activities. The proposal to amend Directive 2013/34/EU as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. In order to avoid duplicating reporting obligations, this Directive should therefore not introduce any new reporting obligations in addition to those under Directive 2013/34/EU for the companies covered by that Directive as well as the reporting standards that should be developed under it. As regards companies that are within the scope of this Directive, but do not fall under Directive 2013/34/EU, in order to comply with their obligation of communicating as part of the due diligence under this Directive, they should publish on their website an annual statement in a language customary in the sphere of international business. | (44) Like in the existing international standards set by the United Nations Guiding Principles on Business and Human Rights and the OECD framework, it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies, processes and activities conducted to identify and address actual or potential adverse impacts, including the findings and outcomes of those activities. The proposal to amend Directive 2013/34/EU as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. Notwithstanding the reporting requirements under Directive 2013/34/EU, Member States should ensure that companies report on the matters covered by this Directive by publishing on their website, in an accessible and timely manner, their due diligence policies, prevention action plans, correction action plans, procedures for dealing with grievances, reports on the outcome of the assessments as well as other relevant information. |
Or. en
Amendment 30
Proposal for a directive
Recital 45 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (45a) A full, safe, meaningful and effective engagement of all relevant stakeholders throughout all the steps of due diligence process in the whole value chain is fundamental in order to ensure a proper implementation of this Directive. In line with international standards, that process should be interactive, responsive, continuous, gender-responsive, child-sensitive and adapted to vulnerable stakeholders. Their involvement should take place timely and prior to decisions that could cause any adverse impacts. All relevant information needed by stakeholders to make informed judgments should be made available in an accessible and transparent manner, including meaningful information about operations, projects and investments and their actual and potential adverse impacts. |
Or. en
Amendment 31
Proposal for a directive
Recital 46
| Text proposed by the Commission | Amendment |
|---|---|
| (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 impacts. | (46) In order to provide support and practical tools to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, using relevant international guidelines and standards as a reference, and in consultation with Member States and stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Union Agency for Criminal Justice Cooperation (Eurojust), the European Union Agency for Law Enforcement Cooperation (Europol), the European Public Prosecutor’s Office, the European Anti-Fraud Office (OLAF) and where appropriate with international bodies having expertise in due diligence, should have the possibility to issue guidelines, including for specific sectors or specific adverse impacts. |
Or. en
Amendment 32
Proposal for a directive
Recital 49
| Text proposed by the Commission | Amendment |
|---|---|
| (49) The Commission and Member States should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships, paying specific attention to the challenges faced by smallholders. They should use their neighbourhood, development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. This could include working with partner country governments, the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts. | (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, environmental, rule of law 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, environmental, rule of law 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, environmental, rule of law and good governance impacts. In the same line, the Commission and Member States should provide targeted support to stakeholders in developing countries, in order to ensure their meaningful engagement in all due diligence processes. In particular, support should be provided to national and local civil society organisations to monitor corporate practices and hold companies accountable and dedicated measures and funds should ease access to justice. |
Or. en
Amendment 33
Proposal for a directive
Recital 56
| Text proposed by the Commission | Amendment |
|---|---|
| (56) In order to ensure effective compensation of victims of adverse impacts, Member States should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. The company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent, and as a result of this failure an adverse impact that should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures occurred and led to damage. | (56) In order to ensure effective compensation of victims of adverse impacts, Member States should be required to lay down rules governing the civil liability of companies for damages arising from adverse impacts. Companies should be strictly liable for damages arising from any adverse impacts and resulting from their own operations or those of their subsidiaries. For damages arising from adverse impacts resulting from the operations of partners with whom they have a business relationships, companies should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent, and as a result of this failure an adverse impact that should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures occurred and led to damage. |
Or. en
Amendment 34
Proposal for a directive
Recital 57
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (57) As regards damages occurring at the level of established indirect business relationships, any person with a legitimate interest should be entitled to obtain from the company the full extent of damages resulting from any adverse impact and the company should benefit from a legal assurance to obtain compensation from the partners with whom it has an established business relationship and who are responsible for the adverse impact. |
Or. en
Amendment 35
Proposal for a directive
Recital 58
| Text proposed by the Commission | Amendment |
|---|---|
| (58) The liability regime does not regulate who should prove that the company’s action was reasonably adequate under the circumstances of the case, therefore this question is left to national law. | (58) The company should bear the burden of proof to demonstrate that the company’s action was adequate under the circumstances of the case. |
Or. en
Amendment 36
Proposal for a directive
Recital 61
| Text proposed by the Commission | Amendment |
|---|---|
| (61) In order to ensure that victims of human rights and environmental 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. | (61) In order to ensure that victims of human rights, environmental rule of law 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. |
Or. en
Amendment 37
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (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 and | (a) on obligations for companies regarding actual and potential human rights adverse impacts, environmental adverse impacts and rule of law and good governance adverse impacts, with respect to their own operations, products and services, the operations, products and services of their subsidiaries, and the value chain operations carried out by entities with whom the company has a business relationship |
Or. en
Justification
The inclusion of products and services within a company’s obligation is crucial in order to deal with environmental damage and carbon emissions resulting from the use of a company’s products or services. This is connected to the efforts to reach SDG 13 (Climate Action).
Amendment 38
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point b a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ba) on access to justice, including judicial and non-judicial remedies for victims of the adverse impacts and persons or groups of persons with legitimate interests. |
Or. en
Amendment 39
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| The nature of business relationships as ‘established’ shall be reassessed periodically, and at least every 12 months. | deleted |
Or. en
Amendment 40
Proposal for a directive
Article 1 – paragraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| 2. This Directive shall not constitute grounds for reducing the level of protection of human rights or of protection of the environment or the protection of the climate provided for by the law of Member States at the time of the adoption of this Directive. | 2. This Directive shall not constitute grounds for reducing the level of protection of human rights or of protection of the environment, the protection of the climate or the rule of law and good governance provided for by the law of Member States at the time of the adoption of this Directive. |
Or. en
Amendment 41
Proposal for a directive
Article 1 – paragraph 3
| Text proposed by the Commission | Amendment |
|---|---|
| 3. This Directive shall be without prejudice to obligations in the areas of human rights, protection of the environment and climate change under other Union legislative acts. If the provisions of this Directive conflict with a provision of another Union legislative act pursuing the same objectives and providing for more extensive or more specific obligations, the provisions of the other Union legislative act shall prevail to the extent of the conflict and shall apply to those specific obligations. | 3. This Directive shall be without prejudice to obligations in the areas of human rights, protection of the environment and climate change and the respect of the rule of law and good governance, 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. |
Or. en
Amendment 42
Proposal for a directive
Article 2 – paragraph 1 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) the company had more than 500 employees on average and had a net worldwide turnover of more than EUR 150 million in the last financial year for which annual financial statements have been prepared; | (a) the company had more than 50 employees on average and had a net worldwide turnover of more than EUR 8 million in the last financial year for which annual financial statements have been prepared; |
Or. en
Justification
The scope proposed does not align with UN and OECD standards which apply to all type of companies. All companies have a responsibility to respect human rights, environment, rule of law and good governance and to carry out due diligence. They should do so in a proportional way, depending on the risks, severity of impacts and resources. The current high threshold for company scope means that many companies carrying out activities with widely known adverse impact on human rights in developing countries like those active in the garment industry or diamond trading would not be covered.
Amendment 43
Proposal for a directive
Article 2 – paragraph 1 – point b – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| (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 million in the last financial year for which annual financial statements have been prepared, provided that at least 50% of this net turnover was generated in one or more of the following sectors: | (b) the company did not reach the thresholds under point (a), but had a net worldwide turnover of more than EUR 8 million in the last financial year and at least 50% of this net turnover was generated in one or more of the following sectors: |
Or. en
Amendment 44
Proposal for a directive
Article 2 – paragraph 1 – point b – point ii
| Text proposed by the Commission | Amendment |
|---|---|
| (ii) agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages; | (ii) agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages and sale to consumers; |
Or. en
Amendment 45
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii
| Text proposed by the Commission | Amendment |
|---|---|
| (iii) the extraction 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). | (iii) energy; 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). |
Or. en
Amendment 46
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (iiia) construction, logistics and infrastructures; |
Or. en
Amendment 47
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (iiib) oil and gas production and oil refining sector; |
Or. en
Amendment 48
Proposal for a directive
Article 2 – paragraph 2 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 2. This Directive shall also apply to companies which are formed in accordance with the legislation of a third country, and fulfil one of the following conditions: | 2. This Directive shall also apply to companies which are formed in accordance with the legislation of a third country, and generated a net turnover of more than EUR 8 million in the Union in the financial year preceding the last financial year. |
Or. en
Amendment 49
Proposal for a directive
Article 2 – paragraph 2 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) generated a net turnover of more than EUR 150 million in the Union in the financial year preceding the last financial year; | deleted |
Or. en
Amendment 50
Proposal for a directive
Article 2 – paragraph 2 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) generated a net turnover of more than EUR 40 million but not more than EUR 150 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). | deleted |
Or. en
Amendment 51
Proposal for a directive
Article 2 – paragraph 3
| Text proposed by the Commission | Amendment |
|---|---|
| 3. For the purposes of paragraph 1, the number of part-time employees shall be calculated on a full-time equivalent basis. Temporary agency workers shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company. | 3. For the purposes of paragraph 1, the number of part-time employees shall be calculated on a full-time equivalent basis. Temporary agency workers shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company. Furthermore: |
| (a) the average number of employees shall include: | |
| (i) employees in the company; | |
| (ii) employees in its directly and indirectly-owned subsidiaries and branches; and | |
| (iii) employees in third party undertakings with whom the company or its directly and indirectly-owned subsidiaries and branches have entered into a vertical agreement in return for payment of royalties or an outsourcing agreement or a subcontracting agreement; | |
| (b) the net turnover shall include the net worldwide turnover generated by: | |
| (i) the company; and | |
| (ii) its directly and indirectly-owned subsidiaries and branches, and third party undertakings with whom the company or its directly and indirectly-owned subsidiaries and branches have entered into a vertical agreement in return for payment of royalties or an outsourcing agreement or a subcontracting agreement. | |
| For the purposes of paragraph 2, the net turnover shall include: | |
| (i) the net turnover generated in the Union by the company; | |
| (ii) the net turnover generated in the Union by its directly and indirectly-owned subsidiaries and branches; and | |
| (iii) the net turnover generated in the Union through third-party undertakings with whom the company or its directly and indirectly-owned subsidiaries and branches have entered into a vertical agreement in return for payment of royalties or an outsourcing agreement or a subcontracting agreement. |
Or. en
Amendment 52
Proposal for a directive
Article 3 – paragraph 1 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex, Part II; | (b) ‘adverse environmental impact’ means severe harm on the environment resulting from the violation of one of the prohibitions and obligations established under international environmental law, including, but not limited to, the international environmental conventions listed in the Annex, Part II, a violation within the meaning of Directive (EU) .../... of the European Parliament and of the Council1a, or an adverse impact on one of the following environmental categories: |
| (a) air quality, air pollution and atmosphere; | |
| (b) water pollution, water contamination, access to water and depletion of fresh water; | |
| (c) soil, such as soil pollution, soil contamination, soil erosion and land degradation; | |
| (d) biodiversity, including damage to wildlife, seabed and marine environment, flora, fauna, natural habitats and ecosystems; | |
| (e) human health in accordance with the 'One Health' approach; and | |
| (f) climate, including through greenhouse gas emissions and the destruction or degradation of sinks; | |
| 1a Directive (EU) .../... of the European Parliament and of the Council1a of ... on the protection of the environment through criminal law and replacing Directive 2008/99/EC (OJ L ...). |
Or. en
Amendment 53
Proposal for a directive
Article 3 – paragraph 1 – point c
| Text proposed by the Commission | Amendment |
|---|---|
| (c) ‘adverse human rights impact’ means an adverse impact on protected persons resulting from the violation of one of the rights or prohibitions listed in the Annex, Part I Section 1, as enshrined in the international conventions listed in the Annex, Part I Section 2; | (c) ‘adverse human rights impact’ means any harm to the enjoyment of human rights of a person or group of persons, as enshrined in international conventions, in particular the conventions listed in the Annex, Part I Section 2 and especially the protected position in the Annex, Part I Section 1; |
Or. en
Justification
A wide interpretation of adverse human rights is necessary to ensure that relevant groups are also protected (e.g. indigenous groups) and that rights central to the fulfilling of the Sustainable Development Goals are respected (SDG 5 - Gender Equality; SDG 10 - Reduced inequality)
Amendment 54
Proposal for a directive
Article 3 – paragraph 1 – point c a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ca) "adverse rule of law and good governance impact" means harms caused to the effective functioning of the rule of law and good governance systems in the country, region or territory where the company or its subsidiary or partners in the value chain operate when the obligations and prohibitions pursuant to the legal acts on the international or regional rule of law or good governance are violated, including anti-corruption conventions; "adverse rule of law and good governance impact" also includes impacts on informal structures; |
Or. en
Justification
Insufficient respect of the rule of law and good governance including anti-corruption greatly undermine human rights and the environment, enables companies to avoid responsibility for their adverse impacts, endangers human rights and environmental defenders, weakens the effectiveness of country structures, the quality of public services, the trust for enforcement activities of public authorities (labour inspection, environmental authority) and for judicial proceedings.
Amendment 55
Proposal for a directive
Article 3 – paragraph 1 – point e – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| (e) ‘business relationship’ means a relationship with a contractor, subcontractor or any other legal entities (‘partner’) | (e) ‘business relationship’ means a relationship between a company or one of its subsidiaries and a contractor, subcontractor or any other legal entities (‘partner’) within the value chain: |
Or. en
Amendment 56
Proposal for a directive
Article 3 – paragraph 1 – point f
| Text proposed by the Commission | Amendment |
|---|---|
| (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; | deleted |
Or. en
Justification
The concept of "established business relationship" is not aligned with international standards and would limit the value chain coverage to first tier(s), failing to cover human rights violations happening further down the value chain in developing countries. Indeed, the concept leaves out short-term and informal suppliers and can result in companies opting for other types of business relationship to avoid obligations and responsibility. With such limitation, the impact on informal workers or homeworkers for instance would not be taken into account.
Amendment 57
Proposal for a directive
Article 3 – paragraph 1 – point g
| Text proposed by the Commission | Amendment |
|---|---|
| (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 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; | (g) ‘value chain’ means activities related to the production, distribution or sale of goods, or the provision of services by a company, or any of its directly and indirectly-owned subsidiaries and branches, 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 business relationships of the company. |
Or. en
Amendment 58
Proposal for a directive
Article 3 – paragraph 1 – point h
| Text proposed by the Commission | Amendment |
|---|---|
| (h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value chain, with human rights and environmental requirements resulting from the provisions of this Directive by an auditor which is independent from the company, free from any conflicts of interests, has experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit; | (h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value chain, with human rights, environmental, rule of law and good governance requirements resulting from the provisions of this Directive by an auditor which is independent from the company, free from any conflicts of interests, has experience and competence in environmental, human rights, rule of law and good governance matters and is accountable for the quality and reliability of the audit; |
Or. en
Amendment 59
Proposal for a directive
Article 3 – paragraph 1 – point l
| Text proposed by the Commission | Amendment |
|---|---|
| (l) ‘severe adverse impact’ means an adverse environmental impact or an adverse human rights impact that is especially significant by its nature, or affects a large number of persons or a large area of the environment, or which is irreversible, or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact; | (l) ‘severe adverse impact’ means an adverse environmental impact, an adverse human rights impact or an adverse damage to the functioning of the rule of law and governance systems of the country or the region or territory where the company or its subsidiaries in value chain operate, that is especially significant by its nature, or affects a large number of persons or a large area of the environment, or which is irreversible, or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact, or affects key institutions or structures in charge of providing protection and services to the population or protecting the environment in a manner that makes them unable to perform their functions, interfering in the decision-making processes mediating corruption, violence or intimidation and impeding populations to enjoy their human rights or seriously affecting the environment; or creates insecurity and destabilisation; |
Or. en
Amendment 60
Proposal for a directive
Article 3 – paragraph 1 – point n
| Text proposed by the Commission | Amendment |
|---|---|
| (n) ‘stakeholders’ means the company’s employees, the employees of its subsidiaries, and other individuals, groups, communities or entities whose rights or interests are or could be affected by the products, services and operations of that company, its subsidiaries and its business relationships; | (n) ‘stakeholders’ means: |
| (i) the company’s employees, the employees of its subsidiaries and value chains workers and other individuals, including children, groups, communities or entities, whose rights or interests are or could be affected by the potential or actual adverse impacts on human rights, climate, environment, the rule of law and good governance systems caused by a company, its subsidiaries and its business relationships, including through the value chain; | |
| (ii) other legal or natural persons promoting, protecting and defending, as part of their statutory purpose or otherwise, human rights, the environment, as well as the rule of law and good governance, including trade unions and workers representatives; |
Or. en
Justification
The definition of stakeholder should not only be referred to “affected” people or groups but it should also include those who have “sufficient interest” in the consequences of the damage to the environment, to human rights, to institutions and seek the cessation and reparation. Individuals, groups and communities affected by human rights and environmental violations in developing countries sometimes face obstacles in making their voice heard. This is why it is crucial to ensure that their representatives or other external stakeholders are also acknowledged.
Amendment 61
Proposal for a directive
Article 3 – paragraph 1 – point n a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (na) ‘human rights, environmental and rule of law and good governance defenders’ mean individuals, groups and structures of society, including non-government organisations, that promote, protect and defend human rights, the environment and the rule of law and good governance. |
Or. en
Amendment 62
Proposal for a directive
Article 3 – paragraph 1 – point n b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (nb) ‘vulnerable stakeholders’ means individuals and right-holder groups that find themselves in marginalised situations and situations of vulnerability, due to specific contexts or intersecting factors, including, among others, their sex, gender, age, race, ethnicity, class, education, indigenous identity, migration status, disability, as well as social and economic status, which are the causes of differentiated and often disproportionate adverse impacts, and create discrimination and an additional barrier to participation and access to justice; |
Or. en
Amendment 63
Proposal for a directive
Article 3 – paragraph 1 – point n c (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (nc) ‘meaningful engagement’ means an interactive, responsive, ongoing and gender-responsive, child-sensitive process of engagement with stakeholders, adapted to vulnerable stakeholders, taking place at each phase of and throughout the entire due diligence process, which is proactive, takes place prior to taking decisions that may impact stakeholders, takes their interest into consideration and involves the timely provision of all relevant information needed by stakeholders to make informed judgments, in an accessible and transparent manner, including meaningful information about operations, projects and investments and their actual and potential adverse impacts; |
Or. en
Amendment 64
Proposal for a directive
Article 4 – paragraph 1 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that companies conduct human rights and environmental due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions: | 1. Member States shall ensure that companies conduct human rights, environmental, rule of law and good governance due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions: |
Or. en
Amendment 65
Proposal for a directive
Article 4 – paragraph 1 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) identifying actual or potential adverse impacts in accordance with Article 6; | (b) identifying actual or potential risks and adverse impacts in accordance with Article 6; |
Or. en
Amendment 66
Proposal for a directive
Article 4 – paragraph 1 – point c a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ca) ensuring that due diligence is an ongoing and preventive process carried out on the basis of prioritisation based on the level of severity, likelihood and urgency of potential and actual adverse impacts, the nature and the context of operations in accordance with Article 7; |
Or. en
Amendment 67
Proposal for a directive
Article 4 – paragraph 1 – point d
| Text proposed by the Commission | Amendment |
|---|---|
| (d) establishing and maintaining a complaints procedure in accordance with Article 9; | (d) establishing and maintaining effective grievance mechanisms in accordance with Article 9; |
Or. en
Amendment 68
Proposal for a directive
Article 4 – paragraph 1 – point e
| Text proposed by the Commission | Amendment |
|---|---|
| (e) monitoring the effectiveness of their due diligence policy and measures in accordance with Article 10; | (e) monitoring and assessing the effectiveness of their due diligence policy and measures in accordance with Article 10; |
Or. en
Amendment 69
Proposal for a directive
Article 4 – paragraph 1 – point f
| Text proposed by the Commission | Amendment |
|---|---|
| (f) publicly communicating on due diligence in accordance with Article 11. | (f) publicly reporting on due diligence in accordance with Article 11. |
Or. en
Amendment 70
Proposal for a directive
Article 4 – paragraph 1 – point f a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (fa) ensuring a meaningful and safe engagement with stakeholders throughout the due diligence process in accordance with Article 11a. |
Or. en
Amendment 71
Proposal for a directive
Article 4 – paragraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 1a. Member States shall ensure that companies operating in conflict-affected areas conduct enhanced conflict sensitive due diligence to address the higher risks of gross human rights violations and damages to the environment and to ensure that their operations and activities do not aggravate or finance the conflicts. That enhanced due diligence process shall include a conflict sensitive analysis and an effective, safe and meaningful engagement with stakeholders in accordance with Article 11a. Member States shall ensure that companies operating in the conflict-affected areas respect their international humanitarian law obligations. |
Or. en
Amendment 72
Proposal for a directive
Article 5 – paragraph 1 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. The due diligence policy shall contain all of the following: | 1. Member States shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. The due diligence policy shall be developed with meaningful engagement of stakeholders in accordance with Article 11a and shall contain at least all of the following: |
Or. en
Amendment 73
Proposal for a directive
Article 5 – paragraph 1 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) a description of the company’s approach, including in the long term, to due diligence; | (a) a description of the company’s approach, including in the long term, to due diligence, which includes a comprehensive description of the company’s corporate structure, business relationships, and value chains, including inter alia a list of the company’s business relationships and production sites; |
Or. en
Amendment 74
Proposal for a directive
Article 5 – paragraph 1 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; | (b) a code of conduct to be established with the full engagement of trade unions and workers’ representatives as well as other stakeholders, that describes rules and principles to be followed by the company’s employees and subsidiaries and value chain partners; |
Or. en
Amendment 75
Proposal for a directive
Article 5 – paragraph 1 – point c
| Text proposed by the Commission | Amendment |
|---|---|
| (c) a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. | (c) a description of the processes put in place to implement due diligence, including: |
| (i) the measures taken to verify compliance with the code of conduct including tools, methodology, objectives and timeline of the measures; | |
| (ii) the measures to extend its application to business relationships, including contractual provisions; and | |
| (iii) a description of the measures to ensure the safety, meaningful engagement with stakeholders in compliance with Article 11a. |
Or. en
Amendment 76
Proposal for a directive
Article 5 – paragraph 1 – point c a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ca) a description of the measures aimed at identifying actual and potential adverse impacts in accordance with Article 6; |
Or. en
Amendment 77
Proposal for a directive
Article 5 – paragraph 1 – point c b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (cb) a description of the actual and potential adverse impacts in relation to the company’s direct and indirect operations including through any of its directly and indirectly-owned subsidiaries and branches, business operations and value chains; |
Or. en
Amendment 78
Proposal for a directive
Article 5 – paragraph 1 – point c c (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (cc) a description of the measures aimed at preventing and mitigating potential adverse impacts, and bringing actual adverse impacts to an end and minimising their extent in accordance with Articles 7 and 8; |
Or. en
Amendment 79
Proposal for a directive
Article 5 – paragraph 1 – point c d (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (cd) a description of the grievance mechanism in accordance with Article 9. |
Or. en
Amendment 80
Proposal for a directive
Article 5 – paragraph 1 – subparagraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| When the description of the processes referred to in point (c) includes reference to independent third-party verification, companies shall add to their due diligence policy a comprehensive report on the results of third-party audits over the preceding three years. |
Or. en
Amendment 81
Proposal for a directive
Article 5 – paragraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Member States shall ensure that the companies update their due diligence policy annually. | 2. Member States shall ensure that the companies publish and update their due diligence policy promptly once they identify any new actual and potential adverse impacts and at least annually. |
Or. en
Amendment 82
Proposal for a directive
Article 5 – paragraph 2 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 2a. Member States shall ensure that companies carry out an effective implementation of the due diligence policy. |
Or. en
Amendment 83
Proposal for a directive
Article 6 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 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, in accordance with paragraph 2, 3 and 4. | 1. Member States shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental, rule of law and good governance impacts arising from their own operations or those of their subsidiaries and partners in their value chains, with whom the companies have business relationships, in accordance with paragraph 2, 3 and 4. |
Or. en
Amendment 84
Proposal for a directive
Article 6 – paragraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 1a. Member States shall ensure that companies map their value chains and publicly disclose relevant information including names, locations, types of products and services supplied, and other relevant information concerning subsidiaries and business. |
Or. en
Justification
In order to carry out a comprehensive risk assessment and due diligence process, mapping its value chain partners should be an indispensable first step for companies. Many supply chains are still opaque and communities and workers still have no way to know which company they are manufacturing for, or is using the agricultural products they are harvesting or is behind the infrastructure project they have been evicted for. Systematic value chain mapping and its disclosure will benefit stakeholders in engaging dialogue with companies and holding them accountable.
Amendment 85
Proposal for a directive
Article 6 – paragraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| 2. By way of derogation from paragraph 1, companies referred to in Article 2(1), point (b), and Article 2(2), point (b), shall only be required to identify actual and potential severe adverse impacts relevant to the respective sector mentioned in Article 2(1), point (b). | 2. By way of derogation from paragraph 1, companies referred to in Article 2(1), point (b), and Article 2(2), point (b), shall only be required to identify actual and potential adverse impacts relevant to the respective sector mentioned in Article 2(1), point (b). |
Or. en
Amendment 86
Proposal for a directive
Article 6 – paragraph 3
| Text proposed by the Commission | Amendment |
|---|---|
| 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 only before providing that service.. | 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, rule of law and good governance impacts shall be carried out only before providing that service. |
Or. en
Amendment 87
Proposal for a directive
Article 6 – paragraph 4
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | 4. Member States shall ensure that, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on quantitative and qualitative information, companies make use of appropriate resources, including independent reports and information gathered through the grievance mechanisms provided for in Article 9. Companies shall also have an effective and meaningful engagement with all relevant stakeholders, including workers and potentially affected groups to gather information on actual or potential adverse impacts. |
Or. en
Amendment 88
Proposal for a directive
Article 6 – paragraph 4 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 4a. Member States shall ensure that stakeholders have the right to request additional information from a company regarding the actions taken in accordance with Article 4. The information shall be provided in writing and shall be adequate and comprehensible. The company shall provide information within a reasonable time. If the company refuses a request for information, it shall inform the stakeholders about the grounds for the refusal. Any stakeholder whose request for information is refused may demand a more detailed justification for the refusal. The justification shall be provided in writing within a reasonable timeframe. In the event the company does not provide sufficient justification, ignores the request, or refuses to disclose, whether in part or in full, the requested information, Member States shall ensure that supervisory authorities or a court of law are entitled, at the request of any person with legal standing under national law, to order the disclosure of the information. |
Or. en
Justification
Stakeholders shall have access to all complementary information through a right to request information. This will ensure that stakeholders can request information that has not been reported or disclosed pro-actively by the company.
Amendment 89
Proposal for a directive
Article 7 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 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, in accordance with paragraphs 2, 3, 4 and 5 of this Article. | 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, adverse environmental impacts or adverse rule of law and good governance impacts that have been, or should have been, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article. |
Or. en
Amendment 90
Proposal for a directive
Article 7 – paragraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 1a. For the purposes of paragraph 1, companies shall be required to develop and implement a prevention action plan, with reasonable and clearly defined timelines for appropriate measures and qualitative and quantitative indicators for measuring improvement. The prevention action plan shall be developed with effective and meaningful engagement of stakeholders including trade union organisations and shall be publicly available. | |
| The appropriate measures shall apply to a company’s own operations, subsidiaries as well as direct and indirect business relationships. | |
| In the event that the company is not in a position to prevent or mitigate all the potential adverse impacts at the same time, this plan shall include a prioritisation strategy which shall take into account the level of severity and likelihood of the different potential adverse impacts on human rights, the environment and on the rule of law and good governance systems. |
Or. en
Amendment 91
Proposal for a directive
Article 7 – paragraph 2 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Companies shall be required to take the following actions, where relevant: | 2. For the purposes of paragraphs 1 and 2, companies shall be required to take, where applicable, appropriate measures, including the following actions: |
Or. en
Amendment 92
Proposal for a directive
Article 7 – paragraph 2 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (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; | deleted |
Or. en
Amendment 93
Proposal for a directive
Article 7 – paragraph 2 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chain (contractual cascading). When such contractual assurances are obtained, paragraph 4 shall apply; | (b) obtain contractual assurances based on fair, reasonable and non-discriminatory terms, or other assurances within business relationships throughout the value chain, with respect to the implementation of a prevention action plan;; |
Or. en
Amendment 94
Proposal for a directive
Article 7 – paragraph 2 – point c
| Text proposed by the Commission | Amendment |
|---|---|
| (c) make necessary investments, such as into management or production processes and infrastructures, to comply with paragraph 1; | (c) make necessary investments, such as into management or production processes, infrastructures and product traceability; |
Or. en
Amendment 95
Proposal for a directive
Article 7 – paragraph 2 – point c a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ca) adapt business models and strategies, including trading, procurement, purchasing and pricing practices, in order to prevent and address potential adverse impacts; |
Or. en
Amendment 96
Proposal for a directive
Article 7 – paragraph 2 – point d
| Text proposed by the Commission | Amendment |
|---|---|
| (d) provide 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; | (d) provide targeted and proportionate support for an SME with which the company has a business relationship, where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME; |
Or. en
Amendment 97
Proposal for a directive
Article 7 – paragraph 2 – point d a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (da) require business partners with whom it has a business relationship to provide evidence as regards the respect of workers’ fundamental rights and fundamental freedoms as outlined in Annex I; |
Or. en
Amendment 98
Proposal for a directive
Article 7 – paragraph 2 – point d b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (db) include clauses in commercial agreements with business partners with whom the company has a business relationship concerning the termination of the contract in case of violation of workers’ fundamental rights and fundamental freedoms as outlined in Annex I; |
Or. en
Amendment 99
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| As regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2, 3 and 4, the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen and shall, where the law governing their relations so entitles them to, take the following actions: | As regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2, 3 and 4, because mitigation is not possible or acceptable, or there is no reasonable prospect of change, companies shall refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen. |
| In such cases companies shall take the following actions: |
Or. en
Amendment 100
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) temporarily suspend commercial relations with the partner in question, while pursuing prevention and minimisation efforts, if there is reasonable expectation that these efforts will succeed in the short-term; | (a) temporarily suspend commercial relations with the partner in question, while pursuing prevention and mitigation efforts; |
Or. en
Amendment 101
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. | (b) terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe or if the adverse impact repeated. |
Or. en
Amendment 102
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Companies shall engage in a timely manner, efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the business relationship before making that decision, and shall address the adverse impacts derived from those actions. |
Or. en
Amendment 103
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. | Member States shall provide for the availability of an option to suspend or to terminate the business relationship in contracts governed by their laws. |
Or. en
Amendment 104
Proposal for a directive
Article 8 – paragraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Where the adverse impact cannot be brought to an end, Member States shall ensure that companies minimise the extent of such an impact. | 2. Where the adverse impact cannot be brought to an end, Member States shall ensure that companies minimise such impact to the greatest extent possible. |
Or. en
Amendment 105
Proposal for a directive
Article 8 – paragraph 3 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) neutralise the adverse impact or minimise its extent, including by the payment of damages to the affected persons and of financial compensation to the affected communities. The action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; | (a) neutralise the adverse impact or minimise it, to the greatest extent possible by appropriate remedies, including by the payment of damages and of financial compensation to affected persons, groups of persons or communities and the full compensation of the environmental damage or harm to the rule of law and good governance systems. |
| In the event of payment of damages or financial compensation by companies for adverse impacts resulting from their business partners’ conduct, companies shall benefit from legal assurance to obtain compensation from those partners. The action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; |
Or. en
Amendment 106
Proposal for a directive
Article 8 – paragraph 3 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) where necessary due to the fact that the adverse impact cannot be immediately brought to an end, develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. Where relevant, the corrective action plan shall be developed in consultation with stakeholders; | (b) where necessary due to the fact that the adverse impact cannot be immediately brought to an end, develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. The corrective action plan shall be developed with the meaningful engagement of stakeholders, including trade unions and workers’ representatives, and shall be made publicly available; |
Or. en
Amendment 107
Proposal for a directive
Article 8 – paragraph 3 – point c
| Text proposed by the Commission | Amendment |
|---|---|
| (c) seek contractual assurances from a direct partner with whom it has an established business relationship that it will ensure compliance with the code of conduct and, as necessary, a corrective action plan, including by seeking corresponding contractual assurances from its partners, to the extent that they are part of the value chain (contractual cascading). When such contractual assurances are obtained, paragraph 5 shall apply. | (c) obtain contractual assurances from a direct partner with whom it has a business relationship that it will: |
| (i) ensure compliance with the code of conduct and, as necessary, a corrective action plan; and | |
| (ii) inform workers and other stakeholders of the grievance mechanisms, established by the company or in which the company participates, under Article 9, including by obtaining corresponding contractual assurances from its partners, to the extent that they are part of the value chain (contractual cascading); when such contractual assurances are obtained, paragraph 5 shall apply; |
Or. en
Amendment 108
Proposal for a directive
Article 8 – paragraph 3 – point d
| Text proposed by the Commission | Amendment |
|---|---|
| (d) make necessary investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3; | (d) make necessary investments, such as into management or production processes and infrastructures and product traceability to comply with paragraphs 1, 2 and 3; |
Or. en
Amendment 109
Proposal for a directive
Article 8 – paragraph 3 – point e
| Text proposed by the Commission | Amendment |
|---|---|
| (e) provide 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 corrective action plan would jeopardise the viability of the SME; | (e) provide targeted and proportionate support for an SME with which the company has a business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME; |
Or. en
Amendment 110
Proposal for a directive
Article 8 – paragraph 3 – point f
| Text proposed by the Commission | Amendment |
|---|---|
| (f) in compliance with Union law including competition law, collaborate with other entities, including, where relevant, to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective. | (f) in compliance with Union law including competition law, collaborate with other entities, including to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective. |
Or. en
Amendment 111
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shall refrain from entering into new or extending existing relations with 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: | As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the value chain of which the impact has arisen and shall take one of the following actions: |
Or. en
Amendment 112
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe. | (b) terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe or if the adverse impact repeated. |
Or. en
Amendment 113
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. | Member States shall provide for the availability of an option to suspend or to terminate the business relationship in contracts governed by their laws. |
Or. en
Amendment 114
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Companies shall engage in a timely manner, efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the business relationship before making that decision, and shall address the adverse impacts derived from those actions. |
Or. en
Amendment 115
Proposal for a directive
Article 9 – title
| Text proposed by the Commission | Amendment |
|---|---|
| Complaints procedure | Non-judicial grievance mechanisms |
Or. en
Justification
The current proposal aligns the wording with OECD guidelines and with UNGP 31 which provides qualification elements to determine the grievance mechanism’s independence which it is a key feature of such a mechanism.
Amendment 116
Proposal for a directive
Article 9 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chains. | 1. Member States shall ensure that companies establish or participate in effective grievance mechanisms at operational level, both as an early-warning risk-awareness and as a remediation system, that can be used by persons and organisations listed in paragraph 2 to raise grievances and request remedies where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts or adverse impacts on the rule of law and good governance systems with respect to the companies’ own operations, the operations of their subsidiaries and their value chains. |
| Member States shall ensure that companies could provide such mechanisms through collaborative arrangements with other companies or organisations, by participating in multi-stakeholder grievance mechanisms or joining a Global Framework Agreement. | |
| Member States shall ensure that grievance mechanisms are public, legitimate, accessible, predictable, safe, equitable, transparent, rights-compatible, and adaptable as set 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. Such mechanisms shall provide for the possibility to raise concerns either anonymously or confidentially, as appropriate, in accordance with national law. | |
| Member States shall ensure that actual and potentially affected rights holders and other stakeholders, including inter alia trade unions and other workers representatives participate in the design and evaluation of such grievance mechanisms and in the provision of remedy. | |
| Member States shall ensure that companies provide information to actual and potentially affected rightholders and other stakeholders on such grievance mechanisms, including on how to access them, decisions and remedies relating to a company and how the company is implementing them. All information shall be published in a manner that does not endanger the stakeholders’ safety, including by not disclosing their identity. | |
| Grievance mechanisms shall have the right to propose solutions to the companies on how potential or actual adverse impacts may be addressed. |
Or. en
Justification
In accordance with international standards, non-judicial remedies represent a useful mechanism to provide remedies to victims. While it can never replace judicial processes, it can - in some instances - provide some remedies and reparation to victims; in particular to provide financial compensation or employment reinstatement.
Amendment 117
Proposal for a directive
Article 9 – paragraph 2 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Member States shall ensure that the complaints may be submitted by: | 2. Member States shall ensure that the grievances may be raised by: |
Or. en
Amendment 118
Proposal for a directive
Article 9 – paragraph 2 – point c
| Text proposed by the Commission | Amendment |
|---|---|
| (c) civil society organisations active in the areas related to the value chain concerned. | (c) civil society organisations and human rights, environmental, rule of law and good governance defenders; |
Or. en
Amendment 119
Proposal for a directive
Article 9 – paragraph 2 – point c a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ca) other persons having a sufficient interest or maintaining the impairment of a right. |
Or. en
Amendment 120
Proposal for a directive
Article 9 – paragraph 3
| Text proposed by the Commission | Amendment |
|---|---|
| 3. Member States shall ensure that the companies establish a procedure for dealing with complaints referred to in paragraph 1, including a procedure when the company considers the complaint to be unfounded, 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. | 3. Member States shall ensure that the companies establish a procedure for dealing with grievances referred to in paragraph 1, including a procedure when the company considers the grievance to be unfounded, and inform all relevant stakeholders, including workers and trade unions, of those procedures. Member States shall ensure that where the grievance is well-founded, the adverse impact that is the subject matter of the grievance is deemed to be identified within the meaning of Article 6. The company shall publicly report on how grievances are taken into account in identifying and responding to risks or violations, including inter alia statistics about the grievance received, the types of adverse impacts referred to, their treatment by companies and the publication of processed and anonymised cases. |
Or. en
Amendment 121
Proposal for a directive
Article 9 – paragraph 4 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 4. Member States shall ensure that complainants are entitled | 4. Member States shall ensure that complainants and their representatives are entitled: |
Or. en
Amendment 122
Proposal for a directive
Article 9 – paragraph 4 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) to request appropriate follow-up on the complaint from the company with which they have filed a complaint pursuant to paragraph 1, and | (a) to receive timely, effective, appropriate follow-up in writing on the grievance, from the grievance mechanism with which they have filed a grievance pursuant to paragraph 1, providing substantiated reasoning as to whether the claim has been considered unfounded or founded; |
Or. en
Amendment 123
Proposal for a directive
Article 9 – paragraph 4 – point a a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (aa) to receive guarantees of non-retaliation, confidentiality and anonymity for all actual and potentially affected stakeholders; |
Or. en
Amendment 124
Proposal for a directive
Article 9 – paragraph 4 – point a b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ab) to receive timely and effective information on the steps and actions taken in the context of a specific grievance filed through the independent grievance mechanism; |
Or. en
Amendment 125
Proposal for a directive
Article 9 – paragraph 4 – point b
| Text proposed by the Commission | Amendment |
|---|---|
| (b) 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. | (b) to engage with the grievance mechanisms and the company’s representatives at an appropriate level to discuss potential or actual adverse impacts that are the subject matter of the grievance. |
Or. en
Amendment 126
Proposal for a directive
Article 9 – paragraph 4 – point b a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (ba) to request that companies fully remediate or contribute to the full remediation of actual adverse impacts. The remedy shall be proportionate to the significance and scale of the adverse impact. |
Or. en
Amendment 127
Proposal for a directive
Article 9 – paragraph 4 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 4a. Member States shall ensure that recourse to a grievance mechanism does not preclude the claimants from having access to the substantiated concerns procedure referred to in Article 19, to the civil liability referred to in Article 22, or to any other judicial mechanism or other non-judicial grievance mechanism. Member States shall also ensure that the right to resort to the judicial bodies and courts is not conditional on the prior use of the grievance mechanism. Member States shall ensure that any non-judicial remediation efforts are in parallel to encouraging collective bargaining and recognition of trade unions and should by no means undermine the role of legitimate trade unions in addressing labour-related disputes. |
Or. en
Amendment 128
Proposal for a directive
Article 10 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that companies carry out periodic assessments of their own operations and measures, those of their subsidiaries and, where related to the value chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. Such assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy shall be updated in accordance with the outcome of those assessments. | Member States shall ensure that companies carry out periodic assessments of their own operations and measures, those of their subsidiaries and, and those of the value chains of the company, those of their business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of adverse human rights, environmental and rule of law and good governance impacts. |
| Such assessments shall be based on qualitative and quantitative indicators and be carried out with a meaningful engagement of stakeholders. They shall be conducted at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy, the prevention plan and the corrective action plan shall be updated and the operations and measures modified in accordance with the outcome of those assessments. | |
| The company shall provide a public report of the outcome of the assessments including copies of third-party verification audits and shall inform stakeholders, including trade unions and workers’ representatives. |
Or. en
Amendment 129
Proposal for a directive
Article 11 – title
| Text proposed by the Commission | Amendment |
|---|---|
| Communicating | Reporting requirements |
Or. en
Justification
Taking into account that due diligence is aimed at addressing adverse impacts and at allowing victims and interested people or groups to bring claims or legal actions, it is crucial that companies are required to publish comprehensive information about inter alia their due diligence policy, their action plans, their assessments to be complemented with a comprehensive description of the company’s corporate structure, business relationships, and value chain including inter alia a list of the company’s established business relationships and production sites.
Amendment 130
Proposal for a directive
Article 11 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in a language customary in the sphere of international business. The statement shall be published by 30 April each year, covering the previous calendar year. | Notwithstanding the reporting requirements under Articles 19a and 29a of Directive 2013/34/EU, Member States shall ensure that companies report on the matters covered by this Directive by publishing on their website, in an accessible and timely manner, their due diligence policies, prevention action plans, correction action plans, procedures for dealing with grievances, reports on the outcome of the assessments as well as other relevant information. Member States shall ensure that companies publish and update their due diligence policies promptly once they identify any new actual and potential adverse impacts and at least annually. |
Or. en
Amendment 131
Proposal for a directive
Article 11 – paragraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| The Commission shall adopt delegated acts in accordance with Article 28 concerning the content and criteria for such reporting under paragraph 1, specifying information on the description of due diligence, potential and actual adverse impacts and actions taken on those. | The Commission shall adopt delegated acts in accordance with Article 28 concerning the content and criteria for such reporting under paragraph 1, specifying information on the description of due diligence, potential and actual adverse impacts and actions taken on those, as well as related information in order to support companies, their subsidiaries and business partners operating in developing countries to identify, prevent and effectively address actual or potential adverse impacts on human rights, the environment and the rule of law and good governance systems. |
Or. en
Amendment 132
Proposal for a directive
Article 11 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Article 11a | |
| Stakeholder engagement | |
| 1. Member States shall ensure that companies effectively, safely and meaningfully engage stakeholders when fulfilling their obligations pursuant to Articles 4 to 11. Companies shall be required to ensure: | |
| (a) that stakeholders are engaged regularly and throughout the entire due diligence process, as provided for in Articles 4 to 11; | |
| (b) effective and appropriate modes of engagement, including: appropriate timelines for stakeholder engagement activities; identifying and addressing potential barriers to participation; adequate protection of stakeholders from the risk of reprisals; ensuring anonymity, confidentiality and proactively seeking the engagement of marginalised or vulnerable stakeholders and ensuring a gender-responsive and child-friendly approach; | |
| (c) that they regularly provide meaningful information to stakeholders about actual and potential adverse human rights, environmental, rule of law and good governance impacts of particular operations, projects and investments, in a timely, culturally sensitive, and accessible manner taking into account specificities of the stakeholder group including children and gender; and | |
| d) in case of significant changes in operations, activities or operating context, they pro-actively communicate and provide complementary and intermediary reporting. | |
| 2. Companies shall respect the rights of indigenous peoples, as laid out in the United Nations Declaration on the Rights of Indigenous Peoples, including free, prior and informed consent and indigenous peoples’ right to self-determination. | |
| 3. Companies shall pay special attention to overlapping vulnerabilities and intersecting factors in stakeholder engagement, including by adopting a gender-responsive and a child-friendly approach. | |
| 4. Member States shall ensure that, when stakeholders request to participate in the engagement referred to in paragraph 1, companies assess and timely respond to those requests. | |
| 5. Stakeholders shall also be informed by the company on its due diligence policy and on its implementation, to which they shall be able to contribute. In particular, workers’ representatives shall be informed by the company on its due diligence policy and on its implementation, to which they shall be able to contribute, in accordance with Directives 2002/14/EC1a and 2009/38/EC1b of the European Parliament and of the Council and Council Directive 2001/86/EC1c. | |
| 1a Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29). | |
| 1b Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (OJ L 122, 16.5.2009, p. 28). | |
| 1c Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees (OJ L 294, 10.11.2001, p. 22). |
Or. en
Amendment 133
Proposal for a directive
Article 13 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | 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, the European Union Agency for Criminal Justice Cooperation (Eurojust), the European Union Agency for Law Enforcement Cooperation (Europol), the European Public Prosecutor’s Office, the European Anti-Fraud Office (OLAF) and where appropriate with international bodies having expertise in due diligence, may issue guidelines concerning: |
| - specific sectors and in particular high-risk sectors of economic activity leading to severe adverse impacts; | |
| - impacts on the rule of law and good governance systems; | |
| - specific adverse impacts; | |
| - implementation of enhanced due diligence in conflict-affected areas; | |
| - safe, effective and meaningful engagement with stakeholders in all due diligence processes; | |
| - mapping of companies value chains and efficient process to monitor business partners’ behaviours throughout the value chains; | |
| - specific corporate polices such as trading, procurement, purchasing and pricing; | |
| - facilitating access to justice for victims and persons, groups of persons and organisations with legitimate interests; | |
| - prevention and mitigation of retaliation risks faced by stakeholders including human rights, environmental, rule of law and good governance defenders for their involvement in due diligence processes; | |
| - responsible disengagement from a harmful business relationships or from a specific area or economic sector; and | |
| - cooperation with partner countries’ authorities in order to carry out investigations. |
Or. en
Amendment 134
Proposal for a directive
Article 14 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall, in order to provide information and support to companies and the partners with whom they have established business relationships in their value chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly dedicated websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs that are present in the value chains of companies. | 1. Member States shall, in order to provide information and support to companies and the partners with whom they have business relationships in their value chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly dedicated websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs that are present in the value chains of companies. |
Or. en
Amendment 135
Proposal for a directive
Article 14 – paragraph 3 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 3a. The Commission shall support safe participatory collection of independent data on adverse human rights, environmental, rule of law and good governance impacts and undertake necessary actions for the data to be considered. |
Or. en
Amendment 136
Proposal for a directive
Article 14 – paragraph 3 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 3b. The Commission, in particular in developing countries, shall provide measures aimed at: | |
| - building an enabling environment and protecting civic space, in particular, supporting freedom of association and expression, the protection of human rights, environmental, rule of law and good governance defenders at risk and supporting civil society organisations and other stakeholders in actively participating in due diligence processes; | |
| - raising awareness and capacity-building for communities and stakeholders, including trade unions, non-governmental organisations and local associations on human rights, environmental, rule of law and good governance requirements, companies obligations and on filing judicial and non-judicial complaints; | |
| - monitoring the respect for human rights, environmental, rule of law and good governance standards and obligations which shall include the research, investigation and implementation of due diligences processes; this shall include supporting the development of grassroots and worker-driven models; | |
| - supporting access to justice for victims and persons and groups of persons with legitimate interests, including supporting submitting substantiated concerns pursuant to Article 19 to the supervisory authorities and supporting legal experts and human rights, environment, rule of law and good governance law firms; and | |
| - supporting partner countries in the implementation, monitoring and enforcement of human rights, environmental, rule of law and good governance standards and obligations. |
Or. en
Amendment 137
Proposal for a directive
Article 14 – paragraph 4
| Text proposed by the Commission | Amendment |
|---|---|
| 4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States may facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. | 4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States may facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. The criteria for the assessment of fitness of an industry scheme shall comprise the inclusion of the perspectives of civil society in audits and the steering of the standards and grievance mechanisms according to the effectiveness criteria of the United Nations Guidance Principles on Business and Human Rights. |
| Reliance on industry schemes and multi-stakeholder initiatives shall not absolve the company of its individual responsibility to perform due diligence or prevent it from being held liable. |
Or. en
Amendment 138
Proposal for a directive
Article 17 – paragraph 8 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 8a. Member States shall ensure that the supervisory authorities have the qualifications and expertise in human rights, environment, rule of law and good governance to effectively perform their duties and exercise their powers. |
Or. en
Amendment 139
Proposal for a directive
Article 19 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that natural and legal persons are entitled to submit substantiated concerns to any supervisory authority when they have reasons to believe, on the basis of objective circumstances, that a company is failing to comply with the national provisions adopted pursuant to this Directive (‘substantiated concerns’). | 1. Member States shall ensure that natural and legal persons are entitled to submit substantiated concerns to any supervisory authority when they have reasons to believe, on the basis of objective circumstances, that a company is failing to comply with the national provisions adopted pursuant to this Directive (‘substantiated concerns’), without prejudice to any legal action that any natural and legal persons may initiate in accordance with Article 22. |
Or. en
Amendment 140
Proposal for a directive
Article 20 – paragraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 1a. Member States shall provide for at least the following administrative measures and sanctions within their national law: | |
| (a) a public statement indicating the natural person or the legal entity responsible, including the company directors and the nature of the infringement; | |
| (b) exclusion from entitlement to public benefits or aid; | |
| (c) temporary or permanent exclusion from access to public funding, including tender procedures, grants and concessions; and | |
| (d) temporary or permanent disqualification from the carrying out of commercial activities. |
Or. en
Amendment 141
Proposal for a directive
Article 22 – paragraph -1 (new)
| Text proposed by the Commission | Amendment |
|---|---|
| -1. Member States shall ensure that companies are strictly liable for damages arising from any adverse impact resulting from their own operations, products or service and from the operations, products or services of their subsidiaries. |
Or. en
Justification
This amendment distinguishes cases where the adverse impact result from the company’s own operations or subsidiaries where strictly liable should be the rule, from cases where the adverse impact result from the company’s business relationships. In this case, companies shall be liable anyway so as to favour payment of damages to victims and benefit from a legal assurance to then obtain compensation from their business partners.
Amendment 142
Proposal for a directive
Article 22 – paragraph 1 – introductory part
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that companies are liable for damages if: | 1. Member States shall ensure that companies are liable for damages arising from any adverse impact resulting from their partners’ operations, products or services if: |
Or. en
Justification
This amendment distinguishes cases where the adverse impact result from the company’s own operations or subsidiaries where strictly liable should be the rule, from cases where the adverse impact result from the company’s business relationships. In this case, companies shall be liable anyway so as to favour payment of damages to victims and benefit from a legal assurance to then obtain compensation from their business partners.
Amendment 143
Proposal for a directive
Article 22 – paragraph 1 – point a
| Text proposed by the Commission | Amendment |
|---|---|
| (a) they failed to comply with the obligations laid down in Articles 7 and 8 and; | (a) they failed to comply with the obligations laid down in Articles 5, 6,7, 8, 9, 10 and 11 and; |
Or. en
Amendment 144
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| Notwithstanding paragraph 1, Member States shall ensure that where a company has taken the actions referred to in Article 7(2), point (b) and Article 7(4), or Article 8(3), point (c), and Article 8(5), it shall not be liable for damages caused by an adverse impact arising as a result of the activities of an indirect partner with whom it has an established business relationship, unless it was unreasonable, in the circumstances of the case, 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 extent of the adverse impact. | Notwithstanding paragraph 1, Member States shall ensure that any person or group of persons with a legitimate interest may be entitled to obtain from companies the full extent of damages resulting from any adverse impact. Member States shall ensure that companies shall benefit from a legal assurance to obtain compensation from their subsidiaries and the partners with whom they have a business relationship and who are responsible for the adverse impact. |
Or. en
Justification
The proposal foresees that companies may not be liable for damages caused by an adverse impact arising as a result of the activities of an indirect partner. This exclusion of liability reduces incentives for multinationals to tackle adverse impacts resulting from activities of indirect suppliers. The suggested amendment introduce a civil liability regime that would allow people affected by violations to obtain full compensation of harm.
Amendment 145
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that liability regimes put in place pursuant to this Article address existing barriers to access to justice and in particular: | |
| - allow for collective redress; | |
| - allow for representative actions by organisations acting on behalf of and for the protection of the collective interests of victims; | |
| - ensure that the costs of the proceedings based on provisions of national law transposing this Directive do not prevent claimants from having access to courts; and | |
| - establish reasonable and appropriate limitation periods for claimants or groups of claimants to bring cases to competent courts. |
Or. en
Amendment 146
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall apply suspension of limitation periods for the duration of procedures linked to complaints submitted through grievance mechanisms pursuant to Article 9, to actions taken by supervisory authorities in accordance with Article 18 and to substantiated concerns submitted to supervisory authorities pursuant to Article 19. |
Or. en
Amendment 147
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| In the assessment of the existence and extent of liability under this paragraph, due account shall be taken of the company’s efforts, insofar as they relate directly to the damage in question, to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided pursuant to Articles 7 and 8, as well as any collaboration with other entities to address adverse impacts in its value chains. | deleted |
Or. en
Amendment 148
Proposal for a directive
Article 22 – paragraph 3
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | 3. The civil liability of a company for damages arising under this provision shall be without prejudice to joint and several civil liability of its subsidiaries or of any direct and indirect business partners in the value chain. |
Or. en
Amendment 149
Proposal for a directive
Article 22 – paragraph 4
| Text proposed by the Commission | Amendment |
|---|---|
| 4. The civil liability rules under this Directive shall be without prejudice to Union or national rules on civil liability related to adverse human rights impacts or to adverse environmental impacts that provide for liability in situations not covered by or providing for stricter liability than this Directive. | 4. The civil liability rules under this Directive shall be without prejudice to Union or national rules on civil liability related to adverse human rights impacts, to adverse environmental impacts or adverse rule of law and good governance impacts that provide for liability in situations not covered by or providing for stricter liability than this Directive. |
Or. en
Amendment 150
Proposal for a directive
Article 22 – paragraph 4 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 4a. Member States shall ensure that the company shall bear the burden of proof to demonstrate that the company’s action was adequate under the circumstances of the case. |
Or. en
Amendment 151
Proposal for a directive
Article 23 – paragraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that companies refrain from retaliation against any stakeholders and their representatives for exercising their rights under this Directive, and shall identify, prevent, mitigate and monitor the risk of retaliation and reprisal, related to their business relationships and their value chains. |
Or. en
Amendment 152
Proposal for a directive
Article 23 – paragraph 1 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that companies are liable for retaliation actions against stakeholders and their representatives, including whistleblowers and human rights, environmental, rule of law and good governance defenders, taken by themselves or by actors mandated to do so. |
Or. en
Amendment 153
Proposal for a directive
Article 25 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that, when fulfilling their duty to act in the best interest of the company, directors of companies referred to in Article 2(1) take into account the consequences of their decisions for sustainability matters, including, where applicable, human rights, climate change and environmental consequences, including in the short, medium and long term. | 1. Member States shall ensure that, when fulfilling their duty to act in the best interest of the company, directors of companies referred to in Article 2(1) take into account the consequences of their decisions for sustainability matters, including, where applicable, human rights, climate change and environmental consequences, as well as impacts on the rule of law and good governance systems of the countries, regions or territories where the company, its subsidiaries or partners in the supply chain perform their operations, including in the short, medium and long term. |
Or. en
Amendment 154
Proposal for a directive
Article 26 – paragraph 1
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that directors of companies referred to in Article 2(1) are responsible for putting in place and overseeing the due diligence actions referred to in Article 4 and in particular the due diligence policy referred to in Article 5, with due consideration for relevant input from stakeholders and civil society organisations. The directors shall report to the board of directors in that respect. | 1. Member States shall ensure that directors of companies referred to in Article 2(1) are responsible for putting in place and overseeing the due diligence actions referred to in Article 4 and in particular the due diligence policy referred to in Article 5,with mandatory meaningful engagement and due consideration for relevant input from stakeholders and civil society organisations including trade unions, workers and persons and groups of persons affected or with legitimate interests in the adverse impacts arising from operations carried out by the company, its subsidiaries or business partners in the value chain. The directors shall report to the board of directors in that respect. |
Or. en
Amendment 155
Proposal for a directive
Annex I – Part I – section 2 – indent 8 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| - International Convention for the Protection of All Persons from Enforced Disappearance; |
Or. en
Amendment 156
Proposal for a directive
Annex I – Part I – section 2 – indent 23 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| - Occupational Safety and Health Convention, 1941 |
Or. en
Amendment 157
Proposal for a directive
Annex I – Part I – section 2 – indent 23 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| - Promotional Framework for Occupational Safety and Health Convention, 2006 |
Or. en
Amendment 158
Proposal for a directive
Annex I – Part I – section 2 – indent 23 c (new)
| Text proposed by the Commission | Amendment |
|---|---|
| - Violence and Harassment Convention, 2019 |
Or. en
Amendment 159
Proposal for a directive
Annex I – Part I – section 2 – indent 23 d (new)
| Text proposed by the Commission | Amendment |
|---|---|
| - Convention on the Protection of the Rights of All Migrant Workers and Members of their Families |
Or. en