opinion parliamentary committee, 25 January 2023
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 ITRE-AD-736458 · (COM(2022)0071 – C90050/2022 – 2022/0051(COD))
Committee on Industry, Research and Energy · Rapporteur: Martina Dlabajová
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Short justification 178 paragraphs
In general, the rapporteur supports the long-term aim presented in the Commission’s proposal that must be however aligned to current needs of businesses, especially SMEs and the “one in, one out” principle. There is a clear need to provide a harmonised legal framework and level playing field, if we want to improve trust in companies’ commitments for human rights’ enforcement and environmental protection while incentivising sustainable investment, however the legislative proposal should not create new unnecessary burdens, especially for SMEs in existing and future supply chains. On the other hand, there is a need to avoid distortive discrepancies emerging between Member States to improve predictability and certainty for the industry.
The rapporteur strongly supports the Commission’s proposal to keep SMEs and Microenterprises out of the proposed rules. The financial and administrative burden to set up and implement a due diligence process would be too high for small and family businesses that will be already indirectly affected by obligations stemming from large companies amongst their customers. Accordingly, the proposal's requirements to assess potential adverse effects on them and to provide them with appropriate support are justified and needed. Only such an approach can achieve the goal of supporting SMEs not only from the Member States and the EU, but also from companies within supply chains outside the EU.
The rapporteur is nonetheless of the opinion that the introduction of the proposed rules along the value chain should be gradual and therefore suggest to focus on the supply chain instead of the whole value chain. The Commission´s proposal also contains numerous unclear legal concepts that are open to interpretation, and thus considers in contradiction to legal certainty and harmonisation intentions. Any obligation should only occur in the context of activity related to a company’s own operations or through a direct business relationship. The proposal would only cover companies contributing to the production of goods, including their development, or the provision of services, as "direct partners". The directive should not apply to downstream companies that only use or receive products up and/or take them to their end of life. This would represent excessive burden for those companies, who usually operate with many suppliers compared to upstream companies with a reduced number of suppliers. This change should also be reflected in the definition of established business relationship in order to provide legal certainty to companies and ensure that only direct relationship is concerned.
Finally, on liability, the rapporteur is of the opinion that it should be left to the Member States to align to already existing civil liability regime. Given the impact this could have on companies, some Member States exclude specific liability regime and favour an obligation of mean rather than an obligation of result. This possibility for Member States of using their own tests to consider accountability and appropriate remedy should remain.
AMENDMENTS
The Committee on Industry, Research and Energy 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 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 and environmental impacts connected with companies’ own operations, subsidiaries and supply chains. |
Amendment 2
Proposal for a directive
Read the rest (166 paragraphs)
Recital 14 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (14 a) In line with relevant Union and national law, all companies in the Union need to adhere to the protection of human rights and environmental standards. If that is not the case, Member States and their relevant authorities are required to enforce the legislation. Thus, there is no need for companies within the Union to control each other’s conduct. The goal of due diligence is to tackle risks in cases where human rights and environmental standards are not or cannot be enforced. Therefore, tracing activities in the upstream supply chain shall be focused on direct business relationships outside of the European Union. |
Amendment 3
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 within their means to set up and carry out risk based due diligence measures, with respect to their own operations, their subsidiaries, as well as their direct business relationships with entities from third countries throughout their supply 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’. While companies can be asked to prevent or mitigate adverse impacts through due diligence policies, it is still in the responsibility of states to actually combat human rights violations worldwide. 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. The measures taken should be proportionate and commensurate to the likelihood and severity of the company’s potential or actual adverse impacts and its specific circumstances, particularly its sector of activity, the size and length of its supply chain, the size of the company, its capacity, resources and leverage. |
Amendment 4
Proposal for a directive
Recital 17
| Text proposed by the Commission | Amendment |
|---|---|
| (17) Adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their value chains, in particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal. In order for the due diligence to have a meaningful impact, it should cover human rights and environmental adverse impacts generated throughout the life-cycle of production and use and disposal of product or provision of services, at the level of own operations, subsidiaries and in value chains. | (17) Adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their supply chains, in particular at the level of raw material sourcing and manufacturing. In order for the due diligence to have a meaningful impact, it should cover human rights and environmental adverse impacts generated throughout the production, at the level of own operations, subsidiaries and in supply chains. |
Amendment 5
Proposal for a directive
Recital 17 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (17 a) Companies should be allowed to set up a prioritisation strategy based on a risk assessment and a risk-based monitoring methodology for identifying potential adverse impacts. Companies should consider the level of severity, likelihood and urgency of the different adverse impacts, the nature and context of their operations, including geography, the scope of the risks, their scale and how irremediable they might be, and if necessary, use the prioritisation policy in dealing with them. |
Amendment 6
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 supply chain should cover activities directly necessary for the production of a good or provision of services by a company, including the development of the product or the service as well as the related activities of direct business relationships of the company. It should encompass upstream 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. |
Amendment 7
Proposal for a directive
Recital 19
| Text proposed by the Commission | Amendment |
|---|---|
| (19) As regards regulated financial undertakings providing loan, credit, or other financial services, “value chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considered to be part of the value chain. The activities of the companies or other legal entities that are included in the value chain of that client should not be covered. | (19) As the financial services industry is already subject to several provisions and obligations under existing legislation such as the Sustainable Finance Disclosure Regulation (SFDR) or the Capital Requirements Directive (CRD), the risk of overlap, lack of clarity and undue burden is evident. Furthermore the risk of limited financing to the European economy should not be underestimated. A possible future inclusion should therefore be preceded by a proper impact assessment. |
Amendment 8
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 and prioritise the adverse impacts in their supply chain based on a risk assessment and risk-based monitoring and to make it possible for them to exercise appropriate leverage, the due diligence obligations should be limited in this Directive to business relationships. For the purpose of this Directive, business relationships should mean a relationship with a business partner from a third country that are necessary for the supply of goods or the provision of services that are necessary for the production of the companies' product or the provision of and use of the relevant service, with whom the company has a commercial agreement, and that does not represent a negligible or merely ancillary part of the supply chain. |
Amendment 9
Proposal for a directive
Recital 20 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (20 a) In order to offset of the regulatory burden for citizens, administrations and businesses introduced by this Directive, the Commission should review the Union regulatory framework in relevant policy area by applying the “one in, one out” principle as set out in the Commission communication of 29 April 2021 entitled “Better Regulation: Joining forces to make better laws”, and, where appropriate, present legislative proposals for the amendment or deletion of provisions in other Union legislative acts in the same policy area. |
Amendment 10
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 5000 employees on average and a net turnover in the EU 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 1000 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. |
| 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). |
Amendment 11
Proposal for a directive
Recital 37
| Text proposed by the Commission | Amendment |
|---|---|
| (37) As regards direct and indirect business relationships, industry cooperation, industry schemes and multi-stakeholder initiatives can help create additional leverage to identify, mitigate, and prevent adverse impacts. Therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. Companies could assess, at their own initiative, the alignment of these schemes and initiatives with the obligations under this Directive. In order to ensure full information on such initiatives, the Directive should also refer to the possibility for the Commission and the Member States to facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. | (37) As regards direct business relationships, industry cooperation, industry schemes and multi-stakeholder initiatives can help create additional leverage to identify, mitigate, and prevent adverse impacts. Therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. Member States should assess the alignment of these schemes and initiatives with the obligations under this Directive. In order to ensure full information on such initiatives, the Commission and the Member States should facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, should issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. |
Amendment 12
Proposal for a directive
Recital 45
| Text proposed by the Commission | Amendment |
|---|---|
| (45) In order to facilitate companies’ compliance with their due diligence requirements through their value chain and limiting shifting compliance burden on SME business partners, the Commission should provide guidance on model contractual clauses. | (45) In order to facilitate companies’ compliance with their due diligence requirements through their supply chain and limiting shifting compliance burden on SME business partners, the Commission should provide guidance on model contractual clauses including with a focus on SMEs, and microenterprises that could be impacted by this Directive. |
Amendment 13
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, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Agency for Small and Medium enterprises, and where appropriate with international bodies having expertise in due diligence, should issue guidelines in digital, free of charge and easily accessible format, including for specific sectors or specific adverse impacts, an overview of applicable industry initiatives, and practical guidance on proportionality and prioritisation, in terms of impacts, sectors and geographical areas. Furthermore, the guidelines should include a list of areas, whether sectoral or geographic, such as regions and countries where adverse human rights impacts and/or environmental adverse impacts are unlikely or likely to occur. Companies should not be required to perform due diligence on parts of the supply chain linked to areas where adverse impacts are unlikely to occur. Countries or regions, where adverse impacts are unlikely to occur, could be the European Economic Area, the United States of America, the United Kingdom, Canada, Australia, New Zealand, and Japan. One criteria for this list could be a free-trade agreement between the European Union and the third country or region. The guidelines should be made available no later than 18 months after the date of entry into force of this Directive. The Commission should regularly review the relevance of its guidelines and adapt them to new best practices. Country factsheets should be updated regularly by the Commission and made publicly available in order to provide up-to-date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission should collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub-sectors, and products. |
Amendment 14
Proposal for a directive
Recital 47
| Text proposed by the Commission | Amendment |
|---|---|
| (47) Although SMEs are not included in the scope of this Directive, they could be impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate financial or administrative burden on SMEs, many of which are already struggling in the context of the global economic and sanitary crisis. In order to support SMEs, Member States should set up and operate, either individually or jointly, dedicated websites, portals or platforms, and Member States could also financially support SMEs and help them build capacity. Such support should also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME, are also encouraged to support them to comply with due diligence measures, in case such requirements would jeopardize the viability of the SME and use fair, reasonable, non-discriminatory and proportionate requirements vis-a-vis the SMEs. | (47) Although SMEs are not included in the scope of this Directive, they could be impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate financial or administrative burden on SMEs, many of which are already struggling in the context of the global economic and sanitary crisis. In order to support SMEs, Member States should set up and operate supporting materials, either individually or jointly, such as dedicated websites, toolkits, portals or platforms, and Member States should also financially support SMEs and help them build capacity to comply with this Directive. Such support should also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME, are also encouraged to support them to comply with due diligence measures, in case such requirements would jeopardize the viability of the SME and use fair, reasonable, non-discriminatory and proportionate requirements vis-a-vis the SMEs. |
Amendment 15
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 and environmental adverse impacts, with respect to their own core business operations, the operations of their subsidiaries, and the supply chain operations carried out by entities in third countries with whom the company has a business relationship and |
Amendment 16
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 |
Amendment 17
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 5000 employees on average including its subsidiaries and had a net turnover of more than EUR 150 million in the EU in the last financial year for which annual financial statements have been prepared; |
Amendment 18
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 more than 1000 employees on average and had a net turnover of more than EUR 40 million in the EU in the last financial year for which annual financial statements have been prepared, provided that at least 50% of this net turnover was generated in one or more of the following sectors: |
Amendment 19
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). | (b) generated a net turnover of more than EUR 40 million in the Union in the financial year preceding the last financial year, provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1, point (b). |
Amendment 20
Proposal for a directive
Article 2 – paragraph 2 – point b a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (b a) their subsidiaries or branch offices established in the European Union and controlled by the third country company generated collectively a combined net turnover of more than EUR 40 million in the Union in the financial year preceding the last financial year and have a branch office or subsidiary in the Union. |
Amendment 21
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 partner’ means a legal entity |
Amendment 22
Proposal for a directive
Article 3 – paragraph 1 – point e – point i
| Text proposed by the Commission | Amendment |
|---|---|
| (i) with whom the company has a commercial agreement or to whom the company provides financing, insurance or reinsurance, or | (i) with whom the company has a commercial agreement and |
Amendment 23
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii
| Text proposed by the Commission | Amendment |
|---|---|
| (ii) that performs business operations related to the products or services of the company for or on behalf of the company; | (ii) that performs business operations directly related to the products or services of the company for or on behalf of the company; |
Amendment 24
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; | (f) ‘business relationship’ means a relationship with a business partner that does not represent a negligible or merely ancillary part of the supply chain; |
Amendment 25
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) ‘supply chain’ means activities directly necessary for the production of goods or the provision of services by a company, including the development of the product or the service as well as the related activities of direct upstream business relationships of the company; |
Amendment 26
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 the company’s employees, the employees of its subsidiaries, employees within its supply chain, and other individuals, groups, communities or entities whose rights or interests are or could be directly affected by the actual or potential adverse human rights and environmental impacts connected to products, services and operations of that company, its subsidiaries and its business relationships; |
Amendment 27
Proposal for a directive
Article 6 – title
| Text proposed by the Commission | Amendment |
|---|---|
| Identifying actual and potential adverse impacts | Identifying and prioritising actual and potential adverse impacts |
Amendment 28
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 impacts arising from their own operations or those of their subsidiaries and, where related to their supply chains, from their business relationships, in accordance with paragraph 2, 3 and 4. |
Amendment 29
Proposal for a directive
Article 6 – paragraph 2 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 2 a. For the purpose of fulfilling these requirements, companies may map all areas of their own operations, those of their subsidiaries and, where related to their supply chains, those of their business partners. Based on the results of that mapping, companies may carry out an in-depth assessment of the areas where adverse impacts were identified to be most likely to be present or most significance. | |
| Companies may identify actual and potential adverse impacts on the basis of a risk assessment and risk-based monitoring methodology, taking into account the likelihood, severity and urgency of adverse impacts, the nature and context of their operations, including sector and geographic location, the scope of the risks, their scale and how irremediable they might be. | |
| This prioritisation shall support companies in determining which identified potential adverse impacts companies prevent or mitigate as a priority under Article 7 and which actual adverse impacts companies bring to an end or minimise as a priority under Article 8. |
Amendment 30
Proposal for a directive
Article 6 – paragraph 2 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 2 b. Member States shall not require companies 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 supply chains, from their business relationships, when these are linked to countries or regions where potential and actual adverse impacts are unlikely to occur according to the Commission guidelines under Article 13. |
Amendment 31
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, including access to capacity-building, guidance, financial support or participation in collaborative initiatives where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME; |
Amendment 32
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, including access to capacity-building guidance, financial support or participation in collaborative initiatives where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME; |
Amendment 33
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. | 1. In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Innovation Council and Small and Medium-sized Enterprises Executive Agency and where appropriate with international bodies having expertise in due diligence, shall issue clear and easily understandable guidelines in digital, free of charge and easily accessible format, taking due consideration of the limited capacities and resources of SMEs, including the following: |
Amendment 34
Proposal for a directive
Article 13 – paragraph 1 – point a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (a) guidelines for specific sectors or specific adverse impacts; |
Amendment 35
Proposal for a directive
Article 13 – paragraph 1 – point b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (b) an overview on applicable industry initiatives, multi-stakeholder initiatives and industry schemes; |
Amendment 36
Proposal for a directive
Article 13 – paragraph 1 – point c (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (c) practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas, may be applied to due diligence obligations depending on the size and sector of the company; |
Amendment 37
Proposal for a directive
Article 13 – paragraph 1 – point d (new)
| Text proposed by the Commission | Amendment |
|---|---|
| (d) lists of areas, whether sectoral or geographic, such as a list of regions and countries where adverse human rights impacts or environmental adverse impacts are unlikely or likely to occur. |
Amendment 38
Proposal for a directive
Article 13 – paragraph 1 a (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 2. The list of areas identified in point (d) shall be updated continuously by the Commission and made publicly available. |
Amendment 39
Proposal for a directive
Article 13 – paragraph 1 b (new)
| Text proposed by the Commission | Amendment |
|---|---|
| 3. The guidelines shall be made available no later than 18 months after the date of entry into force of this Directive. The Commission shall regularly review the relevance of its guidelines and adapt them to new best practices. |
Amendment 40
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 supply chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly supporting materials such as dedicated helpdesks, websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs and notably microenterprises that are present in the supply chains of companies. |
Amendment 41
Proposal for a directive
Article 14 – paragraph 2
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Without prejudice to applicable State aid rules, Member States may financially support SMEs. | 2. Without prejudice to applicable State aid rules, Member States may provide financial and technical support to SMEs in order to help them to voluntarily comply with due diligence requirements set out in this Directive. |
Amendment 42
Proposal for a directive
Article 14 – paragraph 3
| Text proposed by the Commission | Amendment |
|---|---|
| 3. The Commission may complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and may devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations. | 3. The Commission shall establish due diligence advisors under the scope of the Enterprise Europe Network and shall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and may devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations. |
Amendment 43
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 shall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, shall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. |
Procedure pages
How the committees handled the text, and how their members voted on it.
Procedure – committee asked for opinion 1 paragraph
| Title | Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937 | |
| References | COM(2022)0071 – C9-0050/2022 – 2022/0051(COD) | |
| Committee responsible Date announced in plenary | JURI 4.4.2022 | |
| Opinion by Date announced in plenary | ITRE 4.4.2022 | |
| Rapporteur for the opinion Date appointed | Martina Dlabajová 19.4.2022 | |
| Discussed in committee | 13.10.2022 | |
| Date adopted | 24.1.2023 | |
| Result of final vote | +: –: 0: | 43 24 3 |
| Members present for the final vote | Hildegard Bentele, Tom Berendsen, Vasile Blaga, Marc Botenga, Markus Buchheit, Cristian-Silviu Buşoi, Jerzy Buzek, Ignazio Corrao, Beatrice Covassi, Ciarán Cuffe, Josianne Cutajar, Nicola Danti, Marie Dauchy, Pilar del Castillo Vera, Martina Dlabajová, Christian Ehler, Valter Flego, Niels Fuglsang, Lina Gálvez Muñoz, Jens Geier, Nicolás González Casares, Bart Groothuis, Christophe Grudler, András Gyürk, Henrike Hahn, Robert Hajšel, Ivo Hristov, Seán Kelly, Izabela-Helena Kloc, Zdzisław Krasnodębski, Andrius Kubilius, Miapetra Kumpula-Natri, Marisa Matias, Eva Maydell, Marina Mesure, Dan Nica, Angelika Niebler, Niklas Nienaß, Johan Nissinen, Mauri Pekkarinen, Morten Petersen, Markus Pieper, Clara Ponsatí Obiols, Robert Roos, Sara Skyttedal, Maria Spyraki, Riho Terras, Grzegorz Tobiszowski, Patrizia Toia, Henna Virkkunen, Pernille Weiss, Carlos Zorrinho | |
| Substitutes present for the final vote | Franc Bogovič, Damien Carême, Jakop G. Dalunde, Matthias Ecke, Klemen Grošelj, Alicia Homs Ginel, Ladislav Ilčić, Elena Lizzi, Marian-Jean Marinescu, Alin Mituța, Jutta Paulus, Massimiliano Salini, Jordi Solé, Susana Solís Pérez, Viola von Cramon-Taubadel, Emma Wiesner | |
| Substitutes under Rule 209(7) present for the final vote | Rosanna Conte, László Trócsányi |
Final vote by roll call in committee asked for opinion 3 paragraphs
43 · For
- ECR
- Ladislav Ilčić, Izabela-Helena Kloc, Zdzisław Krasnodębski, Johan Nissinen, Grzegorz Tobiszowski
- ID
- Markus Buchheit, Rosanna Conte, Marie Dauchy, Elena Lizzi
- No group
- András Gyürk, László Trócsányi
- EPP
- Hildegard Bentele, Tom Berendsen, Vasile Blaga, Franc Bogovič, Cristian-Silviu Buşoi, Jerzy Buzek, Pilar del Castillo Vera, Christian Ehler, Seán Kelly, Andrius Kubilius, Marian-Jean Marinescu, Eva Maydell, Angelika Niebler, Markus Pieper, Massimiliano Salini, Sara Skyttedal, Maria Spyraki, Riho Terras, Henna Virkkunen, Pernille Weiss
- Renew
- Nicola Danti, Martina Dlabajová, Valter Flego, Bart Groothuis, Klemen Grošelj, Christophe Grudler, Alin Mituța, Mauri Pekkarinen, Morten Petersen, Susana Solís Pérez, Emma Wiesner
- S&D
- Ivo Hristov
24 · Against
- ECR
- Robert Roos
- S&D
- Beatrice Covassi, Matthias Ecke, Niels Fuglsang, Lina Gálvez Muñoz, Jens Geier, Nicolás González Casares, Robert Hajšel, Alicia Homs Ginel, Dan Nica, Patrizia Toia, Carlos Zorrinho
- The Left
- Marc Botenga, Marisa Matias, Marina Mesure
- Greens
- Damien Carême, Ignazio Corrao, Ciarán Cuffe, Jakop G. Dalunde, Henrike Hahn, Niklas Nienaß, Jutta Paulus, Jordi Solé, Viola von Cramon-Taubadel
3 · Abstained
- No group
- Clara Ponsatí Obiols
- S&D
- Josianne Cutajar, Miapetra Kumpula-Natri