(Brussels) – The new EU directive adopted on May 24, 2024, requiring large companies to ensure human rights respect in their value chains signals a new era for corporate accountability, Human Rights Watch said today. Human Rights Watch issued a question-and-answer document about the provisions, strengths, and weaknesses of the new law.
The document describes how the EU Corporate Sustainability Due Diligence Directive (CSDDD) will require companies to conduct due diligence. Under the new law, large companies will be required to identify, mitigate, prevent, and remedy harmful human rights and environmental impacts in their operations and their value chains; that is, the company’s business partners involved in production, distribution, transport, and storage of the company’s products. It provides for regulatory oversight and the possibility of initiating civil lawsuits against corporations in European courts.
“The EU’s Due Diligence Directive represents a landmark shift from voluntary corporate responsibility to mandatory obligations for corporations to prevent and address human rights abuses,” said Tirana Hassan, executive director at Human Rights Watch. “This groundbreaking law is a major victory for rights groups, trade unions, and civil society networks at the forefront of the fight for corporate accountability. Despite fierce opposition from powerful corporate lobbyists seeking to thwart or indefinitely postpone this law, this directive is a testament to the strength and perseverance of those advocating for justice and accountability in the corporate sector.”
Wow, does anyone who’s looked into this more know if this is as big as it sounds? Are there obvious loopholes?
Because legally mandated corrections of existing human rights abuses in the value chains of corporations would change corporations entirely.
That’s a paradigm shift.
As far as I know it‘s pretty toothless due to but not exclusively pressure from Germany, who in the end abstained from the vote. It will be introduced in steps in the future, there won‘t be any civil prosecutions and oversight will be minimal.
Okay, so there are administrative fines and civil liability, as well as exclusion from public procurement and restrictions on access to financial markets.
It’ll be interesting to see what happens going forward. I’m glad to see there are at least consequences in some form rather than just due diligence guidelines that the corporations can willfully ignore without penalty.
yeah, you‘re right! I am surprised there‘s civil liability, I thought this was omitted, but I was wrong.
Yeah civil liability seems like a big one.
Let’s see how that plays out.
Ah, thanks. Shane
Germany actually has a stricter domestic law already than what the EU is doing here.
But reality of course never matters. As long as Europeans can tell themselves the fairy tale of how they successfully fought those bad Germans for every slightly positive achievement, they are happy. Even if it’s actually too little or meaningless or just virtue-signaling. Or several of those things combined…
In which ways is the German law stricter?
Is there such a strong anti German sentiment in the European parliament? Or generally in Europe?
Behind closed doors in the actual workings of the EU things are different.
But there is an universal law that you can always dress unpopular but neccessary EU decisions or compromises as “Germany made us do it” at home and can always get bonus points if you tell the story how you bravely fought Germany to push through a popular EU decision.
Basically the same propaganda for domestic a audience in slightly modified form that Orban has made an art form in Hungary.
I guess it goes both ways though :I
I looked up the differences between the German and EU supply chain law, and you can‘t really suggest the German one was stricter. It for example doesn‘t include civil liability. Germany abstaining as well as them blocking other legislation recently kinda made them look like an ass. Coming from a German perspective.