Making human rights due diligence a legal requirement for companies including systems to identify, assess, mitigate or manage human rights risks and impacts to improve that process over time and to disclose the risks and impacts, the steps taken and the results.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council acknowledges the issues regarding human rights, environmental and climate change effects on sustainable growth. However, the Council prefers a comprehensive corporate governance code and does not entirely agree on strict legislation. The Council acknowledges that it is necessary to define certain frameworks for supply chain due diligence. However, the Company considers that an EU legal framework could lead to potential important competition disadvantages for companies operating in the EU and it is more practical to conduct supply chain due diligence following international standards.
In response to question 2, the Council states that ‘we call upon the Commission to consider the importance of an international level playing field, based on the UNGP and OECD guidelines. We would also like to highlight to the Commission that there are many sectors and companies that already conduct supply chain due diligence, based on their own initiatives and international standards. The commission should therefore look to build upon these existing guidelines and standards, which many industries already implement.’
In response to question 14, the Council emphasizes the importance of keeping the definition of ‘due diligence’ in line with the existing international frameworks, such as UNGP and OECD Guidelines. The Council states that it disagrees with the definition of ‘supply chain’ as it lacks an appreciation of the supply chain market power structure between a downstream company and upstream company.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council acknowledges that a due diligence framework is necessary and is willing to contribute to a due diligence duty that improves the current framework and provides legal clarity to all stakeholders. The Council calls upon the Commission to support internationally recognized due diligence frameworks that follow a risk-based approach and remain a risk management tool. However, the Council does not have an active position to make human rights due diligence a legal requirement.
In consultation response to phase 1, the Council states that ‘JBCE is eager to contribute to a due diligence duty1 that improves the current framework and provides legal clarity to all stakeholders. However, the Commission’s upcoming proposal should also make sure that due diligence remains a risk management and not a ‘tick-box’ compliance tool. JBCE calls upon the Commission to support internationally recognised due diligence frameworks that follow a risk-based approach, such as the UNGP and OECD guidelines for multinational enterprises.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council acknowledges the importance of a due diligence framework but points out several problems with the current directive: the Council insists that the commission should ensure the framework aligns with international standards in relying on a risk-based approach; the definitions in the directive should be clearer, such as liability and responsibility, established business relationship, and affected stakeholders; due diligence policy should be evaluated on an annual basis.
In their response to phase 3, the Council states: ‘JBCE calls on the co-legislators to further clarify notions such as ‘established business relationship’, ‘value chain’, and ‘stakeholder’, and to ensure that the EU framework aligns with international standards in relying on a risk-based approach. We must ensure that the EU framework for Sustainable Corporate Due Diligence is aligned with international standards – including the UNGPs and the OECD MNE Guidelines. JBCE asks for more precise provisions when it comes to civil liability. JBCE suggests to more clearly divide liability and responsibility. We support the provision to evaluate such policy on an annual basis. The draft proposal leaves too much unclarity for non-EU companies, especially with regards to how they should comply with the due diligence obligations for their subsidiaries and joint ventures.’
Requiring Human rights due diligence of all companies, regardless of sector and size, while still reflecting their individual circumstances.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council prefers a minimum process and definitions approach, which should be applicable across all sectors. The Company is not in favour of combining a sector specific approach with a horizontal approach. The Council agrees that due diligence rules should apply to certain third country companies. However, the Company recognises the limitation of leverage to in the entire supply chain, specially beyond a tier 2 supply chain and expects the Commission to have an efficient due diligence practices and process.
In response to question 15, the Council indicates that ‘Option 2. “Minimum process and definitions approach”: The EU should define a minimum set of requirements with regard to the necessary processes (see in option 1) which should be applicable across all sectors. Furthermore, this approach would provide harmonised definitions for example as regards the coverage of adverse impacts that should be the subject of the due diligence obligation and could rely on EU and international human rights conventions, including ILO labour conventions, or other conventions, where relevant. Minimum requirements could be complemented by sector specific guidance or further rules, where necessary.’
In response to question 16, the Council states that ‘SMEs should be subject to lighter requirements (“principles-based” or “minimum process and definitions” approaches as indicated in Question 15); Capacity building support, including funding; Detailed non-binding guidelines catering for the needs of SMEs in particular; Toolbox/dedicated national helpdesk for companies to translate due diligence criteria into business practices.’
In response to question 17, the Council states that ‘The Commission should recognise that companies are not able to prevent all adverse impacts in their entire supply chain, and that the UNGP recognise the process of principled prioritization of efforts. Beyond a tier 2 supply chain relation, companies do not have any commercial or contractual leverage, making it difficult to effectively improve the adverse impacts. Since it is challenging to exercise leverage, the Commission should thus incentivise efficient due diligence practices and processes. This makes liability a difficult concept to apply to these situations. Reinforced initiatives for support, including guidelines, best practices, financial support for SMEs, should rather be considered to implement better due diligence.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council acknowledges that a due diligence framework is necessary and is willing to contribute to a due diligence duty that improves the current framework and provides legal clarity to all stakeholders. The Council calls upon the Commission to support internationally recognized due diligence frameworks that follow a risk-based approach and remain a risk management tool. However, the Council does not have an active position to make human rights due diligence a legal requirement.
In consultation response to phase 1, the Council states that ‘JBCE is eager to contribute to a due diligence duty1 that improves the current framework and provides legal clarity to all stakeholders. However, the Commission’s upcoming proposal should also make sure that due diligence remains a risk management and not a ‘tick-box’ compliance tool. JBCE calls upon the Commission to support internationally recognised due diligence frameworks that follow a risk-based approach, such as the UNGP and OECD guidelines for multinational enterprises.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The entity raises questions and requests further guidance on the obligations for non-EU companies.
The JBCE raises questions regarding the coverage of non-EU companies and their subsidiaries and joint ventures. It states: 'The draft proposal leaves too much unclarity for non-EU companies, especially with regards to how they should comply with the due diligence obligations for their subsidiaries and joint ventures. JBCE would like to see clearer commitments as to when – and on which topics – the Commission will provide further guidance.'
Implementing an enforcement mechanism where companies fail to carry out due diligence as described.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council considers that due diligence duty should focus on the process but not on the result, enforcement mechanism should support companies in undertaking due diligence, and there should distinct definition of ‘responsibility’ and ‘liability’, however, the Company has not provided clear enforcement mechanism measures.
The Council does not pick a defined option but indicates that ‘First of all, it is important to ensure that the due diligence duty focuses on the process and not on the result. Any enforcement mechanism envisaged by the Commission should in priority aim to incentivise and support companies in undertaking due diligence activities in proactive ways and to recognise such efforts. Secondly, we believe that there should be a distinct nuance between the scope of “responsibility” and of “liability”. The scope of responsibility is broader than the scope of liability and this difference should be considered when considering the enforcement mechanism.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The entity suggests significant caveats to the enforcement mechanism proposed by the proposal.
The JBCE suggests the introduction of more rules for the national supervisory authorities than those proposed by the EU Commission. It states: 'The supervisory authorities should disclose the criteria that triggers an investigation. The results of the investigation and the evidence triggering the investigation should be communicated transparently to the affected parties.' The entity goes on to say that sanctions should be limited to the turnover of the member state imposing the sanctions rather than global turnover.
Including in the duties of directors and company law obligations to avoid human rights impacts or “harms”.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council strongly disagree that corporate directors should be required by law to identify the companies' stakeholders and their interests and to manage the risks for the company in relation to stakeholders and their interests - including in the long run - and to identify the opportunities arising from promoting stakeholders.
In response to question 6, the Council states that: ‘JBCE believes these suggestions should not be required by law as there are already several non-legal binding guidelines, such as corporate governance codes in each country. We call upon the Commission to focus on increasing the application of corporate governance codes by companies rather than establishing a new, potentially burdensome and uncompetitive regulation.’
In response to question 7, the Council goes on to say: ‘these procedures should not be required by law as companies (such as JBCE members) proactively conduct their strategies, tailored to their situation, that maximise their sustainable corporate governance output. Setting such requirements in law could transform internal sustainable strategies into a compliance/ tick box process, which would not effectively contribute to companies’ long-term and sustainable growth. Instead of setting requirements, the Commission should support measures that encourage and incentivise companies to engage more effectively and rapidly with the adverse impacts.’
The Council strongly disagree with question 8: ‘We believe this question is asked based on the assumption that companies consistently fail to consider the interests of stakeholders. On the contrary, our members actively take the long-term interests of stakeholders into consideration. Indeed, continuous dialogue is the key to understand the interests of stakeholders. Such engagement with stakeholders will naturally be encouraged more by the implementation of a well-designed due diligence obligation for companies. Overall, setting such requirements in law could transform internal sustainable strategies into a compliance/ tick box process, which would not effectively contribute to companies’ long-term and sustainable growth. Instead of setting requirements, the Commission should support measures that encourage and incentivise companies to engage more effectively and rapidly with the adverse impacts.’
Require companies to provide remedy for human rights impacts they have caused or contributed to.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council emphasizes that due diligence duty should focus on the process but not the result: enforcement mechanisms should support companies in undertaking due diligence and there should distinct definition of ‘responsibility’ and ‘liability’; however, the company has not provided clear enforcement mechanism measures.
The Council does not pick a defined option but believes: ‘it is important to ensure that the due diligence duty focuses on the process and not on the result. Any enforcement mechanism envisaged by the Commission should in priority aim to incentivise and support companies in undertaking due diligence activities in proactive ways and to recognise such efforts. Secondly, we believe that there should be a distinct nuance between the scope of “responsibility” and of “liability”. The scope of responsibility is broader than the scope of liability and this difference should be considered when considering the enforcement mechanism.’
Require companies to provide grievance mechanisms for all stakeholders including those in the value chain.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council strongly disagrees that the EU should require directors to establish and apply mechanisms to engage with stakeholders by emphasising that it should not be required by law, but depending on companies own business structure.
In response to question 20a, the Council answers: ‘Stakeholder engagement is necessary for companies’ sustainable growth, but it should not be required by law. The Companies have to be encouraged to engage with stakeholders through incentives or other supporting measures. However, the decision-making should remain with the companies, as it depends on their own business structure.’
Enabling judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council has not mentioned the judicial enforcement in fulfilling the due diligence obligations but emphasizes that due diligence duty should focus on the process but not on the result, enforcement mechanism should support companies in undertaking due diligence, and there should distinct definition of ‘responsibility’ and ‘liability’. However, the Council does not have a supportive position to enabling judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.
In response to question 19a, the Council states that ‘First of all, it is important to ensure that the due diligence duty focuses on the process and not on the result. Any enforcement mechanism envisaged by the Commission should in priority aim to incentivise and support companies in undertaking due diligence activities in proactive ways and to recognise such efforts. Secondly, we believe that there should be a distinct nuance between the scope of “responsibility” and of “liability”. The scope of responsibility is broader than the scope of liability and this difference should be considered when considering the enforcement mechanism.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The JBCE suggests changes to the civil liability provisions, believing that it should be limited to impacts directly caused by the activity of the companies.
The JBCE states: 'In addition to the importance of providing more clear definitions in order to establish the scope of the Directive, JBCE asks for more precise provisions when it comes to civil liability. ... e liability should only be applied to a limited scope of a more clearly defined ‘established business relationship’ (see above). Liability should be clearly based on whether the harmful impacts are directly caused by the activities of the company (i.e., their explicit failure to comply with due diligence obligations).' It goes on to say the following: 'Affected stakeholders should have the right to file substantiated complaints, but the Directive should avoid the possibility of parallel litigation processes, related to the same complaint, in different Member States.'
Require companies to implement a due diligence process covering their value chain to identify, prevent, mitigate and remediate human rights impacts and improve that practice over time.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council acknowledges the issues regarding human rights, environmental and climate change effects on sustainable growth. However, the Council prefers a comprehensive corporate governance code and does not entirely agree on strict legislation. The Council acknowledges that it is necessary to define certain frameworks for supply chain due diligence. However, the Council considers that an EU legal framework could lead to potential important competition disadvantages for companies operating in the EU and it is more practical to conduct supply chain due diligence following international standards. No evidence is found that the Council has a requirement for its companies to implement a due diligence process covering all its value chain. The Company calls upon the European Commission to conduct an impact assessment on how to integrate environmental due diligence in supply chains. Furthermore, the Council disagree with the definition of supply chain.
In response to question 3, the Council states that ‘Ensuring that the company is aware of its adverse human rights, social and environmental impacts and risks related to human rights violations other social issues and the environment and that it is in a better position to mitigate these risks and impacts; Contribute effectively to a more sustainable development, including in non-EU countries; Levelling the playing field, avoiding that some companies freeride on the efforts of others; Increasing legal certainty about how companies should tackle their impacts, including in their value chain; A non-negotiable standard would help companies increase their leverage in the value chain; Harmonisation to avoid fragmentation in the EU, as emerging national laws are different’. However, no evidence is found on a requirement for companies to implement a due diligence process covering its value chain. The Company also has a concern that ‘There is a risk that a new framework would transform the supply chain due diligence duty into a compliance tool where meeting the minimum requirement will be the focus, rather than a risk management tool where creativity and positive management would bring more conclusive improvements.’
In response to question 14, the Council states that ‘in practical terms, it is not clear for the JBCE how and what the due diligence duty for this risk would entail. We therefore call upon the European Commission to conduct, as early as possible, an impact assessment on how to integrate environmental due diligence in supply chains, and bring clarity to which environmental standards are relevant and how due diligence obligations would interrelate with existing environmental management approaches.’ The Council suggests the European Commission to undertake individual and clear definitions of “subsidiary’, “supplier” and “subcontractors’.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council agrees with the importance of an internationally recognised due diligence framework. However, the Council emphasizes that companies alone cannot change all partners in the supply chains and asks for collaboration between industry and governments. The Council makes an example that the Commission should provide adequate tools and guidance to companies of all size to enable them to conduct an effective due diligence exercise. The Council is a proactive position to require companies to impact a due diligence process covering all value chains.
In consultation response to phase 1, the Council indicates that ‘it is essential that the Commission and Member States play a role to tackle the root causes of human rights abuses, such as poverty and corruption. Companies alone cannot change all partners in the supply chain: collaboration between industry and governments is therefore primordial to achieve positive and durable transformation in all tiers. JBCE believes that companies alone will struggle to take all the responsibilities in the supply chain vis-à-vis new due diligence responsibilities. Indeed, the Commission should push for stronger collaboration between public authorities and private stakeholders, and between industries, to tackle issues within supply chains. For example, the Commission should provide adequate tools and guidance to companies of all size to enable them to conduct an effective due diligence exercise.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council acknowledges the EU obligation to apply the legislation to the entire value chain of Companies. However, the Council argues the Commission should make clear definition of an ‘established business relationship’ and ‘value chain’, since the Council states that beyond tier 1, most companies loose elements of control of business relationships.
In the consultation response to phase 3, the Council states the following: ‘it is of utmost importance to clarify the definitions that govern the scope and requirements of the proposal. JBCE calls on the co-legislators to further clarify notions such as ‘established business relationship’, ‘value chain’, and ‘stakeholder’, and to ensure that the EU framework aligns with international standards in relying on a risk-based approach. To avoid legal fragmentation at Member State level, we must ensure that the EU framework for Sustainable Corporate Due Diligence is aligned with international standards – including the UNGPs and the OECD MNE Guidelines.’
Require that companies identify their stakeholders and their interests.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council agrees 'to some extent' with this requirement. It acknowledges the importance of identifying stakeholders and interests, however, the level of importance and relevance should vary in the contexts and companies. However, the Company strongly disagrees with directors’ duty to identify the Company’s stakeholders and their interests.
In response to question 5, the Council indicates that ‘JBCE believes that the interests suggested in Q5 are all important and relevant for the long-term success and the resilience of a company. However, it is important to note that the level of relevance and importance varies in context from and within company to company.’
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The entity suggests limiting the definition of 'stakeholder' to 'affected stakeholders' as this would affect companies' obligations regarding stakeholders on a broad scale.
The entity suggests changing the definition of the term stakeholders in Article 3 (n) of the proposed directive.
Require directors to establish and apply mechanisms or, where they already exist for employees for example, use existing information and consultation channels for engaging with stakeholders.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council strongly disagrees on the requirement for directors to establish and apply mechanisms for engaging with stakeholders.
In response to question 20a, the Council states the following: ‘stakeholder engagement is necessary for companies’ sustainable growth, but it should not be required by law. Companies have to be encouraged to engage with stakeholders through incentives or other supporting measures. However, the decision-making should remain with the companies, as it depends on their own business structure.’
Require that corporate directors should manage the human rights risks for the company in relation to stakeholders and their interest including on the long run.
Direct Consultation with Governments
Comments from the entity submitted through official regulatory and legislative consultation processes, or via meetings and other direct engagements with policymakers. Includes evidence obtained by InfluenceMap through Freedom of Information requests.
The Council strongly disagree that corporate directors should be required by law to identify the company´s stakeholders and their interests, and manage the risks related to them. Regarding requirements for corporate directors to manage the human rights risks for the company in relation to stakeholders and their interests, the Council disagree to some extent by stating that ‘these procedures should not be required by law as companies (such as JBCE members) proactively conduct their strategies.'
In response to question 7, the Council states that rather than being required by law, ‘the Commission should support measures that encourage and incentivise companies to engage more effectively and rapidly with the adverse impacts.’
| Legislation | Phase of Active Company Engagement | Position |
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| Member | Performance band |
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