Confindustria

The entity opposes the inclusion of smaller companies and argues that current thresholds are already too low. It also calls for narrowing the scope by refining sector definitions and excluding low-impact activities and products, even within high-risk sectors

The entity states that ‘the sector list not only covers most economic sectors, but these sectors also represent those most affected by environmental legislation, which are already undertaking (and will continue to undertake) the greatest efforts from a sustainability standpoint … Furthermore, the list, in addition to being very broad, refers to everything produced within a sector, regardless of whether the product or service itself has a high impact on human rights and the environment. In this context, a possible solution would be to leave the selection of sectors to be regulated to subsequent delegated acts by the Commission, preceded by a work plan based on objective, scientific, and duly justified criteria …. The Commission should also consider identifying within sectors the specific stages of production that present significant risks for human rights and the environment or distinguishing the most problematic products within a given sector’. Regarding SMEs, it states that ‘it should be noted that the identified size thresholds … must be considered as an absolute minimum, below which the Directive could further jeopardize companies’ ability to meet its requirements and to adjust their supply chains … Therefore, the thresholds should not only not be lowered but should potentially be raised further to minimize such risks.Original in Italian. Translated text

The entity criticises the enforcement framework as overreaching and legally unclear.

The entity states that ‘The Proposal outlines an enforcement system that is too broad and vague, and should therefore be more clearly defined … It is thus unclear what exactly should be subject to supervision. Firstly, it should be clarified that the supervisory authorities should oversee compliance with due diligence obligations in the sense that they should verify the adoption and implementation of the due diligence process … but not the adequacy of the measures adopted …. It also states that ‘the basis for assessing administrative penalties should be further expanded. First, sanctions should only be imposed in cases of significant violations … Also, under the Proposal, in deciding whether to impose sanctions and in determining their nature and level, supervisory authorities must take into account the company’s initiatives to comply with the corrective measures requested by the authority itself and other actions taken to prevent and remedy the negative impacts (Art. 20, para. 2). However, sanctions should also reflect other circumstances, such as the severity and duration of violations or any prior breaches of national provisions adopted under the Proposal (in line with sanction policies in many regulatory sectors). Finally, for the sake of harmonization, pecuniary sanctions should not exceed a common maximum amount proportionate to turnover’.Original in Italian. Translated text

The entity opposes integrating directors' duties within the enforcement scope of the Directive.

It states that 'other provisions— particularly those concerning corporate governance currently included in the Proposal (Art. 15, para. 3; Arts. 25–26)—should remain outside the authority’s scope of action'.Original in Italian. Translated text

The entity opposes broad access to grievance/ reporting mechanisms, calling to limit the right to file complaints to those with a legitimate interest.

The entity states that ‘the Proposal grants the right to report a violation to any natural or legal person with reason to believe, based on objective circumstances, that the provisions are not being complied with (Art. 18, para. 1). This would leave the issues within the supervisory authorities’ jurisdiction practically unlimited. Therefore, not only should the scope of this jurisdiction be restricted, but the right to file a report should at least be granted only to those with a legitimate interest’.Original in Italian. Translated text

The entity opposes the civil liability approach proposed, arguing it lacks legal clarity and could lead to companies being held liable for damages beyond their control or intent.

The entity states that civil liability approach ‘raises concerns. Companies could end up being held liable for damages not attributable to their own conduct, regardless of intent, fault, or the causal link between conduct and event—all of which are fundamental elements in the tradition of civil law in the European Union. … it should at least be stipulated that companies are liable only for damages they intentionally or negligently caused or substantially contributed to. Moreover, liability for damages caused by an indirect business partner is excluded only under specific conditions, notably introducing the “unreasonableness” criterion, which is too vague and offers companies no legal predictability. On the contrary, this liability should be excluded by default, in consideration of the extremely limited power companies have to control or influence indirect relationships’.Original in Italian. Translated text

The entity rejects the requirement to implement due diligence across the full value chain, citing impracticality. It also calls for simplifying and narrowing the scope of obligations.

The entity states that ‘Due diligence obligations are extended to the entire value chain (as defined in Art. 3(g)), an extension that, however, disproportionately broadens companies’ liability, making the application of the rules unrealistic. For a company, in fact, verifying the conduct and rule compliance throughout the entire value chain—upstream (suppliers) and downstream (clients, distributors, product users, etc.)—is virtually impossible. Therefore, to ensure feasibility and the realistic achievement of the Directive’s objectives, the provisions should apply exclusively to the supply chain, specifically to suppliers with whom companies have a direct contractual relationship’. It also indicates that ‘To define the due diligence obligation, the Proposal refers to negative impacts on human rights and the environment linked to violations of the international conventions listed in the annex to the Proposal itself. This reference to a lengthy list of international human and environmental rights conventions appears problematic. … the practical articulation of the due diligence obligation should not be grounded in the multiple agreements and conventions listed in the annex to the Proposal, whose sole recipients are the governments of ratifying states. Alternatively, the list of listed conventions should be significantly simplified and shortened, with clearer specification of the scope of due diligence in terms of negative human rights and environmental impacts’.Original in Italian. Translated text

The entity supports the use of contract clauses if business input and feasibility are respected.

The entity states that ‘to facilitate compliance, the introduction of a so-called contractual cascading system ... may be useful. However, it is essential to define model contractual clauses in advance and in a timely manner … to allow operators to absorb and implement them. In this regard, model clauses should be developed in collaboration with companies, including small ones, that will implement these clauses in daily operations and have contractual experience within supply chains. Additionally, in drafting the model clauses, it may be helpful to consider all actions already undertaken to comply with certifications required and held by SMEs in order to operate in supply chains (e.g., concerning health and safety, environment, and product traceability). Therefore, the proposed adoption by the Commission of guidelines to define model contractual clauses is viewed positively—provided it involves companies and considers the burden that excessive bureaucracy may place on SMEs in terms of time, cost, and expertise’.Original in Italian. Translated text