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 entity agrees with the need of a legal framework for supply chain due diligence, advocating for a minium process and definitions approach to due diligence.
It considers that an EU legal framework is needed (question 2). It states that ‘Ideally, a global level playing field on human rights due diligence would be established. As this might not be realistic, an EU legal framework is preferable over individual national legislation. Such an EU framework should also establish rules for non-European companies that conduct business within the EU to ensure fair competition …. A human rights due diligence should always be risk-based and should call for reasonable effort, in line with to the UN Guiding Principles on Business and Human Rights’. It does not indicate whether it agrees with due diligence duty definition, as it considers it rather a description of due diligence (question 14). It advocates for a minimum process and definitions approach (question 15).
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 welcomes a supranational legal framework on due diligence.
The entity states that: ‘They members therefore welcome a leveling of the global playing field through binding obligations, if the requirements are in line with international standards, meaning if they follow a risk-based approach and call for reasonable effort. Econsense has already shown support for the EU-Commission’s initiative in the public consultation in the beginning of 2021, as we prefer a supranational legislation on due diligence over different national laws. Considering that the presented proposal is a Directive, it is crucial to avoid national fragmentation in the implementation’.
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 entity advocates for a cross sectorial approach to due diligence duty. However, it does not take position in relation to the size of companies.
The entity advocates for a horizontal approach based on minimum process and definitions (question 15). It also states that: ‘Minimum requirements should be based on the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. These requirements will need to be complemented by sector-specific guidance. Furthermore, a clear list of human rights issues that are in scope of such a legislation would be a requirement to make such a legislation successful in practice’. The entity did not respond to the question related to the size of entities under scope (question 16).
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 entity disagrees 'to some extent' with including in the duties of directors and company law an obligation to have procedures to ensure that possible risks and adverse impacts on stakeholders are identified, prevented and addressed.
The entity disagrees 'to some extent' with including in the duties of directors and company law an obligation to have procedures to ensure that possible risks and adverse impacts on stakeholders are identified, prevented and addressed. It states that: 'The aspects mentioned above are important and have been addressed in various pieces of regulation with regard to a company’s responsibility, as for example the Non-Financial Reporting Directive (NFRD). Adding further topics to director’s duties increases the complexity of a company’s management unnecessarily and thus should not be required by law'. It also disagrees with legally requiring directors to manage the risks for the company in relation to stakeholders.
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.
Although the entity does not directly address grievance mechanisms, it disagrees with a legal requirement to establish consultation channels for engaging with stakeholders as part of the due diligence duty.
The entity does not respond in relation to whether grievance mechanisms as part of due diligence should be promoted at the EU level (question 20c). However, it disagrees with a legal requirement to establish consultation channels as part of due diligence: 'It should be in a company’s own responsibility and choice to decide which mechanisms or channels it uses to engage with stakeholders and not be required by law'.
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.
Although the entity did not respond to the question related to liability and compensation, it warns about the risks and negative impacts of a comprehensive clause on civil liability.
The entity did not respond to question 19 which asks about the posibility of implementing judicial enforcement with liability and compensation. However, it states the following (question 3a): ‘Comprehensive liability might negatively affect companies that engage in risky markets and aim to improve the human rights situation when they fear to be prone to lawsuits at the same time. Civil liability must therefore always consider both the impact of companies on human rights as well as an appropriate balance of measures to minimize potential human rights impacts. Human rights related due diligence should always be risk-based and should call for reasonable effort, in line with the UN Guiding Principles on Business and Human Rights. Due performance of the obligations should consequently limit civil liability. Under these circumstances, disengagement should be avoidable, as such disengagement of companies can be detrimental to the development process of countries in the global south’.
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 Company calls to restrict civil liability according to the obligation of means.
The entity states that: 'We welcome that the draft Directive establishes an obligation of means (Recital 15). However, this is not reflected in the comprehensive liability scheme with its rebuttable presumption (Art. 22, 2). Due performance of the obligations should consequently limit civil liability. In addition, civil liability concerning third parties (i.e., direct or indirect established business relationships) creates an uncontrollable risk for companies. It could, as a consequence, lead to disengagement from certain high-risk markets, which could also be detrimental to the development and human rights situation in producing countries in the Global South.’
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.
Although the entity agrees that a legal framework is needed, it has reservations in relation to due diligence duty definition proposed by the consultation. While it agrees that due diligence should be risk based, it highlights practical difficulties with monitoring and tracking suppliers beyond tier-1.
The entity agrees that a legal framework is needed as per question 2. In response to question 14, on whether it agrees with due diligence duty definition provided by the consultation, it states that 'We do agree that due diligence should be based on a “risk-based, proportionate and context specific” approach and that companies can be expected to make a “reasonable effort”. However, we do believe that this text 14 is not a definition but rather a description of due diligence’. In relation to scope of supply chain, it states: ‘Companies only have an economic and legal impact on their direct suppliers (Tier 1), and in some cases even this impact has limitations. Beyond Tier 1, there is only limited influence and information on suppliers available. The ability to monitor and track suppliers beyond Tier 1 is difficult due to the complexity and lack of transparency of supplier networks’. It asks for clarification on topics to be addressed, the term ‘business relationship’ and ‘impact’.' It does not refer to remedy.
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 states that: 'The due diligence scope does not follow a risk-based approach' and 'implementing the drafted due diligence obligations along the entire value chain is way beyond a company's sphere of influence and not feasible'. It argues that the responsibilities for companies need to be more clearly defined and limited.
The entity states that: 'We welcome that the due diligence requirements of the draft Directive are based on renowned international frameworks. However, by including all established business relationships in the due diligence scope the Directive does not follow a risk-based approach on the basis of reasonable effort. ... Implementing the drafted due diligence obligations along the entire value chain is way beyond a company’s sphere of influence and not feasible. The draft Directive’s approach to restrict the broad coverage of the value chain by the indefinite term “established business relationships” is not helpful, as long as the entire product lifecycle is in the scope. Companies’ responsibility needs to be clearly defined and limited, according to a company’s ability to influence. In addition, downstream due diligence efforts are different to upstream efforts due to several reasons such as contractual relationships and leverage. This needs to be reflected in the legislative proposal.’
Require assessment and additional action (e.g. capacity building or monitoring of suppliers) where the risks for severe human rights impacts are greatest.
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 considers that the directive does not follow a risk-based approach on the basis of reasonable effort regarding business relationships.
The entity states that: '‘The draft requires companies to oblige and verify compliance of all established business relationships (Art. 7, 4; Art 8, 5) notwithstanding their risk profile or a company’s ability to influence. Firstly, the concept of established business relationships is not renowned and needs further clarification, especially concerning the criteria of “intensity” and concerning indirect established business relationships (Art. 3f). The prescribed annual assessment of established business relationships (Art. 1, 1) would also create an additional task for companies while consuming valuable resources for the actual risk analysis. Secondly, the concept neglects the significant difference in a company’s influence on direct vs. indirect business relationships. The due diligence requirements should differentiate between comprehensive requirements for direct suppliers and reasonable requirements for indirect suppliers (as in the German Supply Chain Due Diligence Law).’
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 entity disagrees 'to some extent' with a legal requirement (for directors) to identify stakeholders and their interests.
The entity disagrees 'to some extent' with a legal requirement (for directors) to identify stakeholders and their interests as per question 6. It states that 'The aspects mentioned above of stakeholders and their interests are important and essential for the good and long-term governance of a company and are therefore at the core interest of the directors of a company themselves. For this reason, they should not be required by law. it also states (question 5) that: "we consider all relevant stakeholders generally as equally relevant ... depending on the industry, the location, the context, the type of business decisions or topic, however, it might vary which stakeholders group's interest are more relevant at a certain time."
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 entity disagrees with a legal requirement to establish consultation channels for engaging with stakeholders as part of the due diligence duty.
It disagrees with a legal requirement to establish consultation channels as part of a due diligence duty (question 20a): 'It should be in a company’s own responsibility and choice to decide which mechanisms or channels it uses to engage with stakeholders and not be required by law.'
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 entity disagrees 'to some extent' with a legal requirement for directors to manage risks for the company in relation to stakeholders.
The entity disagrees 'to some extent' with a legal requirement for directors to manage risks for the company in relation to stakeholders as per question 6. It states that: 'The aspects mentioned above risks for the company in relation to stakeholders are important and essential for the good and long-term governance of a company and are therefore at the core interest of the directors of a company themselves. For this reason, they should not be required by law."
| Legislation | Phase of Active Company Engagement | Position |
|---|
| Member | Performance band |
|---|---|
| Deloitte EU Policy Centre | D- |
| Deutsche Börse Group (DBG) | E |
| E. ON | E- |
| PwC IL | C |
| RWE | E |
| Siemens Energy | F |
