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 responds that it does not know if there should be a legal framework for supply chain due diligence to address adverse impacts on human rights.
In its response to question 2, it states that: ‘EUROCHAMBRES believes that the proliferation of national legal frameworks covering due diligence practices calls for the harmonisation of certain due diligence practices to promote the Single Market and to achieve a wider convergence in terms of how to conduct responsible business within the EU and abroad. However, the Commission should make sure that this legal framework does not cover SMEs, while making sure that larger contractual partners, or first-tier companies, do not simply pass their reporting obligations down the supply chain. The Commission should take into consideration existing guidance for companies …. EASME and national governments should thus work towards providing tailor-made guidance on how to consider SMEs in this discussion.' The entity rejects a legally binding implementation of due diligence as defined by the consultation in question 14.
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 onsiders that current proposal does not guarantee the legal certainty and harmonisation needed.
The entity states that ‘Chambers consider that the Commission’s proposal for a Corporate Sustainability Due Diligence Directive does not guarantee the legal certainty and harmonisation needed in terms of scope, reporting standards, liability, and enforcement modalities. The proposal also adds considerable administrative and regulatory burden at a time of long-lasting disruptions, delays and protracted supply shortages affecting the Single Market’. It then makes general remarks regarding the proposed Directive.
Media Reports
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The letter expresses support for the Directive and calls for maximum harmonisation across several articles.
The letter states that: 'Our associations remain supportive of the proposed directive on corporate sustainability due diligence. However, we call strongly for maximum harmonisation provisions to be introduced into the legal framework so as to ensure a level playing field and avoid further internal market fragmentation. Divergent national legal regimes on due diligence would not only be costly and burdensome for companies of all sizes but, more importantly, risk undermining the achievement of the goals of the legislation in an efficient and effective manner'. Specifcally, 'we urge the European Parliament and Member States to adopt maximum harmonisation provisions such as those previously applied to consumer law. At a minimum such provisions should be applied to the scope (Art.2), definitions (Art.3), due diligence process (Arts. 4-8), communication (Art. 11), guidelines (Art.13), sanctions (Art. 20) and civil liability (Art. 22).'
Media Reports
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The entity calls for full harmonisation
The entity states that 'The most important element of the proposal should be full harmonisation. This is necessary to avoid fragmentation of the EU single market and ensure a level playing field. This can be achieved by using, for instance, an “internal market clause”. If the EU wishes its model to be used as a reference elsewhere in the world, it cannot rely on the limited harmonisation provided by the directive that would potentially lead to 27 different frameworks'.
Media Reports
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The entity, through a joint business statement (JBS), shows support while showing some concerns on implementation.
The JBS indicates that: 'European business remains supportive of the objectives of the proposed directive ... and we urge co-legislators to work on a reasonable approach that is manageable for companies in practice'. It also states that 'we strongly call for full harmonization to ensure a level playing field and avoid further internal market fragmentation' and that 'legal clarity is paramount for the success of this initiative'.
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 Company advocates for a vertical approach where due diligence requirements are only expected for key sectors and where all SMEs (with some exceptions) are excluded.
The entity states (Question 15b) that 'If the Commission decides to adopt an EU-wide due diligence duty, they should be limited to selected high-risk industries and direct contractual partners (“first-tier only”) in order to minimise the economic impact on the Union's economic fabric. More comprehensive measures could be discussed subsequently, or as soon as it is ensured that no unwanted secondary effects occur and any measures need to be preceded by a thorough impact assessment study'. It also considers that All SMEs should be excluded, with some exceptions (question 16): 'EUROCHAMBRES believes that smaller firms cannot implement complex due diligence and reporting systems like large undertakings do, due to their size and financial capacity constraints, nor can be expected to implement expensive traceability and compliance requirements. EUROCHAMBRES considers that the Non-Financial Reporting Directive (NFRD) could serve as benchmark, limiting the scope of future mandatory due diligence legislation to large public interest companies, i.e. with more than 500 employees'.
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 due diligence should be sector-specific and exclude SMEs and financial companies.
The entity states that: '‘Eurochambres believes that due diligence should be proportionate, risk-based, and sector-specific’. It also claims that: ‘The chamber network encourages the Commission to reconsider the inclusion of the financial sector in the proposal taking into account the existing financial regulatory framework.’ Finally: ‘Lawmakers must guarantee that SMEs remain out of the scope of the proposal, address the contractual cascading and focus on targeted support measures.’
Media Reports
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The JBS does not oppose the inclusion of SMEs, but calls for safeguards to protect them.
The JBS seem to show support to the inclusion of SMEs, although it reiterates that: "The European economy, included SMEs which will be impacted even if formally out of the scope, need a workable due diligence framework that is drafted in a balanced and proportionate way."
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 entity opposes to civil liability, leaving liability to member states. However, it doesn't pick any of the other options or proposes a specific mechanism.
The entity did not choose any of the mechanisms proposed by the consultation. It responded the following: 'Civil liability regimes considerably differ among Member States. Therefore, it would be preferable to leave any decision with regards to liability to the Member States'.
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 current proposal contributes to fragmentation and advocates for regulatory incentives instead of 'targeting businesses with the possibility of civil liability'.
The entity states that: 'The wide discretion given to Member States e.g. when it comes to administrative sanctions will also contribute to more fragmentation in the Single Market'. Regarding civil liability it states: 'Chambers believe that, instead of targeting businesses with the possibility civil liability, regulatory incentives should be considered as more effective tools. Those who are able and willing to take on the administrative burden can prove that they have fulfilled their due diligence obligations and thus should receive a benefit, to be determined in concertation with national authorities and/or the Commission.'
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.
Although the entity states that it does not take a position on whether directors should be required to ensure that possible risks and adverse impacts on stakeholders are identified, prevented, and addressed, it considers placing this responsibility on directors to be disproportionate. In addition, it strongly disagrees with legally requiring directors to manage risks in relation to stakeholders and their interests.
In response to question 7, on requiring directors to establish procedures to ensure that possible impacts are identified, prevented, and addressed, the entity selects the option of not taking a position and explains the following: '... Chambers believe that companies should be allowed to carefully consider relevant stakeholders, according to the sector in which they operate and its risk level, in order to ensure legal certainty. Obliging directors to take into account all stakeholders and related enforcement mechanisms is disproportionate’. In response to question 6 on directors being required to manage risks in relation to stakeholders, it strongly disagrees, referring to existing legislation and adding that 'Chambers believe that national frameworks and evolving case law provide rules that are flexible enough to allow for the redefinition of the company's long-term purposes and stakeholders' interests in an orderly, harmonious way’.
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 introducing directors’ duties could create legal loopholes and lead to frivolous litigation. It argues that such a measure could disrupt national legal systems and that there is no need for further regulation at the EU level
The entity states that: ‘Modifying the notion of directors’ duties through imprecise considerations risks creating legal loopholes and the notion that due diligence oversight could be achieved through modifications to company law is baseless and could result in frivolous actions against the interest of companies, deflecting attention away from the real culpable’. It also states that: ‘The proposal’s provisions on directors’ duties risk disrupting effective legal systems implemented in Member States and the careful balance achieved through corporate governance codes and well-established business practices. There is no need for this matter to be further regulated at EU level.’
Media Reports
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The entity does not consider it necessary to regulate directors' duties.
The entity states that: 'Regulating directors’ duties is unnecessary to reach the objectives of the proposal and does not belong in a due diligence framework. It will have negative side-effects, e.g. interfering with national company law systems and creating legal uncertainty, without added value to the ability of companies to apply effective due diligence'.
Media Reports
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The JBS rejects including directors' duties in the Directive.
The JBS states that: 'regulating directors' duties does not belong in a due diligence framework. It will have negative side-effects, including the disruption of existing, well-established governance models of the member states, without added value to the ability of companies to apply effective due diligence'.
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 entity does not take a direct position in relation to liability and compensation, leaving liability to member states.
The entity does not clarify its position in relation to liability and compensation: 'civil liability regimes considerably differ among Member States. Therefore, it would be preferable to leave any decision with regards to liability to the Member States.'
Require companies to exert leverage on and/or provide support to their counterparties in the remediation of human rights impacts that are linked to company activities through their business relationships (e.g their value chains).
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 is against a requirement of terminating relationships if they can't apply enough leverage.
The entity states the following: ‘The proposal also indicates that if companies are unable to mitigate or stop severe human rights and environmental impacts they must suspend or terminate the business relationship. This is seemingly incompatible with international covenants on economic development as well as Article 16 of the Charter of Fundamental Rights of the EU on the freedom to conduct a business.’
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 entity did not respond to the question related to grievance mechanisms and does not take a clear position in relation to a requirement for stakeholder consultation.
The entity did not respond to question 20c on whether complaint mechanisms should be promoted at the EU level as part of due diligence duty. In response to question 20, related to a requirement for directors to establish mechanisms for stakeholder engagement as part of due diligence duty, it states that: 'A legal requirement to take stakeholders’ interests into account combined with risk of personal liability would create significant legal uncertainties. EUROCHAMBRES believes that the EU should explore the creation of an Expert Group on Sustainable Corporate Governance to identify best practices on stakeholder engagement based on already existing corporate government models and the possible consultation channels.'
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 entity considers that liability should be left to the discretion of Member States.
In response to question 19 a it states that: 'Civil liability regimes considerably differ among Member States. Therefore, it would be preferable to leave any decision with regards to liability to the Member States'.
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 is opposed to the inclusion of civil liability in the proposal.
The entity states that: 'the proposal introduces overly complex and inadequate liability clauses. Companies may be held liable for harms committed at home or abroad by their subsidiaries, contractors and suppliers, and potential third country victims will have the opportunity to file lawsuits before EU courts. This will result in a bigger burden for companies with fewer resources and a higher risk for damages that are beyond their control. The inclusion of such clauses is unsuitable because companies cannot be charged for potential damages in their supply chain if they did not cause these damages, could not reasonably know about them, or if they took the appropriate measures to prevent and remediate them. Chambers believe that, instead of targeting businesses with the possibility civil liability, regulatory incentives should be considered as more effective tools. Those who are able and willing to take on the administrative burden can prove that they have fulfilled their due diligence obligations and thus should receive a benefit, to be determined in concertation with national authorities and/or the Commission.'
Media Reports
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Although the entity does not oppose legal liability, it calls for a more balanced approach.
The entity states that: 'Legal liability provisions need to be balanced and truly incorporate the widely accepted principle that due diligence is first and foremost an obligation of means and that companies cannot be made liable for damages they have not caused or directly contributed to (intentionally or negligently).'
Media Reports
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Although the joint statement does not oppose to legal liability, it calls for a more balanced approach
The joint statement indicates that 'Legal liability provisions, including sanctions, need to be balanced, follow legal traditions around breach-damage-causality and truly incorporate the widely accepted principle that due diligence is first and foremost an obligation of means. The complexity of value chains cannot be underestimated when analysing impacts which can have multiple competing causes, players and dynamics. Therefore, companies cannot be made liable for damages they have not -intentionally or negligently - caused'.
Enable and support effective remedy by allowing victims of the actions of subsidiaries outside the parent company’s home country to sue the parent company if victims are not able to find remedy in their own country.
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 opposes enabling potential third-country victims to file lawsuits before EU courts.
Chambers believe that the proposal introduces overly complex and inadequate liability clauses: 'Companies may be held liable for … potential third country victims will have the opportunity to file lawsuits before EU courts. This will result in a bigger burden for companies with fewer resources and a higher risk for damages that are beyond their control. The inclusion of such clauses is unsuitable because companies cannot be charged for potential damages in their supply chain if they did not cause these damages, could not reasonably know about them, or if they took the appropriate measures to prevent and remediate them.'
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 entity rejects due diligence duty definition proposed, and does not take a position in favour of a legal framework for due diligence.
In its response to question 14, the entity states that 'This definition of due diligence duty goes too far. A legally binding implementation of this definition is clearly rejected. Companies have varying degree of influence along their supply chains. Issues that are not directly within the sphere of influence of companies cannot be assigned to their responsibility. This definition implies the imposition of obligations on companies which, as a rule, they are unable to comply with. The responsibility for compliance with the respective legal framework must lie with the respective local companies on site'. In addition, in its response to question 15 on the approach to due diligence duty, the entity points out that 'If the Commission decides to adopt an EU-wide due diligence duty, they should be limited to selected high-risk industries and direct contractual partners (“first-tier only”) in order to minimise the economic impact on the Union's economic fabric'. In its response to question 2, the entity does not explicitly support the development of a legal framework on due diligence. 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 considers that the proposal should only have practical implications for large companies' own operations and up to their respective tier 1 suppliers.
The entity states that: ‘businesses have varying degrees of influence along their supply chain and cannot accept the imposition of legal obligations over an extremely broad coverage of operations which, as a rule, they unable to comply or thoroughly verify. Adopting the concept of “established business relationship” beyond tier 1 companies is problematic because tier 2-n commercial partners are often unknown and contractually sensitive information should not be disclosed.’ It adds that: ‘Eurochambres believes that due diligence should be proportionate, risk-based, and sector-specific. The proposal should thus only have practical implications for large companies’ own operations and up to their respective tier 1 suppliers.’
Media Reports
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The entity considers that covering the whole value chain is neither manageable nor realistic. It also calls for a reduction of obligations.
The entity states that 'Focusing on all aspects within the whole value chain is neither manageable nor realistic. Supply chains alone can comprise multiple tiers with hundreds or thousands of locations, product lines and entities. Companies should be able to prioritise the most salient risks and have the freedom to take appropriate actions to cease, prevent or mitigate identified adverse impacts in accordance with a risk based approach. Without this ability to prioritise, companies cannot realistically implement due diligence requirements in an efficient way'. It also points out that ' The list of norms/conventions in the Annex is too far reaching and generates legal uncertainty. Most of the norms in the annex are only applicable to states and not legal private entities like companies. To be workable, this list should be reviewed and shortened, clearly indicating what are the requirements directly applicable to companies'.
Media Reports
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The joint statement argues that companies can't focus in all elements of their value chains. It also calls for a reduction of obligations
The joint statement states that 'To ensure that the future Directive is truly consistent with a risk-based approach, widely supported in international instruments in the UN and OECD, companies cannot be expected to focus on every single element of their value chains. The ability to prioritise the identification of and action to address the most salient risks is a necessity that must have a crucial impact on compliance with the due diligence process and its consequences'. It also points out that 'we call for revisiting and shortening the annex to only include those conventions and treaties that create concrete obligations on companies so not to mix up their roles with the one of states'.
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 strongly disagrees with a legal requirement of stakeholder identification.
The entity refers to the Accounting Directive and the Non-Financial Reporting Directive and then states that: 'Chambers believe that national frameworks and evolving case law provide rules that are flexible enough to allow for the redefinition of the company's long-term purposes and stakeholders' interests in an orderly, harmonious way.'
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.
Although the entity indicates that it does not take position, it points out that this would create signficant legal uncertainties and calls for best practice identification based on existing corporate governance models.
In response to question 20a, the entity states that it does not take position. Developing an explanation to this question, it points out that 'A legal requirement to take stakeholders’ interests into account combined with risk of personal liability would create significant legal uncertainties. EUROCHAMBRES believes that the EU should explore the creation of an Expert Group on Sustainable Corporate Governance to identify best practices on stakeholder engagement based on already existing corporate government models and the possible consultation channels'.
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 there's no need to further regulate directors' duties at the EU level.
The entity states that: ‘Board members should be allowed to define who are the relevant stakeholders, disclose on the chosen engagement methodology and report on how they integrated their interests during their decision-making.’ It also states that: ‘The proposal’s provisions on directors’ duties risk disrupting effective legal systems implemented in Member States and the careful balance achieved through corporate governance codes and well-established business practices. There is no need for this matter to be further regulated at EU level.’
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 strongly disagrees with this requirement, which is explicitly and directly asked in the consultation.
The entity refers to the Accounting Directive and the Non-Financial reporting Directive and then states that 'Chambers believe that national frameworks and evolving case law provide rules that are flexible enough to allow for the redefinition of the company's long-term purposes and stakeholders' interests in an orderly, harmonious way'.
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 there's no need to further regulate directors' duties at the EU level. It argues that directors may become risk averse if the liability risk is too high, forgoing investment opportunities in favor of less attractive alternatives.
The entity states that: ‘It is important to recognise that directors may become risk averse if the liability risk faced by them is too high, thus forgoing investment opportunities in favor of less attractive alternatives. Any hard law intervention in corporate governance will contribute to jeopardise director liability in accordance with an unknown number of externalities on which the management has no control, and result in breaching their duty of care vis-à-vis the companies’ and the shareholders’ interests.' It also states that: ‘The proposal’s provisions on directors’ duties risk disrupting effective legal systems implemented in Member States and the careful balance achieved through corporate governance codes and well-established business practices. There is no need for this matter to be further regulated at EU level.’
| Legislation | Phase of Active Company Engagement | Position |
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