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.
Main Web Site
The main organizational Web site of the company and its direct links to major affiliates and attached documents.
The entity argues that in it's current from, the Directive will lead to legal uncertainty, withdrawal of European companies from high-risk regions and will fragment the EU single market.
The entity states that ‘In this form, the Directive will lead to even more red tape, legal uncertainty and ultimately the withdrawal of European companies from high-risk regions. The EU Directive is likely to make the diversification of supply chains required to ensure security of supply more difficult. The German business community calls for a proportionate European directive which supports European companies in global competition such that the necessary protection of human rights and environment can be promoted in interaction between States and businesses. A prior condition for this is that companies must at least be able to exert some influence in these areas. In this regard, it is essential to recognise practical limits. Against this background, we regard the following points as indispensable’. Then the entity makes remarks in a number of topics including the following: ‘Without an adequate degree of binding harmonisation, a directive runs the risk of fragmenting the EU single market, since companies across Europe will not be subject to the same laws and competition conditions. The least that is needed here is a so-called single market clause. European companies will otherwise be confronted with 27 different sets of transposition provisions. As a result, the EU would fail in its mission of being a regulatory beacon for other jurisdictions’.
Main Web Site
The main organizational Web site of the company and its direct links to major affiliates and attached documents.
The entity frames the proposed Directive as a threat to competitiveness, supply chain resilience, and industrial transformation, and considers that current proposals don't meet business expectations
The entity states that ‘The EU institutions involved in the CSDD seem to lack a sense of proportion for the competitiveness of European companies in the crisis and the strategically necessary diversification of supply chains. With this directive, the EU risks a massive impairment of the necessary transformation of its industries. It jeopardises the development of alternative and resilient value chains and thus the security of supply of the economy and society. Instead of facilitating access to new sources of supply and expanding them in number, the directive makes the important diversification of supply chains significantly more difficult, including in high-risk countries. It fails to achieve the common goal of politics and business of reducing existing dependencies. This way, Europe will not be able to keep up in the geopolitical competition’. … it is wrong to shift the responsibility for the protection of human rights and the environment solely onto companies in this form. … None of the positions agreed upon so far meets the expectations of the business community.
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 for legal action in relation to due diligence.
In response to question 2, on whether a legal framework is needed, the entity states that no action is needed, and argues the following: First, the whole formulation of question 2 is based on disputed assumptions. …. The reference to the survey and study on due diligence requirements as empirical evidence is misleading since SMEs were underrepresented as well as (sectoral) business organizations while NGOs were overrepresented. … Second, when it comes to addressing adverse impacts on human rights the EU is not starting from zero. … As a result, companies enjoy a very good reputation with respect to their commitment beyond national and European boarders. Thus, the Commission should check possibilities to further develop and support voluntary schemes. In addition, the EU Non-Financial Reporting Directive (NFRD) already requires public interest companies to disclose information on the policies they implement – including in their supply chains – … Third, the Commission points to the fact that human rights violations occur in supply chains internationally, but not how legally binding rules for EU companies would make them disappear. …
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 critizes the proposal in general through the heading 'subject matter' including aspects such as definitions, scope, liability, etc.
The entity states that 'The BDI sees the obligations as not implementable in business practice especially due to its concept covering the whole value chain, including indirect “established business relationships” and defining liability rules for third party activities. In particular, we criticize the fact that the scope of application not only covers upstream but also downstream transactions. Companies cannot control their clients’ usage of their products even if they can give instructions. An adjustment is needed here and the scope of application should be narrowed to transactions in the supply chain. ... It is furthermore irritating that the far-reaching obligations for companies should also apply within the European Union, where it should actually be assumed that the human rights and environmental standards listed in the annex to the draft are guaranteed or must be enforced by the member states.
Requiring Human rights due diligence of all companies, regardless of sector and size, while still reflecting their individual circumstances.
Main Web Site
The main organizational Web site of the company and its direct links to major affiliates and attached documents.
The entity calls for applying a threshold of 1.000 employees
The entity calls for applying a threshold of 1.000 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 opposes to the EU legal framework and does not take position on a specific approach. It considers that all SMEs should be excluded.
In response to question 16 the entity considers that all SMEs should be excluded. It states that 'SMEs face distinct challenges in meeting due diligence responsibilities because of their size, activities, available resources and leverage in obtaining information in the supply chain. A possible mandatory approach will thus impose bigger burdens on them. … A key approach to making due diligence more manageable for companies could be, for example, a positive list in which entire countries, the EU plus other countries in which human rights and ILO core labour standards are respected or legalized, are excluded from the due diligence obligation and only those suppliers have to be considered who are located outside the EU in high-risk countries, which will prevent many SMEs that are part of the supply chain from being burdened with excessive and unaffordable bureaucracy. Also, the entity does not respond to a specific approach as presented in question 15 (cross sector, vertical). It considers that an EU legal framework on due diligence is not necessary.
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 the application to all companies and advocates for raising thresholds.
The entity states that 'The thresholds for the applicability of the due diligence obligations are clearly too low and should be raised at the very least to the already low threshold of 1,000 employees (valid from 2024) of the German Supply Chain Act. A further lowering is likely to lead to a disproportionately high administrative burden for medium-sized companies'.
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 is in favour of supervision by national authorities based con complaints about non-compliance with setting up and implementing due diligence with effective sections, with a mechanism of EU coordination to ensure consistency.
As per its response to question 19a on enforcement mechanisms, the entity selects the option (multiple choice) of supervision by competent national authorities based on complaints (and/or reporting, where relevant) about non-compliance with setting up and implementing due diligence measures, etc. with effective sanctions (such as for example fines), complemented with a mechanism of EU cooperation/coordination to ensure consistency throughout the EU. However, in its explanation to the question, the entity refers to question 2 where it doesn't agree with a new legal framework on due diligence. After that reference, it states: ‘We want to point out that there is a need to acknowledge companies’ efforts and protect them against lawsuits, otherwise they will disengage from risky markets. Fines should thus be waived if corporates have implemented a sufficient Compliance Management System. Furthermore, there are also still many unanswered questions regarding the question of law enforcement or regulatory control …’.
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 the creation of new enforcement mechanisms under the Directive, arguing that existing national administrative sanctions and supervisory controls are sufficient to address non-compliance with due diligence requirements
The entity states that 'Mandatory legal and sanction – as well as liability-linked requirements – must therefore be limited to direct suppliers (tier-1) with whom businesses have direct contractual and thus influential relationships. We thus suggest limiting the obligations to the supply chain instead of the value chain and use a risk-based approach as the UNGP foresees. Law enforcement is guaranteed by administrative sanctions and control by supervisory authorities. Civil liability rules that satisfy necessary conditions (damages occurred and a causal link between the two is established) already exist in the EU member states'.
Including in the duties of directors and company law obligations to avoid human rights impacts or “harms”.
Main Web Site
The main organizational Web site of the company and its direct links to major affiliates and attached documents.
The entity explicitly opposes obligations placed on directors regarding human rights
It states that 'The separate requirements applicable specifically for members of the management team should be deleted. Additional rules in company law constitute a superfluous duplication within the Directive and unnecessarily complicate its implementation for companies.
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 for directors to establish procedures to ensure risks and impacts on stakeholders are identified, prevented and addressed, and to manage risks for the Company in relation to stakeholders and their interests.
In its response to question 7 on whether directors should be legally required to establish procedures to ensure risks and impacts on stakeholders are identified, prevented and addressed, it states that ‘The consideration of possible risks and adverse impacts on stakeholders, … are a common element of risk-management processes in companies. However, it is important to note that there is no one-size-fits-all approach. Companies need to be flexible and take sector-specific risks into account as they are best placed to identify, reassess and thus also control different risks. Furthermore, the mentioned aspects have been addressed in various pieces of regulation with regard to a company’s responsibility, as for example the NFRD and the new Taxonomy regulation. In relation to managing risks for the Company in relation to stakeholders (question 6), it states ‘directors´ duties cannot be put on a checklist formula as there is no one-size-fits-all approach. Companies and their boards need to retain the flexibility to take sector-specific risks into account and to balance the different stakeholders´ interests, which vary from one company to another’.
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 explicitly opposes obligations placed on directors regarding human rights
The entity states that 'The related provision Duty of Care should be deleted. The proposed Directive addresses the responsibility of management for human rights and environmental concerns in a very far reaching, unspecified and much more complicated way than the German Supply Chain Act. Management must take into account the short, medium and long-term impacts of their decisions on sustainability matters, including human rights, climate change and environmental impacts. Provisions in national law on breaches of duty by management are intended to capture this duty'.
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 support the obligation to remedy impacts and criticises holding companies responsible for third-party impacts.
The entity states that 'Companies can only be liable for their own activities in the supply chain, not for those of their business partners or their suppliers. The German SupplyChain Act as well as the UN Guiding Principles on Business and Human Rights (UNGP) therefore do not provide for civil liability. The legal uncertainty for entrepreneurs and companies is immense'.
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 opposes making the inclusion of grievance mechanisms a legal requirement
"In its response to question 20c, the entity states that 'it should be up to the company to decide which mechanism is suitable for the stakeholder with which they are engaging — either advisory body, complaint mechanism, etc.' The entity also disagrees 'to some extent' with the requirement for directors to establish consultation mechanisms for engaging with stakeholders as part of 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 entity seems to acknowledges the obligation to provide grievance mechanisms but expresses concerns about increased bureaucratisation, not showing a clear support for this requirement.
The document describes the proposal requirements, including complaint mechanisms, and then states that 'While we very much agree on the “obligation of means” approach understood as reasonable effort, we see the risk of increasing bureaucratisation, which leads to companies orienting themselves less towards real, actual risk prevention and more towards working through legislative and administrative checklists in accordance with the rules'.
Enabling judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.
Main Web Site
The main organizational Web site of the company and its direct links to major affiliates and attached documents.
The entity calls for deleting civil liability introduced by the Directive
It states that 'Any additional civil liability must be completely deleted from the draft Directive In essence, civil liability must be limited to directly attributable actions, as already provided for in individual national legal systems in the EU. Companies need clear definitions in precisely this area to guaranty legal certainty.
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 doesn't consider this a suitable option as enforcement mechanism.
Question 19a asks about enforcement mechanisms through a multiple-choice format, one of which is 'judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations'. The company did not select this as one of its preferred measures. Also, in its response to question 2 the entity also states that 'any EU legal framework on corporate human rights due diligence should envision an international level playing field, leave out liability provisions …'.
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 stronlgy opposes enabling judicial liability based on due diligence failures
The entity states that 'Companies can only be liable for their own activities in the supply chain, not for those of their direct or indirect business partners. Therefore, the German Supply Chain Act as well as the UN Guiding Principles on Business and Human Rights (UNGP) do not provide for civil liability. The provisions in Art. 22 of the CSDD proposal would cause unproportionate and uninfluenceable civil liability risks for companies'.
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.
Main Web Site
The main organizational Web site of the company and its direct links to major affiliates and attached documents.
The entity calls for reducing the scope to direct suppliers and for reducing the list of due diligence obligations.
The entity states that Meeting due diligence obligations must be limited to the sphere of the supply chain and more specifically to the direct supplier. A consideration of the entire supply chain is not feasible in practice and would inevitably lead to a bureaucratic nightmare, not only for small and medium-sized enterprises. It should be possible for companies to assign weightings and to prioritise, especially within the supply chain structure. In addition, it points out that ‘The list of individual due diligence obligations in the Annex to the Directive must be shortened. Due diligence obligations to be complied with must be manageable and legally certain for companies. A blanket reference to implementing and complying with requirements under international agreements goes too far for companies. The requirement should be reduced to a statement of the clear rules of the UN Guiding Principles’.
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 consider that a legal framework on due diligence is needed and disagrees with several aspects of due diligence duty definition.
The entity does not consider that a legal framework on due diligence is needed (question 2). In relation to question 14, on whether it agrees with due diligence duty definition, it states '‘BDI welcomes a common definition of “due diligence duties” but disagrees with the definition proposed above. The definition is too broad and lacks clarity. To establish a more manageable, practical and proportionate due diligence duty on EU level, limitations are necessary. A rather broad definition, is namely in d anger of being ineffective because companies might focus on different/wrong effects of their actions … On the definition of “supply chain”: We disagree with this definition, which is too broad. In practice, it is impossible to manage all the risks related to companies’ “business relationships” along the whole supply chain. Companies’ efforts should be limited to first-tier suppliers/subcontractors outside the EU …. The future legislation needs to be proportionate regarding resources and the actual leverage companies have towards their suppliers. However, there is no legal concept of “foreseeable impacts” and therefore this term cannot be applied in practice. Furthermore, this definition should include the element of empowerment, e.g. in case of the identification of “problematic” contractual partners, before or instead of the retreat from “risky” business relationships’.
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 covering the entire value chain, advocating limitation to direct suppliers. The entity generally critizises the proposal.
The entity states that 'Mandatory legal and sanction – as well as liability-linked requirements – must therefore be limited to direct suppliers (tier-1) with whom businesses have direct contractual and thus influential relationships. The entity generally opposes to the provisons of the proposal for Directive, and doesn't refer to remedy nor improvement.
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 (for directors) of stakeholder identification.
The entity strongly disagrees with question 6 about a requirement (for directors) to identify stakeholders and their interests. It states that ‘All of the above-mentioned points are part of the successful management of a company and are therefore a core interest of the directors of the company themselves. For this reason, BDI does not see a need for additional regulatory measures to set an incentive here. It rather seems that no incentive, but a threat of legal liability is aimed at, here. A lot of formal mistakes can arise in the identification and analysing process. … it is not reasonable to believe that companies can carry out an exhaustive overview of all their stakeholders’ interests. There is no sufficiently specified definition of the term stakeholder and no reasonable definition can be found due to the specificity of each company´s environment. … many of the issues mentioned are already covered by national corporate governance codes, by the NFRD and the recently adopted Taxonomy Regulation’.
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 to some extent that the EU should require directors to establish mechanisms for engaging with stakeholders as part of due diligence duty.
It disagrees to some extent (question 20a) with a mandatory requirement to establish mechanisms for engaging in stakeholder consultation. It states that 'We recognize that consultation of relevant stakeholders is important in the life of companies. To generate significant benefits, the company, best knowing the impact stakeholders have on its activities and inversely, should be given the flexibility to determine the relevant stakeholders depending on its specificities and the type of measures/mechanisms to inform, consult and engage with them. Companies already organise the dialogue with their stakeholders using different mechanisms that are suitable to the intended goals: internal, advisory committees, roadshows, direct dialogue, one to one meetings, partnerships, panels… etc. On the contrary, legally mandated mechanisms could lead to either meaningless box-ticking exercises or to conflicting situations (between different stakeholders’ interests) that would reduce efficiency of decision-making processes in companies and harm their competitiveness. In addition, new legal requirements risk destabilising or duplicating existing effective provisions’.
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 a legal requirement for directors to manage the risks of the company in relation to stakeholders and their interests.
The entity strongly disagrees with question 6 about a requirement (for directors) of management of the risks for the company in relation to stakeholders and their interests. It states that 'All of the above-mentioned points are part of the successful management of a company and are therefore a core interest of the directors of the company themselves. For this reason, BDI does not see a need for additional regulatory measures to set an incentive here. It rather seems that no incentive, but a threat of legal liability is aimed at, here. A lot of formal mistakes can arise in the identification and analysing process. Secondly, directors´ duties cannot be put on a checklist formula as there is no one-size-fits-all approach. Companies and their boards need to retain the flexibility to take sector-specific risks into account and to balance the different stakeholders´ interests, which vary from one company to another. … many of the issues mentioned are already covered by national corporate governance codes, by the NFRD and the recently adopted Taxonomy Regulation. We therefore believe that it is appropriate for the directors to take these into account in their decision-making, but not for this to be required by law. Last, legal requirements would potentially disrupt decision-making in boards given that not all the interests of stakeholders of companies are fully compatible with each other and sometimes they are even incompatible depending on the concrete situation’.
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