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 states that ‘an EU legal framework is needed’, however, the entity does not fully agree with the suggested definition of due diligence.
In response to question 2, the entity prefers that an EU legal framework is needed, however, considers that ‘the scope of the due diligence legislation should be based on the UNGP and OECD due diligence guidance and consistent with existing EU legislation…It should be limited to human rights and not cover environmental issues as a separate question. In response to question 14, the entity does not fully agree on the definition of due diligence because the Commission defines the scope broader than commonly understood ....
In response to question 15, the entity picks option 2 ‘minimum process and definitions approach’.
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.
It seems that the entity is in favour of a legal requirement for making human rights due diligence as long as it does not over-regulate.
The entity states that ‘European rules should follow the framework set up by the UN’s Guiding Principles on Business and Human Rights (hereinafter UNGP) and the OECD Guidelines for Multinational Enterprises as closely as possible’, however, over-regulation must be avoided.
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 picks option 2 ‘minimum process and definitions approach’ and ‘SMEs should be subject to lighter requirements’.
In response to question 15, the entity picks option 2 ‘minimum process and definitions approach’, however, the entity is not ‘in favour of theme or sector specific regulation on top of horizontal rules’. The entity considers ‘option 2 to be the best solution to the careful balancing act between sufficient flexibility and proportionality, allowing for sector and company specific implementation of due diligence on the one hand and enough clarity on the minimum requirements on the other hand.’
In response to question 16, the entity thinks that ‘It is important to reduce the burden of SMEs and provide them with non-binding toolbox(es) and guidelines’ and ‘SMEs should have lighter reporting requirements’.
In response to question 17, the entity considers that due diligence rules should also be applied to third-country companies, stating that ‘All companies active in the Single Market…should be obliged to follow the same DD requirements regardless of their domicile.’
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 scope of the regulation should cover companies of all sizes, but the obligations applied to small companies should be lighter than those imposed on larger companies.
The entity believes that ‘ensuring the fairness of the rules would require the turnover limits applicable to non-EU companies to be adjusted down-ward. The scope would leave companies that remain below the threshold values in a challenging limbo, given that these companies can be bound to the Directive’s obligations through agreements, but without a clear possibility to rely on the flexibilities of the rules, which the large companies within the scope of the Directive are able to do.’ As a result, the entity considers that ‘the scope of the regulation should cover companies of all sizes, but the obligations applied to small companies should be lighter than those imposed on larger ones and put in proportion to their resources and possibility to influence matters. This would serve all market operators.’
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 considers that sanctions should be proportionate to the leverage of the company and the level of adverse impact.
In response to question 19a, the entity states that due diligence responsibilities must be separated from the question of liability. ‘Liability should be limited to instances where a company demonstrates total lack of human rights DD, false statements or gross negligence. Any administrative sanctions must be proportionate to the type of non-compliance and leave room to sector- and company-specific characteristics of DD: excessive sanctioning can steer companies to apply rules rigidly, which may result in ineffective and inefficient implementation of legislation. They should also be proportionate to the leverage of the company and commensurate with the adverse impact, in particular for SMEs.’.
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 supportive of administrative sanctions that are effective and proportionate.
The entity states that 'Given that the assessment of due diligence is situation-specific, the guidance and counselling provided by Member States is necessary in terms of ensuring the proposed Directive’s effective and consistent enforcement. ...Regarding both administrative sanctions and damages, the Finnish Commerce Federation notes that their use should be limited to acts or negligence occurring within a company’s sphere of influence, which the company had or should have had an opportunity to address. In all cases, negligence should have a causal link to the damage or other adverse effect. Violations of the due diligence duty or the reporting obligation associated with it, which will inevitably remain highly open to interpretation, should be primarily subject to administrative sanctions alone. The grounds for imposing sanctions must defined precisely and unambiguously and be based, above all, on the severity of the negligence rather than secondary aspects, such as a company’s turnover. ... It is the opinion of the Finnish Commerce Federation that the supervision of the due diligence duty and the related sanctions should as a whole emphasise effective and proportionate administrative consequences over damages and, above all, guidance and counselling that supports companies in their endeavours.'
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 strongly disagrees with directors’ legal duty to identify the company’s stakeholders and their interests and set up procedures to identify and address human rights...impacts. The entity disagrees to some extent with directors’ legal duty to manage risks on the long run.
In response to question 6, the entity states that directors’ responsibility is already included in corporate law and ‘any legal obligation to identify and manage interests and related risks of stakeholders would be burdensome and even counterproductive for promoting sustainable corporate governance because the focus would be on fulfilling the legal requirements, discouraging the directors to recognize opportunities and develop new ideas for improving the SCG.’
In response to question 7, the entity emphasizes that ‘legal obligation to set up procedures and measurable targets would be burdensome and even counterproductive for promoting sustainable corporate governance because the focus would be on fulfilling the legal requirements, not on the business and SCG as a whole.’
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 not supportive of including legal duty of directors in addressing human rights impacts.
The entity states that ‘the duty of care of a company’s directors be provided for separately from the general due diligence duty.’ The entity considers that ‘this solution is ineffective from the perspective of promoting corporate responsibility and that it could lead to serious challenges when assessing whether the directors of a company have acted in the company’s interest. The Commission’s proposal should not be adopted for this part.’
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 states companies should allowed to remedy impacts for their own conducts before being sanctioned.
The entity states that ‘the grounds for imposing sanctions must defined precisely and unambiguously and be based, above all, on the severity of the negligence rather than secondary aspects, such as a company’s turnover. Companies should also be allowed to remedy their own conduct when instructed to do so, prior to imposing sanctions on them.’
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 strongly disagrees with directors to establish and apply consultation mechanisms for engaging stakeholders. The entity acknowledges the importance of consultation stakeholders; however, it is not favour of legal requirements for consultation mechanism.
In response to question 20a, the entity states that ‘Stakeholder engagement is included in the UNGP but without any formal requirements, providing companies with much-needed flexibility in deciding how to do this. Strict legal requirements concerning the procedures or mechanisms would be counterproductive to the promotion of stakeholders’ interests.’
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 response seems that the entity is in favour of legal liability in due diligence process only in very limited cases.
In response to question 19a, the entity states that due diligence responsibilities must be separated from the liability. The entity considers that ‘Liability should be limited to instances where a company demonstrates total lack of human rights DD, false statements or gross negligence. Any administrative sanctions must be proportionate to the type of non-compliance and leave room to sector- and company-specific characteristics of DD: excessive sanctioning can steer companies to apply rules rigidly, which may result in ineffective and inefficient implementation of legislation.’
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 indicates that ‘an EU legal framework is needed’ and thinks that it will help companies increase their leverage in the value chain. However, no statement was found elaborating on what it considers adequate coverage of the value chain.
In response to question 2, the entity prefers that an EU legal framework is needed, however, considers that ‘the scope of the due diligence legislation should be based on the UNGP and OECD due diligence guidance and consistent with existing EU legislation…It should be limited to human rights and not cover environmental issues as a separate question.
In response to question 3, the entity chooses option 1,3,4,5 and 6 as benefits of an EU due diligence duty, including that ‘A non-negotiable standard would help companies increase their leverage in the value chain’.
In response to question 15, the entity picks option 2 ‘minimum process and definitions approach’. The entity states that ‘We are not in favour of theme or sector specific regulation on top of horizontal rules. However, non-binding guidance taking into account the specificities of different sectors could be considered if the companies believe these would provide added value.’
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 ‘Focusing on serious risks in lieu of an established supply chain is a better solution from the perspective of all operators’. It seems that the entity is not in favour of implementing due diligence obligations covering their value chain.
The entity states that ‘the extent of the due diligence should be limited to the supply chain rather than the value chain’, ‘Focusing on serious risks in lieu of an established supply chain is a better solution from the perspective of all operators’. The entity proposes that ‘the potential liability for damages should be limited, in accordance with the UNGP, to the operations of first-tier business partners, even if the obligation to minimise serious risks would be extended to the second level.’
Require that companies implement contract clauses and Code of Conduct with business partners clarifying obligations to avoid and to address human rights 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 is not in favour of contractual requirements for business partners on obligations to avoid and to address human rights harms.
Regarding the duty to commit indirect established business partners to comply with a company’s code of conduct through contractual assurances, the entity indicates that ‘While this may yet be successful with first-tier subcontractors, companies on the second tier and the tiers further down the line remain easily in the dark with regard to the content of the agreements.’ As an alternative, the entity proposes that ‘as regards indirect business partners, it should be adequate to ensure that direct business partners commit to relaying information about the code of conduct or equivalent requirements to their own subcontractors and to replicating them in their own contracts.’
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 indicates that a duty for directors to identify the company's stakeholders and their interests should not be legally mandated. However, it is unclear whether it has a similar objection to a legal obligation of that duty for companies.
In response to question 6 the entity states that 'As explained in the answer to Q1, companies and their directors already take into account said interests, when these have direct impact on the long-term interests of the shareholders/owners. Corporate law already requires the directors to act in the interest of the owners and also manage the risks of other stakeholders, when these are relevant. However, any legal obligation to identify and manage interests and related risks of stakeholders would be burdensome and even counterproductive for promoting sustainable corporate governance because the focus would be on fulfilling the legal requirements, discouraging the directors to recognize opportunities and develop new ideas for improving the SCG. It is also worth noting that the UNGP only refers to companies', not their directors' duties.'
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 strongly disagrees with directors’ responsibility to establish and apply consultation mechanisms for engaging with stakeholders.
In response to question 20a, the entity states that ‘Stakeholder engagement is included in the UNGP but without any formal requirements, providing companies with much-needed flexibility in deciding how to do this. Strict legal requirements concerning the procedures or mechanisms would be counterproductive to the promotion of stakeholders’ interests.’
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 with directors’ legal duty in management the risks in relation to stakeholders and their interests.
In response to question 6, the entity states that ‘Corporate law already requires the directors to act in the interest of the owners and also manage the risks of other stakeholders, any legal obligation to identify and manage interests and related risks of stakeholders would be burdensome and even counterproductive for promoting sustainable corporate governance because the focus would be on fulfilling the legal requirements, discouraging the directors to recognize opportunities and develop new ideas for improving the SCG.’
In response to question 7, the entity strongly disagrees with directors’ legal duty to set up procedures to identify and address human rights, social, and environmental impacts. It emphasizes that ‘legal obligation to set up procedures and measurable targets would be burdensome and even counterproductive for promoting sustainable corporate governance because the focus would be on fulfilling the legal requirements, not on the business and SCG as a whole.’
| Legislation | Phase of Active Company Engagement | Position |
|---|
| Member | Performance band |
|---|
