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 is largely unsupportive of making human rights due diligence a legal requirement and argues that existing guidelines and standards are enough. However, the entity does support a policy framework for human rights due diligence.
"Response Question 2: No, it should be enough to focus on asking companies to follow existing guidelines and standards. There is little nuance in the question and possible answers as presented. A potential policy framework should support businesses in developing and maintaining their due diligence approaches, with attention for the nuanced complexity as experienced by SMEs and depending on the sector and complexity of the supply chain. A potential framework should provide a European level playing field, also covering companies from third countries, thereby safeguarding competition vis-à-vis third countries. Response Question 3: Ensuring that the company is aware of its adverse human rights, social and environmental impacts and risks related to human rights violations other social issues and the environment and that it is in a better position to mitigate these risks and impacts;Harmonisation to avoid fragmentation in the EU, as emerging national laws are differentIncreased administrative costs and procedural burden;Penalisation of smaller companies with fewer resources;Competitive disadvantage vis-à-vis third country companies not subject to a similar duty;Responsibility for damages that the EU company cannot control;Decreased attention to core corporate activities which might lead to increased turnover of employees and negative stock performance;Difficulty for buyers to find suitable suppliers which may cause lock-in effects (e.g. exclusivity period/no shop clause) and have also negative impact on business performance of suppliers;Disengagement from risky markets, which might be detrimental for local economies;Other""Putting additional pressure on Board members and discouraging persons to accept Board mandates considering the liabilities attached to their mandatesTrade interruption due to the inability to quickly find an alternative for an urgent need in production or delivery due to the lack of time for proper due diligence.SCG will result in a major competitive disadvantage for EU based companies due to m.o. increased costs of services and/or goods within the EU. Consumers choosing to buy products from companies outside EU.European companies alone cannot solve all problems arising from States failing to provide and/or enforce the necessary legal framework, rule of law and protective laws. An EU legislation, which shifts the onus from these third countries to EU companies, could disincentivise States taking their responsibility to improve human rights and social standards on their territory.Mandatory due diligence could also create a climate of distrust and defensive behaviours: the fear of being held liable with regard to their supply chains could lead EU companies to become very cautious to avoid legal risks rather than engage trustfully in useful dialogue and cooperation. As stakeholders around the world may be encouraged to seize the courts against EU companies, who are already applying high environmental and human rights standards, there may be a risk of excessive litigation and judicialization of the relationship with stakeholders."""
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 supports lighter requirements for SMEs
"A potential policy framework should support businesses in developing and maintaining their due diligence approaches, with attention for the nuanced complexity as experienced by SMEs and depending on the sector and complexity of the supply chain." "Micro-enterprises (less than 10 people employed) should be excluded; SMEs should be subject to lighter requirements (“principles-based” or “minimum process and definitions” approaches as indicated in Question 15);SMEs should have lighter reporting requirements; Capacity building support, including funding; Detailed non-binding guidelines catering for the needs of SMEs in particular; Toolbox/dedicated national helpdesk for companies to translate due diligence criteria into business practices."
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.
It is unclear whether the entity supports the level of ambition proposed in relation to enforcement mechanisms.
The nature and scope of enforcement mechanisms and sanctions will depend on the exact content and scope of the regulation/obligation. When it comes to enforcement and sanctions, there is a critical difference between holding companies responsible for breaches in only the first tier of the supply chain or throughout the entire supply chain. Should the due diligence obligations apply throughout the entire supply chain, the sanctions should be determined differently for breaches in respectively first tier and beyond first tier. In other words, the sanctions should consider how much the company could reasonably be aware of, how much it could influence and mitigate and how serious the breach was. The appropriate enforcement mechanism must be defined accordingly. In addition, sanctions should also be determined differently and in a proportionate way depending on the size of the enterprise (SME versus large companies)."
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 opposes the inclusion of a directors duty of care at the EU level.
"A legislative intervention would likely have potential unintended negative effects that should be taken into account and challenges several fundamental principles of our market economy model which is the freedom of enterprise and property (ownership) rights and disrupt a long-standing and fine-tuned balance in national corporate governance systems. EU action could have other counterproductive effects on different levels:- Unlimited and diffuse director liability where directors by law are required to balance the interests of their stakeholders, will inevitably lead to stakeholder conflicts and deadlocks which in turn can lead to risk aversion and less entrepreneurial behaviour;- These conflicts of interests could also reduce investors’ incentives to provide risk capital to companies, including first movers and others who need risk capital to invest in the sustainable transition;- By having the law determining that managers must take on board all stakeholders expectations, there is a risk to give them (paradoxically) even more freedom because these expectations could be vague, contradictory and difficult to measure against any KPI’s;- Considerable administrative burden would be added which would hamper and slow down decision-making processes in companies making them more vulnerable to competitors (including from outside the EU)." "These possible risks could be mitigated by refraining from setting up at EU level a definition of duty of care or “company interest” which have to remain flexible."
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 acknowledges the importance of companies having consultation channels for its stakeholders, but opposes the inclusion of having grievance mechanisms as a legal requirement.
In response to question 20a, which asks, "Do you believe that the EU should 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 in this area?", the entity responded, "I disagree to some extent" - "We recognise that consultation of relevant stakeholders is important in the life of companies, but it should be up to the company itself to define which stakeholders are relevant. 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, co-innovation, panels… etc. Specifically on workers, whilst it is important that they have the possibility to be involved in discussions on company strategy (including due diligence), in full respect of national industrial relations systems, there is no need for further EU legal requirements to ensure this. The EU directive on information on consultation is already sufficient. Also, new legal requirements risk destabilising or duplicating existing effective provisions. 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."
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 does not support the inclusion of civil liability provisions in the CSDDD.
In response to Q 19 on enforcement of the CSDDD, the entity did not select that there should be judicial enforcement or liability for non-compliance.
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 calls to limit supply chain due diligence obligations to first tier suppliers.
Q 14, in response to the proposed 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 a company’s “business relationships” along the whole supply chain. Companies’ efforts should be limited to first-tier suppliers/subcontractors.
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 does not support requiring companies to identify stakeholders and their interests.
"Moreover, it is not reasonable to believe that companies can carry out an exhaustive overview of all their stakeholders’ interests. There is no definition behind “stakeholders” and no reasonable definition can be found due to the specificity of each company's environment. We strongly believe that any legal consequences attached to this notion would be highly problematic and hazardous for companies."
"Companies should decide and disclose which stakeholders they take into account when determining their strategy depending on their stakeholders, end markets, footprint/communities and social and environmental impact. Also, depending on the activity of the company, some aspects will be more material than others, and companies should be able to focus on their most material ESG subject."
|"Going too far into the supply chain (eg taking into account the interests of the employees of your supplier) should be avoided as this would even more complexify decision making."
"Once a company has determined (and disclosed) its stakeholders and its materiality framework, it should decide how and to which extent they need to be taken into account for determining its strategy (e.g. as far as shareholders are concerned, the company should interact with its shareholders and understand their strategic objectives and what they expect from the company)."
"Directors’ duties cannot be put on a checklist formula as suggested by the previous two questions but through broad principles that provide flexibility for the company to identify in the present and in the long term which of the stakeholder interests it should consider in accordance with its activity, structure, nature and size."
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 does not support the inclusion of directors’ duties in relation to stakeholder engagement.
Question 20a: Do you believe that the EU should 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 in this area? I disagree to some extent - "We recognise that consultation of relevant stakeholders is important in the life of companies, but it should be up to the company itself to define which stakeholders are relevant. 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, co-innovation, panels… etc.
Specifically on workers, whilst it is important that they have the possibility to be involved in discussions on company strategy (including due diligence), in full respect of national industrial relations systems, there is no need for further EU legal requirements to ensure this. The EU directive on information on consultation is already sufficient. Also, new legal requirements risk destabilising or duplicating existing effective provisions. Involvement/consultation/information to relevant stakeholders is important, but should be determined by the company, depending on its specificities.
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. Also, if there are requirements throughout the entire supply chain, at which levels should a company make sure to have a consultation mechanism? Only in their own direct operations or beyond that? Is it reasonable to ask a company to manage a consultation mechanism in place at each supplier, for example?"
Require that human rights risks and impacts should be assessed through dialogue with stakeholder or with their legitimate representatives.
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 creating legally binding requirements for companies to assess human rights risks and impacts through dialogue with its stakeholders.
"We recognise that consultation of relevant stakeholders is important in the life of companies, but it should be up to the company itself to define which stakeholders are relevant. 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, co-innovation, panels… etc.
Specifically on workers, whilst it is important that they have the possibility to be involved in discussions on company strategy (including due diligence), in full respect of national industrial relations systems, there is no need for further EU legal requirements to ensure this. The EU directive on information on consultation is already sufficient. Also, new legal requirements risk destabilising or duplicating existing effective provisions. Involvement/consultation/information to relevant stakeholders is important, but should be determined by the company, depending on its specificities.
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. Also, if there are requirements throughout the entire supply chain, at which levels should a company make sure to have a consultation mechanism? Only in their own direct operations or beyond that? Is it reasonable to ask a company to manage a consultation mechanism in place at each supplier, for example?"
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 states that existing legislation on the management of companies' human rights risks is sufficient and does not support the inclusion of new directors' duties in the CSDDD.
"Regarding the management of the risks and opportunities in relation to stakeholders, we recall that the first mission of the Board is to determine the strategy of the company, taking into account the risks it is confronted with and the opportunities it has identified. Integrating and reporting on risks factors are key components of corporate stewardship and have already been included in EU legislation for a long time. In accordance with the Accounting directive, the management report shall include “a fair review of the development and the performance of the undertaking’s business and of its position, together with a description of the principal risks and uncertainties that it faces”. The NFRD has notably extended the scope of this risk assessment by requiring companies to publish a non-financial statement which is in Belgium part of the management report and therefore falls under the responsibility of the Board of Directors. As a consequence, we consider that the framework regarding the integration of sustainability risks, impacts and opportunities is already in place and efficient. This framework will certainly be strengthened following the review of NFRD and overlapping legislation should therefore be avoided.
Question 7. Do you believe that corporate directors should be required by law to set up adequate procedures and where relevant, measurable (science –based) targets to ensure that possible risks and adverse impacts on stakeholders, ie. human rights, social, health and environmental impacts are identified, prevented and addressed? I strongly disagree
It is not up to the Board of Directors, which is not a permanent body, to set up procedures or targets to ensure that sustainability-related risks are identified, prevented, and addressed. It is a task for management which has to fulfill this duty by mapping risks and therefore allowing for the identification, assessment and prioritisation of sustainability-related risks. The role of the Board of Directors is to review these risks, as well the measures taken accordingly, based on the strategy it has defined. It should also be recalled that the Board’s duty is not only to address sustainability-related risks, but all kinds of risks."
| Legislation | Phase of Active Company Engagement | Position |
|---|
| Member | Performance band |
|---|---|
| ArcelorMittal | E- |