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Opinion and Comment

An Ambitious European Directive on Mandatory Human Rights Due Diligence and Responsible Business Conduct

Text: Isabelle Schömann, European Trade Union Confederation (ETUC)

Isabelle Schömann, Confederal Secretary of the European Trade Union Confederation (ETUC), advocates for a European directive to regulate companies’ human rights due diligence obligations. In her view, the involvement of trade unions and workers’ representatives and coherence with Europe’s industrial, social, environmental and climate policy will be decisive.

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Corporations operate across borders. Complex corporate structures and supply and value chains enable parent companies to circumvent responsi­bility for violations of human rights or social and environmental standards. It is difficult to trace the negative social and environmental impacts of their global operations and to make them accountable.

Human rights violations as a result of companies’ business operations must stop

Violations of human rights, including workers’ and trade union rights, continue to take place in companies’, in particular multinationals’, direct activities and in their supply and value chains. The freedom of association, the right to bargain collectively, the right to information, consultation and participation and to take collective actions are at the core of such violations.

Violations also concern the right to fair remu­neration, decent working conditions, nondiscrimination, health and safety in the workplace and child labour. This must stop. Intolerable situ­ations like the Rana Plaza disaster cannot be part of the business model of any sustainable multinationals and supply chains. This is definitively not what the EU stands for. The European trade union movement calls for ambitious and urgent actions at European level to introduce binding and effective due diligence mechanisms.

Voluntary route has proven insufficient and ineffective

A voluntary framework to promote business respect for human rights has proven insufficient and ineffective for workers, society and businesses. The main international and European tools, like the UN Guiding Principles on Business and Human Rights, the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, the Council of Europe’s Recommendations on Human Rights and Business and the OECD Guidelines for Multinational Enterprises, do not provide binding requirements and do not include effective, proportionate and dissuasive sanction mechanisms to force businesses to live up to their responsibilities.

„The European trade union movement calls for ambitious and urgent actions at European level to introduce binding and effective due diligence mechanisms. “

Robust European directive on human rights due diligence and responsible business conduct including supply chains

A robust, binding European due diligence framework with legal certainty and predictability is needed instead of a patchwork of ineffective voluntary measures that creates unfair competition at European and global level and leads to a race to the bottom in terms of human rights enforcement and the protection of environmental and social standards. Furthermore, in the current situation there is no stable ground for investors to evaluate and to compare companies’ sustainability and due diligence processes.

The EU must act, and it must act now! There is a clear and concrete political responsibility to live up to the EU principles and objectives, its commitment to the values of liberty, democracy and respect for human rights as laid out in the Treaty on the European Union and the Treaty on the Functioning of the European Union (the so-called Lisbon Treaty) and the EU’s Charter of Fundamental Rights. The EU must provide for a legally binding environment based on a sustainable and stakeholder-oriented corporate governance model which fully respects human rights, including workers’ and trade unions’ rights, and recognises and values the necessity of workers’ contributions and interests. The ETUC calls for an EU directive on human rights due diligence and responsible business conduct.1

Active involvement of trade unions and workers’ ­representatives, as well as other stakeholders, should be guaranteed in the European directive

A European directive should ensure the full and active involvement of trade unions and workers’ representatives in the whole due diligence process, as workers’ and trade unions’ rights are at the core of sustainable businesses, including the management of their value chains. Effective remedies and access to justice should be available for workers and trade unions as well as to victims of human rights violations. Companies should be held accountable for the adverse impacts of their operations: liability must be introduced for cases where companies fail to respect their due diligence obligations, without prejudice to joint and several liability frameworks.

„A robust, binding European due diligence framework with legal certainty and predictability is needed.“

Coherence with European industrial, ­environmental and climate policy

This initiative should go hand in hand with the efforts to ensure more transparency of business activities, including through a European business register and public country-by-country reporting. Sustainable corporate governance should include fair taxation principles, making multinational com­panies pay taxes where profits are generated with the aim of preventing global supply chains that are based on tax avoidance and aggressive tax planning. It should also provide for consistency with European industrial policy as well as environmental and climate policies.

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