Can the EU hold companies to account?
The case for introducing laws on corporate accountability is stronger today than it has ever been. The climate crisis is getting worse, not better, and 2020 was the deadliest year on record for land and environmental activists.
Global supply chains, many of which end in Europe, contribute to much of the violence, as activists seek to protect their land against destructive industries to plundering their natural resources to feed their global economy.
On 23 February 2022, the European Commission released the long-awaited proposal on Corporate Sustainability Due Diligence. The draft Directive aims to “foster [companies’] respect of human rights and the environment in their own operations and throughout their value chains” by mandating them to identify, prevent, mitigate and account for their impacts. This presents an unprecedented opportunity to help protect people and the environment.
This briefing aims to inform ongoing EU legislative debates by outlining Global Witness’s key proposals for a robust due diligence and liability framework. It seeks to help strengthen the current proposal where it falls short of protecting communities and the environment from corporate abuse, and calls for the EU to:
- Establish a clear corporate duty to prevent human rights, environmental, and climate harms throughout the entire value chain
- Incorporate safe and meaningful stakeholder engagement as an essential and mandatory component of the due diligence process, while recognizing the safety concerns specific to Human Rights Defenders (HRDs) and Land and Environmental Defenders (LEDs)
- Address the barriers to justice that prevent victims of corporate abuse from accessing effective remedy
- Ensure that companies cannot exclusively rely on contractual assurances and third-party verification processes to seek and establish compliance with their due diligence obligations and to rebut liability
- Ensure that financial institutions are held to the same ongoing due diligence requirements as other companies, and do not provide financial services where these might cause or contribute to harm.