14 December 2023
In the early hours of Thursday 14 December, the European Parliament, European Commission and Council of the European Union reached a definitive political agreement on the Corporate Sustainability Due Diligence Directive. The specific content of the agreement is still being clarified by decision makers, more complete and detailed information will be available in the upcoming days.
While some uncertainty on the details remains, this is a big day. The world’s largest single market, home to millions of businesses whose value chains extend across the globe, has agreed on legislation mandating companies to conduct human rights and environmental due diligence.
This is a great milestone in global efforts to legislate for corporate accountability for harm. This legislation, which we expect to come into force around March 2024, has the potential to improve working conditions for millions of workers globally and to drive better business practice.
Decision-makers have agreed on the inclusion of elements Anti-Slavery International, alongside allies including Justice Is Everybody’s Business, advocated strongly for, such as:
- A more meaningful due diligence duty: Companies will be required to perform human and environmental rights due diligence based on where the actual risks sit in their value chains, rather than focusing on arbitrary tasks unrelated to real harm. Moreover, rather than focusing exclusively on box-ticking measures like social audits and contracts, the final version of the text will expand the tools that companies will have to use to perform due diligence.
- An article on stakeholder engagement: Requiring companies to engage with workers, affected communities, trade unions and Civil Society Organisations throughout the most important steps of a company’s due diligence activity is the best way to ensure that activity is relative to the needs of workers and that it’s in fact effective. The details of this are yet to be decided.
- Purchasing practices: Companies will be required to change their business strategies including adapting their purchasing practices to contribute to living wages and incomes for their suppliers. Critically, this will hold companies accountable for purchasing products made with underpaid or exploited labour.
- Civil liability for companies: Victims will be able to hold companies accountable for violations of human and environmental rights. This is a turning point for workers in global value chains of EU businesses.
- Access to justice measures: The negotiators have agreed to include some measures (with a complete list and details still to be confirmed) to reduce the obstacles victims face when seeking justice in courts, such as lack of information, financial restrictions, linguistic barriers, and many others.
The legislation has the potential to improve working conditions for millions of workers globally and to drive better business practices. And we commend those who fought to keep workers at the core of negotiations.
However, some important battles were lost along the way. In particular, a disappointingly low number of companies will be required to comply with the law, and the financial sector has been exempted from having to carry out the due diligence. And crucially, we are disappointed to see that the burden of proof will rest with victims, meaning that victims – often under-resourced – rather than multinational companies, will have to prove their case in courts.
It’s important that the voices of workers in producer countries and their affected communities were part of the advocacy for this law, which is why Anti-Slavery International pushed to make this happen. This information is crucial to making sure the law is effective and that it works for those who stand to benefit from it most. Anti-Slavery International is part of the Global Network Against Forced Labour (NForce), which brings together the perspectives of various civil society organisations from countries around the world that have strong trade relations with the EU.
Sian Lea, Business and Human Rights Manager at Anti-Slavery International shared
“This is a big day as the world’s largest single market, home to millions of businesses whose value chains extend across the globe, agrees on legislation mandating companies to conduct human rights and environmental due diligence. We are delighted to see that elements we advocated for have been incorporated, including the inclusion of purchasing practices and stakeholder engagement. While the final text is not as strong as earlier versions have been, we commend those who fought to keep workers at the centre of it. The world must watch and learn, we can bring in laws that compel companies to put workers first.”
Victoria Perino Rosa from Reporter Brasil, member of NForce, said
“We are pleased to see the EU taking such a great step for the protection of workers globally. We are particularly happy to see the attention given to mandatory stakeholder engagement. We have seen firsthand the importance of stakeholder engagement, particularly bringing workers and CSOs, in the coffee industry in Brazil and the improvements this type of activity can have. We look forward to seeing how the law drives forward better business practice.”
Carolina Rudnick from Fundacion Libera, member of NForce, said
“Today is an important day for civil society, for the NForce, and for workers worldwide. We have been advocating for this law for four years trying show decision-makers in the EU what is happening at the lowest levels in corporate supply chains. After decades of exploitation of workers, displacement of communities and environmental destruction, we are ready for change. A fairer world where companies respect workers’ rights is just around the corner.”
This law will also have an impact on UK companies trading in the EU. However, it is unclear what size companies this will include. Reports indicate that non-EU companies with a turnover of either EUR 150 million or EUR 300 million will fall under scope of the law. We are waiting for more clarity on what the exact threshold will be.
Next steps:
Over the next few months, the text will have to be finalised at a technical level (translated into legal wording), get final approval by the Council and Parliament and then translated into the EU’s 27 languages. It will then come into force around March 2024, at which point it will be transposed into each member state’s national legal framework.
Anti-Slavery International will publish a comprehensive analysis of the legislation in 2024 after it comes into force. Until then, we want to greatly applaud the efforts of our fellow Civil Society Organisations, trade unions, workers and policymakers who have spent the past few years working towards a strong corporate accountability law that would improve working conditions worldwide.
END
Notes to Editor:
For more information or media inquiries, please contact:
Georgina Russell, Communications Officer at Anti-Slavery International
media@antislavery.org // +44 (0)7789 936 383
About Anti-Slavery International:
Anti-Slavery International is the world’s oldest human rights organisation. We exist to ensure all people, everywhere, are free from slavery. Since 1839, we have challenged slavery in all its forms and helped to make slavery illegal in every nation around the world. Today, we challenge modern forms of slavery wherever they exist by tackling the root causes of slavery and creating lasting freedom for all.
Additional Resources:
European Parliament’s Press Release
Anti-Slavery International’s previous reactions on the evolution of the legislative process :
