Towards a mandatory due diligence obligation in the field of
business and human rights in EU law.
Master thesis of Moenty Ingwersen. Master track: Public International Law.
Email: moentyingwersen@hotmail.com. Student number: 10778780
Supervisor: mw. dr. Rosanne van Alebeek
Date of submission: 5 January 2020. Word count: 13650.
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Abstract
The EU remains to be the world’s largest economy and maintains significant economic and political power to influence business-related human rights developments. The EU, EU Member States, non-governmental organizations and business enterprises indicated to be in favour of EU legislation that establishes a mandatory human rights due diligence framework. This research analyses the possibilities of EU legislation on mandatory due diligence
obligations for business enterprises. Which substantive norms could such legislation contain, in what form can the EU legislate in this field and what is the scope of ratione personae application?
On an international level, the UN Guiding Principles on Business and Human Rights provide substantial clarity on the corresponding responsibilities of States and corporations in this field. EU Member States created National Action Plans in order to implement the UNGPs and several EU Member States enacted national legislation addressing corporate accountability. Among others, the Modern Slavery Act (2015) in the UK, the ‘Duty of Vigilance’ law (2017) in France, the Child Labour Due Diligence Bill (2019) in the Netherlands, along with other legislative attempts and considerations by, inter alia, Germany, Sweden, Luxembourg, Finland and Denmark. In 2016, members of national parliaments initiated a “Green Card” requesting the European Commission take steps towards EU legislation.
At EU level, certain legislation exists with the purpose of widening the scope of enforceable corporate responsibility measures. In the field of business and human rights, the EU Timber Regulation (2010), the EU Non-Financial Reporting Directive (2014) and the EU Conflict Minerals Regulation (2016) are examples of such measures, all with a particular focus on enforcing due diligence. However, as this research will demonstrate, the level of human rights protection provided by this legislation remains insufficient. The European Commission’s Communication on Corporate Social Responsibility addresses the implementation of the UNGP framework through the Corporate Social Responsibility Strategy. The Council of the EU stated that the EU shall continue to promote the implementation of the UNGP and will explore the option of EU legislation. In 2019, the European Parliament Working Group on Responsible Business Conduct launched a Shadow EU Action Plan on Responsible Business Conduct which provides a certain groundwork for drafting EU legislation.
The legislative draft shall be in the form of a Regulation and applies to all business enterprises operating or domiciled in the EU, in order to not jeopardise a fair level playing field. The main obligations for business enterprises are to respect human rights and therefore to operate with due diligence. Arising from these obligations, business enterprises shall incorporate an ongoing risk assessment, provide general disclosure and all information and findings shall me made publicly available. Gender equality and human rights defenders enjoy additional attention. The grievance mechanism is corporate-based; Member States have a secondary supervising role, therefore, the duration of the process shall be less prolonged and corporations shall remediate individual or collective victims of adverse human rights impact. EU Member States shall designate a monitoring organization to evaluate compliance with the obligations following from the Regulation. Certain penalties shall be imposed when business enterprises do not act in compliance with any of the imposed obligations. All obligations shall be similar to large-and small scaled corporations, however, what it subsequently means in practice to comply with these obligations will depend on the size and circumstances of the business enterprise.
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Table of contents
Abstract ……….. 2
Introduction ……… 5
1 The UN Guiding Principles on Business and Human Rights (UNGP) .……… 10
1.1 Background information ……….... 10
1.2 The Guiding Principles ……… 10
1.2.1 First pillar: The Duty of States to Protect ... ………. 10
1.2.2 Second pillar: The Responsibility of Corporations to Respect ………... 11
1.2.3 Third pillar: Access to Remedy………. 11
1.3 Evaluation ………. 12
2 Developments in the EU since 2011 ………. 14
2.1 Background Information………... 14
2.2 European Commission……… 15
2.2.1 European Strategy on Corporate Social Responsibility ………. 16
2.2.2 The UNGP Framework and EU CSR Strategy ……… 16
2.3 European Parliament ……… 17
2.3.1 Shadow EU Action Plan ……….. 17
2.4 Council of The EU ………... 18
2.5 Fundamental Rights Agency ……… 19
2.6 Evaluation EU ………. 19
3 National Action Plans and Legislation ………... 21
3.1 National Action Plans ………. 21
3.2 Evaluation NAPS ………. 22
3.3 Legislation and initiatives EU Member States ………. 23
3.3.1 France ……….. 23
3.3.2 The Netherlands ……….. 23
3.3.3 The United Kingdom ………... 24
3.3.4 Italy ……….. 24
4 3.3.6 Denmark ……….. 25 3.3.7 Luxembourg ……… 25 3.3.8 Sweden ……… 25 3.3.9 Finland ..………. 26 3.3.10 Switzerland ……… 26 3.3.11 Norway ……….. 26 3.4 Legislation EU……….. 26
4 Regulation 2020/01/EU on Mandatory Due Diligence Obligation ……… 27
5 Explanatory note Regulation 2020/01/EU ………. 36
Conclusion ……….. 38
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Introduction
“A building housing several factories making clothing for European and American
consumers collapsed into a deadly heap on Wednesday, only five months after a horrific fire at a similar facility prompted leading multinational brands to pledge to work to improve safety in the country’s booming but poorly regulated garment industry. — Dhaka, Bangladesh”1.
International Human Rights Law (IHRL) provides a standard for individuals to live a dignified life in which freedom and equality are guaranteed.2 However, globalization of the economy poses a threat by its negative impact on the universal and uniform application of human rights.3 Globalization is characterized by the rise of the economic, social and political power of corporations.4 International business enterprises are corporations that perform business activities globally.5 Numerous enterprises are EU-based. The activities of global business enterprises can have a remarkably negative human rights impact in developing States when people’s livelihoods are destroyed, workers get exploited or communities are displaced.6 Operating in developing States provides competitive advantages to the corporation, and is a valuable source of income for the national economy of developing States.7 The existing imbalance between more developed States and less developed States with regard to knowledge, economic means and power has subsequently led to an unequal global society.8 Maximizing profits appears to have become more important for Western-based corporations, rather than the human rights of individuals residing in developing States.
The obligations of States under IHRL can be categorized in accordance with the tripartite typology. States acquire the obligation to respect, protect and ensure human rights to all individuals on their territory and within their jurisdiction.9 This means that a State must respect and ensure human rights to anyone within its power or effective control.10 Following from the obligation to protect, IHRL has indirect horizontal effect. States have the obligation to protect individuals within their power or effective control from human rights abuse caused by non-State actors within their power or effective control, including the harm caused by business
1 J. Manik and J. Yardley, ‘Building Collapse in Bangladesh Leaves Scores Dead’, The New York Times, April 24 2013, https://www.nytimes.com/2013/04/25/world/asia/bangladesh-building-collapse.html (accessed 23 December 2019)
2 W. Moka-Mubelo ,’Human Rights and Human Dignity. In: Reconciling Law and Morality in Human Rights
Discourse’, PPCE, vol 3. Springer 2017, Chapter 4.
UN GA, Universal Declaration of Human Rights, 10 December 1948, 217 A (III).
3 T. C. W. Farrow, ‘Globalization, International Human Rights, and Civil Procedure’, Alberta Law Review Vol.41, No.3. (2003), p. 672.
4 J. L. Cernic, 'Corporate Responsibility for Human Rights: Analyzing the ILO Tripartite Declaration of Principles
concerning Multinational Enterprises and Social Policy', MJIL, Vol. 6, No.1, 2009 , p. 24.
5 Definition: https://www.inc.com/encyclopedia/global-business.html (accessed on 28 November 2019). 6 OHCHR, HR/PUB/14/3, ‘Frequently asked questions about the Guiding Principles on Business and Human
Rights’, 2014, p. 4. (herein after: HR/PUB/14/3).
7 U. E. Ite, ‘ Poverty reduction in resource-rich developing countries: what have multinational corporations got
to do with it?’, J. Int. Dev. Vol. 17, No.7, 2005, p. 914.
8 S.R. Ratner, ‘Corporations and Human Rights: A Theory of Legal Responsibility, YLJ Vol. 111, 2001, p. 462. L. B. Smaghi, ‘Global imbalances and monetary policy’, J. of Pol. Mode. 29, 2007, p. 711.
9 International Convention Civil and Political Rights, Dec 16, 1996 UNTS, 999, article 2.
10 HRC, General Comment 31, The nature of the general legal obligation imposed on States Parties to the Covenant, UN Doc. CCPR/C/21/Rev.1/Add.13 2004. Para 10.
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enterprises.11 States shall take the permissible preventative and remedial measures to decrease the abuse of human rights, and especially take appropriate steps in order to prevent business-related human rights abuse within their jurisdiction.12 However, States are not required to regulate extraterritorial activities of enterprises under their jurisdiction.13
Corporate activity can in many instances be more far-reaching and disruptive than the activities of States.14 However, corporations are the most challenging to target under IHRL.15 IHRL is State orientated and therefore not well equipped to deal with negative corporate impact.16 Between the scope and impact of corporate business activities and the capacity of governments to manage their adverse impact, global government gaps exist.17 Due to the particularly complicated supply chain of business enterprises operating globally, it remains difficult to hold corporations accountable and responsible for human rights abuse in developing States. There exists no clear link between these violations and the State where the business enterprise has its seat.
In response to the governmental gaps, which hinder the accountability and responsibility of corporations and the resulting difficulty to obtain remedial justice faced by individuals claiming to be a victim of human rights abuses, the United Nations (UN) created the UN Guiding Principles on Business and Human Rights (UNGP).18 These principles clarify the relationship between States and business enterprises and maintain the purpose to implement the tripartite typology of the UN “Protect, Respect and Remedy” Framework.19
So far, it remain the sole internationally accepted standards on the responsibilities of States and corporations with regard to preventing and addressing business-related human rights violations.20 The document defines the framework wherein States and corporations should develop policies, rules and processes following from their corresponding roles in society.21 The UNGP contain a complex interplay between hard – and soft legal norms. It includes certain mandatory components, however the norms do not impose legal obligations upon business enterprises. As such, these moral norms cannot be legally enforced and therefore the framework appears insufficient, as was learned from the evaluation of largescale enterprises by the Corporate Human Rights Benchmark in 2019. Numerous corporations scored less than 24% on the assessment of human rights performance, which implicates that the UNGPs have
11 UNHRC, Guiding Principles on Business and Human Rights, Resolution 17/4 (16 June 2011), p. 3. (herein after: UNGP).
12 Ibid. UNGP, p.3. 13Ibid. p. 3.
14 R. McCorquodale, and R. Fairbrother, "Globalization and Human Rights." Human Rights Quarterly, vol. 21, no. 3, 1999, p. 738.
15D. Kinley and J. Tadaki, “From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations
at International Law”, VJIL vol 44, (2003–2004), p. 251.
16 J.G. Ruggie ‘Current Developments Business and Human Rights: The Evolving International Agenda’ (2007), American Journal of International Law. Vol. 101, No. 4, 2007 p. 819.
17 J.G. Ruggie, ‘Global Governance and “new governance theory”: lessons from business and human rights’, Global Governance 20, no. 1, 2014, p.6.
18 Ibid. UNGP.
19 J.G. Ruggie, Protect, Respect and Remedy A Framework for Business and Human Rights, MIT Press, 2008, p. 129.
20 C.F. Hillemans, ‘UN Norms on the Responsibilities of Transnational Corporations and Other Business
Enterprises with regard to Human Rights’, GLJ Vol. 04, p. 1065.
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not been adequately implemented.22 This could possibly indicate the difficulties that
corporations face in connection to risk assessment and the ongoing process of human rights due diligence (HRDD) caused by the lack of knowledge and understanding of corporate responsibility to respect human rights throughout their activities down the supply chain.23 Several States revealed their concern on the lack of control of corporate human rights abuse abroad. In the absence of an effective international legal framework to address this problem, certain EU Member States enacted national legislation. Among other initiatives, including the existing national legislation of EU Member States, the United Kingdom established the 2015 Modern Slavery Act24 and France created the Duty of Vigilance Law in 2017.25 The Netherlands adopted legislation concerning Child Labour Due Diligence in 2019.26
It is important to note that business enterprises’ impact on human rights is not solely negative. Corporations provide innovation and services in developing States that improve living
standards and stimulate the economy.27 Moreover, corporations indicated to be in favour of EU legislation that establishes a mandatory HRDD framework. 28 The lack of cross-sectoral laws in the EU requiring corporations to identify, prevent, mitigate and account for human rights abuse consequently continues the adverse human rights impact in developing States. If national legislation differs per EU Member State, the necessary fair level playing field would be at stake. Therefore, the EU should provide legislation in order to ensure that the obligations of corporations throughout the EU are similar.29 The possibility of a mandatory HRDD
obligation in EU legislation shall be discussed in this research.
Several business enterprises expressed their concern and instigated specific initiatives. For instance, international cacao corporations call for a EU-wide human rights and environmental due diligence regulation30, in the Netherlands various corporations such as Heineken and Nestlé expressed support of the Dutch Child Labour due diligence Bill.31 In 2014, Ikea declared its
22 Corporate Human Rights Benchmark, Key Findings 2019, p.5, https://www.corporatebenchmark.org/ (accessed 10 November).
23 OHCHR, A/73/163, Summary of the report of the Working Group on Business and Human Rights to the
General Assembly, October 2018.
24 UK, Modern Slavery Act 2015, GBR-2015-L-101872.
25 France, LOI n° 2017-399 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre, 2017.
26 Nederland, Wet zorgplicht kinderarbeid, Stb 2019 401. 27 Ibid. HR/PUB/14/3, p. 4.
28 A call for EU human rights and environmental due diligence legislation, Signed by organizations and networks, October 2019, https://corporatejustice.org/final_cso_eu_due_diligence_statement_03.10.19-compressed.pdf (accessed 10 November 2019). (herein after: Call October 2019).
29 Ibid. Call October 2019.
30 Cocoa companies call for human rights and environmental due diligence requirements, 2 December 2019. https://www.voicenetwork.eu/2019/12/cocoa-companies-call-for-human-rights-and-environmental-due-diligence-requirements/ (accessed 29 December 2019).
31 Gezamenlijke brief van bedrijven om steun te betuigen voor de Wet Zorgplicht Kinderarbeid, oktober 2017, https://tonyschocolonely.com/storage/configurations/tonyschocolonelycom.app/files/wetzorgplichtkinderarb eid/een_wet_zorgplicht_pakt_kinderarbeid_serieus_aan.pdf (accessed 23 December 2019).
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support for appropriate due diligence requirements following from the UNGPs.32 In Finland, numerous corporations commenced a campaign calling for mandatory HRDD legislation.33 The role of Non-Governmental Organizations (NGOs) in the process of raising awareness among States and corporations with regard to the development of business and human rights is indispensable. Due to the fact that the UNGPs are not enforceable, NGOs serve as the ‘watch dog’ of human rights in society and attempt to improve the corporate impact on human rights. Several prominent NGOs, including Amnesty International and the European Coalition for Corporate Justice, formed a coalition urging the European Commission to take immediate steps towards the development of business and human rights within the EU.34
In 2011, the European Commission’s Communication on Corporate Social Responsibility addressed the implementation of the UNGP framework through the Corporate Social Responsibility Strategy.35 In 2016, the European Commission committed to develop an Action Plan relating to the improvement of responsible business conduct and the UNGP.36 The same year, the European Parliament filed a report concerning binding and enforceable standards in relation to due diligence and related sanctions.37 In 2018, the European Parliament requested the European Commission to propose a mandatory legal framework.38 As a response to the failure of the Commission’s commitment, the European Parliament Working Group on Responsible Business Conduct launched a Shadow EU Action Plan on Responsible Business Conduct in March 2019.39
Against this backdrop, this thesis will explore the idea of EU legislation on mandatory HRDD obligations for business enterprises. Which substantive norms could such legislation contain, in what form can the EU legislate in this field and what is the scope of ratione personae application? The drafting process of EU legislation could be conducted from two different perspectives: (1) from a top-down perspective analysing existing initiatives and legislation on international-, European- and national level (2) from a grass-root perspective of historical- and contemporary business related human rights abuse caused by corporations domiciled and operating in the EU. This research will focus on the top-down perspective of existing initiatives
32 IKEA submission to UK government, March 2014,
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/draft-modern-slavery-bill-committee/draft-modern-slavery-bill/written/7461.pdf (accessed 23 December 2019).
33 Finnwatch, ‘Companies, Civil Society and Unions call on Finland to adopt mHRDD legislation’ (ECCJ, 24 September 2018) https://corporatejustice.org/news/9039-civil-society-and-companies-call-finland-to-adopt-mandatory-hrdd-legislation (accessed 23 December 2019).
34 Joint statement NGO’s, ‘NGOs welcome MEP initiative on responsible business conduct’, 19 March 2019. http://corporatejustice.org/news/2019_ngos-welcome-mep-initiative-on-responsible-business-conduct-18-march.pdf. (accessed on 29 November 2019).
35 European Commission, ‘Commission Staff Working Document on Implementing the UN Guiding Principles on
Business and Human Rights - State of Play’, SWD (2015) 144 final, p. 6. (herein after: SWD (2015) 144 final)
36 Council of the EU, ‘Conclusions on Business and Human Rights’, 10254/16 (2016), para. 6. (herein after: Council 10254/16 (2016)).
37 European Parliament, ‘Report on corporate liability for serious human rights abuses in third countries’ (2015/2315(INI)).
38 European Parliament, ‘Report on the EU flagship initiative on the garment sector’ (2016/2140(INI)). 39 BHRRC, ‘MEPs & companies call for EU-level human rights due diligence legislation’. https://www.business-humanrights.org/en/meps-companies-call-for-eu-level-human-rights-due-diligence-legislation (accessed 23 December 2019).
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by evaluating relevant and detailed legal documents on all three earlier described different levels.
The research questions in this thesis will be answered in the following sequence. First, the international UNGP framework will be introduced and analysed (chapter 1). Subsequently, relevant developments in the EU since 2011 will be outlined from the perspective of EU institutions (chapter 2). The third part will evaluate the National Action Plans provided for by EU Member States along with other national legislative initiatives and attempts, and existing EU legislation in relation to mandatory human rights due diligence shall be explained (chapter 3). Finally, based on the analysis of the aforementioned chapters, EU legislation concerned with mandatory due diligence will be proposed in an appropriate form, (chapter 4) accompanied with an explanatory note (chapter 5). Most of the factual information is gathered from the UNGP Document of the UN, the webpages of the European Union, national legislation and initiatives of EU Member States, and articles published by the Business and Human Rights Resource Centre and European Coalition for Corporate Justice. The research in this thesis is based on facts that were available before the date of submission. Everything that occurred after the 5th of January 2020 has not been taken into account and has therefore not been incorporated.
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1 The UN Guiding Principles on Business and Human Rights (UNGP)
1.1 Background information
The role of business corporations in society is increasing and therefore the demand for corporations to respect human rights has grown, alongside with the possibility of holding them accountable for their actions.40 Due to this growing concern, the UN Secretary-General’s Special Representative on the issue of business and human rights, John Ruggie, issued the UNGPs and the Human Rights Council endorsed them in June 2011.41
The principles serve as an authoritative global framework and provide substantial clarity on the corresponding responsibilities of States and corporations in this field.42 The UNGP framework distinguishes three pillars, namely the State’s duty to protect, the responsibility of corporations to respect and access to remedy.
1.2 The Guiding Principles
First pillar: The Duty of States to Protect
States must protect individuals within their territory and jurisdiction against human rights abuse committed by third parties within their territory and jurisdiction, including business enterprises.43 This reflects a certain standard of conduct, however States can be held accountable for human rights abuse caused by corporations in case they failed to take appropriate steps to prevent, investigate, punish and redress private actors’ abuse.44 Alongside with this obligation, States shall clarify the expectation that corporations, domiciled in their territory or jurisdiction, should respect human rights throughout their business activities. 45 In addition to the foundational principles of the first pillar, operational principles were established to illustrate which actions should be taken by States to fulfil their obligation in the context of business operations.46 States shall enforce national legislation aiming at requiring business enterprises to respect human rights and assess the adequacy of these measures. Guidance shall be provided for corporations on how to comply with their responsibilities.47 In case a State owns, controls or substantively supports a corporation, the State is obliged to take additional steps to prevent human rights abuse.48
States should stimulate respect of human rights by corporations in conflict-areas due to the fact that these areas are particularly sensitive to gross human rights abuse. This could be established by providing guidance, assistance and enforcement mechanisms.49 States shall maintain
40 Foreword by the United Nations High Commissioner for Human Rights (2013 update), Human Rights and Business Learning Tool. http://human-rights-and-business-learning-tool.unglobalcompact.org/ (accessed 23 December 2019). 41 Ibid. UNGP. 42 Ibid.HR/PUB/14/3, p. 5. 43 Ibid. UNGP, p. 3 44 Ibid., p. 3. 45 Ibid., p. 3. 46 Ibid., p. 4, 5. 47 Ibid. p.4, 5. 48 ibid, p. 6., HR/PUB/14/3 p. 19. 49 Ibid. p. 8.
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adequate domestic policy coherence, which involves policies that are coherent across government departments.50 External cooperation agreements, for instance bilateral investment treaties, should be aligned with their human rights obligations.51
Second pillar: The Responsibility of Corporations to Respect
Business corporations should respect human rights throughout business activities, which means to avoid breaching the human rights of others, and to address any adverse human rights impact in which they are engaged.52 The human rights of others are for instance rights of employees, consumers or community members in developing States. Corporate responsibility applies to all sizes, sectors and operations of business enterprises. However, the means through which the responsibility is met will be proportional to the size of the enterprise and other relevant factors.53 For instance, large-sized enterprises enjoy a greater capacity and maintain more formal processes and management structures then small-sized enterprises. In order to meet the criteria of the responsibility to respect human rights, corporations should formulate policies and processes appropriate to their size and circumstances. This includes a policy commitment and a human rights due diligence (HRDD) process in order to identify, prevent, mitigate and account on how to address negative human rights impact.54
The statement of human rights policies serves as a foundation for entrenching the responsibility to respect human rights for corporations and should be publicly available.55 It must be embedded from the most senior level of the corporations throughout all its functions and reflected in operational policies.56
HRDD implies a continuous process of identifying and addressing the human rights impact of a corporation throughout its operations, products and its suppliers - and business partner networks. This process should include assessments of internal procedures and systems, alongside with external engagement with groups potentially affected by its operations.57 In order to identify, prevent and mitigate the negative impact, business enterprises should incorporate the findings of the due diligence processes into policies and procedures on a regular basis. 58 Subsequently, when it follows from the due diligence process that the corporation has caused or contributed to adverse impacts, it should provide for remediation through legitimate processes.59 In order to address the negative human rights impact, corporations should be willing to communicate their findings externally.60
Third pillar: Access to Remedy
The third pillar contains a shared burden for both States and corporations to provide effective remedy for victims of business-related human rights abuse. States must undertake appropriate
50 Ibid. 10 51 Ibid., p. 11. 52 Ibid., p. 13. 53 Ibid., p. 15. 54 Ibid., p. 15, 16. 55 Ibid.p. 16 56 Ibid., p. 17. 57 Ibid, p. 32, 33. 58 Ibid., p. 20. 59 Ibid., p. 24. 60 Ibid., p. 23.
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steps to ensure that those that are affected have access to effective remedy. Without this obligation, the duty to protect would become meaningless.61 The remedial assurance can be achieved through judicial, administrative, legislative or other appropriate means.62 Remedy refers both to the available processes of providing remedy for an adverse human rights impact and the reparational outcome of this process.63 Both State-based domestic judicial mechanisms empowered with addressing business-related human rights abuse and effective non-judicial remedies play an essential role in the remedial process.64
Nonetheless, business enterprises should establish or participate in effective operational-level grievance mechanisms. A grievance mechanism on this level is directly accessible to individuals and communities who are adversely impacted by a business enterprise.65 It functions as a part of the continuing due diligence process of the corporation in order to support the identification of adverse human rights impact. By analysing tendencies and patterns in complaints, systematic problems can be identified and corporations can adjust their practices. Once identified that business activities of a corporation have a negative human rights impact, it can be remediated promptly and directly. By this means, future adverse impact and escalation can be prevented.66
1.3 Evaluation
The UNGP framework do not create and represent new legal obligations for States under international law. They elaborate on existing human rights standards, some of which are legally binding and therefore enforceable. Both the distinct and complementary roles of States and corporations in ensuring compliance with human rights standards are reflected in the UNGP framework.67
The responsibility of corporations to respect human rights follows from the Universal Declaration on Human Rights (UDHR) referring to the fact that “every organ” of society should contribute to realizing human rights for all.68 Although it is reflected in many ‘soft-law’ instruments, the responsibility remains a minimum expectation under international law. Therefore, the UNGPs reflect a complicated interaction between both hard legal norms for States, and some more ‘voluntary’ components for corporations within the international framework. The UNGPs remain to be recognized as the global standard for responsible business conduct.69 The establishment of this common global platform for action is without prejudice to other promising longer-term developments.70
61 Ibid. p. 27. 62 Ibid., p. 27. 63 HR/PUB/14/3, p. 34, 35. 64 HR/PUB/14/3, p. 34, 35. 65 ibid, p. 31, 32. 66 Ibid., p. 32. 67 HR/PUB/14/3, p. 9.
68 UN GA, Universal Declaration of Human Rights, 10 December 1948, 217 A (III). 69 HR/PUB/14/3, p. 5.
70 J. Ruggie, "Report of the Special Representative of the Secretary-General on the Issue of Human Rights and
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The UN Human Rights Council’s Open Ended Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with respect to Human Rights was mandated to negotiate the ‘Zero Draft’.71 This process maintains the purpose of developing an international legally binding set of business and human rights obligations for States and corporations with transnational activities. The scope of the first draft in 2018 was limited to transnational business enterprises.72 The publicity of the content of this draft permits discussions from civil society organizations, States, business enterprises and other stakeholders which could provide interesting input.73
However, the EU has been reluctant to engage in the process towards a UN Treaty.74 EU Member States justified their absence during the debates due to the limited scope of the Zero draft and other predecessor documents.75 The revised draft published in 2019 widens the scope to all business activities, however still with the main focus on those of a transnational character.76 It would be revolutionary when IHRL confers direct obligations upon business enterprises due to the original State-centric structure. However, the main focus is still on the obligation of States to provide national legislation.77 The European Economic and Social Committee is in favour of an international binding instrument.78
71 UN Human Rights High Commissioner, Working Group on the issue of human rights and transnational corporations and other business enterprises.
https://www.ohchr.org/en/issues/business/pages/wghrandtransnationalcorporationsandotherbusiness.aspx (accessed 27 December 2019).
72 OHCHR, ‘legally binding instrument to regulate, in IHRL, the activities of transnational corporations and other
business enterprises’, ZERO DRAFT June 2018.
73 SOMO, ‘Re-cap: negotiations over the Zero Draft of a binding treaty on business and human rights’ (BHRRC, October 2018). https://www.business-humanrights.org/en/re-cap-negotiations-over-the-zero-draft-of-a-binding-treaty-on-business-and-human-rights. (accessed 23 December 2019).
74 N. Carrillo-Santarelli, ‘Some Observations and Opinions on the “Zero” Version of the Draft Treaty on Business
and Human Rights (Part I)’, (Opinio Iuris, 2018)
http://opiniojuris.org/2018/09/24/some-observations-and-opinions-on-the-zero-version-of-the-draft-treaty-on-business-and-human-rights-part-i/ (accessed 27 December 2019).
75 C. Lopez, ‘The Revised Draft of a Treaty on Business and Human Rights: Ground-breaking improvements and
brighter prospects’, (October 2019, Investment Treaty News)
https://www.iisd.org/itn/2019/10/02/the- revised-draft-of-a-treaty-on-business-and-human-rights-ground-breaking-improvements-and-brighter-prospects-carlos-lopez/, (accessed 23 November 2019).
76 OHCHR, ‘‘legally binding instrument to regulate, in IHRL, the activities of transnational corporations and other
business enterprises’, OEIGWG Chairmanship Revised draft June 2019.
77 M. Piazza, ‘The “Zero Draft”: Missed Opportunity or the Beginning of a Revolution?’ (SSI, November 2018). http://www.senseandsustainability.net/2018/11/08/the-zero-draft-missed-opportunity-or-the-beginning-of-a-revolution/ (accessed on 27 December).
78 European Economic and Social Committee, Opinion REX/518, ‘Binding UN treaty on business and human
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2 Developments in the EU since 2011
2.1 Background Information
The EU is an intergovernmental organization and is therefore directly bound by the international obligation to promote and protect human rights.79 Additionally, this obligation follows from its internal constitution.80 The EU remains to be the world’s largest economy and maintains significant economic and political power to influence certain business-related developments.81 Nearly half of all significant corporations located in the EU are subject to verified allegations of human rights violations and the EU increasingly subsidizes European corporations operating in developing States.82 This enlarges the leading responsibility of the EU on promoting and respecting business-related human rights. Regulation of business activities is desirable due to the fact that 70 percent of trade operations takes place crossing global borders.83
Therefore, there exists an increasing demand of a horizontal mandatory HRDD obligation for business enterprises. The EU is in need of legislation in this field and there is a need for measures to ensure effective ability to access justice for those claiming to be victim of human rights abuse. The Council of Europe maintains an authoritative position concerning human rights related issues as the continent’s leading human rights organization.84 It underlines the necessity of a mandatory HRDD.85
In 2016, members of national parliaments in several EU Member States initiated a “Green Card” with the purpose of requesting the European Commission to initiate a legislative procedure providing corporate accountability for human rights abuse.86 This initiative is supported by France, the UK, Italy, Estonia, Lithuania, Slovakia, Portugal and the Netherlands. It sends an important signal on the need of mandatory due diligence requirements to EU decision makers.
The European Network of National Human Rights Institutions (ENNHRI) is a network enhancing the promotion and protection of human rights across the European region.87 The 79 T. Ahmed and I. Jesús Butler , ‘The European Union and Human Rights: An International Law Perspective’, EJIL Vol. 17 no.4, 2006, p. 776.
80 Treaty on European Union (2012) (TEU) OJ C326, articles 2,3,5,6 and 21.
81 https://ec.europa.eu/trade/policy/eu-position-in-world-trade/ (accessed 23 December 2019) ECCJ, ‘NGOs welcome MEP initiative on responsible business conduct’, (ECCJ, 19 March 2019)
https://corporatejustice.org/news/13635-ngos-welcome-mep-initiative-on-responsible-business-conduct (accessed 23 December 2019).
82 IPIS, ‘The Adverse Human Rights Risks and Impacts of European Companies: Getting a glimpse of the picture’, (IPIS, October 2014), http://ipisresearch.be/publication/adverse-human-rights-risks-impacts-european-companies-getting-glimpse-picture-2/ (accessed on 27 December 2019).
83Hallitsija, ‘Shadow EU Action Plan on Business and Human Rights’, (RBC March 2019).
https://responsiblebusinessconduct.eu/wp/2019/04/03/gearing-up-eu-action-launch-of-shadow-eu-action-plan/ (accessed on 27 December 2019).
84 Council of Europe https://www.coe.int/en/web/yerevan/the-coe/about-coe (accessed 29 December 2019). 85 Council of Europe, Recommendation CM/Rec(2016)3 of the Council of Europe’s Committee of Ministers to member States on Human Rights and Business, adopted March 2016. https://rm.coe.int/human-rights-and-business-recommendation-cm-rec-2016-3-of-the-committe/16806f2032 (accessed 27 December 2019). 86 ”Members of eight Member States Parliaments support duty of care legislation for EU corporations”, (ECCJ 31 May 2018), https://corporatejustice.org/news/132-members-of-8-european-parliaments-support-duty-of-care-legislation-for-eu-corporations (accessed on 27 December 2019).
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ENNHRI initiated a multitude of actions ranging from investigations of abuses and analyses of legal and policy frameworks. In November 2019, the ENNHRI recommended to the new EU Commission to develop and adopt an EU-level Action Plan on Business and Human Rights and calls the EU and EU Member States to engage proactively in the development of a legally binding instrument on business and human rights. 88 The latter is needed to better articulate and concretise the commitments made by the EU and EU Member States in relation to the implementation of the UNGPs.
2.2 European Commission
The 2011 Communication of the European Commission on Corporate Social Responsibility addresses the implementation of the UNGP framework.89 In the Action Plan on Democracy and Human Rights, the Commission committed to promote National Action Plans on business and human rights.90 The European Commission committed to develop an Action Plan related to the improvement of responsible business conduct and the UNGP in 2016. However, it failed to execute this commitment.91
The Commission takes part in the work of the Organization for Economic Co-operation and Development (OECD). The guidelines following from this organization aim at improving better policies that promote equality, prosperity, opportunity and well-being for all individuals.92 The Action Plan Financing Sustainable Growth (2018) contains measures aimed at the improvement of corporate governance and established the commitment to assess the possibility of supply chain due diligence.93 The European Commission assigned the British Institute of International and Comparative Law (BIICL), in partnership with Civic Consulting and LSE Consulting, to lead an external study concerning this issue.94 The report has not been published yet.
According to the Political Guidelines for the European Commission (2019-2024), responsible corporate conduct would be critical in order to realize the ambitions set forth in this document; create an economy that works for people, and aim at a stronger Europe in the world - which contains global responsible leadership.95 In December 2019, the European Commission presented the European Green Deal, in which it underlines 'just and socially fair' transition. 96
88 ENNHRI, ‘Recommendations to the new EU Commission: developing and adopting an EU-level Action
plan on Business and Human Rights’, p. 1-5.
http://ennhri.org/wp-content/uploads/2019/11/ENNHRI-BHR-Statement_EU-Commision.pdf (accessed on 27 December 2019). 89Ibid. SWD (2015) 144 final p. 6.
90 Council of the EU, ‘Action Plan on Human Rights and Democracy (2015-2019)’, December 2015, p. 29. 91 Council 10254/16 (2016) para. 6.
92 OECD, https://www.oecd.org/about/ , https://www.oecd.org/eu/european-union-and-oecd.htm. (accessed on 27 December 2019).
93 European Commission, ‘Communication from the Commission: Action Plan: Financing Sustainable Growth’, COM(2018) 97 final.
94.European Commission, ‘Commission Staff Working Document on Corporate Social Responsibility, Responsible
Business Conduct, and Business & Human Rights: Overview of Progress’, SWD(2019) 143 final, p. 20.
95 (candidate) President of the European Commission Ursula von der Leyen, ‘A Union that strives for more:
My agenda for Europe’, Political Guidelines European Commission 2019-2024, p. 8.
96 Communication from the Commission to the EP, the European EC, EC, EESC and COR, ‘The European Green
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European Strategy on Corporate Social Responsibility
Generally, business and human rights are approached by the EU through its wider Strategy on Corporate Social Responsibility.97 It remains the leading internal EU policy framework addressing implementation of the UNGP framework, and got established by the 2011 Communication of the Commission arranging the European Strategy on Corporate Social Responsibility (CSR).98
CSR is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.99 This strategy reflects the growing expectation and concern of the EU towards the evolving role of corporations in society. As a result of these concerns and the criteria established in the CSR, business activities have become more transparentand influence investment decisions of both individuals and institutions.100 Corporations should pursue social responsibility throughout the whole supply chain, the implementation of the CSR Strategy realizes this. CSR sets out to achieve improvement of human rights within- and outside the EU.101
‘‘Because CSR is fundamentally about voluntary business behaviour, an approach involving additional obligations and administrative requirements for business risks being counter-productive and would be contrary to the principles of better regulation’’. 102 The
contemporary CSR Strategy emerges an ideal compromise between the need for innovation and competitiveness on the one hand, and the European social model on the other.103
The UNGP Framework and EU CSR Strategy
The UNGP framework allocates an essential and explicit role for the State. The emphasis lies on the legal responsibility of the State to supervise and protect non-State actors from human rights abuse caused by business enterprises to individuals within their power or effective control.104
Contrary to the UNGP framework, CSR focusses more on the responsible role of business enterprises in society rather than the role of States. It is focused on corporate governance and decision making of corporations. It recognizes the influential role of corporations in society and the necessity of engagement with communities and stakeholders during business
operations.105 This strategy contains a more management approach for corporations in order to comply with IHRL.
97 Ibid. SWD (2015) 144 final, p. 4. 98 Ibid. SWD (2015) 144 final, p. 6.
99 European Commission, ‘Promoting a European framework for Corporate Social Responsibility’, COM (2001)
366 final, p. 6. (herein after COM(2001) 366 final).
100 Ibid.COM (2001) 366 final p. 4. 101 Ibid. SWD(2019) 143 final, p. 7-8.
102 Communication from the Commission to the European Parliament, the Council and
the European economic and social Committee, ‘Implementing the partnership for growth and jobs:
making Europe a pole of excellence on corporate social responsibility’, COM(2006) 136 final, p. 1.
103 O. Delbard, ‘CSR legislation in France and the European regulatory paradox: an analysis of EU CSR policy and
sustainability reporting practice’, Corporate Governance VOL. 8 NO. 4 2008, p. 399
104 A. Ramasastry, ‘Corporate Social Responsibility Versus Business and Human Rights: Bridging the Gap
Between Responsibility and Accountability’, Journal of Human Rights, Vol. 14, 2015 , p.245. (herein after
‘Ramasastry).
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In conclusion, both the UNGP framework and CSR are ‘soft-law’ instruments aiming at improving corporate responsibility with regard to human rights abuse. However, the degree to which the actor, the State or the business enterprise, is approached, differs. When drafting EU legislation, elements of both frameworks will remain useful.
2.3 European Parliament
In 2016, the European Parliament (EP) issued a report concerning corporate liability for human rights violations in developing States that inquired binding and enforceable standards in relation to due diligence and related sanctions and monitoring mechanisms.106 The
following year, the Report on the EU Flagship Initiative for the textile sector107 contained the demand for the Commission to establish binding due diligence legislation throughout the whole supply chain and the Report on Global Value Chains108 requested the Commission to consider proposals for corporate due diligence.
In 2018, the Report on Indigenous Peoples109 and the Report on Sustainable Finance110 emphasized the need for the possibility to hold corporations accountable for their behaviour and therefore underlined the need and desire for mandatory HRDD in EU law. The French Duty of Vigilance Law could provide a solid basis.
The EP initiated the Shadow EU Action Plan in 2019 which aims at mandatory HRDD obligation for corporations. This same year, the Subcommittee of Human Rights of the EP examined difficulties faced by victims of adverse human rights impact caused by corporations in developing States. 111 Therefore, the Subcommittee of Human Rights of the EP
recommended the adoption of mandatory HRDD in order to address governance gaps and thereby guarantee improved access to remedy for victims.112
Shadow EU Action Plan
In 2016, the European Commission committed to develop an Action Plan related to the improvement of responsible business conduct by outlining an overall European policy framework to enhance further implementation of the principles.113 However, it failed in taking the necessary steps to realize this purpose.114
Therefore, the Responsible Business Conduct Working Group (RBC Group) of the EP was founded to bring further expertise to the EP on the topic of business-related human rights issues
106 EP Report on corporate liability for serious human rights abuses in third countries (2015/2315(INI)). 107 EP Report on the EU flagship initiative on the garment sector (2016/2140(INI)).
108 EP Report on the impact of international trade and the EU’s trade policies on global value chains (2016/2301(INI)).
109 EP Report on violation of the rights of indigenous peoples in the world, including land grabbing (2017/2206 (INI)).
110 EP Report on Sustainable Finance (2018/2007(INI)).
111 EP, ”Access to legal remedies for victims of corporate human rights abuses in third countries”, Study requested by the DROI committee, February 2019.
112 Ibid.
113 Ibid.Council 10254/16 (2016), para. 6.
114 ECCJ, ‘NGOs welcome MEP initiative on responsible business conduct’, (ECCJ, 19 March 2019)
https://corporatejustice.org/news/13635-ngos-welcome-mep-initiative-on-responsible-business-conduct (accessed 23 December 2019).
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and responsible conduct. Furthermore, it maintains the purpose to increase the discussion on this subject between numerous stakeholder groups and EU institutions.115
The RBC Group initiated the Shadow EU Action Plan which contains proposed action points with regard to mandatory due diligence obligations for businesses domiciled or operating in the EU.116 It serves as a signal to the responsibility of the European Commission and the Council of the EU to generate systematic and effective measures in order to implement the UNGPs correctly.117
The Plan acknowledges the world leading position of the EU with respect to global trade, economic diplomacy and economic promotion, and therefore its leading role in the development and improvement of corporate accountability and mandatory HRDD.118 A foundational structure and framework should be established by the Commission to entail and expedite corporations to act responsible with regard to human rights and to facilitate effective remedy for victims of advert impact on human rights.119
It calls for an increased support for human rights defenders and reflects acknowledgment of the fact that business activities often impact gender equality in a disproportionate and differentiated way.120 By establishment of the Shadow EU Action Plan, a certain groundwork for EU legislation has been created and will therefore be used during the process of drafting EU legislation provided for in this thesis.
2.4 Council of The EU
The Conclusions on Global Value Chains (2016)121 and the Conclusions on Business and Human Rights (2016)122 entailed calls for the European Commission to enhance the implementation of UNGPs and to launch an EU Action Plan on Responsible Business Conduct attending HRDD and appropriate access to remedy on EU level. In 2018, the Council reaffirmed the EU’s commitment to implement the UNGPs and therefore to mandatory HRDD and access to remedy.123 In its 2019 Conclusion, the Council stated: “The EU will continue to promote the
issue of implementation of the UN Guiding Principles on Business and Human Rights both in its external action and internal policies, including through initiatives on human rights due diligence, access to remedy for victims of corporate abuses, and support to environmental and indigenous human rights defenders and it will look into option to step-up the implementation
115 RBC Group, https://responsiblebusinessconduct.eu/wp/about-the-group/ (accessed 10 November 2019). 116 BHRRC, ‘MEPs & companies call for EU-level human rights due diligence legislation’. https://www.business-humanrights.org/en/meps-companies-call-for-eu-level-human-rights-due-diligence-legislation (accessed 23 December 2019).
117 RBC Group, https://responsiblebusinessconduct.eu/wp/about-the-group/ (accessed 10 November 2019). RBC Group, ‘Shadow EU Action Plan on the Implementation of the UN Guiding Principles on Business and
Human Rights within the EU’, 2019, p. 1.
118 RBC Group, ‘Shadow EU Action Plan on the Implementation of the UN Guiding Principles on Business and Human Rights within the EU’, 2019, p. 1.
119Ibid., p. 6. 120Ibid., p.5.
121 Council Conclusions on the EU and Responsible Global Value Chains, 8833/16, (12 May 2016). 122 Council 10254/16 (2016)
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of the UNGPs, including a possible related EU Action Plan”.124 In December 2019, Finland’s Presidency of the Council of the EU put forward an "Agenda for Action on Business and Human Rights”, acknowledging the need for EU legislation.125
2.5 Fundamental Rights Agency
The EU Fundamental Rights Agency (FRA) provides independent, evidence-based advice to EU- and national decision makers.126 In its Opinion on improving access to remedy in the area of business and human rights in 2017, it recommended the establishment of mandatory HRDD obligations, including for parent companies connected with human rights behaviour of its subsidiaries or throughout the supply chains.127
2.6 Evaluation EU
Certain components of the EU policy in relation to human rights appear to be paradoxical. The EU is part of a fundamental, regional and foundational framework with regard to approaching human rights violations. The Charter of Fundamental Rights of the European Union was drafted by the EU and is interpreted by the Court of Justice of the European Union (CJEU). The European Convention on Human Rights (1950, ECHR) and its monitoring mechanism, the European Court on Human Rights (1959, ECtHR), remain to be important elements within this framework as well. The content of this framework consists of hard legal norms and is therefore enforceable. In addition, the CSR Strategy takes a less stringent approach and maintains a voluntary character for businesses.
The EU is an institution that prioritizes human rights, therefore a more rigid approach towards business enterprises is expected. The contemporary human rights focus is on internal EU protection. Therefore, a binding legislative act mainly focusing on external human rights protection would be revolutionary. However, following from the Treaty of Lisbon, which was drafted inter alia with the purpose of addressing global issues128, the EU is bound by the obligation to advance and consolidate human rights in EU external action.129 In relation to business and human rights, it fails to act in compliance with this obligation.
Consequently, adverse human rights impact is an ongoing increasing phenomenon caused by corporations operating or based in the EU. The approach of the EU is ambiguous and the CSR Strategy appears to be insufficient to enhance the business-related human rights field within
124 Council Conclusions on EU Priorities in UN Human Rights Fora in 2019, 6339/19, (18 February 2019), para. 20.
125 Perspectives Paper; Business and Human Rights – Towards a Common Agenda for Action, 2 December 2019. https://eu2019.fi/documents/11707387/12748683/BHR_konferenssi_Perspectives_Paper.pdf/e683f507-5bff-f09d-127b-f5ece1ea62b1/BHR_konferenssi_Perspectives_Paper.pdf (accessed 29 December 2019).
126 European Union, European Union Agency for Fundamental Rights (FRA). https://europa.eu/european-union/about-eu/agencies/fra_en (accessed 10 November 2019).
127 FRA, ”Improving access to remedy in the area of business and human rights at the EU level”, FRA Opinion - 1/2017, 10 April 2017.
128 EU Treaties: https://europa.eu/european-union/law/treaties_en
129 Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community [2007] OJ C306/01, article 21.
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and outside the EU. Due to the globally political and economic power, more hard legal constraints and obligations for business corporations remain desirable. Therefore, drafting EU legislation in this field is necessary. The UNGP framework, the EU CSR Strategy and elements of the EU Shadow Action Plan could complement each other alongside this process.
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3 National Action Plans and Legislation
3.1 National Action Plans
National Action Plans (NAPs) are policy documents in which a State sets forth the measures it will adopt to enhance the implementation of its obligations and commitments with regard to a certain policy.130 The use of this form for the promotion and protection of human rights is recommended by the World Conference on Human Rights.131 NAPs, among others, stimulate national discussions, enhance awareness and promote human rights-based sustainable development.132
In order to comply with the duty to protect human rights, following from the first pillar of the UNGPs, EU Member States were tasked, on an EU-level, to develop NAPs in order to improve the implementation of the UNPSs.133 Thereupon, in 2014, the UN Working Group on the Issue of Human Rights and Transnational Corporations and Other Business Entities ordered to promote the ‘effective and comprehensive dissemination and implementation’ of the UNGPs.134 This working group encouraged and stimulated States to develop NAPs on business and human rights with the purpose to comply with their international obligation to prevent and redress business-related human rights abuse.135 On a regional level, the European Commission failed to develop an Action Plan and set out the necessary steps towards a responsible and accountable European business sector.136
Nevertheless, EU Member States have taken the international lead in developing and adopting NAPs to implement the UNGPs into their national legislation and CSR Strategies.137 In December 2019, 16 EU Member States have developed NAPs in respect to business and human rights. These are, in no particular order, France, the Netherlands, The United Kingdom, Italy, Germany, Denmark, Poland, Luxembourg, Sweden, Austria, Belgium, Finland, Lithuania, Czech-Republic, Ireland and Spain. In Addition, non-EU States, Norway and Switzerland have developed NAPs and legislation.138 These States are subject of EU trade legislations and therefore worth mentioning.139
130 ICAR, DIHR, ‘National Action Plans on Business and Human Rights Toolkit 2’, 2017, p.11. 131 OHCHR, ‘National Plans of Action for the Promotion and Protection of Human Rights’,
https://www.ohchr.org/EN/Issues/PlansActions/Pages/PlansofActionIndex.aspx (accessed on 27 December 2019).
132ICAR, DIHR, ‘National Action Plans on Business and Human Rights Toolkit 2’, 2017, p.16. 133 Council of European Union, ‘Action Plans on Human Rights and Democracy’ 2012 and 2015.
134 Human Rights Council, ‘Human Rights and Transnational Corporations and Other Business Entities’, HRC Resolution /17/4 (6 July 2011).
135 UN SG, ‘Report of the Working Group on the issue of Human Rights and Transnational Corporations and
other Business Enterprises’, A/69/263 (6 August 2014).
136 BHRRC, ‘MEPs & companies call for EU-level human rights due diligence legislation’. https://www.business-humanrights.org/en/meps-companies-call-for-eu-level-human-rights-due-diligence-legislation (accessed 23 December 2019).
137 Ibid. Council 10254/16 (2016), para. 5.
138 NAPS, https://globalnaps.org/country/ (accessed 5 December 2019).
139 https://ec.europa.eu/trade/policy/countries-and-regions/countries/norway/,
https://ec.europa.eu/trade/policy/countries-and-regions/countries/switzerland/ (accessed on 31 December 2019).
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In paragraph 4.3, certain other relevant States’ initiatives and legislation utilised to enforce corporate HRDD in national legal systems will be discussed.140
3.2 Evaluation NAPS
A generally positive aspect in the content of the NAPs is that States explicitly commit to the UNGP and discuss international and regional organizations and standards.141 Although EU Member States play a pioneering role regarding the development of NAPs both in quantity and quality, several NAPs contain shortcomings in respect of process and content.142 The most significant weakness of the NAPs is that the focus primarily lays on raising awareness by means of training and research, and not sufficiently on exploring regulatory options. Additionally, in most NAPs, not all three pillars of the UNGPs are adequately addressed. The NAPs generally focus on previous actions of States instead of focussing on future action point. 143 There is insufficient information on concrete steps to be taken in regard to the implementation. States often fail to specify quantitative or qualitative indicators.144 Another point of critique is that NAP processes in some EU Member States, are neither participatory nor transparent. There is a lack of information or opportunities for civil society organizations to participate in the whole process.145 The involvement of stakeholders is rather weak and there are inadequate provisions with regard to monitoring, review and follow up.146 Due to these procedural and substantive deficiencies, there exists the risk of undermining an effective implementation of the UNGPs in the EU. Therefore, EU legislation would improve the effect of the UNGPs throughout EU Member States. Several EU Member States already initiated national legislation in regard to mandatory HRDD obligations, and civil society organizations play an important role in these processes.
140 M. Fasciglione,. "The Enforcement of Corporate Human Rights Due Diligence: From the UN Guiding Principles
on Business and Human Rights to the Legal Systems of EU Countries." HR & Int. LD, vol. 10, no. 1, 2016, p. 109.
141 ICAR and ECCJ, ‘Assessments of Existing National Action Plans on Business and Human Rights’, 2014. P.4. https://static1.squarespace.com/static/583f3fca725e25fcd45aa446/t/59998094cd39c36f1e0d1726/150323215 2737/ICAR-ECCJ+Assessments+of+Existing+NAPs.pdf (accessed 23 December 2019).
142 D. Augenstein, M. Dawson, P. Thielborger, ‘The UNGPs in the European Union: The Open
Coordination of Business and Human Rights?, Business and Human Rights Journal, Volume 3, 2018, p.5. (herein
after: Augenstein, Dawson, Thielborger).
143 ICAR and ECCJ, ‘Assessments of Existing National Action Plans on Business and Human Rights’, 2014. P.4. https://static1.squarespace.com/static/583f3fca725e25fcd45aa446/t/59998094cd39c36f1e0d1726/150323215 2737/ICAR-ECCJ+Assessments+of+Existing+NAPs.pdf (accessed 23 December 2019).
144Ibid. Augenstein, Dawson, Thielborger, p.7.
145 European Network of National Human Rights Institutions (ENNHRI), ‘Recommendations for the next EU Strategy on CSR’ (April 2015), p.2.
https://www.business-humanrights.org/sites/default/files/documents/EU%20CSR%20Communication%20ENNHRI%20Final%20Apr%2 02015%20%282%29.pdf (accessed 10 November 2019).
146 European Parliament, ‘Study: Implementation of the UN Guiding Principles on Business and Human Rights’ (2017), 39–42.
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3.3 Legislation and initiatives EU Member States.147
France
In 2017, France adopted the “Duty of Vigilance” law and became a leading State with respect to implementation of the UNGPs.148 This national legislation requires French-located large-scale corporations to establish and publish a vigilance plan in order to adequately identify risks and prevent serious harms to human rights. This corporate responsibility extends the activities carried out by the corporation, its subsidiaries, subcontractors and suppliers.149 By establishment of this law, civil liability is created to fortify human rights impact by business operations of corporations. France expressed its commitment to support a legislative proposal establishing ‘Duty of Vigilance’ at EU-level.150
The Netherlands
The Netherlands adopted the Child Labour Due Diligence Bill in 2019.151 This created HRDD obligations for business enterprises that provide products and services to the Dutch market. For corporations that are not located in the European part of the Netherlands, this obligation shall apply after the company delivers goods or services to end users in the Netherlands for the second time in a given year.152 These corporations are obligated to submit a statement in which they declare identified risks related to child labour throughout the entire supply chain. In case of a reasonable presumption that child labour takes place, an action plan shall be drawn up by the corporation.153
The United Kingdom
Following from the Modern Slavery Act 2015, corporations conducting business and domiciled in the UK are obliged to reveal their taken actions to ensure that slavery or human trafficking is excluded from the supply chain, this includes HRDD measures.154
In 2017, the Joint Committee on Human Rights, which examines matters relating to human rights within the UK, recommended legislation obliging corporations to prevent human rights abuses, which would contain a HRDD obligation and civil remedies against parent companies
147 ECCJ, ‘Evidence for mandatory HRDD legislation’, (ECCJ 20 May 2019). https://corporatejustice.org/eccj-publications/15144-evidence-for-mandatory-hrdd-legislation-updated-may-2019 (accessed 23 December 2019). This document serves as a guideline while identifying and providing an elaboration of national legislation and other EU Member State initiatives and legislation of the EU. (herein after: ECCJ, ‘Evidence for mandatory HRDD legislation’, 2019).
148 LOI n° 2017-399 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre, 2017.
149 LOI n° 2017-399 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre, 2017. article 1.
150 France, ”Stratégie nationale de lutte contre la déforestation importee”, 2018-2030”, adopted by the Ministry of Ecological Transition and Solidarity, November 2018.
151 Nederland, Wet zorgplicht kinderarbeid, Stb 2019 401. 152 Ibid., article 4 (2).
153ibid, article 5.
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located in the UK when abuses occur.155 In 2019, a group of civil society organisations launched a campaign calling for a mandatory human rights due diligence law.156
Italy
According to the NAP presented by Italy in 2016157, the government committed itself to evaluate the possibility of integration of administrative liability of legislative reforms requiring corporate human rights respect. Italy created the Legislative Decree on Administrative Liability of Legal Entities and thereby introduced corporate criminal liability for crimes committed in the interest or advantage of the business enterprise. Subsequently, this includes human rights violations. It requires corporations to demonstrate its implemented compliance strategies.158 This national legislation applies to all corporations, associations and entities and indirectly provokes awareness on preventing human rights abuse in accordance with HRDD procedures.159
Germany
According to the German NAP with regard to implementation of the UNGPs, it announced in its Coalition Agreement in 2016 that legislation on HRDD would be considered in case less than half of major German business enterprises adopt sufficient and acceptable HRDD processes by 2020.160
In 2019, a draft by the German Federal Ministry for Economic Cooperation and Development on mandatory HRDD was leaked.161 The law is bound to apply to German companies with over 250 employees and more than 40 million Euros annual turnover. It would require internal supply chain risk assessments, the selection of a compliance officer to monitor compliance with the law’s requirements and establish an effective complaint mechanism. Non-compliance could lead to fines, imprisonment and exclusion from public procurement procedures in Germany.162
155 House of Lords, House of Commons, Joint Committee on Human Rights, “Human Rights and business 2017: Promoting responsibility and accountability”, Sixth report of Session 2016-2017.
156 BHRRC, ‘UK: CSOs call for mandatory human rights due diligence law to make multinationals accountable for
abuses’, (BHRRC, 10 April 2019).
https://www.business-humanrights.org/en/uk-csos-call-for-mandatory-human-rights-due-diligence-law-to-make-multinationals-accountable-for-abuses (accessed on 23 December). 157 NAP, ‘Implementing the UNGPs on Business and Human Rights’ Italian Government, 2016-2021.
http://cidu.esteri.it/resource/2016/12/49117_f_NAPBHRENGFINALEDEC152017.pdf (accessed 10 November 2019).
158HRIC, Italian Legislative Decree N. 231/2001 , ‘On Administrative Liability of Legal Persons and BHR
Violations: A Brief Overview, 2017, p.1.
https://docs.wixstatic.com/ugd/6c779a_ae42b0a57aad4620ba65b9708836f3ef.pdf (accessed 27 December 2019).
159ECCJ, ‘Evidence for mandatory HRDD legislation’, 2019.
160 NAP, ‘Implementing the UNGPs on Business and Human Rights’, 2016-2020. https://www.auswaertiges-amt.de/blob/610714/fb740510e8c2fa83dc507afad0b2d7ad/nap-wirtschaft-menschenrechte-engl-data.pdf (accessed 23 December 2019).
German Government Coalition Agreement, 2018, Chapter XII.6. https://www.spiegel.de/media/media-42518.pdf (23 December 2019)
161 ‘German Development Ministry drafts law on mandatory human rights due diligence for German companies’,
(BHHRC, 2019).
https://www.business-humanrights.org/en/german-development-ministry-drafts-law-on-mandatory-human-rights-due-diligence-for-german-companies (accessed 23 December 2019). 162 ECCJ, ‘Evidence for mandatory HRDD legislation’, 2019, p.1.
