The E.U.'s bid to hold companies accountable

The E.U.’s bid to hold companies accountable

  • Published on
    August 8, 2022
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  • Category:
    Forced Labor, Law & Policy, Supply Chain
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For decades, European companies have profited from forced labor and environmental destruction in their global value chains. But with new E.U. due diligence legislation in the pipeline, the days of big business shirking responsibility are numbered.

Member states review proposal for due diligence legislation 

In February, the European Commission introduced a proposal for new due diligence rules for companies. Member states have been reviewing the file over recent months, and the EU-level debate is expected to heat up in coming weeks.

Edie reports:

The EU’s proposal on corporate accountability requires large companies that are either based in member states or have a considerable turnover in the EU to identify, prevent and mitigate human rights and environmental violations throughout their value chains. […]

The EU proposal would apply to all companies based or operating in the bloc with more than 500 employees and a net €150m in annual turnover but also smaller companies in high-risk sectors, such as textile, agriculture, and mineral extraction industries.

Banning products made with forced labor 

Another key development in the bid for greater corporate accountability is the proposed ban on products made with forced labor.

Around 25 million people around the world are subjected to forced labor, according to data from the Commission, with most facing exploitation in the private sector.

To combat European complicity in modern slavery, the European Parliament has called on the Commission to develop an instrument that would ensure products made with forced labor can be seized at E.U. borders. To release the goods, companies would have to prove the lack of forced labor.

Freedom United recently submitted a series of considerations for the European Commission to help strengthen the proposal. In particular, we highlighted the need for remediation to be part of the model, and for remedy to be sought in consultation with victims and survivors.

The European Commission is expected to present legislation in September.

A critical time for campaigners

The proposed legislation has received significant pushback from corporate lobbyists who claim the increased regulation will weaken companies’ competitiveness. They are attempting to water down the proposal.

On the other hand, civil society is mobilizing to ensure the final legislation has teeth and leaves no room for potential loopholes. Freedom United is part of the Justice is Everybody’s Business campaign which will launch in September, calling on the E.U. to follow through and protect people and the planet from corporate greed. Find out more about the campaign here.

Do you think it’s time that we put people and the planet above profit? Send a strong message to the E.U. today.


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