Activities of Angelika WINZIG related to 2022/0051(COD)
Shadow opinions (1)
OPINION on the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937
Amendments (421)
Amendment 20 #
Proposal for a directive
Recital 5
Recital 5
(5) EWell-established existing international standards on responsible business conduct like the United Nations Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, and the OECD Due Diligence Guidance for Responsible Business Conduct specify that companies should protect human rights and set out how they should address the protection of the environment across their operations and value chains. The United Nations Guiding Principles on Business and Human Rights79 recognise the responsibility of companies to exercise human rights due diligence by identifying, preventing and mitigating the adverse impacts of their operations on human rights and by accounting for how they address those impacts. Those Guiding Principles state that businesses should avoid infringing human rights and should address adverse human rights impacts that they have caused, contributed to or are linked with in their own operations, subsidiaries and through their direct and indirect business relationships. These guidelines should be the basis for this Directive. __________________ 79 United Nations’ “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework”, 2011, available at https://www.ohchr.org/documents/publicati ons/guidingprinciplesbusinesshr_en.pdf.
Amendment 23 #
Proposal for a directive
Recital 6
Recital 6
(6) The concept of human rights due diligence was specified and further developed in the OECD Guidelines for Multinational Enterprises80 which extended the application of due diligence to environmental and governance topics. The OECD Guidance on Responsible Business Conduct and sectoral guidance81 are internationally recognised frameworks setting out practical due diligence steps to help companies identify, prevent, mitigate and account for how they address actual and potential impacts in their operations, valuesupply chains and other business relationships. The concept of due diligence is also embedded in the recommendations of the International Labour Organisation (ILO) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.82direct business relationships. __________________ 80 OECD Guidelines for Multinational Enterprises, 2011 updated edition, available at http://mneguidelines.oecd.org/guidelines/.h ttps://mneguidelines.oecd.org/mneguidelin es/ 81 OECD Guidance on Responsible Business Conduct, 2018, and sector- specific guidance, available at https://www.oecd.org/investment/due- diligence-guidance-for-responsible- business-conduct.htm. 82 The International Labour Organisation’s “Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, Fifth Edition, 2017, available at: https://www.ilo.org/empent/Publications/ WCMS_094386/lang--en/index.htm.
Amendment 24 #
Proposal for a directive
Recital 8
Recital 8
Amendment 25 #
Proposal for a directive
Recital 9
Recital 9
Amendment 26 #
Proposal for a directive
Recital 10
Recital 10
Amendment 27 #
Proposal for a directive
Recital 11
Recital 11
Amendment 28 #
Proposal for a directive
Recital 13
Recital 13
(13) The European Parliament, in its resolution of 10 March 2021 calls upon the Commission to propose Union rules for a comprehensive corporate due diligence obligation100. The Council Conclusions on Human Rights and Decent Work in Global Supply Chains of 1 December 2020 called upon the Commission to table a proposal for a Union legal framework on sustainable corporate governance, including cross- sector corporate due diligence obligations along global supply chains.101 The European Parliament also calls for clarifying directors` duties in its own initiative report adopted on 2 December 2020 on sustainable corporate governance. In their Joint Declaration on EU Legislative Priorities for 2022102 , the European Parliament, the Council of the European Union and the Commission have committed, to deliver on an economy that works for people, and to improve the regulatory framework on sustainable corporate governance. __________________ 100 European Parliament resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability (2020/2129(INL)), P9_TA(2021)0073, available at https://oeil.secure.europarl.europa.eu/oeil/p opups/ficheprocedure.do?lang=en&referen ce=2020/2129(INL). 101 Council Conclusions on Human Rights and Decent Work in Global Supply Chains, 1 December 2020 (13512/20). 102 Joint declaration of the European Parliament, the Council of the European Union and the European Commission on EU Legislative Priorities for 2022, available at https://ec.europa.eu/info/sites/default/files /joint_declaration_2022.pdf.
Amendment 31 #
Proposal for a directive
Recital 14
Recital 14
(14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimisation of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and value chains.supply chains. (This amendment applies throughout the text and is related to the amendment of the definition in Article 3(1), point (g). Adopting it will necessitate corresponding changes throughout.)
Amendment 32 #
Proposal for a directive
Recital 14 a (new)
Recital 14 a (new)
(14a) In line with relevant Union and national law, all companies in the Union need to adhere to the protection of human rights and environmental standards. If that is not the case, Member States and their relevant authorities are required to enforce the legislation. Thus, there is no need for companies within the Union to control each other’s conduct. The goal of due diligence is to tackle risks in cases where human rights and environmental standards are not or cannot be enforced. Therefore, tracing activities in the upstream supply chain shall be focused on direct business relationships outside of the European Union.
Amendment 33 #
Proposal for a directive
Recital 15
Recital 15
(15) Companies should take appropriate steps within their means to set up and carry out risk-based due diligence measures, with respect to their own operations, their subsidiaries, as well as their established direct and indirect business relationships with entities from third countries throughout their valuesupply chains in accordance with the provisions of this Directive. This Directive should not require companies to guarantee, in all circumstances, that adverse impacts will never occur or that they will be stopped. For example with respect to business relationships where the adverse impact results from State intervention, the company might not be in a position to arrive at such results. Therefore, the main obligations in this Directive should be ‘obligations of means’. While companies can be asked to prevent or mitigate adverse impacts through due diligence policies, it is still in the responsibility of states to actually combat human rights violations worldwide. The company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. Account should be taken of the specificitiesThe measures should be proportionate and commensurate to the likelihood and severity of the company’'s value chain, sector or geographical area in which its value chain partners operate, the company’s power to influence its direct and indirect business relationships, and whether the company could increase its power of influencpotential or actual adverse impacts and its specific circumstances, particularly its sector of activity, the size and length of its supply chain, the size of the company, its capacity, resources and leverage.
Amendment 37 #
Proposal for a directive
Recital 17
Recital 17
Amendment 39 #
Proposal for a directive
Recital 17 a (new)
Recital 17 a (new)
(17a) Companies should be allowed to set up a prioritisation strategy based on a risk assessment and a risk-based monitoring methodology for identifying potential adverse impacts. Companies should consider the level of severity, likelihood and urgency of the different adverse impacts, the nature and context of their operations, including geography, the scope of the risks, their scale and how irremediable they might be, and if necessary, use the prioritisation policy in dealing with them.
Amendment 41 #
Proposal for a directive
Recital 18
Recital 18
(18) The valuesupply chain should cover activities related todirectly necessary for the production of a good or provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of establisheddirect business relationships of the company. It should encompass direct upstream established direct and indirect business relationshipsbusiness relationships with direct business partners from a third country that design, extract, manufacture, transport, store and supply raw material, products, parts of products, or provide services to the company that are directly necessary to carry out the company’s activities, and also downstream relationships, including established direct and indirect business relationships, that use or receive products, parts of products or services from the company up to the end of life of the product, including inter alia the distribution of the product to retailers, the transport and storage of the product, dismantling of the product, its recycling, composting or landfilling.
Amendment 45 #
Proposal for a directive
Recital 19
Recital 19
(19) As regards regulated financial undertakings providing loan, credit, or other financial services, “value chain” with respect to the provision of such services should be limited to the activities of the clients receiving such services, and the subsidiaries thereof whose activities are linked to the contract in question. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considethe financial services industry is already subject to several provisions and obligations under existing legislation such as the Sustainable Finance Disclosure Regulation (SFDR) or the Capital Requirements Directive (CRD), the risk of overlap, lack of clarity and undue burden is evident. Furthermored to be part of the value chain. The activities of the companies or other legal entities that are included in the value chain of that client should not be coveredhe risk of limited financing to the European economy should not be underestimated. A possible future inclusion should therefore be preceded by a proper impact assessment.
Amendment 50 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to allow companies to properly identify and prioritise the adverse impacts in their value chainsupply chain based on a risk assessment and risk-based monitoring and to make it possible for them to exercise appropriate leverage, the due diligence obligations should be limited in this Directive to establisheddirect business relationships. For the purpose of this Directive, established business relationships should mean such direct and indirect businesscontractual relationships which are, or which are expected to be lasting, in view of ith a contractor, subcontractor or any otheir intlegal enstity and duration and which do not represenies from a third country that are negligible or ancillary partcessary for the supply of goods ofr the value chain. The nature of business relationships as “established” should be reassessed periodically, and at least every 12 months. If the direct business relationship of a company is established, then all linked indirect business relationships should also be considered as established regarding that companyprovision of services that are necessary for the production of the companies' product or the provision of and use of the relevant service, with whom the company has a commercial agreement, and that does not represent a negligible or merely ancillary part of the supply chain.
Amendment 51 #
Proposal for a directive
Recital 20 a (new)
Recital 20 a (new)
(20a) In order to offset of the regulatory burdens for citizens, administrations and businesses introduced by this Directive, the Commission should, in the framework of its annual burden survey conducted pursuant to paragraph 48 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making, review the regulatory framework for the affected sectors and companies in line with the “one in, one out” principle, as set out in the Commission communication of 29 April 2021 entitled “Better Regulation: Joining forces to make better laws”, and, where appropriate, present legislative proposals for the amendment or deletion of provisions in other Union legislative acts that generate compliance costs in those sectors and for those companies.
Amendment 52 #
Proposal for a directive
Recital 21
Recital 21
(21) Under this Directive, EU companies with more than 5000 employees on average and a worldwide net turnover exceeding EUR 150 million in the financial year preceding the last financial year should be required to comply with due diligence. As regards companies which do not fulfil those criteria, but which had more than 250 employees on average and more than EUR 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors, due diligence should apply 2 years after the end of the transposition period of this directive, in order to provide for a longer adaptation period. In order to ensure a proportionate burden, companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. Temporary agency workers, including those posted under Article 1(3), point (c), of Directive 96/71/EC, as amended by Directive 2018/957/EU of the European Parliament and of the Council103 , should be included in the calculation of the number of employees in the user company. Posted workers under Article 1(3), points (a) and (b), of Directive 96/71/EC, as amended by Directive 2018/957/EU, should only be included in the calculation of the number of employees of the sending company. __________________ 103 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (OJ L 173, 9.7.2018, p. 16).
Amendment 56 #
Proposal for a directive
Recital 22
Recital 22
(22) In order to reflect the priority areas of international action aimed at tackling human rights and environmental issues, the selection of high-impact sectors for the purposes of this Directive should be based on existing sectoral OECD due diligence guidance. The following sectors should be regarded as high-impact for the purposes of this Directive: the manufacture of textiles, leather and related products (including footwear), and the wholesale trade of textiles, clothing and footwear; agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum, natural gas, coal, lignite, metals and metal ores, as well as all other, non-metallic minerals and quarry products), the manufacture of basic metal products, other non-metallic mineral products and fabricated metal products (except machinery and equipment), and the wholesale trade of mineral resources, basic and intermediate mineral products (including metals and metal ores, construction materials, fuels, chemicals and other intermediate products). As regards the financial sector, due to its specificities, in particular as regards the value chain and the services offered, even if it is covered by sector-specific OECD guidance, it should not form part of the high-impact sectors covered by this Directive. At the same time, in this sector, the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings, even if they do not have a legal form with limited liability.
Amendment 60 #
Proposal for a directive
Recital 23
Recital 23
(23) In order to achieve fully the objectives of this Directive addressing human rights and adverse environmental impacts with respect to companies’ operations, subsidiaries and value chains, third-country companies with significant operations in the EU should also be covered. More specifically, the Directive should apply to third-country companies which generated a net turnover of at least EUR 150 million in the Union in the financial year preceding the last financial year or a net turnover of more than EUR 40 million but less than EUR 150 million in the financial year preceding the last financial year in one or more of the high- impact sectors, as of 2 years after the end of the transposition period of this Directive.
Amendment 62 #
Proposal for a directive
Recital 24
Recital 24
(24) For defining the scope of application in relation to non-EU companies the described turnover criterion should be chosen as it creates a territorial connection between the third-country companies and the Union territory. Turnover is a proxy for the effects that the activities of those companies could have on the internal market. In accordance with international law, such effects justify the application of Union law to third-country companies. To ensure identification of the relevant turnover of companies concerned, the methods for calculating net turnover for non-EU companies as laid down in Directive (EU) 2013/34 as amended by Directive (EU) 2021/2101 should be used. To ensure effective enforcement of this Directive, an employee threshold should, in turn, not be applied also be applied as a benchmark to determine which third-country companies fall under this Directive, as to create a level- playing field, while taking into account that the notion of “employees” retained for the purposes of this Directive is based on Union law and could not be easily transposed outside of the Union. In the absence of a clear and consistent methodology, including in accounting frameworks, to determine the employees of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. The definition of turnover should be based on Directive 2013/34/EU which has already established the methods for calculating net turnover for non-Union companies, as turnover and revenue definitions are similar in international accounting frameworks too. With a view to ensuring that the supervisory authority knows which third country companies generate the required turnover in the Union to fall under the scope of this Directive, this Directive should require that a supervisory authority in the Member State where the third country company’s authorised representative is domiciled or established and, where it is different, a supervisory authority in the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this Directive.
Amendment 63 #
Proposal for a directive
Recital 24 a (new)
Recital 24 a (new)
(24a) Companies that are part of a group, including subsidies and parent companies, may not always have the same supply chain. However, it may be that due diligence processes and actions are conducted at the level of the group. In this regard, subsidiaries and companies which are part of the same group may refer to the responsibilities pursuant to the obligations of this directive taken on by their parent company or other group members.
Amendment 64 #
Proposal for a directive
Recital 25
Recital 25
(25) In order to achieve a meaningful contribution to the sustainability transition, due diligence under this Directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrine and, at the same time, to limit the regulatory and fin the international conventions as listed in the Annex toancial burden for companies under the scope of thise Directive. In order to ensure a comprehensive coverage of human rights, a violation of a prohibition or right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this Directive, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this Directive, taking into account all relevant circumstances of their operations, such as the sector and operational context., due diligence under this Directive should be carried out with respect to adverse human rights impact and adverse environmental impacts resulting from the violation of one of the principles set out in the OECD Due dDiligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex to this DirectiveGuidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as regards the environment or human rights.
Amendment 69 #
Proposal for a directive
Recital 26
Recital 26
(26) Companies should have guidance at their disposal that illustrates how their activities may impact human rights and which corporate behaviour is prohibited in accordance with internationally recognised human rights. Such guidance is included for instance in The United Nations Guiding Principles Reporting Framework104 and the United Nations Guiding Principles Interpretative Guide105 and should be made easily accessible to companies. Using relevant international guidelines and standards as a reference, the Commission should be able to issue additional guidance that will serve as a practical tool for companies. __________________ 104 https://www.ungpreporting.org/wp- content/uploads/UNGPReportingFramewor k_withguidance2017.pdf. 105 https://www.ohchr.org/Documents/Issues/ Business/RtRInterpretativeGuide.pdf.https: //www.ohchr.org/Documents/Issues/Busine ss/RtRInterpretativeGuide.pdf.
Amendment 71 #
Proposal for a directive
Recital 27
Recital 27
(27) In order to conduct appropriate human rights, and environmental due diligence with respect to their operations, their subsidiaries, and their value chains, companies covered by this Directive should integrate due diligence into corporate policies, identify, prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts, establish and maintain a complaintsnotification procedure, monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this Directive and communicate publicly on their due diligence. In order to ensure clarity for companies, in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end, or when this is not possible, minimising actual adverse impacts should be clearly distinguished in this Directive.
Amendment 73 #
Proposal for a directive
Recital 28
Recital 28
(28) In order to ensure that due diligence forms part of companies’ corporate policies, and in line with the relevant international framework, companies should integrate due diligence into all their corporate policies where necessary and have in place a risk-based due diligence policy. The risk- based due diligence policy should contain a description of the company’s approach, including in the long term, to due diligence, a code of conduct describing the rules and principles to be followed by the company’s employees and subsidiaries; a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. The code of conduct should apply in all relevant corporate functions and operations, including procurement and purchasing decisions. Companies should also update their due diligence policy annuallyregularly update and publish their due diligence policy, taking a risk-based approach in accordance with the OECD Due Diligence Guidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, but at least every five years.
Amendment 76 #
Proposal for a directive
Recital 29
Recital 29
(29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts. An ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. In this context, in line with international frameworks, the company’s influence over a business relationship should include, on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control, market power, pre-qualification requirements, linking business incentives to human rights and environmental performance, etc.) and, on the other hand, the degree of influence or leverage that the company could reasonably exercise, for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact. Severity means the scale, scope and irremediably character of the adverse impact, taking into account the gravity of the impact on the rights holder, the number of individuals that could be affected and the possibility of occurrence
Amendment 77 #
Proposal for a directive
Recital 30
Recital 30
(30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification of adverse impacts, such identification should be based on quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification of adverse impacts should include assessing the human rights, and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically, at least every 12 months, throughout the life of an activity or relationship. Regulated financial undertakings providing loan, credit, or other financial services should identify the adverse impacts only at the inception of the contract. When identifying adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including trading, procurement and pricing practices. Where the company cannot prevent, bring to an end or minimize all its adverse impacts at the same time, it should be able to prioritize its action, provided it takes the measures reasonably available to the company, taking into account the specific circumstances.
Amendment 80 #
Proposal for a directive
Recital 34
Recital 34
(34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following actions, where relevant. Where necessary due to the complexity of prevention and mitigation measures, companies should develop and implement a prevention or mitigation action plan. Companies are encouraged to develop their action plans in cooperation with sectoral initiatives and industry schemes. Companies should seek to obtain contractual assurances from a direct partner with whom they have an established direct business relationship outside of the European Union that it will ensure compliance with the code of conduct or the prevention or mitigation action plan, including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ valuesupply chain. The contractual assurances should be accompanied by appropriate measures to verify compliance. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also make investments which aim to prevent adverse impacts, provide targeted and proportionate support for an SME with which they have an established direct business relationship such as financing, for example, through direct financing, low- interest loans, guarantees of continued sourcing, and assistance in securing financing, to help implement the code of conduct or prevention action plan, or technical guidance such as in the form of training, management systems upgrading, and collaborate with other companies.
Amendment 86 #
Proposal for a directive
Recital 36
Recital 36
(36) In order to ensure that prevention and mitigation of potential adverse impacts is effective, companies should prioritize engagement with business relationships in the valuesupply chain, instead of terminating the business relationship, as a last resort action after attempting at preventing and mitigating adverse potential impacts without success, taking into consideration the best interest of those affected by the adverse impact and taking into account potential supply chain disruptions. However, the Directive should also, for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures, refer to the obligationpossibility for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, to either temporarily suspend commercial relationships with the partner in question, while pursuing prevention and minimisation efforts, if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. It is possible that prevention of adverse impacts and if these measures would be in the best interest of the potential victims. Companies should not be required to refrain from entering into new or extending existing relations with the direct business partner or temporarily suspend the commercial relationship or terminate the level of indirect business relationships requires collaboration with another company, for example a company which has a direct contractual relationship with the supplier. In some instances, such collaboration could be the only realistic way of preventing adv where there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated or wherse impacts, in particular, where the indirect business relationship is not ready to enter into a contract with the company. In these instances, the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competitionno available alternative to that business relationship, that provides a product or service essential to the company’s production of goods or provision of services, exists. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.
Amendment 88 #
Proposal for a directive
Recital 37
Recital 37
(37) As regards direct and indirect business relationships, industry cooperation, industry schemes and multi- stakeholder initiatives can help create additional leverage to identify, mitigate, and prevent adverse impacts. Therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. CompaniMember States cshould assess, at their own initiative, the alignment of these schemes and initiatives with the obligations under this Directive. In order to ensure full information on such initiatives, the Directive should also refer to the possibility for the Commission and the Member States toshould facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, mayshould issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 94 #
Proposal for a directive
Recital 39
Recital 39
(39) So as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this Directive, companies should be required to take the following actions within their means, where relevant. They should neutralise the adverse impact or minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvementindicators for monitoring. Companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established direct business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chaior mitigation action plan. The contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for an SMEs with which they have an established direct business relationship and collaborate with other entities, including through multi-stakeholder initiatives, where relevant, to increase the company’s ability to bring the adverse impact to an end.
Amendment 98 #
Proposal for a directive
Recital 41
Recital 41
(41) In order to ensure that bringing actual adverse impacts to an end or minimising them is effective, companies should prioritize engagement with business relationships in the valuesupply chain, instead of terminating the business relationship, as a last resort action after attempting at bringing actual adverse impacts to an end or minimising them without success, taking into consideration the best interest of those affected by the adverse impact and taking into account potential supply chain disruptions. However, this Directive should also, for cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, refer to the obligationpossibility for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, to either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe and if these measures would be in the best interest of the potential victims. Companies should not be required to refrain from entering into new or extending existing relations with the direct business partner or temporarily suspend the commercial relationship or terminate the business relationship where there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated or where no available alternative to that business relationship, that provides a product or service essential to the company’s production of goods or provision of services, exists. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.
Amendment 100 #
Proposal for a directive
Recital 42
Recital 42
(42) Companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concernsnotify them directly in case they have legitimate information, which must be reasonable documented and factually justified, regarding actual or potential human rights and environmental adverse impacts. Organisations who could submit such complaintsnotify the company should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concernedcompany, its subsidiaries or direct business partners, where they have knowledge about a potential or actual adverse impact. Companies should establish a procedure for dealing with those complainte notifications and inform workers, trade unions and other workers’ representatives, where relevant, about such processes. Recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. In accordance with international standards, complaiinformants should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. This access should not lead to unreasonable solicnotification. This access should not lead to unreasonable solicitations of companies. Companies shall be allowed to deal with notifications as a group, for example within a sectoral initiative, an industry programme or multi-stakeholder initiations of companives.
Amendment 102 #
Proposal for a directive
Recital 43
Recital 43
(43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out periodic assessments of their own operations, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their establisheddirect business relationships with third country entities, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitigation of human rights and environmental adverse impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to- date, they should be carried out at least every 12 months and be revised in- betweenregularly, for example if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen, but at least every five years.
Amendment 108 #
Proposal for a directive
Recital 46
Recital 46
(46) In order to provide support and practical tools to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, using relevant international guidelines and standards as a reference, and in consultation with Member States and stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Agency for Small and Medium enterprises and where appropriate with international bodies having expertise in due diligence, should have the possibility to issue guidelines, including for specific sectors or specific adverse impacts. issue guidelines in digital, free of charge and easily accessible format, including for specific sectors or specific adverse impacts, an overview of applicable industry initiatives, and practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas. Furthermore, the guidelines should include a list of risk and non-risk areas whether sectoral or geographic such as regions and countries where adverse human rights impacts and/or environmental adverse impacts are unlikely or likely to occur. Companies should not be required to perform due diligence on parts of the supply chain linked to non-risk areas where adverse impacts are unlikely to occur. Countries or regions, where adverse impacts are unlikely to occur, could be the European Economic Area, the United States of America, the United Kingdom, Canada, Australia, New Zealand, and Japan. One criteria for this list should be a free-trade agreement between the European Union and the third country or region. The guidelines should be made available no later than 18 months after the date of entry into force of this Directive. The Commission should regularly review the relevance of its guidelines and adapt them to new best practices. Country factsheets should be updated regularly by the Commission and made publicly available in order to provide up-to-date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission should collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub-sectors, and products.
Amendment 115 #
Proposal for a directive
Recital 50
Recital 50
Amendment 117 #
Proposal for a directive
Recital 51
Recital 51
Amendment 117 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a
Article 1 – paragraph 1 – subparagraph 1 – point a
(a) on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own operations, the operations of their subsidiaries, and the valuesupply chain operations carried out by third country entities with whom the company has an direct established business relationship and
Amendment 119 #
Proposal for a directive
Recital 53
Recital 53
(53) In order to ensure the monitoring of the correct implementation of companies’ due diligence obligations and ensure the proper enforcement of this Directive, Member States should designate one or more national supervisory authorities. These supervisory authorities should be of a public nature, independent from the companies falling within the scope of this Directive or other market interests, and free of conflicts of interest. In accordance with national law, Member States should ensure appropriate financing of the competent authority. They should be entitled to carry out investigations, on their own initiative or based on complaints or substantiated concerns raised under this Directive. Where competent authorities under sectoral legislation exist, Member States could identify those as responsible for the application of this Directive in their areas of competence. They could designate authorities for the supervision of regulated financial undertaking also as supervisory authorities for the purposes of this Directive.
Amendment 120 #
Proposal for a directive
Recital 54
Recital 54
(54) In order to ensure effective enforcement of national measures implementing this Directive, Member States should provide for dissuasive, proportionate and effective sanctions for infringements of those measures. In order for such sanction regime to be effective, administrative sanctions to be imposed by the national supervisory authorities should include pecuniary sanctionsMember States should fully align and harmonize sanctions to allow for a level-playing field. Where the legal system of a Member State does not provide for administrative sanctions as foreseen in this Directive, the rules on administrative sanctions should be applied in such a way that the sanction is initiated by the competent supervisory authority and imposed by the judicial authority. Therefore, it is necessary that those Member States ensure that the application of the rules and sanctions has an equivalent effect to the administrative sanctions imposed by the competent supervisory authorities.
Amendment 120 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point b
Article 1 – paragraph 1 – subparagraph 1 – point b
Amendment 121 #
Proposal for a directive
Recital 56
Recital 56
Amendment 123 #
Proposal for a directive
Recital 57
Recital 57
Amendment 127 #
Proposal for a directive
Recital 58
Recital 58
Amendment 127 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
The nature of business relationships as ‘established’ shall be reassessed periodically, and at least every 124 months.
Amendment 128 #
Proposal for a directive
Recital 59
Recital 59
Amendment 130 #
Proposal for a directive
Article 1 – paragraph 2 a (new)
Article 1 – paragraph 2 a (new)
2 a. Member States shall not lay down, in their national law, provisions diverging from those laid down in this Directive unless otherwise provided for in this Directive.
Amendment 131 #
Proposal for a directive
Recital 60
Recital 60
Amendment 133 #
Proposal for a directive
Recital 61
Recital 61
Amendment 134 #
Proposal for a directive
Recital 62
Recital 62
Amendment 136 #
Proposal for a directive
Recital 63
Recital 63
Amendment 137 #
Proposal for a directive
Recital 64
Recital 64
Amendment 138 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 5000 employees on average and had a net worldwide turnover of more than EUR 150 million in the last financial year for which annual financial statements have been prepared;
Amendment 140 #
Proposal for a directive
Recital 70
Recital 70
Amendment 142 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a
Article 1 – paragraph 1 – subparagraph 1 – point a
(a) on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own core business operations, the operations of their subsidiaries, and the valuesupply chain operations carried out by third country entities with whom the company has an established direct business relationship and.
Amendment 143 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 145 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point b
Article 1 – paragraph 1 – subparagraph 1 – point b
Amendment 149 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point i
Article 2 – paragraph 1 – point b – point i
Amendment 150 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
Amendment 154 #
Proposal for a directive
Article 1 – paragraph 2 a (new)
Article 1 – paragraph 2 a (new)
2a. Member States shall not lay down, in their national law, provisions diverging from those laid down in this Directive, unless otherwise provided for in this Directive.
Amendment 154 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point ii
Article 2 – paragraph 1 – point b – point ii
Amendment 156 #
Proposal for a directive
Article 1 – paragraph 3
Article 1 – paragraph 3
3. This Directive shall be without prejudice to obligations in the areas of human rights, and protection of the environment and climate change under other Union legislative acts. If the provisions of this Directive conflict with a provision of another Union legislative act pursuing the same objectives and providing for more extensive or more specific obligations, the provisions of the other Union legislative act shall prevail to the extent of the conflict and shall apply to those specific obligations.
Amendment 159 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii
Article 2 – paragraph 1 – point b – point iii
Amendment 161 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 5000 employees on average and had a net worldwide turnover of more than EUR 150 million in the European Union in the last financial year for which annual financial statements have been prepared;
Amendment 165 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 184 #
Proposal for a directive
Article 2 – paragraph 2 – introductory part
Article 2 – paragraph 2 – introductory part
2. This Directive shall also apply to companies which are formed in accordance with the legislation of a third country, and fulfil one of the following conditions:have a domestic branch office or subsidiary in a Member State and which normally have at least 5000 employees worldwide and had a net worldwide turnover of more than EUR 150 million in the last financial year for which annual financial statements have been prepared;.
Amendment 188 #
Proposal for a directive
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
Amendment 193 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
Amendment 195 #
Proposal for a directive
Article 2 – paragraph 3
Article 2 – paragraph 3
3. For the purposes of paragraph 1, the number of part-time employees shall be calculated on a full-time equivalent basis. Temporary agency workers shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company.
Amendment 205 #
Proposal for a directive
Article 2 – paragraph 3
Article 2 – paragraph 3
3. For the purposes of paragraph 1, the number of part-time employees shall be calculated on a full-time equivalent basis. Temporary agency workers shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company.
Amendment 206 #
Proposal for a directive
Article 2 – paragraph 3 a (new)
Article 2 – paragraph 3 a (new)
3a. For the purposes of paragraph 1, the number of employees and net turnover of all the subsidiaries of the company shall be included in the calculation of the number of employees and net turnover of the company. For the purposes of paragraph 2, the net turnover of all the subsidiaries of the company shall be included in the calculation of turnover of the company and only the net turnover generated by subsidiaries in the Union shall be included in the calculation of the net turnover generated in the Union.
Amendment 207 #
Proposal for a directive
Article 2 – paragraph 4 a (new)
Article 2 – paragraph 4 a (new)
4a. Companies within the scope of this directive that are part of a group, including subsidies and parent companies, may also commit to take on the responsibilities of other group members pursuant to the obligations set out in this directive, under the obligation to deliver at least an equal commitment to due diligence. These other group members will then be relieved from their responsibilities in this regard.
Amendment 214 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv
Article 3 – paragraph 1 – point a – point iv
Amendment 216 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘valuesupply chain’ means activities related todirectly necessary for the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘valuesupply chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The valuesupply chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities;
Amendment 222 #
Proposal for a directive
Article 3 – paragraph 1 – point j
Article 3 – paragraph 1 – point j
(j) ‘industry initiative’ means a combination of voluntary valuesupply chain due diligence procedures, tools and mechanisms, including independent third- party verifications, developed and overseen by governments, industry associations or groupings of interested organisthe Commission, governments, including the governments of developing countries, industry associations;
Amendment 227 #
Proposal for a directive
Article 3 – paragraph 1 – point n
Article 3 – paragraph 1 – point n
(n) ‘stakeholders’ means the company’s employees, the employees of its subsidiaries, and other individuals, groups, communities or entities whose rights or interests are or could bedirectly affected by adverse human rights impacts and adverse environmental impacts arising from the products, services and operations of that company, its subsidiaries and its business relationships;
Amendment 236 #
Proposal for a directive
Article 3 – paragraph 1 – point b
Article 3 – paragraph 1 – point b
(b) ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex, Part II;inciples set out in the OECD Due Diligence Guidance for Responsible Business Conduct and the OECD Guidelines for Multinational Enterprises.
Amendment 240 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point a
Article 1 – paragraph 1 – subparagraph 1 – point a
(a) on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own operations, the operations of their subsidiaries, and the valuesupply chain operations carried out by third country entities with whom the company has an direct established business relationship and
Amendment 240 #
Proposal for a directive
Article 3 – paragraph 1 – point c
Article 3 – paragraph 1 – point c
(c) ‘adverse human rights impact’ means an adverse impact on protected persons resulting from the violation of one of the rights or prohibitions listed in the Annex, Part I Section 1, as enshrined in the international conventions listed in the Annex, Part I Section 2principles set out in the OECD Due Diligence Guidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as regards human rights;
Amendment 241 #
Proposal for a directive
Article 3 – paragraph 1 – point d a (new)
Article 3 – paragraph 1 – point d a (new)
(da) 'group of companies' means a parent company and all its subsidiaries;
Amendment 242 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 1 – point b
Article 1 – paragraph 1 – subparagraph 1 – point b
Amendment 242 #
Proposal for a directive
Article 3 – paragraph 1 – point e – introductory part
Article 3 – paragraph 1 – point e – introductory part
(e) ‘direct business relationship’ means a relationship with a contractor, subdirect contractual relationship with any other legal entity from a third countractor or any other legal entities (‘partner’)y (‘direct business partner’) for the supply of goods or the provision of services that are necessary for the production of the company’s product or the provision and use of the relevant service
Amendment 244 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point i
Article 3 – paragraph 1 – point e – point i
(i) with whom the company has a commercial agreement or to whom the company provides financing, insurance or reinsurance, or, and
Amendment 245 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii
Article 3 – paragraph 1 – point e – point ii
Amendment 246 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii a (new)
Article 3 – paragraph 1 – point e – point ii a (new)
(iia) that does not represent a negligible or merely ancillary part of the supply chain
Amendment 249 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
The nature of business relationships as ‘established’ shall be reassessed periodically, and at least every 124 months.
Amendment 249 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
Amendment 253 #
Proposal for a directive
Article 1 – paragraph 2 a (new)
Article 1 – paragraph 2 a (new)
2a. Member States shall not lay down, in their national law, provisions diverging from those laid down in this Directive, unless otherwise provided for in this Directive.
Amendment 256 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘valuesupply chain’ means activities related todirectly necessary for the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of direct upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities;(This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)
Amendment 261 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
(a) the company had more than 5000 employees on average and had a net worldwide turnover of more than EUR 150 million in the European Union in the last financial year for which annual financial statements have been prepared;
Amendment 265 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 266 #
Proposal for a directive
Article 3 – paragraph 1 – point h a (new)
Article 3 – paragraph 1 – point h a (new)
(ha) ‘leverage’ means the ability of a company to effect change in the wrongful practices of the entity that causes or contributes to the adverse impact.
Amendment 269 #
Proposal for a directive
Recital 4
Recital 4
(4) The behaviour of companies across all sectors of the economy is key to success in the Union’s sustainability objectives as Union companies, especially large ones, rely on global valuesupply chains. It is also in the interest of companies to respect and protect human rights and the environment, in particular given the rising concern of consumers and investors regarding these topics. Several initiatives fostering enterprises which support value-oriented transformation already exist on Union77 , as well as national78 level. Further, binding due diligence legislation has been implemented in several Member States such as France and Germany, which gives rise to the need for a level playing field for companies in order to avoid fragmentation and to provide legal certainty for businesses operating in the single market. _________________ 77 ‘Enterprise Models and the EU agenda’, CEPS Policy Insights, No PI2021-02/ January 2021. 78 E.g. https://www.economie.gouv.fr/entreprises/ societe-mission
Amendment 271 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
Article 8 – paragraph 6 – subparagraph 1 – introductory part
As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the valuesupply chain of which the impact has arisen and shall, where the law governing their relations so entitles them to, take one of the following actions if they are in the best interest of the potential victims of the potential and actual adverse impacts, in line with responsible disengagement, taking into account proportionality and the consequences of disrupting supply chains:
Amendment 272 #
Proposal for a directive
Article 3 – paragraph 1 – point n
Article 3 – paragraph 1 – point n
(n) ‘stakeholders’ means the company’s employees, the employees of its subsidiaries, employees within its supply chain and other individuals, groups, communities or entities whose rights or interests are or could be affdirectly affected by the potential and actual adverse human rights and environmental impacts connected byto the products, services and operations of that company, its subsidiaries and its direct business relationships;
Amendment 273 #
Proposal for a directive
Recital 5
Recital 5
(5) EWell-established existing international standards on responsible business conduct such as the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises clarified in the OECD Due Diligence Guidance for Responsible Business Conduct specify that companies should respect and protect human rights and set out how they should address the protection of the environment across their operations and valuesupply chains. The United Nations Guiding Principles on Business and Human Rights79 recognise the responsibility of companies to exercise human rights due diligence by identifying, preventing and mitigating the adverse impacts of their operations on human rights and by accounting for how they address those impacts. Those Guiding Principles state that businesses should avoid infringing human rights and should address adverse human rights impacts that they have caused, contributed to or are linked with in their own operations, subsidiaries and through their direct and indirect business relationships. These international standards should be the basis for this Directive. _________________ 79 United Nations’ “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework”, 2011, available at https://www.ohchr.org/documents/publicati ons/guidingprinciplesbusinesshr_en.pdf.
Amendment 275 #
Proposal for a directive
Article 3 – paragraph 1 – point o
Article 3 – paragraph 1 – point o
Amendment 276 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point a
Article 8 – paragraph 6 – subparagraph 1 – point a
(a) temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, if there is reasonable expectation that these efforts will succeed in the short- term. If there is no such reasonable expectation or the efforts did not succeed in the short-term, the company shall terminate the business relationship or
Amendment 277 #
Proposal for a directive
Article 3 – paragraph 1 – point p
Article 3 – paragraph 1 – point p
Amendment 280 #
Proposal for a directive
Article 3 – paragraph 1 – point q
Article 3 – paragraph 1 – point q
(q) ‘appropriate measure’ means a measure that is capable of achieving the objectives of risk-based due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. as well as the size of the company, its capacity, resources and leverage. Severity means the scale, scope and irremediably character of the adverse impact, taking into account the gravity of the impact on the rights holder, the number of individuals that could be affected and the possibility of occurrence;
Amendment 282 #
Proposal for a directive
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
1. Member States shall ensure that companies conduct human rights and environmental due diligence on the basis of a risk approach as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions:
Amendment 283 #
Proposal for a directive
Article 4 – paragraph 1 – point b
Article 4 – paragraph 1 – point b
(b) identifying and prioritising actual or potential adverse impacts in accordance with Article 6;
Amendment 285 #
Proposal for a directive
Article 4 – paragraph 1 – point c
Article 4 – paragraph 1 – point c
(c) preventing andor mitigating potential adverse impacts, and, if possible, bringing actual adverse impacts to an end andor minimising their extent in accordance with Articles 7 and 8;
Amendment 285 #
Proposal for a directive
Recital 8
Recital 8
(8) International agreements under the United Nations Framework Convention on Climate Change, to which the Union and the Member States are parties, such as the Paris Agreement84 and the recent Glasgow Climate Pact85 , set out precise avenues to address climate change and keep global warming within 1.5 C degrees for states as signatory parties. Besides specific actions being expected from all signatory Parties, the role of the private sector, in particular its investment strategies, is also considered central to achieve these objectives. _________________ 84 https://unfccc.int/files/essential_backgroun d/convention/application/pdf/english_paris _agreement.pdf. 85 Glasgow Climate Pact, adopted on 13 November 2021 at COP26 in Glasgow, https://unfccc.int/sites/default/files/resourc e/cma2021_L16_adv.pdf.https://unfccc.int/ sites/default/files/resource/cma2021_L16_ adv.pdf.
Amendment 287 #
Proposal for a directive
Article 4 – paragraph 1 – point d
Article 4 – paragraph 1 – point d
(d) establishing and maintaining a complaintsnotification procedure in accordance with Article 9;
Amendment 287 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2
Article 8 – paragraph 6 – subparagraph 2
Member States shall provide for the availability of an option to terminate and temporarily suspend the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.
Amendment 289 #
Proposal for a directive
Article 4 – paragraph 2
Article 4 – paragraph 2
2. Member States shall ensure that, for the purposes of due diligence, companies are entitled to share resources and information within their respective groups of companies and with other legal entities in compliance with applicable competition law. Companies within the scope of this directive that are part of a group, including subsidies and parent companies, may also commit to take on the responsibilities of other group members pursuant to the obligations set out in this directive, under the obligation to deliver at least an equal commitment to due diligence. These other group members will then be relieved from their responsibilities in this regard.
Amendment 290 #
Proposal for a directive
Article 4 a (new)
Article 4 a (new)
Article 4a Due diligence on a group level Member States shall ensure that parent companies falling under the scope of this Directive may fulfil the obligations set out in Articles 5 to 11 and Article 15 (1) and (2) on behalf of companies which are their subsidiaries falling under the scope of this Directive.
Amendment 291 #
Proposal for a directive
Article 5 – paragraph 1 – introductory part
Article 5 – paragraph 1 – introductory part
1. Member States shall ensure that companies integrate due diligence into all their corporate policies where necessary and have in place a risk-based due diligence policy. The risk-based due diligence policy shall contain all of the following:
Amendment 292 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
Amendment 293 #
Proposal for a directive
Recital 10
Recital 10
(10) According to the Commission Communication on forging a climate- resilient Europe89 presenting the Union Strategy on Adaptation to climate change, new investment and policy decisions should be climate-informed and future- proof, including for larger businesses managing valuesupply chains. This Directive should be consistent with that Strategy. Similarly, there should be consistency with the Commission Directive […] amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (Capital Requirements Directive)90 , which sets out clear requirements for banks’ governance rules including knowledge about environmental, social and governance risks at board of directors level. _________________ 89 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Forging a climate-resilient Europe – the new EU Strategy on Adaptation to Climate Change (COM/2021/82 final), available at https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=COM:2021:82:FIN. 90 OJ C […], […], p. […].
Amendment 295 #
Proposal for a directive
Article 5 – paragraph 1 – point c
Article 5 – paragraph 1 – point c
(c) a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships.
Amendment 295 #
Proposal for a directive
Recital 11
Recital 11
Amendment 297 #
Proposal for a directive
Article 9 – paragraph 1
Article 9 – paragraph 1
1. Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit notifications or complaints to them where they have legitimate concernssufficient evidence regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chaindirect upstream business partners.
Amendment 298 #
Proposal for a directive
Article 2 – paragraph 3
Article 2 – paragraph 3
3. For the purposes of paragraph 1, the number of part-time employees shall be calculated on a full-time equivalent basis. Temporary agency workers shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company.
Amendment 299 #
Proposal for a directive
Article 5 – paragraph 2
Article 5 – paragraph 2
2. Member States shall ensure that the companies review and update their due diligence policy annuallyregularly, taking a risk- based approach in accordance with the OECD Due Diligence Guidance for Responsible Business Conduct, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, but at least every five years.
Amendment 299 #
Proposal for a directive
Recital 13
Recital 13
(13) The European Parliament, in its resolution of 10 March 2021 calls upon the Commission to propose Union rules for a comprehensive corporate due diligence obligation100 . The Council Conclusions on Human Rights and Decent Work in Global Supply Chains of 1 December 2020 called upon the Commission to table a proposal for a Union legal framework on sustainable corporate governance, including cross- sector corporate due diligence obligations along global supply chains.101 The European Parliament also calls for clarifying directors` duties in its own initiative report adopted on 2 December 2020 on sustainable corporate governance. In their Joint Declaration on EU Legislative Priorities for 2022102 , the European Parliament, the Council of the European Union and the Commission have committed, to deliver on an economy that works for people, and to improve the regulatory framework on sustainable corporate governance. _________________ 100 European Parliament resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability (2020/2129(INL)), P9_TA(2021)0073, available at https://oeil.secure.europarl.europa.eu/oeil/p opups/ficheprocedure.do?lang=en&referen ce=2020/2129(INL). 101 Council Conclusions on Human Rights and Decent Work in Global Supply Chains, 1 December 2020 (13512/20). 102 Joint declaration of the European Parliament, the Council of the European Union and the European Commission on EU Legislative Priorities for 2022, available at https://ec.europa.eu/info/sites/default/files /joint_declaration_2022.pdf.
Amendment 300 #
Proposal for a directive
Article 2 – paragraph 3 a (new)
Article 2 – paragraph 3 a (new)
3a. For the purposes of paragraph 1, the number of employees and net turnover of all the subsidiaries of the company shall be included in the calculation of the number of employees and net turnover of the company. For the purposes of paragraph 2, the net turnover of all the subsidiaries of the company shall be included in the calculation of turnover of the company and only the net turnover generated by subsidiaries in the Union shall be included in the calculation of the net turnover generated in the Union.
Amendment 301 #
Proposal for a directive
Article 9 – paragraph 1 a (new)
Article 9 – paragraph 1 a (new)
1 a. Companies shall be allowed to deal with notifications as a group, for example within a sectoral initiative, an industry programme or multi-stakeholder initiatives.
Amendment 303 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2a. Member States shall ensure that companies carry out a risk-based due diligence policy which is proportionate and commensurate to the likelihood and severity of their potential or actual adverse impacts and their specific circumstances, particularly their sector of activity, the size and length of their supply chain, its size, capacity, resources and leverage.
Amendment 305 #
Proposal for a directive
Article 5 – paragraph 2 b (new)
Article 5 – paragraph 2 b (new)
2b. Member States shall not require companies to perform Due Diligence on parts of the supply chain linked to non- risk areas where adverse impacts are unlikely to occur according to the Commission guidelines under Article 13.
Amendment 307 #
Proposal for a directive
Recital 14 a (new)
Recital 14 a (new)
(14a) In line with relevant EU and national law, all companies in the EU need to adhere to the protection of human rights and environmental standards. If that is not the case, Member States and their relevant authorities are required to enforce the legislation. Thus, there is no need for companies within the EU to control each other’s conduct. The goal of due diligence is to tackle risks in cases where human rights and environmental standards are not or cannot be enforced. Thus, tracing activities in the supply chain shall be focused on upstream level business relationships outside the EU.
Amendment 308 #
Proposal for a directive
Article 6 – title
Article 6 – title
Identifying and prioritising actual and potential adverse impacts
Amendment 309 #
Proposal for a directive
Recital 14 b (new)
Recital 14 b (new)
(14b) This Directive is without prejudice to obligations in the areas of human rights, protection of the environment and climate change under other Union legislative acts. If the provisions of this Directive conflict with a provision of another Union legislative act pursuing the same objectives and providing for more extensive or more specific obligations, the provisions of the other Union legislative act should prevail to the extent of the conflict and should apply to those specific obligations. Examples of these obligations in Union legislative acts include obligations in the Conflict Minerals Regulation, the proposal for a Batteries Regulation or the proposal for a Regulation on deforestation-free supply chains.
Amendment 312 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures within their means to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, where related to their valuesupply chains, from their establisheddirect business relationships with third country entities, in accordance with paragraph 2, 3 and 4.
Amendment 314 #
Proposal for a directive
Article 9 – paragraph 2 – point a
Article 9 – paragraph 2 – point a
(a) persons who are affected or have reasonable groundssufficient evidence to believe that they might bare affected by an adverse impact,
Amendment 316 #
Proposal for a directive
Article 6 – paragraph 1 a (new)
Article 6 – paragraph 1 a (new)
1a. For the purpose of fulfilling the obligation in paragraph 1, companies may map all areas of their own operations, those of their subsidiaries and, where related to their supply chains, those of their established business partners. Based on the results of that mapping, companies may carry out an in-depth assessment of the areas where adverse human rights impacts and adverse environmental impacts were identified to be most likely, to be present or most significant.
Amendment 316 #
Proposal for a directive
Article 9 – paragraph 2 – point b
Article 9 – paragraph 2 – point b
(b) trade unions and other workers’ representatives representing individuals working in the value chain concernedcompany, their subsidiaries or their direct business partners, that are directly affected by an adverse impact,
Amendment 321 #
Proposal for a directive
Article 6 – paragraph 2
Article 6 – paragraph 2
Amendment 321 #
Proposal for a directive
Recital 17
Recital 17
(17) Adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their value chains, in particulaaspects particularly occur at the level of raw material sourcing, and manufacturing, or at the level of product or waste disposal in the upstream supply chain operating outside the EU. In order for the due diligence to have a meaningful impact, it should cover human rights and environmental adverse impacts generated throughout the life-cycle of production and use and disposal of product or provision of servicthe level of companies’ own operations, operations of their subsidiaries, atnd the level of own operations, subsidiaries and in valueir business relationships outside the EU in their upstream supply chains.
Amendment 322 #
Proposal for a directive
Article 3 – paragraph 1 – point e – introductory part
Article 3 – paragraph 1 – point e – introductory part
(e) ‘business relationship’ means a relationship with a contractor, subcontractor ordirect contractual relationship with any other legal entities (‘partner’)
Amendment 322 #
Proposal for a directive
Article 6 – paragraph 2 a (new)
Article 6 – paragraph 2 a (new)
2a. Member States shall ensure that companies are able to identify actual and potential adverse impacts based on a risk assessment and risk-based monitoring methodology, taking into account the likelihood, severity and urgency of adverse impacts, the nature and context of their operations, including sector and geographic location, the scope of the risks, their scale and how irremediable they might be, and if necessary, use the prioritisation policy in dealing with them.
Amendment 323 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
Amendment 323 #
Proposal for a directive
Recital 17 a (new)
Recital 17 a (new)
(17a) Secondary raw materials can only be traced until the point where the recycled material is returned to the immediate supplier of the recycler and where the information is obtained and retained to demonstrate that the material is recycled. Therefore, due diligence obligations should not go beyond that point.
Amendment 324 #
Proposal for a directive
Article 6 – paragraph 2 b (new)
Article 6 – paragraph 2 b (new)
2b. The priorisation laid out under paragraph 2 a (new) shall allow companies to determine which identified potential adverse impacts companies prevent or mitigate as a priority under Article 7 and which actual adverse impacts companies bring to an end or minimise as a priority under Article 8.
Amendment 325 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
Amendment 328 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that appropriate resources, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, c, are made available to companies in order to enable compliance with the Directive. Member States may work with the Commission to prepare appropriate resources such as lists that officially assess risk (Black-/Whitelists), helpdesks etc. Companies arshall be entitled to make use of appropriate resources, including independent reports and information gathered through the complaints procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 328 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
3. Member States shall ensure that the companies establish a procedure for dealing with complaints referred to in paragraph 1, including a procedure when the company considers the complaint to be unfounded, and inform the relevant workers and trade unions of those procedures. Member States shall ensure that where the complaint is well-founded, the adverse impact that is the subject matter of the complaint is deemed to be identified within the meaning of Article 6.
Amendment 330 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information made available by the Member States, companies are entitled to make use of appropriate resources, including independent reports and information gathered through the complaintsnotification procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 330 #
Proposal for a directive
Recital 18
Recital 18
(18) The valuesupply chain should cover activities related to the production of a good or provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of established business relationships of the company. It should encompass upstream established direct anddirect and, in cases of substantiated knowledge of adverse impacts, indirect business relationships, both outside the EU that design, extract, manufacture, transport, store and supply raw material, products, parts of products, or provide services to the company that are necessary to carry out the company’s activities, and also downstream relationships, including established direct and indirect business relationships, that use or receive products, parts of products or services from the company up to the end of life of the product, including inter alia the distribution of the product to retailers, the transport and storage of the product, dismantling of the product, its recycling, composting or landfilling.directly necessary to carry out the company’s activities;
Amendment 331 #
Proposal for a directive
Article 3 – paragraph 1 – point f
Article 3 – paragraph 1 – point f
(f) ‘established business relationship’ means a direct business relationship, whether direct or indirect, which is, or which is expected to beich is lasting, in view of its intensity or duration and which does not represent a negligible or merely ancillary part of the value chainsupply chain and which has lasted for more than one year;
Amendment 332 #
Proposal for a directive
Article 6 a (new)
Article 6 a (new)
Article 6a Prioritisation of identified adverse impacts 1. Member States shall ensure that companies are allowed to prioritise adverse human rights impacts and adverse environmental impacts arising from their own operations, those of their subsidiaries or those of their established business partners identified pursuant to Article 6 for fulfilling the obligations laid down in Articles 7 or 8, where it is not feasible to address all identified adverse impacts at the same time to the full extent. 2. The prioritisation of adverse impacts shall be based on severity and likelihood of the adverse impact. Severity of an adverse impact shall be assessed based on its gravity, level of severity, likelihood and urgency, the number of persons or the extent of the environment affected, its irreversibility, and difficulty to provide remedy considering the measures necessary to restore the situation prevailing prior to the impact. 3. Once the most significant adverse impacts are addressed in accordance with Article 7 or 8 in a reasonable time, the company shall address less significant adverse impacts.
Amendment 333 #
Proposal for a directive
Article 7 – title
Article 7 – title
Preventing and mitigating potential adverse impacts
Amendment 334 #
Proposal for a directive
Article 7 – title
Article 7 – title
Amendment 336 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to prevent, or where prevention is not possible or not immediately possible, adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been, or should have beenaddress risks, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article, taking into account the level of companies' involvement in the potential adverse impacts.
Amendment 336 #
Proposal for a directive
Recital 19
Recital 19
Amendment 338 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate measureand commensurate measures within their means to prevent, or where prevention is not possible or not immediately possible, adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been, or should have been, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article.
Amendment 340 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘valuesupply chain’ means activities related to the production of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘valuesupply chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, credit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The valuesupply chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities;
Amendment 341 #
Proposal for a directive
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Agency for Small and Medium enterprises, the European Environment Agency, and where appropriate with international bodies having expertise in due diligence, may issue guidelines, including for specific sectors or specific adverse impacts. shall issue clear and comprehensive, guidelines, in digital, free of charge and easily accessible format, taking into account the needs of SMEs, including for specific sectors, specific adverse impacts. These guidelines shall also clarify how companies' obligations stemming from this Directive interact with obligations stemming from other Union legislation to ensure coherence and complementarity. The guidelines shall particularly take into account SMEs’ needs and shall enable administrative and financial assistance. The guidelines shall help companies, in particular SMEs, to fulfil their due diligence obligations in accordance with Articles 6 to 11, by providing guidance on how the requirements under different Union acts could be merged most efficiently. The Commission shall regularly review and update the guidelines taking into account the latest developments in the sectors concerned. Guidelines must be published 24 months before the provisions of this directive become applicable. These guidelines shall include the following: (a) for specific sectors or specific adverse impacts; (b) an overview on applicable industry initiatives, multi-stakeholder initiatives and industry schemes; (c) practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas, may be applied to due diligence obligations depending on the size and sector of the company; (d) lists of risk areas and non-risk areas whether sectoral or geographic such as a list of regions and countries where adverse human rights impacts and/or environmental adverse impacts are unlikely or likely to occur. Countries or regions, where adverse impacts are unlikely to occur, might be the European Economic Area, the United States of America, the United Kingdom, Canada, Australia, New Zealand, and Japan. One criteria for this list shall be a free-trade agreement between the European Union and the third country or region.
Amendment 342 #
Proposal for a directive
Article 7 – paragraph 2 – point a
Article 7 – paragraph 2 – point a
(a) where necessary due to the nature or complexity of the measures required for prevention, develop and implement a prevention action plan, with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. The prevention action plan shall be developed in consultation with affected stakeholders;
Amendment 347 #
Proposal for a directive
Article 13 – paragraph 1 – subparagraph 1 (new)
Article 13 – paragraph 1 – subparagraph 1 (new)
Lists of non-risk areas and risk areas shall be updated continuously by the Commission and made publicly available, for example, in order to provide up-to- date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission shall collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub- sectors, and products.
Amendment 349 #
Proposal for a directive
Article 3 – paragraph 1 – point h
Article 3 – paragraph 1 – point h
(h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its valuesupply chain, with human rights and environmental requirements resulting from the provisions of this Directive by an auditor which is independent from the company, free from any conflicts of interests, has the requisite experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit;
Amendment 353 #
Proposal for a directive
Article 7 – paragraph 2 – point b
Article 7 – paragraph 2 – point b
(b) seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s valuesupply chain (contractual cascading). When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 353 #
Proposal for a directive
Recital 22
Recital 22
Amendment 354 #
Proposal for a directive
Article 3 – paragraph 1 – point j
Article 3 – paragraph 1 – point j
(j) ‘industry initiative’ means a combination of voluntary valuesupply chain due diligence procedures, tools and mechanisms, including independent third- party verifications, developed and overseen by governments, industry associations or groupings of interested organisations;
Amendment 358 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) provide targeted and proportionate support for an SME which, despite being exempt, decides to comply with the obligations under this Directive and with which the company has an established business relationship, wheto ensure compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME;
Amendment 358 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The Commission mayshall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and mayshall devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations. as well as a non-exhaustive list of industry schemes the Commission deems fit.
Amendment 361 #
Proposal for a directive
Recital 24
Recital 24
(24) For defining the scope of application in relation to non-EUthird-country companies the describcompany in question needs turnover criterion should be choseno have a branch or subsidiary in the EU as it creates a territorial connection between the third- country companies and the Union territory. TIn addition, turnover is a proxy for the effects that the activities of those companies could have on the internal market. In accordance with international law, such effects justify the application of Union law to third-country companies. To ensure identification of the relevant turnover of companies concerned, the methods for calculating net turnover for non-EUthird-country companies as laid down in Directive (EU) 2013/34 as amended by Directive (EU) 2021/2101 should be used. To ensure effective enforcement of this Directive, an employee threshold should, in turn, not be applied also be applied as a benchmark to determine which third-country companies fall under this Directive, as to create a level- playing field, while taking into account that the notion of “employees” retained for the purposes of this Directive is based on Union law and could not be easily transposed outside of the Union. In the absence of a clear and consistent methodology, including in accounting frameworks, to determine the employThat is why the nexus to the EU needs of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authoritiesto be ensured through having a branch or subsidiary in the EU. The definition of turnover should be based on Directive 2013/34/EU which has already established the methods for calculating net turnover for non-Union companies, as turnover and revenue definitions are similar in international accounting frameworks too. With a view to ensuring that the supervisory authority knows which third country companies generate the required turnover in the Union to fall under the scope of this Directive, this Directive should require that a supervisory authority in the Member State where the third country company’s authorised representative is domiciled or established and, where it is different, a supervisory authority in the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this Directive.
Amendment 362 #
Proposal for a directive
Article 3 – paragraph 1 – point n
Article 3 – paragraph 1 – point n
(n) ‘stakeholders’ means the company’s employees, the employees of its subsidiaries, and other individuals, groups, communities or entities whose rights or interests are or could be affected byaffected by adverse human rights impacts and adverse environmental impacts arising from the products, services and operations of that company, its subsidiaries and its business relationships;
Amendment 363 #
Proposal for a directive
Recital 25
Recital 25
(25) In order to achieve a meaningful contribution to the sustainability transition, due diligence under this Directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the Annex to this Directive. In order to ensure a comprehensive coverage of human rights, a violation of a prohibition or right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this Directive, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this Directive, taking into account all relevant circumstances of their operations, such as the sector and operational contextOECD Due Diligence Guidelines for Multinational Enterprises as clarified in the OECD Guidance for Responsible Business Conduct, as well as the UN Guiding Principles for Business and Human Rights. Due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex to this DirectiveOECD Due Diligence Guidelines for Multinational Enterprises as clarified in the Guidance for Responsible Business Conduct as regards the environment.
Amendment 364 #
Proposal for a directive
Article 3 – paragraph 1 – point q
Article 3 – paragraph 1 – point q
(q) ‘appropriate measure’ means a measure that is capable of achieving the objectives of risk-based due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action.
Amendment 365 #
Proposal for a directive
Article 3 – paragraph 1 – point q a (new)
Article 3 – paragraph 1 – point q a (new)
(qa) ‘parent company’ means a company which controls one or more subsidiaries within the meaning of point (d);
Amendment 365 #
Proposal for a directive
Recital 26
Recital 26
(26) Companies should have guidance at their disposal that illustrates how their activities may impact human rights and which corporate behaviour is prohibited in accordance with internationally recognised human rights. Such guidance is included for instance in The United Nations Guiding Principles Reporting Framework104 and the United Nations Guiding Principles Interpretative Guide105 . Using relevant international guidelines and standards as a and should be made easily accessible to companies. Therefeorence, the Commission should be able to issue additionalissue guidance that will serve as a practical tool for companies. _________________ 104 https://www.ungpreporting.org/wp- content/uploads/UNGPReportingFramewor k_withguidance2017.pdf. 105 https://www.ohchr.org/Documents/Issues/ Business/RtRInterpretativeGuide.pdf.https: //www.ohchr.org/Documents/Issues/Busine ss/RtRInterpretativeGuide.pdf.
Amendment 367 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States mayshall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, mayshall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 368 #
Proposal for a directive
Article 3 – paragraph 1 – point q b (new)
Article 3 – paragraph 1 – point q b (new)
(qb) ‘group of companies’ means a parent company and all its subsidiaries;
Amendment 368 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
Amendment 368 #
Proposal for a directive
Article 14 – paragraph 4 a (new)
Article 14 – paragraph 4 a (new)
4 a. Single Point of Contact 1.Each Member State shall designate a national single point of contact on corporate sustainability due diligence.Member States may assign this role to an existing authority.Where a Member State designates only one competent authority, that competent authority may also be the single point of contact. 2. Companies may seek guidance and obtain further support and information about how best to fulfil their due diligence obligations through this portal.3. The single point of contact may also exercise a liaison function to ensure cross-border cooperation of Member State authorities and with the relevant authorities in other Member States via cooperation with the European Supervisory Network established in Article 21.
Amendment 372 #
(28) In order to ensure that due diligence forms part of companies’ corporate policies, and in line with the relevant international framework, companies should integrate due diligence into all their relevant corporate policies and have in place a risk- based due diligence policy. The due diligence policy should contain a description of the company’s approach, including in the long term, to due diligence, a code of conduct describing the rules and principles to be followed by the company’s employees and subsidiaries; a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct and to extend its application to establishedits direct business relationships outside the EU. The code of conduct should apply in all relevant corporate functions and operations, including procurement and purchasing decisions. Companies should also update their due diligence policy annuallwhen relevant, meaning after a significant change occurs, such as operating in or sourcing from a new country.
Amendment 373 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 2
Article 7 – paragraph 4 – subparagraph 2
When contractual assurances are obtained from, or a contract is entered into, with an SME, the terms used shall be fair, reasonable and non-discriminatory. Disproportionate passing on of liability to SMEs is prohibited. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification.
Amendment 377 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – introductory part
Article 7 – paragraph 5 – subparagraph 1 – introductory part
As regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2, 3 and 4, the company shall be requiredmay decide as a last resort to refrain from entering into new or extending existing relations with the partner in connection with or in the valuesupply chain of which the impact has arisen and shallmay, where the law governing their relations so entitles them to, take the following actions if they are in the best interest of the potential victims of the potential adverse human rights and adverse environmental impacts, in line with responsible disengagement, also taking into account proportionality and the consequences of disrupting supply chains:
Amendment 377 #
Proposal for a directive
Recital 29
Recital 29
(29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts that it caused or contributed to. An ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and reasonably available to the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of action. In this context, in line with international frameworks, the company’s influencleverage over a business relationship should include, on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control, market power, pre-qualification requirements, linking business incentives to human rights and environmental performance, etc.) and, on the other hand, the degree of influence or leverage that the company could reasonably exercise, for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact.
Amendment 379 #
Proposal for a directive
Article 4 – paragraph 2 a (new)
Article 4 – paragraph 2 a (new)
2a. Member States shall ensure that a company or other legal entity shall not be obliged to disclose to its business partner which is complying with the obligations resulting from this Directive, information that is deemed to be a trade secret as defined in Article 2(1) of Directive (EU) 2016/943 of the European Parliament and of the Council.
Amendment 381 #
Proposal for a directive
Article 4 a (new)
Article 4 a (new)
Article 4a Due diligence on a group level 1. Member States shall ensure that parent companies falling under the scope of this Directive may fulfil the obligations set out in Articles 5 to 11 and Article 15(1) and (2) on behalf of companies which are their subsidiaries falling under the scope of this Directive.
Amendment 381 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 a (new)
Article 7 – paragraph 5 – subparagraph 1 a (new)
As a derogation from Article 7(5), companies shall not be required to refrain from entering into new or extending existing relations with the direct business partner or temporarily suspend the commercial relations or terminate the direct business relationship where: (a) there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated, or (b) no available alternative to that direct business relationship, that provides a product or service essential to the company’s production of goods or provision of services, exists.
Amendment 382 #
Proposal for a directive
Article 7 – paragraph 5 a (new)
Article 7 – paragraph 5 a (new)
5a. The possibility to refrain from entering into new or extending existing relating relations with the business partner according to paragraph 5 shall not apply to commercial agreements concluded by the company before the expiry of the transposition period in accordance with Article 30 of this Directive.
Amendment 384 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
Amendment 385 #
Proposal for a directive
Article 5 – paragraph 1 – introductory part
Article 5 – paragraph 1 – introductory part
1. Member States shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. The due diligence policy shall be proportionate and risk-based and shall contain all of the following:
Amendment 385 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Member States shall ensure that companies take appropriate measuresand commensurate measures within their means to try to bring actual adverse impacts that have been, or should have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article. Those measures should be reasonable in the context of the involvement of the company in the actual adverse impact and the significance of the adverse impact itself.
Amendment 385 #
Proposal for a directive
Recital 31
Recital 31
Amendment 389 #
Proposal for a directive
Article 8 – paragraph 3 – point a
Article 8 – paragraph 3 – point a
(a) neutralise the adverse impact or minimise its extent, including, where reasonable and applicable, by the payment of damages to the affected persons and of financial compensation to the affected communities. The action shall be proportionate and commensurate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact as well as to its resources and leverage;
Amendment 390 #
Proposal for a directive
Article 8 – paragraph 3 – point a a (new)
Article 8 – paragraph 3 – point a a (new)
(aa) set up a prioritisation strategy, taking into account the level of severity, likelihood and urgency of the different actual adverse impacts, the nature and context of their operations, including geographic, the scope of the risks, their scale and how irremediable they might be, and use the prioritisation policy in dealing with them. When prioritising their response to risks to human rights, companies shall treat the severity of an adverse impact, such as where a delayed response would make the impact irremediable, as the predominant factor.
Amendment 393 #
Proposal for a directive
Article 5 – paragraph 2
Article 5 – paragraph 2
2. Member States shall ensure that the companies update their due diligence policy annuallyregularly when a significant change occurs.
Amendment 394 #
Proposal for a directive
Article 8 – paragraph 3 – point b
Article 8 – paragraph 3 – point b
(b) where necessary due to the fact that the adverse impact cannot be immediately brought to an end, develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuonitoring improvement. Where relevant, the corrective action plan shall be developed in consultation with relevant stakeholders;
Amendment 400 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to identify, by means of a risk-based monitoring methodology, actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, where related to their valuesupply chains, from their established business relationships, in accordance with paragraph 2, 3 and 4.
Amendment 401 #
Proposal for a directive
Article 8 – paragraph 3 – point d
Article 8 – paragraph 3 – point d
(d) make necessary and in light of economic circumstances reasonable and prudent investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3;
Amendment 402 #
Proposal for a directive
Article 8 – paragraph 3 – point d
Article 8 – paragraph 3 – point d
(d) make, where necessary and applicable, investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3;
Amendment 405 #
Proposal for a directive
Article 8 – paragraph 3 – point e
Article 8 – paragraph 3 – point e
(e) provide targeted and proportionate support for an SME with which the company has an established direct business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME;
Amendment 405 #
Proposal for a directive
Recital 36
Recital 36
Amendment 406 #
Proposal for a directive
Article 6 – paragraph 1 a (new)
Article 6 – paragraph 1 a (new)
1a. For the purpose of fulfilling the obligation in paragraph 1, companies may map all areas of their own operations, those of their subsidiaries and, where related to their supply chains, those of their established business partners. Based on the results of that mapping, companies may carry out an in-depth assessment of the areas where adverse human rights impacts and adverse environmental impacts were identified to be most likely present or most significant.
Amendment 408 #
Proposal for a directive
Article 8 – paragraph 3 – point f a (new)
Article 8 – paragraph 3 – point f a (new)
(fa) engage, where relevant, with the affected stakeholders in order to provide meaningful opportunities for their views to be considered for the determination of action to be taken.
Amendment 409 #
Proposal for a directive
Article 6 – paragraph 2
Article 6 – paragraph 2
Amendment 409 #
Proposal for a directive
Article 29 – paragraph 1 – introductory part
Article 29 – paragraph 1 – introductory part
No later than … [OP please insert the date = 75 years after the date of entry into force of this Directive], the Commission shall submit a report to the European Parliament and to the Council on the implementation of this Directive. The report shall evaluate the effectiveness and feasibility of this Directive in reaching its objectives and assess the following issues:
Amendment 412 #
Proposal for a directive
Article 8 – paragraph 4
Article 8 – paragraph 4
4. As regards actual adverse impacts that could not be brought to an end or adequately mitigated by the measures in paragraph 3, the company may seek to conclude a contract with a partner with whom it has an indirect relationship, with a view to achieving compliance with the company’s code of conduct or a corrective action plan. When such a contract is concluded, paragraph 5 shall apply.
Amendment 413 #
Proposal for a directive
Article 6 – paragraph 2 a (new)
Article 6 – paragraph 2 a (new)
2a. The risk-based monitoring methodology referred to in paragraph 1 shall take into account the likelihood, severity and urgency of adverse human rights impacts and environmental impacts as well as the nature and context of the operations of the company, including geographic considerations, the extent and type of the risks relating to such potential or adverse impacts and their scale.
Amendment 413 #
Proposal for a directive
Recital 38
Recital 38
(38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights or environmental adverse impacts that it caused or contributed to, it should take appropriate measures to bring those to an end. It can be expected that a company is able to bring to an end actual adverse impacts in theirits own operations and inthose of its subsidiaries. However, it should be clarified that, as regards established business relationships, where adverse impacts cannot be brought to an end, companies should minimise the extent of such impacts. Minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. To provide companies with legal clarity and certainty, this Directive should define which actions companies shcould be reasonably required to take within their means for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent, where relevant depending on the circumstances. When companies are neither causing nor contributing to the adverse impacts, meaning they are directly linked to the adverse impact, they should be obliged to use their influence to bring to an end or minimise the extent of the adverse impact caused by their subsidiaries or business relationships or to increase their influence to do so.
Amendment 415 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 2
Article 8 – paragraph 5 – subparagraph 2
When contractual assurances are obtained from, or a contract is entered into, with an SME, the terms used shall be fair, reasonable and non-discriminatory. Disproportionate passing on of liability to SMEs is prohibited. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification.
Amendment 416 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
Article 8 – paragraph 6 – subparagraph 1 – introductory part
As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shallmay refrain as a last resort from entering into new or extending existing relations with the partner in connection to or in the valuesupply chain of which the impact has arisen and shallmay, where the law governing their relations so entitles them to, take one of the following actions if they are in the best interest of the potential victims of the potential and actual adverse impacts, in line with responsible disengagement, also taking into account proportionality and the consequences of disrupting supply chains:
Amendment 417 #
Proposal for a directive
Article 29 – paragraph 1 – point a
Article 29 – paragraph 1 – point a
(a) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be loweredare appropriate;
Amendment 418 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point a
Article 8 – paragraph 6 – subparagraph 1 – point a
(a) temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, if there is reasonable expectation that these efforts will succeed in the short- term. If there is no such reasonable expectation or the efforts did not succeed in the short-term, the company shall terminate the business relationship or
Amendment 418 #
Proposal for a directive
Recital 39
Recital 39
(39) So as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this Directive, companies should be required to take the following actions, where relevant within their means, where relevant depending on the circumstances. They should neutralise the adverse impact or minimise its extent, with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuonitoring improvement. Companies should alsomay also, where possible and where deemed necessary following engagement with stakeholders, seek to obtain contractual or other assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s valuesupply chain. The contractual assurances should beassurances may be, where appropriate, accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or minimising the extent of adverse impact, provide targeted and proportionate support for an SMEs with which they have an established direct business relationship and collaborate with other entities, including through industry initiatives, where relevant, to increase the company’s ability to bring the adverse impact to an end.
Amendment 419 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
3. When companies referred to in Article 3, point (a)(iv), provide credit, loan or other financial services, identification of actual and potential adverse human rights impacts and adverse environmental impacts shall be carried out only before providing that service..
Amendment 419 #
Proposal for a directive
Article 29 – paragraph 1 – point b
Article 29 – paragraph 1 – point b
Amendment 420 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 a (new)
Article 8 – paragraph 6 – subparagraph 1 a (new)
Amendment 421 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that appropriate resources, for the purposes of identifying the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, c, are made available to companies in order to enable compliance with the Directive. Member States may work with the Commission to prepare appropriate resources such as lists that officially assess risk (Black-/Whitelists), helpdesks etc. Companies arshall be entitled to make use of appropriate resources, including independent reports and information gathered through the complaints procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 421 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2
Article 8 – paragraph 6 – subparagraph 2
Member States shall provide for the availability of an option to temporarily suspend and terminate the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.
Amendment 424 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
Amendment 425 #
Proposal for a directive
Article 8 – paragraph 7 a (new)
Article 8 – paragraph 7 a (new)
7a. By way of derogation from paragraph 6 the company shall not be required to terminate the business relationship in case where: (a) there is a reasonable expectation that the termination would result in an adverse impact that is just as or more severe than the actual adverse impact that could not be brought to an end or minimised, or (b) no available alternative to that business relationship exists and the termination would cause substantial prejudice to the company. The company shall monitor the actual adverse impact, periodically reassess its decision not to terminate the business relationship and seek alternative business relationships.
Amendment 425 #
Proposal for a directive
Recital 41
Recital 41
(41) In order to ensure that bringing actual adverse impacts to an end or minimising them is effective, companies should prioritize engagement with business relationships in the valuesupply chain, instead of terminating the business relationship, as a last resort action after attempting ato bringing actual adverse impacts to an end or minimising them without success. However, this Directive should also, for cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, to either temporarily suspend commercialbusiness relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, or terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe and only if this is in the best interest of those impacted (responsible disengagement). In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.
Amendment 426 #
Proposal for a directive
Article 8 – paragraph 7 a (new)
Article 8 – paragraph 7 a (new)
7a. The possibility to refrain from entering into new or extending existing relating relations with the business partner according to paragraph 5 shall not apply to commercial agreements concluded by the company before the expiry of the transposition period in accordance with Article 30.
Amendment 427 #
Proposal for a directive
Article 8 – paragraph 7 b (new)
Article 8 – paragraph 7 b (new)
7b. The obligation to temporarily suspend or terminate the business relationship pursuant to paragraph 6 shall not apply to commercial agreements concluded by the company before the expiry of the transposition period in accordance with Article 30.
Amendment 428 #
Proposal for a directive
Article 6 a (new)
Article 6 a (new)
Article 6a Prioritisation of identified adverse impacts 1. Member States shall ensure that companies are allowed to prioritise adverse human rights impacts and adverse environmental impacts arising from their own operations, those of their subsidiaries or those of their established business partners identified pursuant to Article 6 for fulfilling the obligations laid down in Articles 7 or 8, where it is not feasible to address all identified adverse impacts at the same time to the full extent; 2. The prioritisation of adverse impacts shall be based on severity and likelihood of the adverse impact. Severity of an adverse impact shall be assessed based on its gravity, level of severity, likelihood and urgency, the number of persons or the extent of the environment affected, its irreversibility, and difficulty to provide remedy considering the measures necessary to restore the situation prevailing prior to the impact; 3. Once the most significant adverse impacts are addressed in accordance with Articles 7 or 8 in a reasonable time, the company shall address less significant adverse impacts;
Amendment 428 #
Proposal for a directive
Article 9 – title
Article 9 – title
Amendment 430 #
Proposal for a directive
Article 7 – title
Article 7 – title
Amendment 430 #
Proposal for a directive
Article 9 – paragraph 1
Article 9 – paragraph 1
1. Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints tonotify them where they have legitimate concernsinformation, which must be reasonable documented and factually justified, regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chaindirect business relationships. This can be done in cooperation with industry schemes or multi-stakeholder initiatives.
Amendment 431 #
Proposal for a directive
Recital 43
Recital 43
(43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out periodiccontinuous assessments of their own operations, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their established business relationships outside the EU, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end and mitigation of human rights and environmental adverse impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and if adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to- date, they should be carried out at least every 12 months and be revised in- betweenwhen deemed necessary after a significant change occurs, such as operating in or sourcing from a new country or if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen.
Amendment 433 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to prevent, or where prevention is not possible or not immediately possible, adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been, or should have been,address risks identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article., taking into account the level of companies' involvement in the potential adverse impacts;
Amendment 433 #
Proposal for a directive
Article 9 – paragraph 1 a (new)
Article 9 – paragraph 1 a (new)
1a. Companies shall be allowed to deal with notifications as a group, for example within a sectoral initiative, an industry programme or multi-stakeholder initiatives.
Amendment 434 #
Proposal for a directive
Article 9 – paragraph 2 – introductory part
Article 9 – paragraph 2 – introductory part
2. Member States shall ensure that the complaintsnotification may be submitted by:
Amendment 436 #
Proposal for a directive
Article 9 – paragraph 2 – point a
Article 9 – paragraph 2 – point a
(a) persons who are directly affected or have reasonable grounds to believe that they mightwill be affdirectedly by an adverse impact,
Amendment 437 #
Proposal for a directive
Article 9 – paragraph 2 – point b
Article 9 – paragraph 2 – point b
(b) trade unions and other workers’ representatives representing individuals working in the value chain concernedcompany, its subsidiaries or direct business partners,
Amendment 440 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
Amendment 443 #
Proposal for a directive
Article 7 – paragraph 2 – point a
Article 7 – paragraph 2 – point a
(a) where necessary due to the nature or complexity of the measures required for prevention, develop and implement a prevention action plan, with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. The prevention action plan shall be developed in consultation with affected stakeholders;
Amendment 443 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
3. Member States shall ensure that the companienotifications establish a procedure for dealing with complaints referred to in paragraph 1, including a procedure when the company considers the complaintinformation to be unfounded, and inform the relevant workers and trade unions of those procedures. Member States shall ensure that where the complaintinformation is well-founded, the adverse impact that is the subject matter of the complaintnotification is deemed to be identified within the meaning of Article 6. This can be done in cooperation with industry schemes or multi-stakeholder initiatives.
Amendment 444 #
Proposal for a directive
Article 9 – paragraph 4 – introductory part
Article 9 – paragraph 4 – introductory part
4. Member States shall ensure that complainants are entitledinformants are entitled to request appropriate follow-up on the notification from the company with which they have filed a notification pursuant to paragraph 1.
Amendment 445 #
Proposal for a directive
Article 9 – paragraph 4 – point a
Article 9 – paragraph 4 – point a
Amendment 446 #
Proposal for a directive
Article 9 – paragraph 4 – point b
Article 9 – paragraph 4 – point b
Amendment 448 #
Proposal for a directive
Recital 47
Recital 47
(47) Although SMEs are not included in the scope of this Directive, they could be heavily impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate the immense financial or administrative burden on SMEs, many of which are already struggling in the context of the global economic and sanitary crisis. In order to support companies in the implementation, including SMEs, Member States should set up and operate, either individually or jointly, dedicated websites, portals or platforms, to provide information and support to companies, and Member States cshould also financially support SMEs specifically and help them build capacity. Such support should also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME, are also encouraged tshould also support them to comply with due diligence measures, in case such requirements would jeopardize the viability of the SME and use fair, reasonable, non-discriminatory and proportionate requirements vis-a-vis the SMEs.
Amendment 450 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU carry out periodic assessments of their own operations and measures, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. Such assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy shall be updated in accordance with the outcome of those assessments.
Amendment 450 #
Proposal for a directive
Recital 48
Recital 48
(48) In order to complement Member State support to companies in their implementation, including SMEs, the Commission mayshould build on existing EU tools, projects and other actions helping with the due diligence implementation in the EU and in third countries. It may set up new support measures that provide help to companies, including SMEs on due diligence requirements, including an observatory for valuesupply chain transparency and the facilitation and assessment of joint stakeholder initiatives.
Amendment 452 #
Proposal for a directive
Article 7 – paragraph 2 – point b
Article 7 – paragraph 2 – point b
(b) seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s valuesupply chain (contractual cascading). When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 453 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies carry out periodic assessments of their own operations and measures regularly, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their establisheddirect business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. Such risk-based assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 monthsregularly and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy shall be updated in accordance with the outcome of those assessments.
Amendment 455 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) provide targeted and proportionate support for an SME which, despite being exempt, decides to comply with the obligations under this Directive and with which the company has an established business relationship, wheto ensure compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SMEaction plan;
Amendment 455 #
Proposal for a directive
Article 11 – paragraph 1
Article 11 – paragraph 1
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in a language customary in the sphere of international business. TWhen changes occur, the statement shall be published by 30 April each year, covering the previous calendar yearupdated.
Amendment 456 #
Proposal for a directive
Article 11 – paragraph 2
Article 11 – paragraph 2
The Commission shall adopt delegated acts in accordance with Article 28 concerning the content and criteria for such reporting under paragraph 1, specifying information on the description of due diligence, potential and actual adverse impacts and actions taken on those. The Commission shall ensure that reporting is possible via a simplified reporting form.
Amendment 457 #
Proposal for a directive
Article 11 – paragraph 2 a (new)
Article 11 – paragraph 2 a (new)
The companies referred to in paragraph 1 may rely on the consolidated reporting of the group to which they belong in order to fulfil their reporting requirements under this Article.
Amendment 457 #
Proposal for a directive
Recital 51
Recital 51
Amendment 458 #
Proposal for a directive
Article 11 – paragraph 2 b (new)
Article 11 – paragraph 2 b (new)
Member States shall ensure that a company or other legal entity shall not be obliged to disclose information that is deemed to be a trade secret as defined in Article 2(1) of Directive (EU) 2016/943 of the European Parliament and of the Council. while fulfilling the duties of this Directive.
Amendment 460 #
Proposal for a directive
Article 12 – paragraph 1
Article 12 – paragraph 1
In order to provide support to companies to facilitate their compliance with Article 7(2), point (b), and Article 8(3), point (c), the Commission shall adopt guidance aboutand publish voluntary model contract clauses no later than 18 months after entry into force of this Directive.
Amendment 460 #
Proposal for a directive
Recital 53
Recital 53
(53) In order to ensure the monitoring of the correct implementation of companies’ due diligence obligations and ensure the proper enforcement of this Directive, Member States should designate one or more national supervisory authorities. These supervisory authorities should be of a public nature, independent from the companies falling within the scope of this Directive or other market interests, and free of conflicts of interest. In accordance with national law, Member States should ensure appropriate financing of the competent authority. They should be entitled to carry out investigations, on their own initiative or based on complaints or substantiated concerns raised under this Directive. Where competent authorities under sectoral legislation exist, Member States could identify those as responsible for the application of this Directive in their areas of competence. They could designate authorities for the supervision of regulated financial undertaking also as supervisory authorities for the purposes of this Directive.
Amendment 461 #
Proposal for a directive
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Agency for Small and Medium enterprises, and where appropriate with international bodies having expertise in due diligence, mayshall issue guidelines, including for specific sectors or specific adverse impactsclear and easily understandable guidelines, in digital, free of charge and easily accessible format, taking into account the need of SMEs, including the following: (a) for specific sectors or specific adverse impacts; (b) an overview on applicable industry initiatives, multi-stakeholder initiatives and industry schemes; (c) practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas, may be applied to due diligence obligations depending on the size and sector of the company; (e) lists of risk areas and non-risk areas whether sectoral or geographic such as a list of regions and countries where adverse human rights impacts and/or environmental adverse impacts are unlikely or likely to occur. Countries or regions, where adverse impacts are unlikely to occur, might be the European Economic Area, the United States of America, the United Kingdom, Canada, Australia, New Zealand, and Japan. One criteria for this list shall be a free-trade agreement between the European Union and the third country or region.
Amendment 462 #
Proposal for a directive
Recital 54
Recital 54
(54) In order to ensure effective enforcement of national measures implementing this Directive, Member States should provide for dissuasive, proportionate and effective administrative sanctions for infringements of those measures. In order for such sanction regime to be effective, administrative sanctions to be imposed by the national supervisory authorities should include pecuniary sanctions. Where the legal system of a Member State does not provide for administrative sanctions as foreseen in this Directive, the rules on administrative sanctions should be applied in such a way that the sanction is initiated by the competent supervisory authority and imposed by the judicial authority. Therefore, it is necessary that those Member States ensure that the application of the rules and sanctions has an equivalent effect to the administrative sanctions imposed by the competent supervisory authorities.
Amendment 463 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
Amendment 464 #
Proposal for a directive
Article 13 – paragraph 1 a (new)
Article 13 – paragraph 1 a (new)
Lists of non-risk areas and risk areas shall be updated continuously by the Commission and made publicly available, for example, in order to provide up-to- date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission shall collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub- sectors, and products.
Amendment 464 #
Proposal for a directive
Recital 55
Recital 55
(55) In order to ensure consistent application and enforcement of national provisions adopted pursuant to this Directive, national supervisory authorities should actively cooperate and coordinate their action. For that purpose a European Network of Supervisory Authorities should be set up by the Commission and the supervisory authorities should assist each other in performing their tasks and provide mutual assistance.
Amendment 465 #
Proposal for a directive
Article 13 – paragraph 1 b (new)
Article 13 – paragraph 1 b (new)
The guidelines shall be made available no later than 18 months after the date of entry into force of this Directive. The Commission shall regularly review the relevance of its guidelines and adapt them to new best practices.
Amendment 467 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. Member States shall, in order to provide information and support to companies and the partners with whom they have establisheddirect business relationships in their valuesupply chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly dedicated helpdesks, websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs that are present in the valuesupply chains of companies.
Amendment 469 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 2
Article 7 – paragraph 4 – subparagraph 2
When contractual assurances are obtained from, or a contract is entered into, with an SME, the terms used shall be fair, reasonable and non-discriminatory. Disproportionate passing on of liability to SMEs is prohibited. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification.
Amendment 472 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 1 – introductory part
Article 7 – paragraph 5 – subparagraph 1 – introductory part
As regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2, 3 and 4, the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the valuesupply chain of which the impact has arisen and shall, where the law governing their relations so entitles them to, take the following actions: , in the case of severe or repeated breaches of obligations under this Directive and after repeated attempts at measures of risk mitigation have failed:
Amendment 474 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The Commission mayshall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and mayshall devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations.
Amendment 474 #
Proposal for a directive
Recital 57
Recital 57
Amendment 475 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States mayshall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, may shall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.
Amendment 476 #
Proposal for a directive
Article 14 a (new)
Article 14 a (new)
Article 14a Single Point of Contact 1. Each Member State shall designate a national single point of contact on corporate sustainability due diligence. Member States may assign this role to an existing authority. Where a Member State designates only one competent authority, that competent authority may also be the single point of contact. 2. Companies may seek guidance and obtain further support and information about how best to fulfil their due diligence obligations through this portal. 3. The single point of contact may also exercise a liaison function to ensure cross-border cooperation of Member State authorities and with the relevant authorities in other Member States via cooperation with the European Supervisory Network established in Article 21.
Amendment 478 #
Proposal for a directive
Article 15
Article 15
Amendment 480 #
Proposal for a directive
Article 7 – paragraph 5 – subparagraph 2
Article 7 – paragraph 5 – subparagraph 2
Member States shall provide for the availability of an option to temporarily suspend and terminate the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.
Amendment 483 #
Proposal for a directive
Recital 61
Recital 61
Amendment 484 #
Proposal for a directive
Recital 62
Recital 62
Amendment 486 #
Proposal for a directive
Recital 64
Recital 64
Amendment 487 #
Proposal for a directive
Article 7 – paragraph 6 a (new)
Article 7 – paragraph 6 a (new)
6a. By way of derogation from paragraph 5, the company shall not be required to terminate the business relationship in case where: (a) there is a reasonable expectation that the termination would result in an adverse impact that is more severe than the potential adverse impact that could not be prevented or adequately mitigated, or (b) no available alternative to that business relationship, that provides a raw material product or service essential to the company’s production of goods or provision of services, exists and the termination would cause substantial prejudice to the company. Where the company decides not to terminate the business relationship in accordance with subparagraph 1, it shall report to the competent supervisory authority about the duly justified reasons of this decision.
Amendment 489 #
Proposal for a directive
Article 7 – paragraph 6 b (new)
Article 7 – paragraph 6 b (new)
6b. The obligation to temporarily suspend or terminate the business relationship pursuant to paragraph 5 shall not apply to commercial agreements concluded by the company before the expiry of the transposition period in accordance with Article 30 of this Directive.
Amendment 491 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to bring actual adverse impacts that have been, or should have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article, taking into account the level of companies’ involvement in the actual adverse impacts.
Amendment 492 #
Proposal for a directive
Article 17 – paragraph 1
Article 17 – paragraph 1
1. Each Member State shall designate one or more supervisory authorities to supervise compliance with the obligations laid down in national provisions adopted pursuant to Articles 6 to 11 and Article 15(1) and (2) (‘supervisory authority’).
Amendment 493 #
Proposal for a directive
Article 17 – paragraph 5
Article 17 – paragraph 5
Amendment 493 #
Proposal for a directive
Recital 70
Recital 70
Amendment 494 #
Proposal for a directive
Article 18 – paragraph 3
Article 18 – paragraph 3
3. Inspections shall be conducted in compliance with the national law of the Member State in which the inspection is carried out and with prior warning to the company, except where prior notification hinders the effectiveness of the inspection. Where, as part of its investigation, a supervisory authority wishes to carry out an inspection on the territory of a Member State other than its own, it shall seek assistance from the supervisory authority in that Member State pursuant to Article 21(2).
Amendment 495 #
Proposal for a directive
Article 18 – paragraph 4 – subparagraph 2
Article 18 – paragraph 4 – subparagraph 2
Taking remedial action does not preclude the imposition of administrative sanctions or the triggering of civil liability in case of damages, in ain Accordance with Articles 20 and 22, respectively.
Amendment 497 #
Proposal for a directive
Article 18 – paragraph 5 – point c a (new)
Article 18 – paragraph 5 – point c a (new)
(ca) to decide on an exemption for companies in line with Article. 7(5a) and Article 8(6), subparagraph (1a).
Amendment 498 #
Proposal for a directive
Article 18 – paragraph 7
Article 18 – paragraph 7
7. Without prejudice to Member State rules on companies’ right to court appeal and other relevant safeguards Member States shall ensure that each natural or legal person has the right to an effective judicial remedy against a legally binding decision by a supervisory authority concerning them in accordance with national law.
Amendment 499 #
Proposal for a directive
Article 8 – paragraph 3 – point a
Article 8 – paragraph 3 – point a
(a) neutralise the adverse impact or minimise its extent, including by the payment of damages to the affected persons and of financial compensation to the affected communities. The action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact;
Amendment 500 #
Proposal for a directive
Article 19 – paragraph 1
Article 19 – paragraph 1
1. Member States shall ensure that natural and legal personsstakeholders as referred to in Article 9(2) are entitled to submit substantiated concerns to any supervisory authority when they have reasons to believe, on the basis of objective circumstances, that a company is failing to comply with the national provisions adopted pursuant to this Directive (‘substantiated concerns’) if the notification procedure referred to in Article 9 did not have a satisfactory outcome.
Amendment 502 #
Proposal for a directive
Article 20 – paragraph 1
Article 20 – paragraph 1
1. Member States shall lay down the rules on sanctions applicable to infringements of national provisions adopted pursuant to this Directive, shall align the sanctions, and shall take all measures necessary to ensure that they are implemented. The sanctions provided for shall be effective, proportionate and dissuasive.
Amendment 504 #
Proposal for a directive
Article 20 – paragraph 2
Article 20 – paragraph 2
2. In deciding whether to impose sanctions and, if so, in determining their nature and appropriate level, due account shall be taken of the legal framework applicable in the country where the adverse impact occurred, the company’s efforts to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided pursuant to Articles 7 and 8, cumulative effects of the different measures and sanctions already imposed on the company as well as the collaboration with other entities to address adverse impacts in its valuesupply chains, as the case may be.
Amendment 508 #
Proposal for a directive
Article 20 – paragraph 3
Article 20 – paragraph 3
Amendment 510 #
Proposal for a directive
Article 8 – paragraph 3 – point c
Article 8 – paragraph 3 – point c
(c) seek contractual assurances from a direct partner with whom it has an established business relationship that it will ensure compliance with the code of conduct and, as necessary, a corrective action plan, including by seeking corresponding contractual assurances from its partners, to the extent that they are part of the valuesupply chain (contractual cascading). When such contractual assurances are obtained, paragraph 5 shall apply.
Amendment 511 #
Proposal for a directive
Article 8 – paragraph 3 – point d
Article 8 – paragraph 3 – point d
(d) make necessary and in light of economic circumstances reasonable and prudent investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3;
Amendment 511 #
Proposal for a directive
Article 20 – paragraph 4
Article 20 – paragraph 4
Amendment 513 #
Proposal for a directive
Article 21 – paragraph 2 a (new)
Article 21 – paragraph 2 a (new)
2a. Supervisory authorities shall share relevant information with the single point of contact as a means of ensuring that the single point of contact has the necessary information to perform its tasks.
Amendment 515 #
Proposal for a directive
Article 22
Article 22
Amendment 519 #
Proposal for a directive
Article 8 – paragraph 4
Article 8 – paragraph 4
4. As regards actual adverse impacts that could not be brought to an end or adequately mitigated by the measures in paragraph 3, the company may seek to conclude a contract with a partner with whom it has an in direct relationship, with a view to achieving compliance with the company’s code of conduct or a corrective action plan. When such a contract is concluded, paragraph 5 shall apply.
Amendment 519 #
Proposal for a directive
Article 1 – paragraph 1 – subparagraph 2
Article 1 – paragraph 1 – subparagraph 2
Amendment 523 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 2
Article 8 – paragraph 5 – subparagraph 2
When contractual assurances are obtained from, or a contract is entered into, with an SME, the terms used shall be fair, reasonable and non-discriminatory. Disproportionate passing on of liability to SMEs is prohibited. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification.
Amendment 527 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
Article 8 – paragraph 6 – subparagraph 1 – introductory part
As regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5, the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the valuesupply chain of which the impact has arisen and shall, where the law governing their relations so entitles them to, take one of the following actions:
Amendment 528 #
2a. Member States shall not introduce, in their national law, more stringent provisions than those laid down in this Directive, unless otherwise provided for in this Directive.
Amendment 529 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point a
Article 8 – paragraph 6 – subparagraph 1 – point a
(a) temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or minimise the extent of the adverse impact, if there is reasonable expectation that these efforts will succeed in the short- term. If there is no such reasonable expectation or the efforts did not succeed in the short-term, the company shall terminate the business relationship or
Amendment 532 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 2
Article 8 – paragraph 6 – subparagraph 2
Member States shall provide for the availability of an option to temporarily suspend and terminate the business relationship in contracts governed by their laws. in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.
Amendment 537 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
7. By way of derogation from paragraph 6, point (b), when companies referred to in Article 3, point (a)(iv), provide credit, loan or other financial services, they shall not be required to temporarily suspend or terminate the credit, loan or other financial service contract, when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided.
Amendment 539 #
Proposal for a directive
Article 8 – paragraph 7 a (new)
Article 8 – paragraph 7 a (new)
7a. By way of derogation from paragraph 6 the company shall not be required to terminate the business relationship in case where: (a) there is a reasonable expectation that the termination would result in an adverse impact that is just as or more severe than the actual adverse impact that could not be brought to an end or minimised, or (b) no available alternative to that business relationship exists and the termination would cause substantial prejudice to the company. The company shall monitor the actual adverse impact, periodically reassess its decision not to terminate the business relationship and seek alternative business relationships.
Amendment 539 #
Proposal for a directive
Article 24
Article 24
Amendment 540 #
Proposal for a directive
Article 2 – paragraph 1 – point a
Article 2 – paragraph 1 – point a
Amendment 541 #
Proposal for a directive
Article 8 – paragraph 7 b (new)
Article 8 – paragraph 7 b (new)
7b. The obligation to temporarily suspend or terminate the business relationship pursuant to paragraph 6 shall not apply to commercial agreements concluded by the company before the expiry of the transposition period in accordance with Article 30 of this Directive.
Amendment 542 #
Proposal for a directive
Article 25
Article 25
Amendment 549 #
Proposal for a directive
Article 9 – paragraph 1
Article 9 – paragraph 1
1. Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chaindirect business partners.
Amendment 549 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 550 #
Proposal for a directive
Article 26
Article 26
Amendment 554 #
Proposal for a directive
Article 9 – paragraph 2 – point a
Article 9 – paragraph 2 – point a
(a) persons who areith a legitimate interest who are directly affected or have reasonable grounds to believe that they might be affected by an adverse impact,
Amendment 556 #
Proposal for a directive
Article 29 – paragraph 1 – introductory part
Article 29 – paragraph 1 – introductory part
No later than … [OP please insert the date = 78 years after the date of entry into force of this Directive], the Commission shall submit a comprehensive report to the European Parliament and to the Council on the implementation and effectiveness of this Directive. The report shall evaluate the effectiveness and feasibility of this Directive in reaching its objectives and also assess the following issues:
Amendment 557 #
Proposal for a directive
Article 29 – paragraph 1 – point a
Article 29 – paragraph 1 – point a
(a) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be lowermodified;
Amendment 558 #
Proposal for a directive
Article 29 – paragraph 1 – point b
Article 29 – paragraph 1 – point b
Amendment 559 #
Proposal for a directive
Article 9 – paragraph 2 – point b
Article 9 – paragraph 2 – point b
(b) trade unions and other workers’ representatives representing individuals working in the value chain concernedir company, their subsidiaries or their direct business partners, that are affected by an adverse impact,
Amendment 560 #
Proposal for a directive
Article 29 – paragraph 1 – point b a (new)
Article 29 – paragraph 1 – point b a (new)
(ba) whether the impact of the Directive was justified and reached the targeted goals, including the associated indirect costs and the economic, social and environmental benefits thereof, and the costs on SMEs.
Amendment 561 #
Proposal for a directive
Article 29 – paragraph 1 – point c
Article 29 – paragraph 1 – point c
Amendment 562 #
Proposal for a directive
Article 29 – paragraph 1 – point d
Article 29 – paragraph 1 – point d
Amendment 564 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 1
Article 30 – paragraph 1 – subparagraph 1
Member States shall adopt and publish, by … [OJ to insert: 25 years from the entry into force of this Directive] at the latest, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.
Amendment 566 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
(c) recognised civil society organisations active in the areas related to the valuesupply chain concerned, concerning persons who have been affected or who are affected by an adverse impact.
Amendment 566 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point a
Article 30 – paragraph 1 – subparagraph 2 – point a
(a) from… [OJ to insert: 25 years from the entry into force of this Directive] as regards companies referred to in Article 2(1), point (a), and Article 2(2), point (a);
Amendment 567 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point b
Article 30 – paragraph 1 – subparagraph 2 – point b
Amendment 569 #
Proposal for a directive
Article 31 – paragraph 1
Article 31 – paragraph 1
1. This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. 2. It shall apply from [2 years from the publication].
Amendment 570 #
Proposal for a directive
Annex I
Annex I
Amendment 574 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
3. Member States shall ensure that the companies establish a procedure for dealing with complaints referred to in paragraph 1, including a procedure when the company considers the complaint to be unfounded, and inform the relevant workers and trade unions of those procedures. Member States shall ensure that where the complaint is well-founded, the adverse impact that is the subject matter of the complaint is deemed to be identified within the meaning of Article 6.
Amendment 584 #
Proposal for a directive
Article 9 – paragraph 4 – point b
Article 9 – paragraph 4 – point b
(b) to meet, when appropriate and feasible, with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint.
Amendment 588 #
Proposal for a directive
Article 9 – paragraph 4 a (new)
Article 9 – paragraph 4 a (new)
4a. Member States shall ensure that companies are allowed to fulfil the obligations laid down in paragraphs 1 and 3, first subparagraph, by participation in collaborative complaints procedures, including those established jointly by companies, through industry associations or multi-stakeholder initiatives, provided that the collective procedures meet the requirements set out in this Article.
Amendment 592 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU carry out periodic assessments of their own operations and measures, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. Such assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy shall be updated in accordance with the outcome of those assessments.
Amendment 599 #
Proposal for a directive
Article 11 – paragraph 1
Article 11 – paragraph 1
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in a language customary in the sphere of international business. The statement shall be published by 30 April each year, covern official language of the European Union. The statement shall be published within a reasonable period of time which shall not exceed 12 months after the end balance sheet date of the financial year for which the statement is drawn up. Companies that are included in consolidated management report in accordance with Articles 19a(7) and 29a(7) of Directive2013/34/EU shall be deemed to have fulfilled the obligation under this Article. The companies referred to in paragraph 1 may rely on the consolidated reporting of the previous calegroup to which they belong in order to fulfil their reporting requirements undaer yearthis Article.
Amendment 602 #
Proposal for a directive
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
Amendment 608 #
Proposal for a directive
Article 12 – paragraph 1
Article 12 – paragraph 1
In order to provide support to companies to facilitate their compliance with Article 7(2), point (b), and Article 8(3), point (c), the Commission in cooperation with sector and business organisations shall adopt guidance about voluntary model contract clauses. The model contractual clauses must be published at least 24 months before the provisions of this directive become applicable.
Amendment 611 #
Proposal for a directive
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, and where appropriate with international bodies having expertise in due diligence, may issushall issue clear and comprehensive guidelines, including for specific sectors or specific adverse impacts. in the form of targeted guidance where applicable. To facilitate compliance of companies and their business partners with the requirements of this Directive. The guidelines shall particularly take into account SMEs’ needs and shall enable administrative and financial assistance. The guidelines shall help companies, in particular SMEs, to fulfil their due diligence obligations in accordance with Articles 6 to 11, by providing guidance on how the requirements under different Union acts could be merged most efficiently. The Commission shall regularly review and update the guidelines taking into account the latest developments in the sectors concerned. Guidelines must be published 24 months before the provisions of this directive become applicable.
Amendment 611 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
Amendment 612 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. Member States shall, in order to provide information and support to companies and the partners with whom they have established business relationships in their valuesupply chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly dedicated helpdesks, websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs that are present in the valuesupply chains of companies.
Amendment 614 #
Proposal for a directive
Article 14 – paragraph 2
Article 14 – paragraph 2
2. Without prejudice to applicable State aid rules, Member States mayshall financially support SMEs.
Amendment 615 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The Commission mayshall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and may devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations.
Amendment 616 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States mayshall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, mayshall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives as well as a non-exhaustive list of industry schemes the Commission deems fit.
Amendment 617 #
Proposal for a directive
Article 14 a (new)
Article 14 a (new)
Article 14a Single Point of Contact 1. Each Member State shall designate a national single point of contact on corporate sustainability due diligence. Member States may assign this role to an existing authority. Where a Member State designates only one competent authority, that competent authority may also be the single point of contact. 2. Companies may seek guidance and obtain further support and information about how best to fulfil their due diligence obligations through this portal. 3. The single point of contact may also exercise a liaison function to ensure cross-border cooperation of Member State authorities and with the relevant authorities in other Member States via cooperation with the European Supervisory Network established in Article 21.
Amendment 625 #
Proposal for a directive
Article 15 – paragraph 1
Article 15 – paragraph 1
Amendment 635 #
Proposal for a directive
Article 2 – paragraph 4 a (new)
Article 2 – paragraph 4 a (new)
4a. In case of a group of companies: (a) the parent company, whether or not it meets the thresholds mentioned in paragraphs 1 or 2, may perform the Due Diligence obligations laid down in this Directive on behalf of any or all its subsidiaries which meet the thresholds in paragraph 1 or 2; (b) any subsidiary shall be deemed in compliance with the obligations laid down in this Directive where their parent company includes those subsidiaries in its due diligence corporate policy.
Amendment 645 #
Proposal for a directive
Article 15 – paragraph 2
Article 15 – paragraph 2
Amendment 648 #
Proposal for a directive
Article 15 – paragraph 3
Article 15 – paragraph 3
Amendment 649 #
Proposal for a directive
Article 3 – paragraph 1 – point a – point iv
Article 3 – paragraph 1 – point a – point iv
Amendment 664 #
Proposal for a directive
Article 18 – paragraph 3
Article 18 – paragraph 3
3. Inspections shall be conducted in compliance with the national law of the Member State in which the inspection is carried out and with prior warning to the company, except where prior notification hinders the effectiveness of the inspection. Where, as part of its investigation, a supervisory authority wishes to carry out an inspection on the territory of a Member State other than its own, it shall seek assistance from the supervisory authority in that Member State pursuant to Article 21(2).
Amendment 667 #
Proposal for a directive
Article 3 – paragraph 1 – point b
Article 3 – paragraph 1 – point b
(b) ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the Annex, Part II; inciples set out in the OECD Due Diligence Guidelines for Multinational Enterprises as clarified in the OECD Guidance for Responsible Business Conduct as regards the environment and climate.;
Amendment 669 #
Proposal for a directive
Article 18 – paragraph 4 – subparagraph 2
Article 18 – paragraph 4 – subparagraph 2
Taking remedial action does not preclude the imposition of administrative sanctions or the triggering of civil liability in case of damages, in accordance with Articles 20 and 22, respectively, but it must be given due consideration in favour of the company in question.
Amendment 676 #
(c) ‘adverse human rights impact’ means an adverse impact on protected persons that may impair the full enjoyment of human rights resulting from the violation of one of the prights or prohibitions listed in the Annex, Part I Section 1, as enshrined in the international conventions listed in the Annex, Part I Section 2nciples set out in the OECD Due Diligence Guidelines for Multinational Enterprises as clarified in the OECD Guidance for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights;
Amendment 677 #
Proposal for a directive
Article 19 – paragraph 1
Article 19 – paragraph 1
1. Member States shall ensure that natural and legal persons with a legitimate interest are entitled to submit substantiated concerns to any supervisory authority when they have reasons to believe, on the basis of objective circumstances, that a company is failing to comply with the national provisions adopted pursuant to Articles 5 to 11 of this Directive (‘substantiated concerns’).
Amendment 681 #
Proposal for a directive
Article 20 – paragraph 2
Article 20 – paragraph 2
2. In deciding whether to impose sanctions and, if so, in determining their nature and appropriate level, due account shall be taken of the company’s efforts to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided pursuant to Articles 7 and 8, as well as collaboration with other entities to address adverse impacts in its valuesupply chains, as the case may be.
Amendment 682 #
Proposal for a directive
Article 3 – paragraph 1 – point c a (new)
Article 3 – paragraph 1 – point c a (new)
(ca) ‘adverse impact’ means an adverse environmental impact and adverse human rights impact;
Amendment 683 #
Proposal for a directive
Article 20 – paragraph 3
Article 20 – paragraph 3
Amendment 684 #
Proposal for a directive
Article 3 – paragraph 1 – point c b (new)
Article 3 – paragraph 1 – point c b (new)
(cb) ‘to cause an adverse impact’ means a company’s own actions that directly led to the adverse impact.
Amendment 687 #
Proposal for a directive
Article 3 – paragraph 1 – point c d (new)
Article 3 – paragraph 1 – point c d (new)
(cd) being ‘directly linked to an adverse impact’ means that there is a relationship between the adverse impact and the company’s products, services or operations through another business relationship. Directly linked is not defined by direct contractual relationships. Also, a direct linkage does not imply that the responsibility shifts from the entity causing an adverse impact to the enterprise with which it has a linkage.
Amendment 690 #
Proposal for a directive
Article 3 – paragraph 1 – point e – introductory part
Article 3 – paragraph 1 – point e – introductory part
(e) ‘direct business relationship’ means a business relationship with a direct contractor, subcontractor or any other legal entities (‘partner’)ual relation for the supply of goods or the provision of services whose supplies are necessary for the production of the enterprise’s product or the provision and use of the relevant service, which is relevant based on the severity and likelihood of adverse impacts and is outside the European Union.
Amendment 692 #
Proposal for a directive
Article 20 – paragraph 4
Article 20 – paragraph 4
4. Member States shall ensure that any final decision of the supervisory authorities containing sanctions related to the breach of the provisions of this directive is published, taking into account the legitimate interests of the respective company.
Amendment 695 #
Proposal for a directive
Article 21 – paragraph 2 a (new)
Article 21 – paragraph 2 a (new)
2a. Supervisory authorities shall share relevant information with the single point of contact as a means of ensuring that the single point of contact has the necessary information to perform its tasks.
Amendment 696 #
Proposal for a directive
Article 22
Article 22
Amendment 697 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point i
Article 3 – paragraph 1 – point e – point i
Amendment 700 #
Proposal for a directive
Article 3 – paragraph 1 – point e – point ii
Article 3 – paragraph 1 – point e – point ii
Amendment 725 #
Proposal for a directive
Article 24
Article 24
Amendment 727 #
Proposal for a directive
Article 3 – paragraph 1 – point g
Article 3 – paragraph 1 – point g
(g) ‘valuesupply chain’ means activities related to the production and supply of goods or the provision of services by a company, including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. As regards companies within the meaning of point (a)(iv), ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan, c as far as these activities are dit, and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of such regulated financial undertakings does not cover SMEs receiving loan, credit, financing, insurance or reinsurance of such entities;rectly necessary for the production of the goods or the provision of the services.
Amendment 728 #
Proposal for a directive
Article 25
Article 25
Amendment 734 #
Proposal for a directive
Article 3 – paragraph 1 – point g a (new)
Article 3 – paragraph 1 – point g a (new)
(ga) ‘leverage’ means the ability of a company, depending on size and importance to supplier’s revenue or the functioning of its business operations, to affect change in the wrongful practices of the entity that causes or contributes to the adverse impact in the supply chain;
Amendment 738 #
Proposal for a directive
Article 26
Article 26
Amendment 746 #
Proposal for a directive
Article 3 – paragraph 1 – point h a (new)
Article 3 – paragraph 1 – point h a (new)
(ha) For the purposes of point (h), the Commission shall adopt a delegated act in accordance with Article 28 to specify the minimum standards for the independent third-party verification;
Amendment 752 #
Proposal for a directive
Article 29 – paragraph 1 – point a
Article 29 – paragraph 1 – point a
(a) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be lowerreassessed;
Amendment 753 #
Proposal for a directive
Article 3 – paragraph 1 – point j a (new)
Article 3 – paragraph 1 – point j a (new)
(ja) For the purposes of point (j), the Commission shall adopt a delegated act in accordance with Article 14b and 28 to specify the minimum standards for the industry initiative to be recognised by one Member States as feasible;
Amendment 754 #
Proposal for a directive
Article 29 – paragraph 1 – point b
Article 29 – paragraph 1 – point b
Amendment 759 #
Proposal for a directive
Article 29 – paragraph 1 – point d
Article 29 – paragraph 1 – point d
Amendment 766 #
Proposal for a directive
Article 29 – paragraph 1 a (new)
Article 29 – paragraph 1 a (new)
By... [3 years after the date of entry into force of this Directive] the Commission shall review the impact of this Directive, including the associated indirect costs and the economic, social and environmental benefits thereof, on SMEs.
Amendment 770 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point a
Article 30 – paragraph 1 – subparagraph 2 – point a
(a) from… [OJ to insert: 24 years from the entry into force of this Directive] as regards companies referred to in Article 2(1), point (a), and Article 2(2), point (a);
Amendment 771 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point b
Article 30 – paragraph 1 – subparagraph 2 – point b
Amendment 774 #
Proposal for a directive
Article 31 – paragraph 1
Article 31 – paragraph 1
1. This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. 2. It shall apply from [Date: 2 years from the publication]
Amendment 776 #
Proposal for a directive
Article 3 – paragraph 1 – point o
Article 3 – paragraph 1 – point o
Amendment 781 #
Proposal for a directive
Article 3 – paragraph 1 – point p
Article 3 – paragraph 1 – point p
Amendment 785 #
Proposal for a directive
Article 3 – paragraph 1 – point q
Article 3 – paragraph 1 – point q
(q) ‘appropriate measure’ means a measure that is capable of achieving the objectives of due diligence, commensurate with the degree of severity and the likelihood of the adverse impact, and proportionate to the size, reasonably available tources and capacities of the company, taking into account the circumstances of the specific case, including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof, and the need to ensure prioritisation of actionleverage in that relationship, and the principle of risk-based prioritisation of action. Companies are not required to guarantee, in all circumstances, that adverse impacts will never occur or that they will be stopped. The main obligations in this Directive are obligations of means;
Amendment 795 #
Proposal for a directive
Article 3 – paragraph 1 – point q c (new)
Article 3 – paragraph 1 – point q c (new)
(qc) ‘risk factors’ means enterprise- level risk factors, geographic risk factors, and sectoral risk factors. The Commission shall prepare a list of risk factors with accompanying guidance as described in Article 13;
Amendment 796 #
Proposal for a directive
Article 3 – paragraph 1 – point q d (new)
Article 3 – paragraph 1 – point q d (new)
(qd) ‘Group’ means a parent company and all its subsidiary undertakings as defined by Article 2 of the Directive 2013/34/EU of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and83/349/EE;
Amendment 802 #
Proposal for a directive
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
1. Member States shall ensure that companies conduct risk-based human rights and environmental due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions:
Amendment 812 #
Proposal for a directive
Article 4 – paragraph 1 – point d
Article 4 – paragraph 1 – point d
(d) establishing and maintaining a complaintsnotification procedure in accordance with Article 9;
Amendment 835 #
Proposal for a directive
Article 5 – paragraph 1 – introductory part
Article 5 – paragraph 1 – introductory part
1. Member States shall ensure that companies integrate due diligence into all their relevant corporate policies and have in place a due diligence policy. The due diligence policy shall contain all of the following:
Amendment 848 #
Proposal for a directive
Article 5 – paragraph 1 – point c
Article 5 – paragraph 1 – point c
(c) a description of the processes put in place to implement due diligence, including, where relevant, the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships;
Amendment 860 #
Proposal for a directive
Article 5 – paragraph 2
Article 5 – paragraph 2
2. Member States shall ensure that the companies continuously update their due diligence policy annuallywhen significant changes occur.
Amendment 892 #
Proposal for a directive
Article 6 – paragraph 1 d (new)
Article 6 – paragraph 1 d (new)
1d. Companies are encouraged to take these measures in cooperation with industry initiatives.
Amendment 902 #
Proposal for a directive
Article 6 – paragraph 3
Article 6 – paragraph 3
Amendment 909 #
Proposal for a directive
Article 6 – paragraph 4
Article 6 – paragraph 4
4. Member States shall ensure that, for the purposes of identifying and prioritising the adverse impacts referred to in paragraph 1 based on, where appropriate, quantitative and qualitative information, companies are entitled to make use of appropriate resources, including independent reports and information gathered through the complaintsnotification procedure provided for in Article 9. Companies shall, where relevant, also carry out consultations engage with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.
Amendment 916 #
Proposal for a directive
Article 6 – paragraph 4 a (new)
Article 6 – paragraph 4 a (new)
4a. In the event that not all the necessary information regarding its supply chain is available, the parent company shall explain the efforts made to obtain the necessary information about its supply chain, the reasons why not all of the necessary information could be obtained, and its plans to obtain the necessary information in the future.
Amendment 933 #
Proposal for a directive
Article 7 – paragraph 2 – point a
Article 7 – paragraph 2 – point a
(a) where necessary due to the nature or complexity of the measures required for prevention, develop and implement a prevention action plan, with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuonitoring improvement. The prevention action plan shall be developed in consultationmeaningful engagement with affected stakeholders where relevant; companies are encouraged to develop their action plans in cooperation with industry initiatives;
Amendment 940 #
Proposal for a directive
Article 7 – paragraph 2 – point a b (new)
Article 7 – paragraph 2 – point a b (new)
(ab) Companies shall apply best efforts to develop and use purchase policies that do not encourage potential adverse impacts on human rights the environment.
Amendment 945 #
Proposal for a directive
Article 7 – paragraph 2 – point b
Article 7 – paragraph 2 – point b
(b) seekmay seek, where appropriate, contractual or other assurances, from a business partner with whom it has a direct business relationship located outside the EU that it will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan, including by seeking corresponding contractual assurances from its partners, to the extent that their activities are part of the company’s value chain ( and by requesting information on their suppliers if possible; Member States shall ensure that the general due diligence duty prevails over contractual cascading).surances; When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 956 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
(d) provide targeted and proportionate supportfinancial and administrative support, especially for an SME with which the company has an established business relationship, where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME outside the EU;
Amendment 962 #
Proposal for a directive
Article 7 – paragraph 2 – point e
Article 7 – paragraph 2 – point e
(e) in compliance with Union law including competition law, collaborate with other entities, sectoral approaches or industry initiatives, including, where relevant, to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective;
Amendment 979 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 1
Article 7 – paragraph 4 – subparagraph 1
Amendment 984 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 2
Article 7 – paragraph 4 – subparagraph 2
When contractual assurancesassurances, including contractual, are obtained from, or a contract is entered into, with an SME outside the EU, the terms used shall be fair, reasonable and non-discriminatory. Where measures are carried out to verify compliance are carried out in relation to SMEs, the company shall bearof assurances obtained from SMEs outside the EU, the cost of the independent third- party verification should be provided by public funds.
Amendment 990 #
Proposal for a directive
Article 7 – paragraph 5
Article 7 – paragraph 5
Amendment 1015 #
Proposal for a directive
Article 7 – paragraph 6
Article 7 – paragraph 6
Amendment 1019 #
Proposal for a directive
Article 8 – paragraph 1
Article 8 – paragraph 1
1. Member States shall ensure that companies take appropriate measures to bring actual adverse impacts that have been, or shouldproportionate and commensurate measures within their means to bring actual adverse impacts that they have caused or contributed to and that have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article. Companies that are directly linked to the actual adverse impact without causing or contributing to it are required to make use of their leverage to the extent possible to bring actual adverse impacts to an end.
Amendment 1027 #
Proposal for a directive
Article 8 – paragraph 2
Article 8 – paragraph 2
2. Where the adverse impact cannot be brought to an end, Member States shall ensure that companies take measures within their means to minimise the extent of such an impact.
Amendment 1037 #
Proposal for a directive
Article 8 – paragraph 3 – point a
Article 8 – paragraph 3 – point a
(a) neutralise the adverse impact or minimise its extent, including by the payment of damages to the affected persons and of financial compensation to the affected communities. The action shall be proportionate and commensurate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact, as well as to its resources and leverage;
Amendment 1045 #
Proposal for a directive
Article 8 – paragraph 3 – point b
Article 8 – paragraph 3 – point b
(b) where necessary due to the fact that the adverse impact cannot be immediately brought to an end, develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuonitoring improvement. Where relevant, tThe corrective action plan shall be developed in consultationthrough meaningful engagement with stakeholders;
Amendment 1047 #
Proposal for a directive
Article 8 – paragraph 3 – point b a (new)
Article 8 – paragraph 3 – point b a (new)
(ba) set up a prioritisation strategy on the basis of Principle 17 of the UN Guiding Principles on Business and Human Rights based on risk factors. Companies shall consider the level of severity, likelihood and urgency of the different actual adverse impacts on human rights or the environment, the nature and context of their operations, including geographic, the scope of the risks, their scale and how irremediable they might be, and use the prioritisation policy in dealing with them. When prioritising their response to risks to human rights, companies shall treat the severity of an adverse impact, such as where a delayed response would make the impact irremediable, as the predominant factor.
Amendment 1052 #
Proposal for a directive
Article 8 – paragraph 3 – point c
Article 8 – paragraph 3 – point c
(c) seekmay seek, where appropriate, contractual or other assurances from a direct partner with whom it has an established direct business relationship outside the EU that it will ensure compliance with the code of conduct and, as necessary, a corrective action plan, including by seeking corresponding contractual assurances from its partners, to the extent that they are part of the value chain ( and by requesting information on their suppliers if possible. Member States shall ensure that the general due diligence duty prevails over contractual cascading)surances. When such contractual assurances are obtained, paragraph 5 shall apply.
Amendment 1057 #
Proposal for a directive
Article 8 – paragraph 3 – point d
Article 8 – paragraph 3 – point d
(d) make necessary, where appropriate, investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3;
Amendment 1063 #
Proposal for a directive
Article 8 – paragraph 3 – point e
Article 8 – paragraph 3 – point e
(e) provide targeted and proportionate supportfinancial and administrative support, especially for an SME with which the company has an established direct business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME outside the EU;
Amendment 1069 #
Proposal for a directive
Article 8 – paragraph 3 – point f
Article 8 – paragraph 3 – point f
(f) in compliance with Union law including competition law, collaborate with other entities, sectoral approaches or industry initiatives, including, where relevant, to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective.
Amendment 1080 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 1
Article 8 – paragraph 5 – subparagraph 1
Amendment 1084 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 2
Article 8 – paragraph 5 – subparagraph 2
When contractual assurancesassurances, including contractual, are obtained from, or a contract is entered into, with an SMEother company, the terms used shall be fair, reasonable and non- discriminatory. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third- party verification should be provided by public funds.
Amendment 1091 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – introductory part
Article 8 – paragraph 6 – subparagraph 1 – introductory part
As regards actual adverse impacts within the meaning of paragraph 1 that the company caused or contributed to and that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3, 4 and 5 and despite repeated efforts, the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the valuesupply chain of which the impact has arisen and shall, as a measure of last resort, where the law governing their relations so entitles them to, take one of the following actions and where the impact is considered extremely severe or irreversible, take the following actions, in line with responsible disengagement, taking into account the best interest of those impacted:
Amendment 1098 #
Proposal for a directive
Article 8 – paragraph 6 – subparagraph 1 – point b
Article 8 – paragraph 6 – subparagraph 1 – point b
(b) if suspension does not lead to a sufficient result, terminate the business relationship with respect to the activities concerned, if the adverse impact is consid. Member States shall provide for the availability of an option to terminate the business relationship in contracts governed severeby their laws.
Amendment 1118 #
Proposal for a directive
Article 8 – paragraph 7
Article 8 – paragraph 7
Amendment 1154 #
Proposal for a directive
Article 9 – paragraph 2 – introductory part
Article 9 – paragraph 2 – introductory part
2. Member States shall ensure that the complaintnotifications may be submitted by:
Amendment 1195 #
Proposal for a directive
Article 9 – paragraph 4 – point b
Article 9 – paragraph 4 – point b
Amendment 1214 #
Proposal for a directive
Article 10 – paragraph 1
Article 10 – paragraph 1
Member States shall ensure that companies carry out periodiccontinuous assessments of their own operations and measures, those of their subsidiaries and, where related to the valuesupply chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. Such assessments shall be based, where appropriate, on qualitative and quantitative indicators and be carried out at least every 12 monthscontinuously and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. The due diligence policy shall be updated in accordance with the outcome of those assessments.
Amendment 1223 #
Proposal for a directive
Article 11 – paragraph 1
Article 11 – paragraph 1
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in a language customary in tone of the official languages of the Union. When sphere of international business. The statement shall be published by 30 April each year, covering the previous calendar yearignificant changes occur, the statement shall be updated.
Amendment 1230 #
Proposal for a directive
Article 11 – paragraph 1 a (new)
Article 11 – paragraph 1 a (new)
The companies referred to in paragraph 1 may rely on the consolidated reporting of the group to which they belong in order to fulfil their reporting requirements under this Article.
Amendment 1262 #
Proposal for a directive
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to provide support to companies or 1. to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, in consultation with Member States and relevant stakeholders, including from third countries, the European Union Agency for Fundamental Rights, the European Environment Agency, the External Action Service, the European Innovation Council and Small and Medium-sized Enterprises Executive Agency (EISMEA) and where appropriate with the OECD and other international bodies having expertise in due diligence, may issue guidelines, including for specific sectors or specific adverse impacts. shall issue clear and easily understandable guidelines in the form of targeted guidance where applicable to facilitate compliance in a practical manner: (a) in digital, free of charge and easily accessible format; (b) including on existing digital solutions to be used for the due diligence process and on the development of digital solutions; (c) including on the implementation of the human rights and environmental standards applicable to businesses based on the OECD Guidelines for Multinational Enterprises as clarified in the Due Diligence Guidance as well as the UNGPs; (d) including lists of risk factors and accompanying guidance, including enterprise-level risk factors, geographic risk factors and sectoral risk factors; (e) including an overview on applicable industry initiatives; (f) including practical guidance on how proportionality and prioritisation, in terms of impacts, sectors and geographical areas, may be applied to due diligence obligations depending on the size and sector of the company; (g) including taking into account SMEs needs. 2. The guidelines shall be made available no later than ... [18 months after the date of entry into force of this Directive]. The Commission shall periodically review the relevance of its guidelines and adapt them to new best practices. 3. Country fact-sheets shall be updated regularly by the Commission and made publicly available in order to provide up-to-date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission shall collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub-sectors, and products.
Amendment 1278 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. The Commission in cooperation with Member States shall, in order to provide information and support to companies and the partners with whom they have established business relationships in their valuesupply chains in their efforts to fulfil the obligations resulting from this Directive, set up and operate individually or jointly dedicated websites, platforms or portals. Specific consideration shall be given, in that respect, to the SMEs that are present in the valuesupply chains of companies.
Amendment 1288 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The Commission mayshall complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and may devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations.
Amendment 1290 #
Proposal for a directive
Article 14 – paragraph 3 a (new)
Article 14 – paragraph 3 a (new)
3a. The Commission may rely on its cooperation and trade instruments to support the development of the enabling environment in third countries, through capacity building and expertise that will reinforce their economic sector to comply with due diligence obligations as set out in this Directive.
Amendment 1299 #
4. Companies may rely on industry schemes and multi-stakeholder initiatives to support the implementation of their obligations referred to in Articles 5 to 11 of this Directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. The Commission and the Member States mayshall facilitate the dissemination of information on such schemes or initiatives and their outcome. The Commission, in collaboration with Member States, may and the OECD as well as relevant stakeholders, shall issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiativesinitiatives in line with Article 14c.
Amendment 1307 #
Proposal for a directive
Article 14 a (new)
Article 14 a (new)
Article 14a Single Point of Contact 1. Each Member State shall designate a national single point of contact on corporate sustainability due diligence. Member States may assign this role to an existing authority. Where a Member State designates only one competent authority, that competent authority may also be the single point of contact. 2. Companies may seek additional guidance and obtain further support and information about how best to fulfil their due diligence obligations through this point of contact. 3. The single point of contact may also exercise a liaison function to ensure cross-border cooperation of Member State authorities and with the relevant authorities in other Member States via cooperation with the European Supervisory Network established in Article 21.
Amendment 1309 #
Proposal for a directive
Article 14 c (new)
Article 14 c (new)
Amendment 1313 #
Proposal for a directive
Article 15
Article 15
Amendment 1344 #
Proposal for a directive
Article 17 – paragraph 3 – subparagraph 1
Article 17 – paragraph 3 – subparagraph 1
As regards companies referred to in Article 2(2), the competent supervisory authority shall be that of the Member State in which the company has a branch. If the company does not have a branch in any Member State, or has branches located in different Member States, the competent supervisory authority shall be the supervisory authority of the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year before the date indicated in Article 30 or the date on which the company first fulfils the criteria laid down in Article 2(2), whichever comes last or subsidiary.
Amendment 1430 #
Proposal for a directive
Article 20 – paragraph 2
Article 20 – paragraph 2
2. In deciding whether to impose sanctions and, if so, in determining their nature and appropriate level, due account shall be taken of the legal framework applicable in the country where the adverse impact may occur or has occurred, the gravity and duration of the infringement, the importance of profits gained or losses avoided by the company, in so far as they can be determined the company’s efforts to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided pursuant to Articles 7 and 8, any previous infringements, cumulative effects of the different measures and sanctions already imposed on the company as well as the collaboration with other entities to address adverse impacts in its valuesupply chains, as the case may be.; any other aggravating or mitigating factors applicable to the circumstances of the case;
Amendment 1462 #
Proposal for a directive
Article 21 – paragraph 2 a (new)
Article 21 – paragraph 2 a (new)
2a. Supervisory authorities shall share relevant information with the single point of contact as a means of ensuring that the single point of contact has the necessary information to perform its tasks.
Amendment 1463 #
Proposal for a directive
Article 21 – paragraph 2 b (new)
Article 21 – paragraph 2 b (new)
2b. The ENSA shall also support the Commission in developing the Single- Reporting-Instrument.
Amendment 1495 #
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1
Article 22 – paragraph 2 – subparagraph 1
Amendment 1551 #
Proposal for a directive
Article 24
Article 24
Amendment 1559 #
Proposal for a directive
Article 25
Article 25
Amendment 1571 #
Proposal for a directive
Article 26
Article 26
Amendment 1598 #
Proposal for a directive
Article 29 – paragraph 1 – point a
Article 29 – paragraph 1 – point a
(a) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be loweredimpact of the Directive was justified and reached the targeted goals, including the associated indirect costs and the economic, social and environmental benefits thereof, including on SMEs;
Amendment 1600 #
Proposal for a directive
Article 29 – paragraph 1 – point a a (new)
Article 29 – paragraph 1 – point a a (new)
(aa) whether the thresholds regarding the number of employees and net turnover laid down in Article 2(1) need to be modified;
Amendment 1607 #
Proposal for a directive
Article 29 – paragraph 1 – point c
Article 29 – paragraph 1 – point c
Amendment 1620 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 1
Article 30 – paragraph 1 – subparagraph 1
Member States shall adopt and publish, by … [OJ to insert: 25 years from the entry into force of this Directive] at the latest, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.
Amendment 1626 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point a
Article 30 – paragraph 1 – subparagraph 2 – point a
Amendment 1632 #
Proposal for a directive
Article 30 – paragraph 1 – subparagraph 2 – point b
Article 30 – paragraph 1 – subparagraph 2 – point b
Amendment 1635 #
Proposal for a directive
Annex I
Annex I