Activities of Margarita DE LA PISA CARRIÓN 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 (87)
Amendment 25 #
Proposal for a directive
Citation 1
Citation 1
Amendment 26 #
Proposal for a directive
Citation 3
Citation 3
After transmission of the draft legislative act to the national parliaments, and having regard to the reasoned opinions from the German, Czech, French and Swedish parliaments,
Amendment 30 #
Proposal for a directive
Recital 3 a (new)
Recital 3 a (new)
(3a) All business projects are designed to serve the common good of society and their role is to generate prosperity and jobs. That role must be preserved and must not be restricted in order to fulfil this social function.
Amendment 32 #
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 value chains. It is also in the interest of companies to protect human rights and the environment, in particular given the rising concern of consumers and investors regarding these topics. SeveralIt is important to promote initiatives fostering enterprises which support value-oriented transformation already exist oncontribute to the common good at Union77, as well as national78 level. _________________ 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 33 #
Proposal for a directive
Recital 4 a (new)
Recital 4 a (new)
(4a) The reference to human rights in the Directive must be closely linked to the provisions of the founding charter of 1948, ensuring that they are interpreted in accordance with the natural order.
Amendment 34 #
Proposal for a directive
Recital 5
Recital 5
(5) Existing international standards on responsible business conduct specify thathow companies should protect human rights and set out how they should address the protection of the environment across their operations and value chain, without prejudice to the freedom to conduct a business. The United Nations Guiding Principles on Business and Human Rights79, although non-binding, 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. _________________ 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/dsites/default/files/d ocuments/publicat ions/guidingprinciplesb usinesshr_en.pdf.
Amendment 35 #
Proposal for a directive
Recital 7
Recital 7
(7) The United Nations’ Sustainable Development Goals83, adopted by all United Nations Member States in 2015, include the objectives to promote sustained, inclusive and sustainable economic growth. The Union has set itself the objective to deliver on the UN Sustainable Development Goals. The private sector contributes to those aimsose goals are voluntary83 a and the private sector is thus not obliged to meet them. _________________ 83 https://www.un.org/ga/search/view_doc.as p?symbol=A/RES/70/1&Lang=E. 83 a https://www.europarl.europa.eu/RegData/ etudes/BRIE/2022/730346/EPRS_BRI(20 22)730346_EN.pdf;
Amendment 36 #
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. Besides specific actions being expected from allwhich is non-binding, set out specific measures that the signatory Pparties, the role of the private sector, in particular its investment strategies, is considered central to achieve these objective are expected to take. The private sector does not have any legal obligation in this regard, although its investment strategies and activities are relevant to these international agreements. _________________ 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 37 #
Proposal for a directive
Recital 9
Recital 9
(9) In the European Climate Law86, the Union also legally committed to becoming climate-neutral by 2050 and to reducing emissions by at least 55% by 2030. Both these commitments require changing the way in which companies produce and procureThis legislation lays down the requirements for fulfilling both commitments. The Commission’s 2030 Climate Target Plan87, which is non-binding, models various degrees of emission reductions required forom different economic sectors, though all need to see considerable reductions under all scenarios for the Union to meet its climate objectives. The Plan also underlines that “changes in corporate governance rules and practices, including on sustainable finance, will make company owners and managers prioritise sustainability objectives in their actions and strategies.”. The 2019 Communication on the European Green Deal88 sets out that all Union actions and policies should pull together to help the Union achieve a successful and just transition towards a sustainableprosperous future. It also sets out that sustainability should be further embedded into the corporate governance framework, without prejudice to the EU principle of freedom to conduct a business. _________________ 86 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) PE/27/2021/REV/1 (OJ L 243, 9.7.2021, p. 1). 87 SWD/(2020/)176 final. 88 COM/(2019/)640 final.
Amendment 38 #
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 the hypothesis of climate change, new investment and policy decisions should btake the climate- informed and future- proof, includingto account, especially for larger businesses managing value chains. This Directive ishould 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 39 #
Proposal for a directive
Recital 12
Recital 12
(12) This Directive is in coherence with the EU Action Plan on Human Rights and Democracy 2020-202499. This Action Plan defines as a priority to strengthen the Union’s engagement to actively promote the global implementation of the United Nations Guiding Principles on Business and Human Rights and other relevant international guidelines such as the OECD Guidelines for Multinational Enterprises, including by advancing relevant due diligence standards. The United Nations Guiding Principles on Business and Human Rights, which are non-binding, require a change to the principle of legal liability in our legal tradition as they seek to require companies to 'address adverse human rights impacts with which they are involved', whether or not they cause those impacts. _________________ 99 Joint Communication to the European Parliament and the Council on the EU Action Plan on Human Rights and Democracy 2020-2024 (JOIN/2020/5 final).
Amendment 41 #
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.
Amendment 42 #
Proposal for a directive
Recital 15
Recital 15
(15) Companies should take appropriate steps to set up and carry out due diligence measures, with respect to their own operations, their subsidiaries, as well as their established direct and indirect business relationships throughout their value 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’. 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. Among other things, account shouldmust be taken of the specificities 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 influencethe company operates.
Amendment 43 #
Proposal for a directive
Recital 16
Recital 16
(16) The due diligence process set out in this Directive should coveris based on the six steps defined by the OECD Due Diligence Guidance for Responsible Business Conduct, which include due diligence measures for companies to identify and address adverse human rights and environmental impacts. This encompasses the following steps: (1) integrating due diligence into policies and management systems, (2) identifying and assessing adverse human rights and environmental impacts, (3) preventing, ceasing or minimising actual and potential adverse human rights, and environmental impacts, (4) assessing the effectiveness of measures, (5) communicating, (6) providing remediation in cases where the company may have caused damage.
Amendment 44 #
Proposal for a directive
Recital 17
Recital 17
(17) Adverse human rights and environmental impact may occur in companies’ own operations, subsidiaries, products, and in their value chains, in particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal. 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 services, at the level of own operations, subsidiaries and in value chains. Nevertheless, the principles of proportionality and liability require due diligence to be carried out for each company in relation to its own operations.
Amendment 46 #
Proposal for a directive
Recital 18
Recital 18
(18) The value chain should covers 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 encompasses upstream established direct and indirect business relationships 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.
Amendment 47 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to allow companies to properly identify the adverse impacts inof their value chain and to make it possible for them to exercise appropriate leverageoperations, the due diligence obligations should be limited in this Directive to establisheddirect business relationships between companies and third parties. For the purpose of this Directive, establisheddirect business relationships should mean such direct and indirect business relationships which are, or which are expected to bbusiness relationships established with a company's customers and suppliers which are lasting, in view of their intensity and duration, and which do not represent a negligible or ancillary part of 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 company.
Amendment 49 #
Proposal for a directive
Recital 21
Recital 21
(21) Under this Directive, EU companies with more than 500 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 52 #
Proposal for a directive
Recital 22
Recital 22
Amendment 56 #
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 millith significant operations 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 Directiveand with a global net turnover of at least EUR 150 million in the financial year preceding the last financial year.
Amendment 57 #
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 connectionensures alignment between the third-country companies and the Union territoryose in the Union, and ensures that the latter are not subject to more stringent conditions. 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 to determine which third-country companies fall under this Directive, as 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 58 #
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 context. 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 Directive.
Amendment 60 #
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 complaintsscreening 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 61 #
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.
Amendment 63 #
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 chaitheir operations. 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 64 #
Proposal for a directive
Recital 31
Recital 31
Amendment 67 #
Proposal for a directive
Recital 32
Recital 32
(32) In line with international standards, prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. In order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts, this Directive should ensure that disengagement is a last-resort action, in line with the Union`s policy of zero-tolerance on child labour. Terminating a business relationship in which child labour was found could expose the child to even more severe adverse human rights impacts. This should therefore be taken into account when deciding on the appropriate action to take.
Amendment 70 #
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 measures, companies should develop and implement a prevention action plan. Companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan, including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value 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 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 71 #
Proposal for a directive
Recital 35
Recital 35
Amendment 72 #
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 value chain, instead of terminating the business relationship, as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. 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 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 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 at 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 adverse 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 competition law.
Amendment 73 #
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. 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 improvement. Companies should also seek to obtain contractual 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 value chain. 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 business relationship and collaborate with other entities, including, where relevant, to increase the company’s ability to bring the adverse impact to an end.
Amendment 74 #
Proposal for a directive
Recital 40
Recital 40
Amendment 82 #
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 value chains of the company, those of their established business relationship and those of their subsidiaries, 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-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen.
Amendment 84 #
Proposal for a directive
Recital 45
Recital 45
(45) In order to facilitate companies’ compliance with their due diligence requirements through their value chain and limiting shifting compliance burden on SME business partners, the Commission should provide guidance on model contractual clauses.
Amendment 87 #
Proposal for a directive
Recital 47
Recital 47
(47) Although SMEs are not included in the scope of this Directive, they could be impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate 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 SMEs, Member States should set up and operate, either individually or jointly, dedicated websites, portals or platforms, and Member States could also financially support SMEs 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 to 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 91 #
Proposal for a directive
Recital 50
Recital 50
Amendment 93 #
Proposal for a directive
Recital 51
Recital 51
Amendment 97 #
Proposal for a directive
Recital 56
Recital 56
(56) In order to ensure effective compensation of victims of adverse impacts, Member States should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. The company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extentlaid down in this Directive, and as a result of this failure an adverse impact that should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures occurred and led to damage.
Amendment 98 #
Proposal for a directive
Recital 57
Recital 57
Amendment 100 #
Proposal for a directive
Recital 58
Recital 58
(58) The liability regime does not regulate who should prove that thew a company’'s action was reasonably adequate under the circumstances of the casefailure to act should be proved, therefore this question is left to national law.
Amendment 102 #
Proposal for a directive
Recital 59
Recital 59
(59) As regards civil liability rules, the civil liability of a company for damages arising due to its failure to carry out adequate due diligence should be without prejudice to civil liability of its subsidiaries or the respective civil liability of direct and indirect business partners in the value chain. Also, the civil liability rules under this Directive should be without prejudice to Union or national rules on civil liability related to adverse human rights impacts or to adverse environmental impacts that provide for liability in situations not covered by or providing for stricter liability than this Directive.
Amendment 104 #
Proposal for a directive
Recital 64
Recital 64
(64) Responsibility for due diligence should be assigned to the company’s directors, in line with the international due diligence frameworks. Directors should therefore be responsible for putting in place and overseeing the due diligence actions as laid down in this Directive and for adopting the company’s due diligence policy, taking into account the input of stakeholders and civil society organisations and integrating due diligence into corporate management systems. Directors should also adapt the corporate strategy to actual and potential impacts identified and any due diligence measures taken.
Amendment 106 #
Proposal for a directive
Recital 65
Recital 65
Amendment 108 #
Proposal for a directive
Recital 66
Recital 66
Amendment 109 #
Proposal for a directive
Recital 70
Recital 70
(70) The Commission should assess and report whether new sectors should be added to the list of high-impact sectors covered by this Directive, in order to align it to guidance from the Organisation for Economic Cooperation and Development or in light of clear evidence on labour exploitation, human rights violations or newly emerging environmental threats, whether the list of relevant international conventions referred to in this Directive should be amended, in particular in the light of international developments, or whether the provisions on due diligence under this Directive should be extended to adverse climate impacts.
Amendment 110 #
Proposal for a directive
Recital 71
Recital 71
(71) The objective of this Directive, namely better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights and environmental adverse impacts in companies’ value chains, cannot be sufficiently achieved by the Member States acting individually or in an uncoordinated manner, but can rather, by reason of the scale and effects of the actions, be better achieved at Union level. In particular, addressed problems and their causes are of a transnational dimension, as many companies are operating Union wide or globally and value chains expand to other Member States and to third countries. Moreover, individual Member States’ measures risk being ineffective and lead to fragmentation of the internal market. Therefore, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.
Amendment 111 #
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, and the operations of their subsidiaries, and the value chain operations carried out by entities with whom the company has an established business relationship and
Amendment 127 #
Proposal for a directive
Article 2 – paragraph 1 – point b
Article 2 – paragraph 1 – point b
Amendment 136 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point i
Article 2 – paragraph 1 – point b – point i
Amendment 138 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point ii
Article 2 – paragraph 1 – point b – point ii
Amendment 140 #
Proposal for a directive
Article 2 – paragraph 1 – point b – point iii
Article 2 – paragraph 1 – point b – point iii
Amendment 152 #
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:
Amendment 156 #
Proposal for a directive
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
(a) generated a net turnover of more than EUR 150 million in the Union in the financial year preceding the last financial year;
Amendment 159 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
(b) genoperated a net turnover of more than EUR 40 million but not more than EUR 150 million in the Union in the financial year preceding the last financial year, provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1, point (b)in the Union in the financial year preceding the last financial year.
Amendment 165 #
Proposal for a directive
Article 2 – paragraph 4 a (new)
Article 2 – paragraph 4 a (new)
(4a) Subsidiaries are excluded from the scope of this Directive.
Amendment 174 #
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 or any other legal entities (‘partner’)
Amendment 176 #
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 be lasting, in view of its intensity or duration and which does not represent a negligible or merely ancillary part of the value chain;
Amendment 178 #
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 experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit;
Amendment 179 #
Proposal for a directive
Article 3 – paragraph 1 – point i
Article 3 – paragraph 1 – point i
(i) ‘SME’ means a micro, small or a medium-sized enterprise, irrespective of its legal form, that is not part of a large group, as those terms are defined in Article 3(1), (2), (3) and (7) of Directive 2013/34/EU;
Amendment 198 #
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 contain all of the following:
Amendment 214 #
Proposal for a directive
Article 6 – paragraph 2
Article 6 – paragraph 2
Amendment 235 #
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 value chain (contractual cascading). When such contractual assurances are obtained, paragraph 4 shall apply;
Amendment 237 #
Proposal for a directive
Article 7 – paragraph 2 – point d
Article 7 – paragraph 2 – point d
Amendment 239 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
Amendment 244 #
Proposal for a directive
Article 7 – paragraph 4 – subparagraph 1
Article 7 – paragraph 4 – subparagraph 1
The contractual assurances or the contract shall be accompanied by the appropriate measures to verify compliance. For the purposes of verifying compliance, the company may refer to suitable industry initiatives or independent third-party verification.
Amendment 246 #
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 value chain of whichwhose operations the impact has arisen and shall, where the law governing their relations so entitles them to, take the following actions:
Amendment 258 #
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 compensationcaused by the company to the affected communitiepersons. 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 impactcaused by the company;
Amendment 267 #
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 value chain (contractual cascading). When such contractual assurances are obtained, paragraph 5 shall apply.
Amendment 269 #
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 business relationship,; where compliance the corrective action plan would jeopardise the viability of the SME;ith the code of conduct or
Amendment 270 #
Proposal for a directive
Article 8 – paragraph 4
Article 8 – paragraph 4
Amendment 273 #
Proposal for a directive
Article 8 – paragraph 5 – subparagraph 1
Article 8 – paragraph 5 – subparagraph 1
The contractual assurances or the contract shall be accompanied by the appropriate measures to verify compliance. For the purposes of verifying compliance, the company may refer to suitable industry initiatives or independent third-party verification.
Amendment 274 #
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 value chain of whichwhose operations the impact has arisen and shall, where the law governing their relations so entitles them to, take one of the following actions:
Amendment 280 #
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 respective companies where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, or to the operations of their subsidiaries and their value chains.
Amendment 292 #
Proposal for a directive
Article 9 – paragraph 2 – point a
Article 9 – paragraph 2 – point a
(a) persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact caused by the company,
Amendment 300 #
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,
Amendment 302 #
Proposal for a directive
Article 9 – paragraph 2 – point c
Article 9 – paragraph 2 – point c
(c) civil society organisations active in the areas related to the value chain concernedcompany's operations.
Amendment 342 #
Proposal for a directive
Article 15 – paragraph 1
Article 15 – paragraph 1
Amendment 343 #
Proposal for a directive
Article 15 – paragraph 2
Article 15 – paragraph 2
Amendment 344 #
Proposal for a directive
Article 15 – paragraph 3
Article 15 – paragraph 3
Amendment 346 #
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 value chaioperations, as the case may be.
Amendment 348 #
Proposal for a directive
Article 22 – paragraph 1 – point b
Article 22 – paragraph 1 – point b
(b) as a result of this failure an adverse impact that should have been identified, prevented, mitigated, brought to an end or its extent minimised through the appropriate measures laid down in Articles 7 and 8 occurred and led to damage due to the company's operations.
Amendment 351 #
Proposal for a directive
Article 22 – paragraph 2 – subparagraph 1
Article 22 – paragraph 2 – subparagraph 1
Amendment 353 #
Proposal for a directive
Article 22 – paragraph 3
Article 22 – paragraph 3
3. The civil liability of a company for damages arising under this provision shall be without prejudice to the civil liability of its subsidiaries or of any direct and inany direct business partners in the value chain.
Amendment 358 #
Proposal for a directive
Article 29 – paragraph 1 – point b
Article 29 – paragraph 1 – point b
Amendment 368 #
Proposal for a directive
Annex I – Part I – point 19
Annex I – Part I – point 19
19. Violation of the prohibition to unlawfully evict or take land, forests and waters when acquiring, developing or otherwise use land, forests and waters, including by deforestation, the use of which secures the livelihood of a person in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights;
Amendment 369 #
Proposal for a directive
Annex I – Part I – point 20
Annex I – Part I – point 20
Amendment 371 #
21. Violation of a prohibition or right not covered by points 1 to 20 above but included in the human rights agreements listed in Section 2 of this Part, which directly impairs a legal interest protected in those agreements, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in orderavoided such impairment and has failed to comply with the obligations referred to in Article 4 of this Directive taking into account all relevant circumstances of their operations, such as the sector and operational context.