(Brussels) – The new EU directive adopted on May 24, 2024, requiring large companies to ensure human rights respect in their value chains signals a new era for corporate accountability, Human Rights Watch said today. Human Rights Watch issued a question-and-answer document about the provisions, strengths, and weaknesses of the new law.
The document describes how the EU Corporate Sustainability Due Diligence Directive (CSDDD) will require companies to conduct due diligence. Under the new law, large companies will be required to identify, mitigate, prevent, and remedy harmful human rights and environmental impacts in their operations and their value chains; that is, the company’s business partners involved in production, distribution, transport, and storage of the company’s products. It provides for regulatory oversight and the possibility of initiating civil lawsuits against corporations in European courts.
“The EU’s Due Diligence Directive represents a landmark shift from voluntary corporate responsibility to mandatory obligations for corporations to prevent and address human rights abuses,” said Tirana Hassan, executive director at Human Rights Watch. “This groundbreaking law is a major victory for rights groups, trade unions, and civil society networks at the forefront of the fight for corporate accountability. Despite fierce opposition from powerful corporate lobbyists seeking to thwart or indefinitely postpone this law, this directive is a testament to the strength and perseverance of those advocating for justice and accountability in the corporate sector.”
Wow, does anyone who's looked into this more know if this is as big as it sounds? Are there obvious loopholes?
Because legally mandated corrections of existing human rights abuses in the value chains of corporations would change corporations entirely.
That's a paradigm shift.
As far as I know it‘s pretty toothless due to but not exclusively pressure from Germany, who in the end abstained from the vote. It will be introduced in steps in the future, there won‘t be any civil prosecutions and oversight will be minimal.
Okay, so there are administrative fines and civil liability, as well as exclusion from public procurement and restrictions on access to financial markets.
It'll be interesting to see what happens going forward. I'm glad to see there are at least consequences in some form rather than just due diligence guidelines that the corporations can willfully ignore without penalty.
yeah, you‘re right! I am surprised there‘s civil liability, I thought this was omitted, but I was wrong.
Yeah civil liability seems like a big one.
Let's see how that plays out.
Ah, thanks. Shane