Progress in the E.U. for laws that put people and planet before profit

By Joanna Ewart-James.

The European Parliament approved a ground-breaking draft law on June 1, that would call on large companies to be responsible for ensuring their goods are produced without harming the environment or causing harm to people, including forced labor – 63% of which is estimated to be in the private economy.

Huw Jones at Reuters reports that the rules would require:

“large companies selling products in the EU – even those headquartered outside the bloc – would have to check on their suppliers and take mitigating action if abuses or environmental damage are found.”

People and planet before profit

Freedom United is campaigning within the Justice is Everybody’s Business coalition calling for strong European rules to hold businesses accountable, as part of our wider global campaign to call for laws that put people and the planet before profit in all jurisdictions.

We are delighted that attempts at watering down the draft law, the Corporate Sustainability Due Diligence Directive (CSDDD) were largely unsuccessful, although proposed rules on company directors holding legal responsibility for their company’s adherence to the rules were not adopted. Board-level oversight is credited with raising awareness, if not compliance, with corporate provisions in the UK’s Modern Slavery Act.

The European initiative, led by Lara Wolters, the rapporteur on corporate sustainability, was supported by 366 MEPs who voted in favor, versus 225 voting against. This signals to EU states, represented by the European Council, that the people want to see this legislation enacted.

We must keep up the pressure to strengthen the law

The CSDDD does have weaknesses. As a directive, rather than a regulation – a binding legislative act, it is for countries to ensure their laws meet its provisions. The directive only applies to large corporations and some of the industries which have a particularly high incidence of forced labor largely operate as small and medium enterprises.

The most significant weakness is that it doesn’t adjust the power imbalance that makes it so difficult for victims to seek redress. For example, they would have to prove their claims in court against large, well-funded companies instead of providing other pathways to secure justice, meaning in practice, many will remain without a remedy.

Although we now have the support of the European Parliament, the attempts to secure last-minute amendments to limit the effect of the rules, go to show that nothing is a given at this point and we must keep campaigning to maintain and strengthen the proposed law.

The latest statistics on modern slavery estimate that the proportion of people in forced labor has increased, as well as the raw number, and that increase was driven ‘entirely by forced labor in the private economy’ (including forced commercial sexual exploitation).

Voluntary initiatives just aren’t good enough

This demonstrates the irrefutable need to set laws that require businesses to act with responsibility rather than just assuming that it is sufficient for them to adhere to standards. Historically, human rights laws have focused on the role and responsibility of the state, vastly underestimating the power of corporations who are expected to ‘respect’ those laws.  

Companies often argued that regulation wasn’t required, and instead developed a plethora of voluntary initiatives to answer calls to take responsibility for environmental and human rights concerns. However, these voluntary mechanisms have proven time and again to be wholly inadequate.  

We can just look at the complete failure to address the climate emergency to know this. So, the vote in favor of the CSDDD at the European Parliament signals an important shift. As well as human rights abuses, it requires companies to implement a transition plan to support the 1.5 degree climate target, making it one of few pieces of legislation to cover environmental and human rights impact.  

Take action!

 We’re finally moving away from voluntary to mandatory; we’re also moving beyond transparency to action – we want to know more than the details of corporate harm to people and planet, we want companies to act and stop it. Sign the petition today!