In a significant move for corporate accountability, the European Parliament has approved a proposed law aimed at ensuring that large companies take responsibility for preventing and addressing human rights and environmental abuses within their global supply chains. The European Corporate Sustainability Due Diligence Directive (CSDDD) mandates that large corporations conduct due diligence regarding human rights and environmental concerns in both their own operations and their global value chains.
The timing of the Parliament’s vote on April 24, 2024, coincided with the 11th anniversary of the tragic Rana Plaza building collapse in Bangladesh, a catastrophe that claimed the lives of 1,138 garment workers and left thousands injured. The proposed law targets companies with over 1,000 employees on average and more than €450 million in net worldwide revenue from the previous financial year. It grants regulators the authority to take action against companies failing to uphold these due diligence requirements and provides avenues for victims of corporate abuses to seek justice through European courts.
“The approval of the CSDDD by the European Parliament underscores the urgency of holding corporations accountable for their actions,” stated Aruna Kashyap, associate director of corporate accountability at Human Rights Watch. “This legislation sends a clear message that the EU will not tolerate human rights and environmental abuses by large corporations.”
The push for this legislation stems from a history of corporate violations spanning various sectors, including human rights abuses, labor rights violations, and environmental degradation within global supply chains. Advocacy efforts by rights groups, trade unions, and concerned citizens have played a pivotal role in advancing this legislation despite opposition from corporate interests.
Despite progress, the legislative journey has been challenging. The scope of the law was significantly limited by the governments of France, Italy, and Germany, who narrowed its application to only the largest corporations, excluded certain sectors, and extended the timeline for implementation. However, following approval by the European Parliament, the law now awaits final endorsement by EU member states’ ministers, with the vote expected to occur in late May.
“The European Commission made a commitment to hold corporations accountable upon taking office five years ago,” Kashyap remarked. “It is now imperative for ministers from EU member states to give their final approval, ushering in a new era of corporate accountability within global supply chains.”
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