Text · Opinion parliamentary committee draft
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
Document AFET-PA-736653 · COM(2022)0071 – C90050/2022 – 2022/0051(COD)
- Kind
- Opinion parliamentary committee draft AFET-PA-736653
- Date
- 5 October 2022
- Committee
- Committee on Foreign Affairs
- Rapporteur
- Raphaël Glucksmann
- Dossier
- 2022-0051
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- Formats
- Official page PDF Word
- Reference
- COM(2022)0071 – C90050/2022 – 2022/0051(COD)
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Short justification
The European Commission published a Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937on 23 February 2022. The proposal puts forward and details mandatory due diligence processes for companies to fulfil their responsibilities and to be held liable for failures to do so.
The DROI rapporteur welcomes the Commission’s proposal and considers it likely to contribute to fostering positive behavioural change by companies towards identification, prevention and mitigation of harmful impacts of their operations and relationships in their global value chains.
With this legislative proposal, the EU has an opportunity to assert itself as a global normative power by showing leadership in addressing the serious sustainable development challenge faced by societies collectively and globally. This Directive presents an unparalleled occasion for the EU to integrate human and environmental sustainability into business and corporate practices and to drive change on the global level.
However, in many respects the proposal fails to adopt a human-rights centred approach and to implement the widely accepted international standards. It does not fully meet its stated objectives and falls short in living up due diligence best practices, already implemented by many EU companies on a voluntary basis.
In order to scale-up the quality and efficiency of due diligence processes and to enhance accountability of companies along their value chains, the rapporteur identifies several aspects where clarification and improvements are to be envisaged. These improvements aim at making the legislation more effective and workable for companies, affected stakeholders and victims.
- ensuring that companies carry out due diligence efforts throughout their entire value chains, based on the risk of adverse impacts determined by their sector of activity and the context of their operations;
- requiring companies to tackle risks and adverse impacts on good governance, given the proven and internationally recognised interrelationship between good governance and the enjoyment of Human Rights;
- requiring companies to meaningfully engage with stakeholders with the aim of informing and improving their corporate decisions and due diligence practices, as well as to ensure protection and safety of all stakeholders from retaliation and reprisal for their participation;
- requiring companies to provide for effective remediation of harm caused by or connected to their operations and value chains;
- ensuring liability of companies and guaranteeing access to justice and legal remedies for victims of harm linked to violations of due diligence obligations.
The Committee on Foreign Affairs calls on the Committee on Legal Affairs, as the committee responsible, to take into account the following amendments:
| Text proposed by the Commission | Amendment |
|---|---|
| (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. Several initiatives fostering enterprises which support value-oriented transformation already exist on Union77 , as well as national78 level. | (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, the environment, and to promote good governance, 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. |
| 77 ‘Enterprise Models and the EU agenda’, CEPS Policy Insights, No PI2021-02/ January 2021. | 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 | 78 E.g. https://www.economie.gouv.fr/entreprises/societe-mission |
| Text proposed by the Commission | Amendment |
|---|---|
| (5) Existing international standards on 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. | (5) Existing international standards on responsible business conduct specify that companies have a responsibility to respect and 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, products and services 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. The UN Guiding Principles state that businesses should have in place processes to enable the remediation of any adverse human right impacts they cause or to which they contribute. |
| 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/publications/guidingprinciplesbusinesshr_en.pdf. | 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/publications/guidingprinciplesbusinesshr_en.pdf. |
UNGP 15 postulates that: in order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances, including: (a) A policy commitment to meet their responsibility to respect human rights;(b) A human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights;(c) Processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute.
| Text proposed by the Commission | Amendment |
|---|---|
| (5 a) The United Nations Guiding Principles on Business and Human Rights further recognise, as part of their duty to protect against business-related human rights abuses, that States should take appropriate steps to ensure, through judicial, administrative and legislative means, that those affected have access to an effective remedy. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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, value 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.82 | (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, value chains and other business relationships. The OECD guidelines also set out the requirement for companies to engage with relevant stakeholders in order to provide meaningful opportunities for their views to be taken into account in relation to planning and decision making for projects or other activities that may significantly impact local communities. 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.82 |
| 80 OECD Guidelines for Multinational Enterprises, 2011 updated edition, available at http://mneguidelines.oecd.org/guidelines/.https://mneguidelines.oecd.org/mneguidelines/ | 80 OECD Guidelines for Multinational Enterprises, 2011 updated edition, available at http://mneguidelines.oecd.org/guidelines/.https://mneguidelines.oecd.org/mneguidelines/ |
| 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. | 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. | 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (14) This Directive aims to ensure that companies active in the internal market respect human rights and contribute to sustainable development and the sustainability transition of economies and societies through the identification, prevention and mitigation of potential and actual adverse human rights, environmental and good governance impacts and through bringing to an end and providing for remediation of actual adverse impacts on human rights, the environment and good governance connected with companies’ own operations, subsidiaries and value chains. |
| Text proposed by the Commission | Amendment |
|---|---|
| (14 a) This Directive aims to ensure that the victims of harm that is linked to human rights, environmental and good governance adverse impacts that are connected with companies’ operations, subsidiaries and value chains, have access to justice and effective legal remedies. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. Account should 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 influence. | (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 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. In such a situation, the company should be required to terminate the harmful business relationship and to modify the structure of its value chain in order to ensure that the value chain no longer contributes to or can be a cause of the adverse impact. 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. Account should 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 influence. |
| Text proposed by the Commission | Amendment |
|---|---|
| (15 a) Companies should adapt the measures taken pursuant to their due diligence obligations to the context, environment and circumstances of their own operations, their subsidiaries, as well as their business relationships throughout their value chains. As conflict-affected areas and situations of occupation have increased worldwide, including in Europe, companies face an increased risk of being involved in serious human rights abuses. In conflict-affected regions, Member States and companies should respect their obligations under International Humanitarian Law (IHL) and refer to existing international standards and guidance including the Geneva Conventions, its additional protocols and the guidance on heightened human rights due diligence for business in conflict-affected contexts developed by the UNDP. In a context of conflict and occupation, due diligence obligations should be complemented by a conflict-sensitive approach. Member States should require companies to conduct heightened due diligence, which should focus on identifying, preventing and mitigating potential and actual adverse impacts on human rights, the environment and good governance, as well as on the conflict itself. This involves carrying out a conflict analysis to understand root causes, triggers and parties driving the conflict and active stakeholder engagement. For the purpose of conducting due diligence, conflict-affected areas refer to geographic areas, regions and countries that experience various levels of armed conflict or widespread violence including inter-state or civil war, armed insurrection, violent extremism or other forms of organized violence 1a. | |
| 1a https://www.undp.org/sites/g/files/zskgke326/files/2022-06/UNDP_Heightened_Human_Rights_Due_Diligence_for_Business_in_Conflict-Affected_Contexts_V2.pdf; Building on the principle of proportionality : the higher the risk, the more complex the process. |
| Text proposed by the Commission | Amendment |
|---|---|
| (16) The due diligence process set out in this Directive should cover 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. | (16) The due diligence process set out in this Directive should cover 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, environmental and good governance 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (16 a) In order to comply fully with due diligence obligations, companies should, for each of the six steps, carry out meaningful engagement with affected and potentially affected stakeholders. As set-out in the OECD Guidelines for Multinational Enterprises, effective stakeholder engagement involves interactive processes, is characterised by two-way communication and depends on the good faith of the participants on both sides. For the purpose of this Directive, stakeholder engagement processes should guarantee the safety and protection of the physical and legal integrity of stakeholders. Companies should address risks of retaliation and reprisal faced by stakeholders due to their participation and should prioritise engagement with most impacted and vulnerable stakeholders. Vulnerable stakeholders should be defined on the basis of intersecting and possibly overlapping factors, including, among others, sex, gender, age, race, ethnicity, class, education, migration status, disability, as well as social and economic status, and should take into account the context of the situation of vulnerability. Such individuals and right-holders groups suffer from differentiated and often disproportionate adverse impacts and often face discrimination and additional barriers to participation and access to justice. They can include, among others, women and girls, children, indigenous people, migrant workers, seasonal workers, homeworkers, illiterate workers, people of low standing in a caste system or ethnic minorities. |
| Text proposed by the Commission | Amendment |
|---|---|
| (17) Adverse human rights and environmental impact 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. | (17) Adverse human rights, environmental and good governance impact occur in companies’ own operations, subsidiaries, products, services 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, environmental and good governance 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (18) The value 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 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. | (18) The value 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 business relationships of the company. It should encompass upstream 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 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 considered 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 covered. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| (20) In order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage, the due diligence obligations should be limited in this Directive to established business relationships. For the purpose of this Directive, established business relationships should mean such direct and indirect business relationships which are, or which are expected to be 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. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (21) Under this Directive, EU companies with more than 250 employees on average and a worldwide net turnover exceeding EUR 40 million and/or a balance sheet of more than EUR 20 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 had more than 10 employees on average, had a net worldwide turnover of more than EUR 700 000 and/or a balance sheet of more than EUR 350 000 in the last financial year, and are publicly listed on the stock exchange or 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. 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). | 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). |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (22) In order to reflect the priority areas of international action aimed at tackling human rights, environmental and good governance issues, the selection of high-impact sectors for the purposes of this Directive should be based on the collection of independent data on and documentation of human rights violations, good governance issues and environmental damages and could in particular be informed by existing and future 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, 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); financial services; the mechanical and electronic engineering industry; construction, logistics and infrastructures; oil and gas production, the oil refining sector and auditing and certification. In the financial 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (23) In order to achieve fully the objectives of this Directive addressing human rights, environmental and good governance adverse 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 40 million in the Union in the financial year preceding the last financial year or a net turnover of more than EUR 10 million but less than EUR 40 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (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 persons resulting from any action or omission which ends or reduces the ability of an individual or a group to enjoy the rights, and be protected by prohibitions, as enshrined in the international instruments and conventions as listed in the Annex to this Directive, including the subsequent related case law and especially the protected position referred to in Part I, Section 1 of the Annex to this Directive. In order to ensure a comprehensive coverage of human rights, a negative impact on the enjoyment of a 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. 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. |
| Text proposed by the Commission | Amendment |
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| (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 complaints 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. | (27) In order to conduct appropriate human rights, environmental and good governance 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 provide for remediation of potential and actual adverse human rights, environmental and good governance impacts, establish and maintain a complaints 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 and providing for remediation of actual adverse impacts should be clearly distinguished in this Directive. |
| Text proposed by the Commission | Amendment |
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| (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 and have in place a 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 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 annually. | (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 and have in place a 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 business relationships. The code of conduct should apply in all relevant corporate functions and operations, including procurement and purchasing decisions. Companies should also assess and update their due diligence policy whenever there are reasonable grounds to believe that new risks of adverse impacts may arise, and at least annually. |
| Text proposed by the Commission | Amendment |
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| (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. | (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, environmental and good governance 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. |
| Text proposed by the Commission | Amendment |
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| (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. | (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 meaningful stakeholder engagement and 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. 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. |
| Text proposed by the Commission | Amendment |
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| (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. | (30) Under the due diligence obligations set out by this Directive, a company should identify actual or potential adverse human rights, environmental and good governance 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, environmental and good governance 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. |
| Text proposed by the Commission | Amendment |
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| (31) In order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this Directive, those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector. | deleted |
| Text proposed by the Commission | Amendment |
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| (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. | (32) In line with international standards, prevention and mitigation as well as bringing to an end and remediation of adverse impacts should fully take into account the interests of those adversely impacted and should be designed and determined on the basis of meaningful engagement with them. |
| Text proposed by the Commission | Amendment |
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| (33) Under the due diligence obligations set out by this Directive, if a company identifies potential adverse human rights or environmental impacts, it should take appropriate measures to prevent and adequately mitigate them. To provide companies with legal clarity and certainty, this Directive should set out the actions companies should be expected to take for prevention and mitigation of potential adverse impacts where relevant depending on the circumstances. | (33) Under the due diligence obligations set out by this Directive, if a company identifies potential adverse human rights, environmental or good governance impacts, it should take appropriate measures to prevent and adequately mitigate them. To provide companies with legal clarity and certainty, this Directive should set out the actions companies should be expected to take for prevention and mitigation of potential adverse impacts where relevant depending on the circumstances. |
| Text proposed by the Commission | Amendment |
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| (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. | (34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following actions. Companies should develop and implement a prevention action plan. Companies should engage and support business partners with whom they have a business relationship throughout their entire value chains in order to obtain assurance, contractual or otherwise, of implementation of the prevention action plan of the company concerned. Possible contractual assurances should be accompanied by appropriate measures to verify compliance. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also adapt their business models and strategies, including trading, procurement, purchasing and pricing practices, and make investments which aim to prevent adverse impacts, provide targeted and proportionate support for partners, suppliers, including SMEs such as financing, for example, through direct financing, low-interest loans, guarantees of continued sourcing, and assistance in securing financing, to help implement the prevention action plan, or technical guidance such as in the form of training, management systems upgrading, and collaborate with other companies. |
| Text proposed by the Commission | Amendment |
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| (35) In order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures, this Directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner, with a view to achieving compliance with the company’s code of conduct or a prevention action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. | deleted |
| Text proposed by the Commission | Amendment |
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| (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. | (36) For cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures, companies should have the obligation to refrain from entering into new or extending existing relations with the partner in question. In such a situation, companies should take one of the following actions: either temporarily suspend commercial relationships with the partner in question, while pursuing prevention and mitigation efforts; or terminate the business relationship with respect to the activities concerned if mitigation and ceasing of the impact is made impossible, in particular due to its systemic or state-imposed nature. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws. The suspension or termination of harmful business relationships should be without prejudice to the civil liability of the company for previous damage arising from its failure to comply with the due diligence obligations under this Directive. 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 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. |
| Text proposed by the Commission | Amendment |
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| (38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights or environmental adverse impacts, 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 their own operations and in 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 should be required to take for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent, where relevant depending on the circumstances. | (38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights, environmental or good governance adverse impacts, 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 their own operations and in subsidiaries. However, it should be clarified that where adverse impacts cannot be brought to an end, companies should mitigate the impacts and provide for or co-operate in the remediation of the impact. Mitigation of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. Remediation of adverse impacts should be determined as a result of impartial procedures and meaningful engagement with stakeholders. Remedial actions should be gender-responsive and could include financial or non-financial compensation, apologies, restitution, rehabilitation and restoration of the environment. In addition, companies should provide guarantees that they will not allow adverse impacts to recur. To provide companies with legal clarity and certainty, this Directive should define which actions companies should be required to take for bringing actual human rights, environmental and good governance adverse impacts to an end, and for mitigation and remediation of such actual adverse impacts. |
| Text proposed by the Commission | Amendment |
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| (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. | (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. 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. 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 engage and support business partners with whom they have a business relationship throughout their entire value chains in order to obtain assurance, contractual or otherwise, of implementation of the company’s corrective action plan. Possible contractual assurances should be accompanied by the appropriate measures to verify compliance. Finally, companies should also make investments aiming at ceasing or mitigating the adverse impact, provide targeted and proportionate support for partners and suppliers, including SMEs with which they have a business relationship and collaborate with other entities, including to increase the company’s ability to bring the adverse impact to an end. |
| Text proposed by the Commission | Amendment |
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| (40) In order to reflect the full range of options for the company in cases where actual impacts could not be addressed by the described measures, this Directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner, with a view to achieving compliance with the company’s code of conduct or a corrective action plan, and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. | deleted |
| Text proposed by the Commission | Amendment |
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| (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 value 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. 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 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. 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. | (41) For cases where actual adverse impacts could not be brought to an end or adequately mitigated by the described measures, companies should have the obligation to refrain from entering into new or extending existing relations with the partner in question. In such situations, companies should take one of the following actions: either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or mitigate the adverse impact, or terminate the business relationship with respect to the activities concerned, if mitigation and ceasing of the impact is made impossible, in particular due to its systemic or state-imposed nature. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws. The suspension or termination of a harmful business relationship should be without prejudice to the civil liability of the company for previous damage arising from its failure to comply with the due diligence obligations under this Directive. |
| Text proposed by the Commission | Amendment |
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| (42) Companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. Organisations who could submit such complaints 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 concerned where they have knowledge about a potential or actual adverse impact. Companies should establish a procedure for dealing with those complaints 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, complaints 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 solicitations of companies. | (42) Companies should provide the possibility for persons and organisations to submit early warnings and complaints directly to them in case of legitimate concerns regarding actual or potential human rights, good governance and environmental adverse impacts with regard to their own operations, the operations of their subsidiaries, and the value chain operations carried out by entities with whom the company has a business relationship. Any stakeholders should be entitled to submit such complaints, including 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 concerned where they have knowledge about a potential or actual adverse impact. Companies should establish a procedure for dealing with and responding in a timely manner to those complaints and inform stakeholders, including workers, trade unions and other workers’ representatives, about such processes. Recourse to the complaints and remediation mechanism should not prevent complainants from having recourse to judicial remedies and from enjoying their right to a fair trial. In accordance with international standards, companies should undertake appropriate follow-up action concerning the complaint, disclose, in full, information about the result of the procedure and measures and decisions taken and the reasoning for the decisions and should publish those results. Complaints should be entitled to meet with the company’s representatives at an appropriate level and with due consideration for practical and cultural obstacles for the organisation of those meetings, in order to discuss potential or actual adverse impacts that are the subject matter of the complaint. This access should not lead to unreasonable solicitations of companies. |
| Text proposed by the Commission | Amendment |
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| (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 relationships, 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. | (43) Companies should monitor the implementation and effectiveness of their due diligence measures. They should carry out ongoing and dynamic assessments of their own operations, those of their subsidiaries and those of their business relationships, to monitor the effectiveness of the identification, prevention, bringing to an end, mitigation and remediation of human rights and environmental adverse impacts. Such assessments should verify that potential or actual 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 in an ongoing manner, but at least annually, and jointly with inputs and consultation with stakeholders and be revised in-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen and if shortcomings in the design and implementation of due diligence measures are detected. |
| Text proposed by the Commission | Amendment |
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| (44) Like in the existing international standards set by the United Nations Guiding Principles on Business and Human Rights and the OECD framework, it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies, processes and activities conducted to identify and address actual or potential adverse impacts, including the findings and outcomes of those activities. The proposal to amend Directive 2013/34/EU as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. In order to avoid duplicating reporting obligations, this Directive should therefore not introduce any new reporting obligations in addition to those under Directive 2013/34/EU for the companies covered by that Directive as well as the reporting standards that should be developed under it. As regards companies that are within the scope of this Directive, but do not fall under Directive 2013/34/EU, in order to comply with their obligation of communicating as part of the due diligence under this Directive, they should publish on their website an annual statement in a language customary in the sphere of international business. | (44) Like in the existing international standards set by the United Nations Guiding Principles on Business and Human Rights and the OECD framework, it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies, processes and activities conducted to identify and address actual or potential adverse impacts, including the findings and outcomes of those activities. The proposal to amend Directive 2013/34/EU as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. In order to avoid duplicating reporting obligations, this Directive should therefore not introduce any new reporting obligations in addition to those under Directive 2013/34/EU for the companies covered by that Directive as well as the reporting standards that should be developed under it. As regards companies that are within the scope of this Directive, but do not fall under Directive 2013/34/EU, in order to comply with their obligation of communicating as part of the due diligence under this Directive, they should publish on their website, in an accessible and timely manner, all information relevant to stakeholders on the matters and procedures regulated by this Directive. Disclosure requirements should at least entail: a full mapping of their value chains, including relevant information, such as names, locations, types of products and services supplied, and concerning subsidiaries, suppliers and business partners in their entire value chains. |
| Text proposed by the Commission | Amendment |
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| (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, 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. | (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, and where appropriate with international bodies having expertise in due diligence, should have the possibility to issue guidelines, including for the following aspects: specific adverse impacts, including adverse impacts on good governance; full mapping of companies’ value chains and efficient processes to monitor partners’ behaviours throughout the entire value chain; responsible and sustainable trading, purchasing and pricing policies; facilitation of access to justice for victims, including regarding collective redress, representative actions, non-discriminatory costs of proceedings and appropriate limitation periods; prevention and mitigation of retaliation risks faced by stakeholders, including human rights and environmental rights defenders, as a result of their participation; implementation of heightened due diligence in conflict-affected areas, occupation situations, and non-self-governing territories; responsible disengagement from harmful business relationships; methodology and criteria to be used by supervisory authorities to make decisions related to administrative sanctions and nature and harmonisation of effective, proportionate and dissuasive sanctions; assessing the integrity and fitness of industry schemes and multi-stakeholder initiatives, in particular the inclusion of the perspectives of civil society and stakeholders in audits. |
| Text proposed by the Commission | Amendment |
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| (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. | (47) 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. |
| Text proposed by the Commission | Amendment |
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| (49) The Commission and Member States should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships, paying specific attention to the challenges faced by smallholders. They should use their neighbourhood, development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. This could include working with partner country governments, the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts. | (49) The Commission and Member States should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights, environmental and good governance impacts of their operations and business relationships, paying specific attention to the challenges faced by smallholders. They should use their neighbourhood, development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights, environmental and good governance impacts of their operations and upstream business relationships. This could include working with partner country governments, the local private sector and stakeholders on addressing the root causes of adverse human rights, environmental and good governance impacts. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (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 financial and human resources of the competent authority, as well as ensure staff have appropriate qualifications, experience and skills in relation to human rights, good governance and the environment to perform its duties and exercise its powers. They should be entitled to require companies to disclose information and to carry out investigations, including interviews with stakeholders and on site examinations, 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 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. | (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 take into account the severity and the duration of the infringement; whether or not it has taken place repeatedly; any previous infringements by the company; penalties imposed in respect of the same infringement in other Member States; the degree to which the company has dealt with complaints by stakeholders. Sanctions can include pecuniary sanctions, temporary or indefinite exclusion from public procurement, from state aid, from public schemes, including schemes relying on export credit agencies, loans and seizure of commodities. 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 extent, 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. | (56) The right to an effective remedy and to a fair trial is enshrined in both the European Convention on Human Rights and the Charter of Fundamental Rights of the European Union. In order to ensure full enjoyment of this fundamental right and 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 their 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 extent, 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| (57) As regards damages occurring at the level of established indirect business relationships, the liability of the company should be subject to specific conditions. The company should not be liable if it carried out specific due diligence measures. However, it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken, including as regards verifying compliance, would be adequate to prevent, mitigate, bring to an end or minimise the adverse impact. In addition, in the assessment of the existence and extent of liability, due account is to be taken of the company’s efforts, insofar as they relate directly to the damage in question, to comply with any remedial action required of them by a supervisory authority, any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. | (57) The United Nations Guiding Principles recognise the duty of States to ensure effectiveness of domestic judicial mechanisms addressing business-related human rights abuses, including to reduce legal, practical and other barriers that could lead to a denial of access to a remedy. The European Union Agency for Fundamental Rights has identified major obstacles for victim-claimants in this context. The obstacles include prolonged legal proceedings, legal fees and financial costs of cross-border and complex procedures, restrictive limitation periods and rules on legal standing, as well as evidence barriers. Civil liability regimes should address those barriers. They should establish reasonable and adequate limitation periods, including the possibility of suspending those periods; they should allow for collective redress and representative actions and civil society organisations should acquire legal standing to file these actions. Claimants should be entitled to constitute cases based on reasonably available preliminary evidence and companies should be required to disclose further evidence relevant to the case. |
UNGP 26 provides that the States should take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing business-related human rights abuses, including considering ways to reduce legal, practical and other relevant barriers that could lead to a denial of access to remedy.
| Text proposed by the Commission | Amendment |
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| (58) The liability regime does not regulate who should prove that the company’s action was reasonably adequate under the circumstances of the case, therefore this question is left to national law. | deleted |
| Text proposed by the Commission | Amendment |
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| (61) In order to ensure that victims of human rights and environmental harms can bring an action for damages and claim compensation for damages arising due to a company’s failure to comply with the due diligence obligations stemming from this Directive, even where the law applicable to such claims is not the law of a Member State, as could be for instance be the case in accordance with international private law rules when the damage occurs in a third country, this Directive should require Member States to ensure that the liability provided for in provisions of national law transposing this Article is of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State. | (61) In order to ensure that victims of human rights, environmental and good governance harms can bring an action for damages and claim compensation for damages arising due to a company’s failure to comply with the due diligence obligations stemming from this Directive, even where the law applicable to such claims is not the law of a Member State, as could be for instance be the case in accordance with international private law rules when the damage occurs in a third country, this Directive should require Member States to ensure that the liability provided for in provisions of national law transposing this Article is of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State. |
| Text proposed by the Commission | Amendment |
|---|---|
| (65) Persons who work for companies subject to due diligence obligations under this Directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this Directive. They can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this Directive. Directive (EU) 2019/1937 of the European Parliament and of the Council106 should therefore apply to the reporting of all breaches of this Directive and to the protection of persons reporting such breaches. | (65) Human rights and environmental rights defenders play a decisive role in all stages of the due diligence process laid down in this Directive and its effective enforcement. Due to their work, human rights and environmental rights defenders are increasingly subject to attacks and retaliation. Acts of retaliation include judicial harassment, such as arbitrary detention and strategic lawsuits against public participation or SLAPPs, intimidation, stigmatisation, death threats, beatings and other forms of violence, disappearances and killings. As recommended by the UN Guiding Principles guidance 105a on ensuring respect for human rights defenders, Member States should ensure that companies, through their activities, actions and omissions, do not incite retaliation, and that they address adverse impacts on human rights and environmental rights defenders, in which such companies are involved either through their own activities or as a result of their business relationships. Moreover, Directive (EU) 2019/1937 of the European Parliament and of the Council106 and Directive (EU) 2022/0117106a should also apply to the reporting of all breaches of this Directive and to the protection of persons reporting such breaches. |
| 105a https://www.ohchr.org/sites/default/files/2021-11/EXECUTIVE-SUMMARY-Human-Rights-Defenders-and-the-role-of-business-en.pdf | |
| 106 Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, p. 17). | 106 Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, p. 17). |
| 106a Directive of the European Parliament and of the Council on protecting persons who engage in public participation from manifestly unfounded or abusive court proceedings (“Strategic lawsuits against public participation”)- proposal published by the EC in April 2022. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (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, and whether the list of relevant international conventions and instruments referred to in this Directive should be amended, in particular in the light of international developments. The Commission should be empowered to adopt delegated acts to complement the list of high-impact sectors. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (71) The objective of this Directive, namely, to promote the respect for and protection of human rights, the environment and good governance worldwide, in line with the Treaty on European Union and the Treaty on the Functioning of the European Union and making sure that products and services placed in the market have not involved violations of human right, environmental rights and good governance and 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, environmental and good governance 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. |
| Text proposed by the Commission | Amendment |
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| -1. This Directive aims to ensure that companies respect human rights, the environment and good governance within their own operations, the operations of their subsidiaries and operations of entities throughout their entire value chain. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 value chain operations carried out by entities with whom the company has an established business relationship and | (a) on obligations for companies regarding actual and potential human rights adverse impacts, actual and potential environmental adverse impacts and actual and potential good governance adverse impacts, with respect to their own operations, products and services, those of their subsidiaries, and the value chain operations carried out by entities with whom the company has a business relationship; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) on liability for violations of the obligations mentioned above. | (b) on liability for violations of the obligations mentioned above and; |
| Text proposed by the Commission | Amendment |
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| (b a) on access to justice and legal remedies for victims of harm linked to those violations. |
| Text proposed by the Commission | Amendment |
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| The nature of business relationships as ‘established’ shall be reassessed periodically, and at least every 12 months. | deleted |
| Text proposed by the Commission | Amendment |
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| 2. This Directive shall not constitute grounds for reducing the level of protection of human rights or of protection of the environment or the protection of the climate provided for by the law of Member States at the time of the adoption of this Directive. | 2. This Directive shall not constitute grounds for reducing the level of protection of human rights, including access to justice or of protection of the environment or the protection of the climate provided for by the law of Member States at the time of the adoption of this Directive. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3. This Directive shall be 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 shall prevail to the extent of the conflict and shall apply to those specific obligations. | 3. This Directive shall be without prejudice to obligations in the areas of human rights, good governance, protection of the environment and climate change under other Union legislative acts or international and European instruments as specified in the Annex. 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. |
| Text proposed by the Commission | Amendment |
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| (a) the company had more than 500 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; | (a) the company had more than 250 employees on average and had a net worldwide turnover of more than EUR 40 million and/ or a balance sheet of more than 20 million in the last financial year for which annual financial statements have been prepared; |
| Text proposed by the Commission | Amendment |
|---|---|
| (a a) the company did not reach the thresholds under point (a) but is publicly listed on the stock exchange and had more than 10 employees on average and had a net worldwide turnover of more than EUR 700 000 and/or a balance sheet of more than EUR 350 000 in the last financial year for which annual financial statements have been prepared; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) the company did not reach the thresholds under point (a), but had more than 250 employees on average and had a net worldwide turnover of more than EUR 40 million in the last financial year for which annual financial statements have been prepared, provided that at least 50% of this net turnover was generated in one or more of the following sectors: | (b) the company did not fulfil one of the conditions under point (a) and point (b), but had more than 10 employees on average and had a net worldwide turnover of more than EUR 700 000 and/or a balance sheet of more than EUR 350 000 in the last financial year for which annual financial statements have been prepared, provided that at least 50% of its net turnover was generated in one or more of the following sectors: |
| Text proposed by the Commission | Amendment |
|---|---|
| (iii) the extraction of mineral resources regardless from where they are extracted (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). | (iii) the extraction of mineral resources regardless from where they are extracted (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, 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); |
| Text proposed by the Commission | Amendment |
|---|---|
| (iii a) financial services; |
| Text proposed by the Commission | Amendment |
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| (iii b) the mechanical and electronic engineering industry; |
| Text proposed by the Commission | Amendment |
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| (iii c) construction, logistics and infrastructures; |
| Text proposed by the Commission | Amendment |
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| (iii d) oil and gas production and oil refining sector; |
| Text proposed by the Commission | Amendment |
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| (iii e) auditing and certification. |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) generated a net turnover of more than EUR 150 million in the Union in the financial year preceding the last financial year; | (a) generated a net turnover of more than EUR 40 million in the Union in the financial year preceding the last financial year; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) generated 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). | (b) generated a net turnover of more than EUR 10 million but not more than EUR 40 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 (c). |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 2; | (c) ‘adverse human rights impact’ means an adverse impact on persons resulting from any action or omission throughout the company's entire value chains, which ends or reduces the ability of an individual or a group to enjoy the rights and to be protected by prohibitions enshrined in the international conventions and instruments listed in the Annex, Part I Section 1 and enshrined in Annex, Part I Section 2, including the subsequent case law; |
| Text proposed by the Commission | Amendment |
|---|---|
| (c a) ‘adverse good governance impact’ means an adverse impact throughout companies’ entire value chains on the good governance of a country, region or territory as defined in, and protected by, the international good governance and anti-corruption instruments listed in the Annex, Part I, Section 3; |
| Text proposed by the Commission | Amendment |
|---|---|
| (e) ‘business relationship’ means a relationship with a contractor, subcontractor or any other legal entities (‘partner’) | (e) ‘business relationship’ means a relationship with a subsidiary, a contractor, subcontractor or any other legal entities (‘partner’) within their value chain; |
| Text proposed by the Commission | Amendment |
|---|---|
| (f) ‘established business relationship’ means a 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; | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| (g) ‘value 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), ‘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; | (g) ‘value 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 business relationships of the company; |
| Text proposed by the Commission | Amendment |
|---|---|
| (h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value 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; | (h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value chain, with human rights and environmental requirements resulting from the provisions of this Directive by an entity which is independent from the company, free from any conflicts of interests, has experience and competence in environmental, good governance and human rights matters and is accountable for the quality and reliability of the audit; |
| Text proposed by the Commission | Amendment |
|---|---|
| (h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value 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; | (h) ‘independent third-party verification’ means verification of the compliance by a company, or parts of its value chain, with human rights, environmental and good governance 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; |
| Text proposed by the Commission | Amendment |
|---|---|
| (l) ‘severe adverse impact’ means an adverse environmental impact or an adverse human rights impact that is especially significant by its nature, or affects a large number of persons or a large area of the environment, or which is irreversible, or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact; | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 by the products, services and operations of that company, its subsidiaries and its business relationships; | (n) ‘stakeholders’ means the company’s employees, the employees of its subsidiaries, workers and their representatives, trade unions, local communities, indigenous people, human rights and environmental rights defenders, civil society organisations, company’s shareholders and other individuals, groups, communities or entities whose rights or interests are or could be affected by the products, services and operations of that company, its subsidiaries and its business relationships through the entire value chain; |
| Text proposed by the Commission | Amendment |
|---|---|
| (n a) ‘vulnerable stakeholders’ means individuals and right-holders groups that find themselves in marginalised situations and situations of vulnerability, due to specific contexts or intersecting factors, including, among others, their sex, gender, age, race, ethnicity, class, education, indigenous identity, migration status, disability, as well as social and economic status; which are the causes of differentiated and often disproportionate adverse impacts, and creates discrimination and an additional barrier to participation and access to justice; |
| Text proposed by the Commission | Amendment |
|---|---|
| (n b) ‘human rights and environmental rights defenders’ mean individuals, groups and organisations belonging to civil society who act to promote, protect or strive for the protection and realisation of universally recognised human rights, fundamental freedoms and protection of the environment, including water, air, land, flora, fauna, other human rights related to the environment and rights of members of groups such as trade unions and indigenous peoples; |
| Text proposed by the Commission | Amendment |
|---|---|
| (n c) ‘meaningful engagement’ means an interactive, responsive, ongoing and gender-responsive process of engagement with stakeholders, adapted to vulnerable stakeholders, taking place at each phase of and throughout the entire due diligence process, which is proactive, takes place prior to taking decisions that may impact stakeholders, takes their interest into consideration and involves the timely provision of all relevant information needed by stakeholders to make informed judgments, in an accessible and transparent manner, including meaningful information about operations, projects and investments and their actual and potential adverse impacts; |
| Text proposed by the Commission | Amendment |
|---|---|
| -1. Member States shall ensure that companies respect human rights, the environment and good governance, and refrain from causing or contributing to adverse impacts through their own operations, the operations of their subsidiaries, and the value chain operations carried out by entities with which the company has a business relationship. |
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that companies conduct human rights and environmental due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions: | 1. Member States shall ensure that companies conduct human rights, environmental and good governance due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions: |
| Text proposed by the Commission | Amendment |
|---|---|
| (c) preventing and mitigating potential adverse impacts, and bringing actual adverse impacts to an end and minimising their extent in accordance with Articles 7 and 8; | (c) preventing potential and actual adverse impacts, mitigating and bringing actual adverse impacts to an end in accordance with Articles 7 and 8; |
| Text proposed by the Commission | Amendment |
|---|---|
| (c a) providing for or cooperating in the remediation of actual adverse impacts in accordance with Article 8(3), point (a); |
| Text proposed by the Commission | Amendment |
|---|---|
| (d) establishing and maintaining a complaints procedure in accordance with Article 9; | (d) establishing and maintaining a complaints mechanism in accordance with Article 9; |
| Text proposed by the Commission | Amendment |
|---|---|
| (e) monitoring the effectiveness of their due diligence policy and measures in accordance with Article 10; | (e) monitoring and evaluating the effectiveness of their due diligence policy and measures and reviewing it in accordance with Article 10; |
| Text proposed by the Commission | Amendment |
|---|---|
| (f) publicly communicating on due diligence in accordance with Article 11. | (f) disclosing relevant information and publicly communicating on due diligence in accordance with Article 11; |
| Text proposed by the Commission | Amendment |
|---|---|
| (f a) engaging meaningfully and safely with stakeholders throughout the due diligence process. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2 a. Member States shall ensure that due diligence is an ongoing and preventive process and is carried out on the basis of prioritization based on the level of severity, likelihood and urgency of potential and actual adverse impacts, the nature and the context of operations and risks of impacts, the scale of the impacts and how irremediable they might be. Member States shall ensure that companies operating in situations of conflict and occupation conduct heightened conflict-sensitive due diligence to address the higher risk of gross human rights abuses and to ensure that their operations do not aggravate or fund ongoing conflicts. Such heightened due diligence efforts should include a thorough conflict analysis and meaningful stakeholder engagement. Member States shall ensure that companies operating in conflict-affected, occupied regions and non-self-governing territories respect their international humanitarian law obligations. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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: | 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 developed in consultation with stakeholders and contain all of the following: |
| Text proposed by the Commission | Amendment |
|---|---|
| (-a) a policy commitment to meet their responsibility to respect human rights as enshrined in international conventions listed in the Annex, Part I, Section 2, and a clear public position stating they will demonstrate zero-tolerance for human rights and good governance abuses and environmental degradation in their value chains; |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) a description of the company’s approach, including in the long term, to due diligence; | (a) a description of the company’s due diligence strategy, including in the short, medium and long term; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; | (b) a code of conduct describing rules and principles and commitments to be followed by the company’s employees, subsidiaries and business relationships in the company’s entire value chain; |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (c) a description of the processes and measures put in place to implement due diligence, including the measures taken to verify compliance by subsidiaries and business relationships in the entire value chain. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Member States shall ensure that the companies update their due diligence policy annually. | 2. Member States shall ensure that the companies update their due diligence policy each time there are reasonable grounds to believe that new risks of adverse impacts may arise, and at least annually. |
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that companies take appropriate measures 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 value chains, from their established business relationships, in accordance with paragraph 2, 3 and 4. | 1. Member States shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts, actual and potential adverse environmental impacts and actual and potential good governance impacts arising from their own operations or those of their subsidiaries and entities on the value chains with which companies have a business relationship, in accordance with paragraph 2, 3 and 4. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. By way of derogation from paragraph 1, companies referred to in Article 2(1), point (b), and Article 2(2), point (b), shall only be required to identify actual and potential severe adverse impacts relevant to the respective sector mentioned in Article 2(1), point (b). | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| 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.. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| 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, companies are 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. | 4. Member States shall ensure that, for the purposes of identifying the adverse impacts referred to in paragraph 1, companies take action and decisions on the basis of: |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) qualitative and quantitative indicators; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) independent reports and information gathered through the complaints mechanisms provided for in Article 9; |
| Text proposed by the Commission | Amendment |
|---|---|
| (c) the context of their operations, the impact of their business models and strategies, including trading, purchasing and pricing practices, and the impact of their business relationships’ business models and strategies; |
| Text proposed by the Commission | Amendment |
|---|---|
| (d) meaningful engagement with stakeholders, taking due account of barriers to participation faced by stakeholders, and of specific needs by vulnerable stakeholders. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article. | 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, potential good governance adverse impacts and potential adverse environmental impacts that have been, or should have been, identified pursuant to Article 6. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Companies shall be required to take the following actions, where relevant: | 2. Companies shall be required to take the following actions: |
| Text proposed by the Commission | Amendment |
|---|---|
| (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; | (a) 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 on the basis of: |
| Text proposed by the Commission | Amendment |
|---|---|
| (i) qualitative and quantitative indicators; |
| Text proposed by the Commission | Amendment |
|---|---|
| (ii) independent reports and information gathered through the complaints mechanisms provided for in Article 9; |
| Text proposed by the Commission | Amendment |
|---|---|
| (iii) the context of their operations, the impact of their business models and strategies, including trading, purchasing and pricing practices, and the impact of their business relationships’ business, models and strategies; |
| Text proposed by the Commission | Amendment |
|---|---|
| (iv) meaningful engagement with stakeholders, taking due account of barriers to participation faced by stakeholders and of specific needs by vulnerable stakeholders. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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; | (b) engage and support business partners with whom it has a business relationship throughout the entire value chain in order to obtain assurance, contractual or otherwise, of implementation of the company’s prevention action plan. When such contractual assurances are obtained, paragraph 4 shall apply; reliance on contractual assurance shall not absolve the company of its individual responsibility to perform due diligence or preclude the liability of contractual entities; |
| Text proposed by the Commission | Amendment |
|---|---|
| (c) make necessary investments, such as into management or production processes and infrastructures, to comply with paragraph 1; | (c) make necessary investments, such as into management or production processes, capacity building, joint prevention and mitigation measures and infrastructures, to comply with paragraph 1; |
| Text proposed by the Commission | Amendment |
|---|---|
| (c a) adapt business models and strategies, including adequate trading, procurement, purchasing and pricing practices, in order to support business relationships compliance and to prevent potential adverse impacts; |
| Text proposed by the Commission | Amendment |
|---|---|
| (d) provide targeted and proportionate support 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; | (d) provide targeted and proportionate support, such as loans or financing for SMEs, where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the SME; |
| Text proposed by the Commission | Amendment |
|---|---|
| (e) in compliance with Union law including competition law, collaborate with other entities, 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. | (e) in compliance with Union law including competition law, collaborate with other entities, including, to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3. As regards potential adverse impacts that could not be prevented or adequately mitigated by the measures in paragraph 2, 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 prevention action plan. When such a contract is concluded, paragraph 4 shall apply. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | Companies shall take appropriate measures to monitor effectiveness of and verify compliance with paragraph 2, including the implementation of prevention action plans. For the purposes of verifying compliance, the company may refer to suitable industry initiatives or independent third-party verification. Companies shall then remain accountable for the verification regardless of the auditor’s own liability. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that third party auditors authorised to verify compliance are certified by public authorities, are independent and can be held accountable for the reliability and quality of the audit and for failure to conduct adequate verification. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 which the impact has arisen and shall, where the law governing their relations so entitles them to, take the following actions: | 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, companies 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 which the impact has arisen and shall take the following actions: |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) temporarily suspend commercial relations with the partner in question, while pursuing prevention and minimisation efforts, if there is reasonable expectation that these efforts will succeed in the short-term; | (a) temporarily suspend commercial relations with the partner in question, while pursuing prevention and mitigation efforts; |
| Text proposed by the Commission | Amendment |
|---|---|
| (a a) engage in a timely manner, efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the relationship before reaching such decision; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. | (b) terminate the business relationship with respect to the activities concerned when mitigation and ceasing of the impact is made impossible, in particular by its systemic or state-imposed nature; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b a) identify, prevent and mitigate the potential or actual adverse impacts related to the suspension or termination of the relationship. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that the suspension of a commercial relationship or the termination of a business relationship as a result of actual adverse impacts is without prejudice to the civil liability of the company for previous damage arising from its failure to comply with the due diligence obligations under this Directive, and in particular those under Article 22. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. | Member States shall provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws. |
| Text proposed by the Commission | Amendment |
|---|---|
| 6. By way of derogation from paragraph 5, 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 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. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| 6. By way of derogation from paragraph 5, 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 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. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Where the adverse impact cannot be brought to an end, Member States shall ensure that companies minimise the extent of such an impact. | 2. Where the adverse impact cannot be brought to an end, Member States shall ensure that companies mitigate the impact, while continuing to pursue all efforts to bring the adverse impact to an end. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3. Companies shall be required to take the following actions, where relevant: | 3. Companies shall be required to take the following actions, |
| Text proposed by the Commission | Amendment |
|---|---|
| (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; | (a) cease and mitigate the adverse impact and, where it identifies that it has caused or contributed to that impact throughout its value chain, provide for, or cooperate with, full remediation of the damage caused to the affected persons or communities. The remedy may include financial or non-financial compensation, apologies, restitution, restoration and rehabilitation. |
| Text proposed by the Commission | Amendment |
|---|---|
| The parameters of remedial actions shall be determined on the basis of: |
| Text proposed by the Commission | Amendment |
|---|---|
| (i) the significance and scale of the adverse impact and the contribution of the company’s conduct to the adverse impact. The obligation to provide for a remedy shall be fairly shared between the company and the partner causing or contributing to the damage; |
| Text proposed by the Commission | Amendment |
|---|---|
| (ii) meaningful engagement with affected stakeholders, taking into account the differentiated impact on different stakeholders groups. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure enforcement of the remediation decision and that the proposal for remediation does not prevent affected stakeholders from engaging the civil liability of companies for damages pursuant to national law. Stakeholders shall not be required to seek non-judicial remedies before filing a claim before a court. Remedies provided for or contributed to by companies shall be duly considered by courts in civil proceedings. |
| Text proposed by the Commission | Amendment |
|---|---|
| (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 measuring improvement. Where relevant, the corrective action plan shall be developed in consultation with stakeholders; | (b) develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. The corrective action plan shall be developed on the basis of : |
| Text proposed by the Commission | Amendment |
|---|---|
| (i) qualitative and quantitative indicators; |
| Text proposed by the Commission | Amendment |
|---|---|
| (ii) independent reports and information gathered through the complaints mechanisms provided for in Article 9; |
| Text proposed by the Commission | Amendment |
|---|---|
| (iii) the context of their operations, the impact of their business models and strategies, including trading, purchasing and pricing practices, and the impact of their business relationships’ business models and strategies; |
| Text proposed by the Commission | Amendment |
|---|---|
| (iv) meaningful engagement with stakeholders, taking due account of barriers to participation faced by stakeholders and of specific needs by vulnerable stakeholders; procedures for stakeholder engagement shall guarantee safety and shall allow for anonymity and confidentiality; |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (c) engage and support the business partners with whom it has a business relationship throughout the value chains in order to obtain assurance, contractual or otherwise, of implementation of the company’s corrective action plan. When such contractual assurances are obtained, paragraph 5 shall apply. Reliance on contractual assurance shall not absolve the company of its individual responsibility to perform due diligence or preclude the liability of contractual entities. |
| Text proposed by the Commission | Amendment |
|---|---|
| (d) make necessary investments, such as into management or production processes and infrastructures to comply with paragraphs 1, 2 and 3; | (d) make necessary investments, such as into management or production processes, capacity building, joint prevention and mitigation measures and infrastructures to comply with paragraphs 1, 2 and 3; |
| Text proposed by the Commission | Amendment |
|---|---|
| (d a) adapt business models and strategies, including adequate trading, procurement, purchasing and pricing practices, in order to support compliance by business relationships and to prevent potential adverse impacts; |
| Text proposed by the Commission | Amendment |
|---|---|
| (e) provide targeted and proportionate support for an SME with which the company has an established business relationship, where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the SME; | (e) provide targeted and proportionate support, such as loans or financing for SMEs, where compliance with the corrective action plan would jeopardise the viability of the SME; |
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | Companies shall take appropriate measures to monitor effectiveness of due diligence efforts and verify compliance with paragraph 3, including the implementation of corrective action plans . For the purposes of verifying compliance, the company may refer to suitable industry initiatives or independent third-party verification. Companies shall then remain accountable for the verification regardless of the auditor’s own liability. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that third party auditors authorised to verify compliance are certified by public authorities, are independent and can be held accountable for the reliability and quality of the audit and for failure to conduct adequate verification; |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 which the impact has arisen and shall, where the law governing their relations so entitles them to, take one of the following actions: | 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 which the impact has arisen and shall take the following actions: |
| Text proposed by the Commission | Amendment |
|---|---|
| (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, or | (a) temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or mitigate the adverse impact, |
| Text proposed by the Commission | Amendment |
|---|---|
| (a a) engage in a timely manner, efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the relationship before reaching such decision; |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) terminate the business relationship with respect to the activities concerned, if the adverse impact is considered severe. | (b) terminate the business relationship with respect to the activities concerned where mitigation and ceasing of the impact is made impossible, in particular by its systemic or state-imposed nature, |
| Text proposed by the Commission | Amendment |
|---|---|
| (ba) provide for remediation of past adverse impacts pursuant to paragraph 3, point (a), |
| Text proposed by the Commission | Amendment |
|---|---|
| (bb) identify, prevent and mitigate the potential or actual adverse impacts related to the suspension or termination of the relationship and cooperate to remediate the impact arising from disengagement. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. | Member States shall provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that the suspension of commercial relationships or the termination of business relationships as a result of actual adverse impacts is without prejudice to the civil liability of the company for previous damage arising from its failure to comply with the due diligence obligations under this Directive, and in particular those under Article 22. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 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. | deleted |
| Text proposed by the Commission | Amendment |
|---|---|
| Complaints procedure | Complaints mechanism |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 chains. | 1. Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit early warnings and complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts, actual or potential adverse environmental impacts and actual or potential good governance adverse impacts with respect to their own operations, the operations of their subsidiaries, and the value chain operations carried out by entities with which the company has a business relationship. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Member States shall ensure that the complaints may be submitted by: | 2. Member States shall ensure that the mechanisms referred to in paragraph 1 are legitimate, accessible, predictable, safe, equitable, transparent and human-rights compatible and that the complaints may be submitted by: |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact, | (a) individuals, groups, communities or entities whose rights or interests are or could be affected by the products, services and operations of that company, its subsidiaries and its business relationships throughout the entire value chain, |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) trade unions and other workers’ representatives representing individuals working in the value chain concerned, | (b) the company’s employees, the employees of its subsidiaries, workers; trade unions and other workers’ representatives representing individuals working throughout all parts of the value chain concerned, |
| Text proposed by the Commission | Amendment |
|---|---|
| (c) civil society organisations active in the areas related to the value chain concerned. | (c) civil society organisations and human rights and environmental rights defenders active in the areas related to the entire value chain concerned. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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. | 3. Member States shall ensure that the companies establish a safe procedure for dealing with complaints referred to in paragraph 1 by ensuring that complaints are anonymous and confidential ; 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| 4. Member States shall ensure that complainants are entitled | 4. Member States shall ensure that complainants are entitled: |
| Text proposed by the Commission | Amendment |
|---|---|
| (-a) to obtain exhaustive information regarding the result of the procedure, including its detailed reasoning; |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) to request appropriate follow-up on the complaint from the company with which they have filed a complaint pursuant to paragraph 1, and | (a) to request appropriate and timely follow-up action on the complaint from the company with which they have filed a complaint pursuant to paragraph 1, |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) 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. | (b) to meet with the company’s representatives at an appropriate level to discuss potential or actual adverse impacts that are the subject matter of the complaint, and |
| Text proposed by the Commission | Amendment |
|---|---|
| (ba) to obtain an effective remedy from companies, as referred to in and within the meaning of Article 8(3) point (a), through the complaints mechanism and receive guarantees that harms that are the subject of the complaint will not be repeated. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that recourse to a complaint mechanism does not preclude the claimants from having unhindered access to public judicial mechanisms. Claimants shall not be required to have used or exhausted the avenues of complaint mechanisms before being entitled to file a complaint and seek justice before competent judicial bodies and courts, pursuant to Article 22. |
| Text proposed by the Commission | Amendment |
|---|---|
| Monitoring | Monitoring, evaluation and review of the due diligence policy |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that companies carry out periodic assessments of their own operations and measures, those of their subsidiaries and, where related to the value 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. | 1. Member States shall ensure that companies carry out periodic assessments of their own operations and measures, those of their subsidiaries and the operations and measures taken by entities in their entire value chains pursuant to Articles 4 to 11 and Article 15, in order to monitor and evaluate the effectiveness of such actions. |
| 2. Such assessments shall be based, on qualitative and quantitative indicators and be carried out on the basis of meaningful engagement with stakeholders and with the involvement of trade unions and workers’ representatives. Such assessment shall be carried out at least every 12 months and whenever there are reasonable grounds to believe that new risks of adverse impacts may arise. | |
| 3. The due diligence policy, the prevention action plan and corrective action plan shall be revised and adapted in accordance with the outcome of those assessments. |
| Text proposed by the Commission | Amendment |
|---|---|
| Communicating | Communication, transparency and disclosure |
| Text proposed by the Commission | Amendment |
|---|---|
| 2a. Member States shall ensure that companies disclose and publish in an accessible and timely manner, all information relevant to stakeholders on the matters and procedures regulated by this Directive. That information shall include, but not be limited to, a full mapping of their value chains, including relevant information such as names, locations, types of products and services supplied concerning subsidiaries, suppliers and business partners in their entire value chains. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2b. Member States shall ensure that stakeholders are entitled to submit additional information requests to companies regarding all information necessary for exercising their rights under this Directive. Where a company denies a request for information, it shall inform the stakeholders of the grounds for that denial. Member States shall ensure that supervisory authorities or competent courts are entitled to order the disclosure of the information. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 about voluntary model contract clauses. | 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 about voluntary model contract clauses. Stakeholders shall be consulted and fully involved in the development of that guidance. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 stakeholders, the European Union Agency for Fundamental Rights, 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. | (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 stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, and where appropriate with international bodies having expertise in due diligence, shall issue guidelines, including for the following aspects: |
| Text proposed by the Commission | Amendment |
|---|---|
| – specific high-risk sectors of economic activity leading to significant adverse impacts on human rights, the environment and good governance, including but not limited to sectors referred to in Article 2(1b), |
| Text proposed by the Commission | Amendment |
|---|---|
| – full mapping of companies’ value chains and efficient processes to monitor partners’ behaviours throughout the entire value chain, |
| Text proposed by the Commission | Amendment |
|---|---|
| – specific adverse impacts, including adverse impacts on good governance, |
| Text proposed by the Commission | Amendment |
|---|---|
| – responsible and sustainable trading, purchasing and pricing policies, |
| Text proposed by the Commission | Amendment |
|---|---|
| – facilitation of access to justice for victims, including regarding collective redress, representative actions, non-discriminatory costs of proceedings and appropriate limitation periods, |
| Text proposed by the Commission | Amendment |
|---|---|
| – prevention and mitigation of retaliation risks faced by stakeholders, including human rights and environmental defenders, for their participation, |
| Text proposed by the Commission | Amendment |
|---|---|
| – implementation of heightened due diligence in conflict-affected areas, occupation situations, and non-self-governing territories, |
| Text proposed by the Commission | Amendment |
|---|---|
| – responsible disengagement from harmful business relationships, |
| Text proposed by the Commission | Amendment |
|---|---|
| – methodology and criteria to be used by supervisory authorities to make decisions related to administrative sanctions and nature and harmonisation of effective, proportionate and dissuasive sanctions, |
| Text proposed by the Commission | Amendment |
|---|---|
| – assessing the integrity and fitness of industry schemes and multi-stakeholder initiatives, notably the inclusion of the perspectives of civil society and stakeholders in audits. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 value 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 value chains of companies. | 1. Member States shall, in order to provide information and support to companies and the partners with whom they have business relationships in their value 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 SMEs. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2 a. Member States shall undertake efforts in order to provide information and support to stakeholders and their representatives to enjoy and exercise their rights resulting from this Directive, including their participation in due diligence and judicial processes. This may include setting up and operating individually or jointly dedicated websites, platforms or portals. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3. The Commission may 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. | 3. The Commission may 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 and stakeholders exercise their rights. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3 a. The Commission shall support safe participatory collection of independent data on human rights violations, infringements of good governance and environmental damage to be considered for the implementation of this Directive. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3 b. The Commission and Union delegations in third countries shall complement Member States’ support measures in order to help stakeholders exercise their rights, including the submission of substantiated concerns pursuant to Article 19 and of civil claims pursuant to Article 22. Union Delegations shall be mandated to and provided with adequate resources to fulfil that facilitation and support role. |
| Text proposed by the Commission | Amendment |
|---|---|
| Member States shall ensure that supervisory authorities have the appropriate qualification, experience and skills in relation to human rights, the environment and good governance to perform their duties and exercise their powers. |
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that the supervisory authorities have adequate powers and resources to carry out the tasks assigned to them under this Directive, including the power to request information and carry out investigations related to compliance with the obligations set out in this Directive. | 1. Member States shall ensure that the supervisory authorities have adequate powers and resources to carry out the tasks assigned to them under this Directive. Those competences shall include the power to require companies to provide necessary information and to carry out investigations, including interviews with stakeholders and on site examinations. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. A supervisory authority may initiate an investigation on its own motion or as a result of substantiated concerns communicated to it pursuant to Article 19, where it considers that it has sufficient information indicating a possible breach by a company of the obligations provided for in the national provisions adopted pursuant to this Directive. | 2. A supervisory authority may initiate an investigation on its own motion and shall initiate an investigation as a result of substantiated concerns submitted to it pursuant to Article 19, where it considers that it has sufficient information indicating a possible breach by a company of the obligations provided for in the national provisions adopted pursuant to this Directive. |
| Text proposed by the Commission | Amendment |
|---|---|
| (b) to impose pecuniary sanctions in accordance with Article 20; | (b) to impose administrative sanctions in accordance with Article 20; |
| Text proposed by the Commission | Amendment |
|---|---|
| (c) to adopt interim measures to avoid the risk of severe and irreparable harm. | (c) to adopt interim measures to avoid the risk of severe or irreparable harm. |
| Text proposed by the Commission | Amendment |
|---|---|
| 7 a. Member States shall ensure that decisions of supervisory authorities regarding a company’s compliance with this Directive shall be without prejudice to the company’s civil liability under Article 22. |
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Member States shall ensure that natural and legal persons 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’). | 1. Member States shall ensure that natural and legal persons are entitled to submit substantiated concerns to any supervisory authority when they have reasons to believe, on the basis of preliminary evidence available and accessible to them, that a company is failing to comply with the national provisions adopted pursuant to this Directive (‘substantiated concerns’). Those concerns shall not be deemed unfounded due to failure by the company to comply with information disclosure requirements pursuant to Article 11. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Where the substantiated concern falls under the competence of another supervisory authority, the authority receiving the concern shall transmit it to that authority. | 2. Where the substantiated concern falls under the competence of another supervisory authority, the authority receiving the concern shall transmit it to that authority and inform the person referred to in paragraph 1. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3. Member States shall ensure that supervisory authorities assess the substantiated concerns and, where appropriate, exercise their powers as referred to in Article 18. | 3. Member States shall ensure that supervisory authorities assess the substantiated concerns and exercise their powers as referred to in Article 18. |
| Text proposed by the Commission | Amendment |
|---|---|
| o | 3 a. Member States shall ensure that, for the purpose of those assessments, companies are required to carry out meaningful engagement with affected stakeholders. |
| Text proposed by the Commission | Amendment |
|---|---|
| 3 b. Member States shall ensure that those procedures guarantee the safety of those persons, including by ensuring that concerns and information the disclosure of which could be harmful to the person concerned remain anonymous and confidential. |
| Text proposed by the Commission | Amendment |
|---|---|
| 4. The supervisory authority shall, as soon as possible and in accordance with the relevant provisions of national law and in compliance with Union law, inform the person referred to in paragraph 1 of the result of the assessment of their substantiated concern and shall provide the reasoning for it. | 4. The supervisory authority shall, as soon as possible and in accordance with the relevant provisions of national law and in compliance with Union law, inform the person referred to in paragraph 1 of the result of the assessment of their substantiated concern, of its decisions, shall provide the reasoning for it and shall publish the assessment and decision. |
| Text proposed by the Commission | Amendment |
|---|---|
| 5 a. Member States shall ensure that submission of substantiated concerns shall not preclude stakeholders from having unhindered access to public judicial mechanisms. Stakeholders shall not be required to have submitted concerns before being entitled to file a complaint to competent judicial bodies and courts, pursuant to Article 22. |
| Text proposed by the Commission | Amendment |
|---|---|
| 5 b. Member States missions and Union delegations in third countries shall be mandated to facilitate and support the submission of substantiated concerns to relevant supervisory authorities by stakeholders in third countries. |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 chains, as the case may be. | 2. In deciding whether to impose sanctions and, if so, in determining their nature and appropriate level, due account shall be taken of: |
| Text proposed by the Commission | Amendment |
|---|---|
| - the company’s efforts to comply with any remedial action required of them by a supervisory authority, |
| Text proposed by the Commission | Amendment |
|---|---|
| - any investments made and any targeted support provided pursuant to Articles 7 and 8, |
| Text proposed by the Commission | Amendment |
|---|---|
| - any collaboration with other entities to address adverse impacts in its value chains, |
| Text proposed by the Commission | Amendment |
|---|---|
| - the severity and the duration of the infringement, whether or not it has taken place repeatedly and the severity of the adverse impacts, |
| Text proposed by the Commission | Amendment |
|---|---|
| - any previous infringements by the company, |
| Text proposed by the Commission | Amendment |
|---|---|
| - penalties imposed in respect of the same infringement in other Member States, |
| Text proposed by the Commission | Amendment |
|---|---|
| - the degree to which the company has dealt with complaints by stakeholders, including through complaints mechanisms pursuant to Article 9. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2 a. Sanctions provided for shall include pecuniary sanctions, such as administrative fines, temporary or indefinite exclusion from public procurement, from state aid, from public schemes, including schemes relying on export credit agencies and loans, and seizure of commodities. |
| Text proposed by the Commission | Amendment |
|---|---|
| 4. Member States shall ensure that any decision of the supervisory authorities containing sanctions related to the breach of the provisions of this directive is published. | 4. Member States shall ensure that any decision of the supervisory authorities containing sanctions related to the breach of the provisions of this directive, including methodology and criteria used for applying sanctions, as well as an up-to-date list of companies that are the subject of those decisions, is published. |
| Text proposed by the Commission | Amendment |
|---|---|
| (a) they failed to comply with the obligations laid down in Articles 7 and 8 and; | (a) they failed to comply with the obligations pursuant to actions referred to in Article 4 and laid down in Articles 5 to 11 and Article 15 and; |
| Text proposed by the Commission | Amendment |
|---|---|
| (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. | (b) an adverse impact that should have been identified, prevented, mitigated, brought to an end or remediated through appropriate actions laid down in Articles 5 to 11 and Article 15 occurred and led to damage. |
| Text proposed by the Commission | Amendment |
|---|---|
| Notwithstanding paragraph 1, Member States shall ensure that where a company has taken the actions referred to in Article 7(2), point (b) and Article 7(4), or Article 8(3), point (c), and Article 8(5), it shall not be liable for damages caused by an adverse impact arising as a result of the activities of an indirect partner with whom it has an established business relationship, unless it was unreasonable, in the circumstances of the case, to expect that the action actually taken, including as regards verifying compliance, would be adequate to prevent, mitigate, bring to an end or minimise the extent of the adverse impact. | Notwithstanding paragraph 1, Member States shall ensure that a company shall be liable for damages caused by an adverse impact arising as a result of the activities of an indirect partner with whom it has a business relationship, unless it was unreasonable, in the circumstances of the case, to expect that the action actually taken, would be adequate to prevent, mitigate, bring to an end or minimise the extent of the adverse impact. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2 a. Member States shall ensure that claimants base their cases on a reasonably available preliminary level of evidence. For the purpose of assessing the existence and extent of liability Member States shall ensure that courts are able to order the respondent companies to disclose further evidence relevant to the case, including evidence regarding their operations, subsidiaries and value chains, the nature of the business relationships and the measures taken to meet their obligations under this Directive. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2 b. Member States shall ensure that liability regimes put in place pursuant to this Article address existing barriers to access to justice, and in particular: |
| Text proposed by the Commission | Amendment |
|---|---|
| - allow for collective redress, |
| Text proposed by the Commission | Amendment |
|---|---|
| - allow for representative actions by organisations acting on behalf of and for the protection of the collective interests of victims, |
| Text proposed by the Commission | Amendment |
|---|---|
| - ensure that the costs of the proceedings based on provisions of national law transposing this Directive do not prevent claimants from having access to courts, |
| Text proposed by the Commission | Amendment |
|---|---|
| - establish reasonable and appropriate limitation periods for claimants or groups of claimants to bring cases to competent courts; Member States shall apply suspension of limitation periods for the duration of procedures linked to complaints submitted to complaints mechanisms pursuant to Article 9, to actions taken by supervisory authorities in accordance with Article 18 and to substantiated concerns submitted to supervisory authorities pursuant to Article 19. |
| Text proposed by the Commission | Amendment |
|---|---|
| Reporting of breaches and protection of reporting persons | Protection of stakeholders and reporting persons |
| Text proposed by the Commission | Amendment |
|---|---|
| -1. Member States shall ensure that companies refrain from retaliation against any stakeholders and their representatives for exercising their rights under the Directive, and shall identify, prevent, mitigate and monitor the risk of retaliation and reprisal, related to their business relationships and their value chains. |
| Text proposed by the Commission | Amendment |
|---|---|
| -1.a Member States shall ensure that companies are liable for retaliation actions against stakeholders and their representatives, including whistleblowers and human rights and environmental rights defenders, taken by themselves or by actors mandated to do so. |
| Text proposed by the Commission | Amendment |
|---|---|
| Directive (EU) 2019/1937 shall apply to the reporting of all breaches of this Directive and the protection of persons reporting such breaches. | In the case of procedures that concern whistleblowers, Directive (EU) 2019/1937 shall apply to the reporting of all breaches of this Directive and the protection of persons reporting such breaches. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. The power to adopt delegated acts referred to in Article 11 shall be conferred on the Commission for an indeterminate period of time. | 2. The power to adopt delegated acts referred to in Article 2 and Article 11 shall be conferred on the Commission for an indeterminate period of time. |
In line with the rapporteur’s amendement to Article 2 (scope) that the list of the high-risk sectors should be regularly revised by delegated acts.
| Text proposed by the Commission | Amendment |
|---|---|
| 3. The delegation of power referred to in Article 11 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. | 3. The delegation of power referred to in Article 2 and Article 11 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. |
| Text proposed by the Commission | Amendment |
|---|---|
| 6. A delegated act adopted pursuant to Article 11 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council." | 6. A delegated act adopted pursuant to Article 2 and Article 11 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council." |
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Violations of rights and prohibitions included in international human rights agreements | 1. Rights and prohibitions included in international human rights agreements |
| Text proposed by the Commission | Amendment |
|---|---|
| Such rights and prohibitions include, among others: |
| Text proposed by the Commission | Amendment |
|---|---|
| 1. Violation of the people's right to dispose of a land's natural resources and to not be deprived of means of subsistence in accordance with Article 1 of the International Covenant on Civil and Political Rights; | 1. the people's right to dispose of a land's natural resources and to not be deprived of means of subsistence in accordance with Article 1 of the International Covenant on Civil and Political Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Violation of the right to life and security in accordance with Article 3 of the Universal Declaration on Human rights; | 2. the right to life and security in accordance with Article 3 of the Universal Declaration on Human rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 3. Violation of the prohibition of torture, cruel, inhuman or degrading treatment in accordance with Article 5 of the Universal Declaration of Human Rights; | 3. the prohibition of torture, cruel, inhuman or degrading treatment in accordance with Article 5 of the Universal Declaration of Human Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 4. Violation of the right to liberty and security in accordance with Article 9 of the Universal Declaration of Human Rights; | 4. the right to liberty and security in accordance with Article 9 of the Universal Declaration of Human Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 5. Violation of the prohibition of arbitrary or unlawful interference with a person's privacy, family, home or correspondence and attacks on their reputation, in accordance with Article 17 of the Universal Declaration of Human Rights; | 5. the prohibition of arbitrary or unlawful interference with a person's privacy, family, home or correspondence and attacks on their reputation, in accordance with Article 17 of the Universal Declaration of Human Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 6. Violation of the prohibition of interference with the freedom of thought, conscience and religion in accordance with Article 18 of the Universal Declaration of Human Rights; | 6. the prohibition of interference with the freedom of thought, conscience and religion in accordance with Article 18 of the Universal Declaration of Human Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 7. Violation of the right to enjoy just and favourable conditions of work including a fair wage, a decent living, safe and healthy working conditions and reasonable limitation of working hours in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights; | 7. the right to enjoy just and favourable conditions of work including a fair wage, a decent living, safe and healthy working conditions and reasonable limitation of working hours in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 7 a. the right to an adequate standard of living for oneself and one’s family, including adequate food, clothing and housing, and the right to continuous improvement of living conditions in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 8. Violation of the prohibition to restrict workers’ access to adequate housing, if the workforce is housed in accommodation provided by the company, and to restrict workers’ access to adequate food, clothing, and water and sanitation in the work place in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights; | 8. the prohibition to restrict workers’ access to adequate housing, if the workforce is housed in accommodation provided by the company, and to restrict workers’ access to adequate food, clothing, and water and sanitation in the work place in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 9. Violation of the right of the child to have his or her best interests given primary consideration in all decisions and actions that affect children in accordance with Article 3 of the Convention of the Rights of the Child; violation of the right of the child to develop to his or her full potential in accordance with Article 6 of the Convention of the Rights of the Child; violation of the right of the child to the highest attainable standard of health in accordance with Article 24 of the Convention on the Rights of the Child; violation of the right to social security and an adequate standard of living in accordance with Article 26 and 27 of the Convention on the Rights of the Child; violation of the right to education in accordance with Article 28 of the Convention on the Rights of the Child; violation of the right of the child to be protected from all forms of sexual exploitation and sexual abuse and to be protected from being abducted, sold or moved illegally to a different place in or outside their country for the purpose of exploitation, in accordance with Articles 34 and 35 of the Convention of the Rights of the Child; | 9. the right of the child to have his or her best interests given primary consideration in all decisions and actions that affect children in accordance with Article 3 of the Convention of the Rights of the Child; the right of the child to develop to his or her full potential in accordance with Article 6 of the Convention of the Rights of the Child; the right of the child to the highest attainable standard of health in accordance with Article 24 of the Convention on the Rights of the Child; the right to social security and an adequate standard of living in accordance with Article 26 and 27 of the Convention on the Rights of the Child; the right to education in accordance with Article 28 of the Convention on the Rights of the Child; the right of the child to be protected from all forms of sexual exploitation and sexual abuse and to be protected from being abducted, sold or moved illegally to a different place in or outside their country for the purpose of exploitation, in accordance with Articles 34 and 35 of the Convention of the Rights of the Child; |
| Text proposed by the Commission | Amendment |
|---|---|
| 10. Violation of the prohibition of the employment of a child under the age at which compulsory schooling is completed and, in any case, is not less than 15 years, except where the law of the place of employment so provides in accordance with Article 2 (4) and Articles 4 to 8 of the International Labour Organization Minimum Age Convention, 1973 (No. 138); | 10. the prohibition of the employment of a child under the age at which compulsory schooling is completed and, in any case, is not less than 15 years, except where the law of the place of employment so provides in accordance with Article 2 (4) and Articles 4 to 8 of the International Labour Organization Minimum Age Convention, 1973 (No. 138); |
| Text proposed by the Commission | Amendment |
|---|---|
| 11. Violation of the prohibition of child labour pursuant to Article 32 of the Convention on the Rights of the Child, including the worst forms of child labour for children (persons below the age of 18 years) in accordance with Article 3 of the of the International Labour Organization Worst Forms of Child Labour Convention, 1999 (No. 182). This includes: | 11. the prohibition of child labour pursuant to Article 32 of the Convention on the Rights of the Child, including the worst forms of child labour for children (persons below the age of 18 years) in accordance with Article 3 of the of the International Labour Organization Worst Forms of Child Labour Convention, 1999 (No. 182). This includes: |
| Text proposed by the Commission | Amendment |
|---|---|
| 12. Violation of the prohibition of forced labour; this includes all work or service that is exacted from any person under the menace of any penalty and for which the said person has not offered himself or herself voluntarily, for example as a result of debt bondage or trafficking in human beings; excluded from forced labour are any work or services that comply with Article 2 (2) of International Labour Organization Forced Labour Convention, 1930 (No. 29) or with Article 8 (3) (b) and (c) of the International Covenant on Civil and Political Rights; | 12. the prohibition of forced labour; this includes all work or service that is exacted from any person under the menace of any penalty and for which the said person has not offered himself or herself voluntarily, for example as a result of debt bondage or trafficking in human beings; excluded from forced labour are any work or services that comply with Article 2 (2) of International Labour Organization Forced Labour Convention, 1930 (No. 29) or with Article 8 (3) (b) and (c) of the International Covenant on Civil and Political Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 13. Violation of the prohibition of all forms of slavery, practices akin to slavery, serfdom or other forms of domination or oppression in the workplace, such as extreme economic or sexual exploitation and humiliation in accordance with Article 4 of the Universal Declaration of Human Rights and Art. 8 of the International Covenant on Civil and Political Rights; | 13. the prohibition of all forms of slavery, practices akin to slavery, serfdom or other forms of domination or oppression in the workplace, such as extreme economic or sexual exploitation and humiliation in accordance with Article 4 of the Universal Declaration of Human Rights and Art. 8 of the International Covenant on Civil and Political Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 14. Violation of the prohibition of human trafficking in accordance with Article 3 of the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime; | 14. the prohibition of human trafficking in accordance with Article 3 of the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime; |
| Text proposed by the Commission | Amendment |
|---|---|
| 15. Violation of the right to freedom of association, assembly, the rights to organise and collective bargaining in accordance with Article 20 of the Universal Declaration of Human Rights, Articles 21 and 22 of the International Covenant on Civil and Political Rights Article 8 of the International Covenant on Economic, Social and Cultural Rights, the International Labour Organization Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the International Labour Organization Right to Organise and Collective Bargaining Convention, 1949 (No. 98), including the following rights: | 15. the right to freedom of association, assembly, the rights to organise and collective bargaining in accordance with Article 20 of the Universal Declaration of Human Rights, Articles 21 and 22 of the International Covenant on Civil and Political Rights Article 8 of the International Covenant on Economic, Social and Cultural Rights, the International Labour Organization Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the International Labour Organization Right to Organise and Collective Bargaining Convention, 1949 (No. 98), including the following rights: |
| Text proposed by the Commission | Amendment |
|---|---|
| 16. Violation of the prohibition of unequal treatment in employment, unless this is justified by the requirements of the employment in accordance with Article 2 and Article 3 of the International Labour Organisation Equal Remuneration Convention, 1951 (No. 100), Article 1 and Article 2 of the International Labour Organisation Discrimination (Employment and Occupation) Convention, 1958 (No. 111) and Article 7 of the International Covenant on Economic, Social and Cultural Rights; unequal treatment includes, in particular, the payment of unequal remuneration for work of equal value; | 16. the prohibition of unequal treatment in employment, unless this is justified by the requirements of the employment in accordance with Article 2 and Article 3 of the International Labour Organisation Equal Remuneration Convention, 1951 (No. 100), Article 1 and Article 2 of the International Labour Organisation Discrimination (Employment and Occupation) Convention, 1958 (No. 111) and Article 7 of the International Covenant on Economic, Social and Cultural Rights; unequal treatment includes, in particular, the payment of unequal remuneration for work of equal value; |
| Text proposed by the Commission | Amendment |
|---|---|
| 17. Violation of the prohibition of withholding an adequate living wage in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights; | 17. the prohibition of withholding an adequate living wage in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights; |
| Text proposed by the Commission | Amendment |
|---|---|
| 18. Violation of the prohibition of causing any measurable environmental degradation, such as harmful soil change, water or air pollution, harmful emissions or excessive water consumption or other impact on natural resources, that | 18. the prohibition of causing any measurable environmental degradation, such as harmful soil change, water or air pollution, harmful emissions or excessive water consumption or other impact on natural resources, that |
| Text proposed by the Commission | Amendment |
|---|---|
| 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; | 19. 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; |
| Text proposed by the Commission | Amendment |
|---|---|
| 20. Violation of the indigenous peoples’ right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired in accordance with Article 25, 26 (1) and (2), 27, and 29 (2) of the United Nations Declaration on the Rights of Indigenous Peoples; | 20. the indigenous peoples’ right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired in accordance with Article 25, 26 (1) and (2), 27, and 29 (2) of the United Nations Declaration on the Rights of Indigenous Peoples; |
| Text proposed by the Commission | Amendment |
|---|---|
| 20 a. the indigenous peoples’ right to self-determination in accordance with Article 3 of the United Nations Declaration on the Rights of Indigenous Peoples and their right to be consulted in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, in accordance with Article 32 thereof; |
| Text proposed by the Commission | Amendment |
|---|---|
| 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 order 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. | 21. 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 order 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. |
| Text proposed by the Commission | Amendment |
|---|---|
| 2. Human rights and fundamental freedoms conventions | 2. Human rights and fundamental freedoms conventions and instruments |
| Text proposed by the Commission | Amendment |
|---|---|
| Such conventions and instruments include, among others: |
| Text proposed by the Commission | Amendment |
|---|---|
| - The International Convention for the Protection of All Persons from Enforced Disappearance; |
| Text proposed by the Commission | Amendment |
|---|---|
| - The United Nations Declaration of the Elimination of Violence against Women; |
| Text proposed by the Commission | Amendment |
|---|---|
| - The United Nations Declaration on Human Rights Defenders; |
| Text proposed by the Commission | Amendment |
|---|---|
| - The International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families; |
| Text proposed by the Commission | Amendment |
|---|---|
| — The Declaration on the Rights of Persons Belonging to National or Ethnic, Religious and Linguistic Minorities; | — The United Nations Declaration on the Rights of Persons Belonging to National or Ethnic, Religious and Linguistic Minorities; |
| Text proposed by the Commission | Amendment |
|---|---|
| - The United Nations Declaration on the Elimination of All Forms of Intolerance and of Discrimination Based on Religion or Belief; |
| Text proposed by the Commission | Amendment |
|---|---|
| - The United Nations Declaration on the Rights of Peasants and Other People Working in Rural Areas; |
| Text proposed by the Commission | Amendment |
|---|---|
| - The International Labour Organization’s Indigenous and Tribal Peoples Convention, 1989 (No. 169); |
| Text proposed by the Commission | Amendment |
|---|---|
| - The International Labour Organization’s Domestic Workers Convention, 2011 (No. 189); |
| Text proposed by the Commission | Amendment |
|---|---|
| - The International Labour Organization’s Violence and Harassment Convention, 2019 (No. 190); |
| Text proposed by the Commission | Amendment |
|---|---|
| - Occupational Safety and Health Convention, 1981 (No.155) |
| Text proposed by the Commission | Amendment |
|---|---|
| - The International humanitarian law instruments |
| Text proposed by the Commission | Amendment |
|---|---|
| - the four Geneva Conventions of 1949: |
| Text proposed by the Commission | Amendment |
|---|---|
| - Convention (I) for the Amelioration of the Condition of the Wounded and Sick in Armed Forces in the Field |
| Text proposed by the Commission | Amendment |
|---|---|
| - Convention (II) for the Amelioration of the Condition of Wounded, Sick and Shipwrecked Members of Armed Forces at Sea |
| Text proposed by the Commission | Amendment |
|---|---|
| - Convention (III) relative to the Treatment of Prisoners of War |
| Text proposed by the Commission | Amendment |
|---|---|
| - Convention (IV) relative to the Protection of Civilian Persons in Time of War |
| Text proposed by the Commission | Amendment |
|---|---|
| - Additional protocols to the Geneva Conventions |
| Text proposed by the Commission | Amendment |
|---|---|
| - United Nations Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law |
| Text proposed by the Commission | Amendment |
|---|---|
| - UNHRC Resolution on the Human Right to a Safe, Clean, Healthy and Sustainable Environment |
| Text proposed by the Commission | Amendment |
|---|---|
| - The European Convention on Human Rights |
| Text proposed by the Commission | Amendment |
|---|---|
| - The Charter of Fundamental Rights of the European Union |
| Text proposed by the Commission | Amendment |
|---|---|
| - The European Social Charter |
| Text proposed by the Commission | Amendment |
|---|---|
| 2 a. Good governance and anti-corruption instruments |
| Text proposed by the Commission | Amendment |
|---|---|
| Such instruments include, among others: |
| Text proposed by the Commission | Amendment |
|---|---|
| - United Nation Convention against Corruption, 2003 |
| Text proposed by the Commission | Amendment |
|---|---|
| - United Nations Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power, 1985 |
| Text proposed by the Commission | Amendment |
|---|---|
| - United Nations Basic Principles on the Independence of the Judiciary, 1985 |
| Text proposed by the Commission | Amendment |
|---|---|
| - Council of Europe Civil law on Corruption, 1999 |
| Text proposed by the Commission | Amendment |
|---|---|
| - OECD Anti Bribery Convention, 1997 |
| Text proposed by the Commission | Amendment |
|---|---|
| - European Union Convention against Corruption Involving Officials (EU Convention against Corruption), 2005 |
| Text proposed by the Commission | Amendment |
|---|---|
| - Principle Ten on Anti-Corruption of the UN Global Compact |
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Sources & citation
Where the facts on this page come from, and how to cite it.
- Official source
- Data source
- Licensed CC BY 4.0.
- Retrieved
- 25 September 2026
Cite as
European Parliament (2022). “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”. Text, 5 October 2022. docId AFET-PA-736653. EU Parl Watch Research. https://news.eu-parl.st-solutions.dev/texts/AFET-PA-736653 (retrieved 25 September 2026). Official source: The text on the European Parliament’s website, https://www.europarl.europa.eu/doceo/document/AFET-PA-736653_EN.html. Data: European Parliament Open Data, https://data.europarl.europa.eu/ (CC BY 4.0).
BibTeX
@misc{epw-text-afet-pa-736653,
author = {{European Parliament}},
title = {{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}},
year = {2022},
date = {2022-10-05},
howpublished = {\url{https://news.eu-parl.st-solutions.dev/texts/AFET-PA-736653}},
url = {https://news.eu-parl.st-solutions.dev/texts/AFET-PA-736653},
urldate = {2026-09-25},
publisher = {EU Parl Watch Research},
note = {Text. docId AFET-PA-736653. Official source: https://www.europarl.europa.eu/doceo/document/AFET-PA-736653\_EN.html. Data: European Parliament Open Data (CC BY 4.0)}
}