Changes from report parliamentary committee draft to plenary report

Business enterprises are major players in economic globalisation, financial services and international trade, and are required to comply with all applicable laws and international treaties and to respect human rights. They may cause, contribute or be directly linked to adverse impacts on human rights and on the environment. However, corporations may also have an important role to play in promoting human rights, democracy and good governance, environmental standards and corporate responsibility.

Victims of corporate abuse face multiple and overlapping obstacles to accessing remedies. Impunity for human rights abuse by transnational corporations remains largely unaddressed in the absence of a robust and comprehensive regulatory framework and alignment at global and regional level.

In recent years, the EU has initiated a number of legislative initiatives aiming to regulate business activities in relation to human rights and environmental and climate-related obligations, notably through the proposal of an EU Corporate Sustainability Due Diligence Directive, the Regulation banning products made with Forced Labour, as well as numerous sectoral initiatives including the Regulation on Deforestation Free Products, the Conflict Minerals Regulation and the Critical Raw Material Acts.

Several EU Member States have recently adopted due diligence legislation of a mandatory nature such as France, Germany and the Netherlands, while a number of other Member States are considering to follow suit.

Outside the EU, regulatory initiatives, including legislation, on business and human rights have been adopted, or are under discussion such as Australia, Brazil, USA, Japan, Norway, New Zealand, Canada, Mexico, South Africa, Ghana and Switzerland and numerous other countries have developed a National Action Plan on Business and Human Rights.

At the level of the United Nations, the UN Human Rights Council (UNHRC) adopted a resolution on 26 June 2014 establishing an open-ended intergovernmental working group (OEIGWG) to elaborate an international legally binding instrument (LBI) “to regulate, in international human rights law, the activities of transnational corporations and other business enterprises”.

The Working Group has to date held eight sessions and a number of regional and other consultations with stakeholders. In July 2023, the Chair circulated an updated draft of the instrument ahead of the ninth session of the working group planned on 23-27 October 2023.

The position of the EU and Member States has evolved in relation to the work of the OEIGWG. Initially, all EU Member States who were then members of the UNHRC voted against the resolution launching the LBI negotiation process and, in the absence of a negotiating mandate, the EU representative only participated in the sessions of the OEIGWG as an observer and has only contributed general statements.

Subsequently, however, the position of EU Member States gradually evolved, with several of them participating actively in the latest sessions of the OEIGWG. France and Portugal have joined the “Friends of the Chair” group. Moreover, among its priorities in human rights fora in 2023, the Council of the EU stated its commitment to “actively participate” in the UN discussions on the LBI and expressed its readiness to work with the Chair of the OEIGWG and the Friends of the Chair “to explore (…) a consensus-based instrument that can effectively enhance the protection of victims and create a global level playing field”.

There is substantial and growing interest in, mobilisation around and expectations from the UN-level discussions on the LBI among affected communities, indigenous peoples, trade unions, members of civil society, scholars and experts globally.

Parliament has consistently supported the UN discussions on the LBI, including in a number of resolutions. As the LBI negotiations gather momentum, it was deemed important to highlight the current Parliament position, in view of the latest developments, both at the EU and UN levels, and reiterate the need for the EU to adopt an ambitious mandate for negotiations in order to participate decisively in the discussions.