Brussels, April 16, 2013 – A proposal released today by the European Commission to require large European companies to report on environmental and social issues will not guarantee ethical corporate behaviour according to the European Coalition for Corporate Justice (ECCJ).
The respect of human rights is the most fundamental value that we have as a society. Nevertheless, economic globalisation has lead to the massive exploitation of human rights in developing countries for the benefit of multinational enterprises (MNEs). The outsourcing and offshoring of production and services have had huge environmental and social costs.
European MNEs have been continually associated with violations of workers' rights, environmental damage, and harm to local communities. The reason for these continued violations is complex and multifaceted, yet of central significance is the law that governs these MNEs’ legal structures and accountability.
Subject to certain exceptions, the parent companies and boards of directors of MNEs are not legally responsible for the adverse human rights impacts directly linked to their operations, products, or services by their business relationships, including those caused by their subsidiaries, subcontractors, or customers. While victims of human rights abuses are typically entitled to pursue legal action in the country where the abuse took place, there may exist significant practical barriers, including the lack of an effective judicial system.
An additional problem is that even if the victims of corporate related abuse can make a legal case against the parent company of an MNE under the jurisdiction of an EU Member State, the existence of legal, procedural, and institutional barriers still prevent these victims from gaining access to an effective remedy.
The concept of human rights due diligence has recently garnered attention as a major tool that has the potential to bridge this governance gap. It sits at the core of the United Nations Guiding Principles for Business and Human Rights, which recognize and clarify the state duty to protect human rights, the corporate responsibility to respect them, and the right of people to access remedy for violations of human rights.
We work with the European Coalition for Corporate Justice (ECCJ), of which we are a Steering Member, and other civil society groups, and renowned legal experts to develop and promote solutions to the above mentioned problems.
Between 2011 and 2014, we contributed to the development of the EU directive on disclosure of non-financial and diversity information by large companies. We coordinated discussion among ECCJ’s members and took part in the Expert Group that the European Commission consulted with regarding the draft legislation.
In 2013, in collaboration with the ECCJ, ICAR and UK-based Corporate Responsibility Coalition, we launched the Access to Justice Project to articulate the need, legal authority and opportunities for judicial remedies for victims of corporate related human rights abuses. We co-organised high-level conferences in Paris, London, Berlin, and Brussels in 2014 to discuss tangible activities that can be taken by policy-makers in Europe. In 2012, we collaborated with the US-based International Corporate Accountability Roundtable (ICAR) to further develop the concept of human rights due diligence and its implementation in law, which we published as the report ‘Human Rights Due Diligence: the Role of States’.
In 2008, we prepared a breakthrough report, ‘Fair Law’, for the ECCJ that proposed reforms of the legal framework for parent company’ liability, duty of care, and transparency. This report was presented at a conference in the European Parliament and marked the restart of discussions about corporate accountability between European institutions and the NGO community.