EU Parliament Approves Measure to Tackle Corporate Abuses in Supply Chains

Human Rights Watch commended the European Parliament’s decision on April 24, 2024, to endorse proposed European legislation aimed at compelling large corporations to address human rights and environmental violations within their global supply chains, marking a significant advancement in corporate accountability.

The proposed EU Corporate Sustainability Due Diligence Directive (CSDDD) aims to establish legal obligations for large corporations to conduct thorough human rights and environmental assessments across their global supply chains.

The vote in Strasbourg coincided with the 11th anniversary of the tragic collapse of the Rana Plaza building in Bangladesh on April 24, 2013, which claimed the lives of 1,138 garment workers and left over 2,000 others injured. Under the proposed law, large companies would be mandated to conduct human rights and environmental due diligence not only within their own operations but also throughout their global value chains.

According to the proposed legislation, large companies are defined as those employing more than 1,000 individuals on average and generating a net worldwide revenue exceeding €450 million in the previous financial year. Regulators would be empowered to take action against companies failing to adhere to these due diligence requirements, while victims of corporate abuses would, in certain instances, have the option to seek justice through European courts.

“The 11th anniversary of the Rana Plaza disaster is a somber reminder of why a due diligence law is long overdue,” said Aruna Kashyap, associate director on corporate accountability at Human Rights Watch. “The European Parliament’s vote sends a strong message that the EU should no longer let large corporations get away with human rights and environmental abuses.”

In the wake of the Rana Plaza tragedy and numerous other instances of corporate human rights, labor rights, and environmental abuses in global supply chains, advocacy groups, trade unions, and even some businesses have been clamoring for enforceable legislation to hold corporations accountable for misconduct in their supply networks.

Efforts from rights groups and social movements worldwide have been instrumental in urging the European Union to adopt such legislation, countering corporate lobbying attempts to derail the proposed law.

The legislative journey, initiated in 2020, has been arduous, according to Human Rights Watch. The governments of France, Italy, and Germany significantly narrowed the legislation’s scope, restricting its reach to very large corporations, exempting certain sectors, and delaying its enactment. On March 15, a majority of EU member state ambassadors greenlit the diluted draft law, following extensive revisions. Subsequently, on March 18, the European Parliament’s Legal Affairs Committee endorsed the revised text.

With the European Parliament’s approval secured, the legislation now awaits final endorsement from EU member state ministers, scheduled for late May.

“The European Commission pledged to adopt a law to hold corporations accountable when they took office five years ago,” said Kashyap. “Ministers from EU member states should give a final nod to the text and pave the way for a new chapter on corporate accountability in global supply chains.”

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