The European Union is a step closer to developing regulations for holding companies accountable for their actions. On April 28, European Commissioner for Justice, Didier Reynders, pledged support for binding rules requiring companies to conduct human rights due diligence in their global supply chains, which could help protect millions of workers around the world.
The EU needs “real and mandatory regulations” that govern “human rights, social issues, and environmental issues,” Reynders said while presenting the EU’s study on due diligence for supply chains. He outlined a vision for “sustainable corporate governance” and explained that authorities at both EU and national government levels could oversee implementation.
Human Rights Watch has exposed environmental and human rights harms in global supply chains in the garment, construction, agriculture, and mining sectors. Deforestation, landgrabs, and poorly regulated mining have contributed to the climate crisis, forced resettlement, child labor, ill-health, and other serious abuses, in countries such as Brazil, Malawi, and Ghana. In others, like Uganda, Indonesia, and Brazil, mining and deforestation have displaced and decimated the livelihoods and identities of indigenous peoples.
Many companies are producing their wares in countries where labor rights regulatory frameworks are weak. In the garment industry, global brands and retailers have often benefited from poor wage and social protection systems in garment-exporting countries, and fueled labor abuses with unfair commercial practices. The Covid-19 crisis has sharpened attention to such problems, and the calamitous impact of that business model is being felt most by poor women workers who are part of the supply chains of these brands.
As the commission prepares to kick-off public consultations following Reynders’ pledge, it should develop its questionnaires for the process with inputs from key stakeholders, including human rights and environmental groups, trade unions, and grassroots organizations that have been at the forefront of holding corporations accountable. Setting a strong agenda that includes sanctions for companies and enforcement mechanisms, coupled with effective public consultations, will form the most solid foundation for the proposed EU regulations.
The time is ripe for the EU to learn from past lessons and finally enforce companies’ legal responsibility for rights abuses in their global supply chains.