European legislation on due diligence expected in June as civil society calls for enforcement mechanisms, a Binding Treaty

On March 12, Euractiv reported: “MEPs have urged the European Commission to table an ambitious due diligence law obliging EU companies to address all aspects of their value chains that could affect human rights, the environment and good governance.”

Another article in Euractiv further explains: “EU lawmakers backed a legislative initiative report by 504 votes to 79 on Wednesday (10 March), hoping that their proposals will feed into legislation that is due to be tabled by the European Commission.”

Civil society calls for stronger European legislation

In response, this civil society statement signed by Global Witness and Amnesty International calls for stronger legislation that would include:

“Enforcement mechanisms (through both public/administrative and private/civil enforcement mechanisms) in case of non-compliance with the due diligence obligations or for harm caused [to] provide an effective deterrent. In this regard, we expect the Commission to consider criminal liability or equivalent instruments.”

Caution from the Global Campaign for a Binding Treaty

And the Global Campaign for a Binding Treaty has cautioned that the European Parliament’s resolution “falls short of the needed binding norms for transnational corporations and human rights that we have been demanding for two decades.”

It further comments: “The proposal is too focused on due diligence, a concept linked to the self-regulation of corporations. ‘Mandatory’ due diligence is a legal sophistication of the UN Guiding Principles that have proved to be inefficient in holding transnational corporations accountable for the violation of human rights.”

The call for due diligence legislation in Canada

University College London law professor Barnali Choudhury has argued that Canada should adopt due diligence legislation. She has noted that this would be a better approach than the “ombudsperson for responsible enterprise, which given its relative lack of powers, has been branded by critics as toothless.”

The Canadian Network on Corporate Accountability adds that due diligence legislation must include “meaningful consequences for non-compliance, including liability for harm and effective enforcement mechanisms.”

Due diligence and Indigenous rights

Secwepemc land defender Kanahus Manuel on the frontlines of the resistance to a pipeline on her territory has tweeted: “[Due diligence] could be a very interesting tool to fight against projects threatening Indigenous Peoples’ territories.”

There is also the caution that without stringency the language of due diligence can be misused to undermine Indigenous rights.

For example, the Canadian government’s export credit agency, Export Development Canada, signed an agreement last year to lend up to $500 million to TC Energy to build the Coastal GasLink fracked gas pipeline on unceded Wet’suwet’en territory (in the province of British Columbia) without free, prior and informed consent.

Le Devoir reported: “EDC says it carried out ‘rigorous due diligence’ before granting the loan.”

EDC’s funding decision summary says: “[EDC recognizes that] the project continues to be opposed by a group of hereditary chiefs from the Wet’suwet’en First Nation, who claim to be the legitimate decision-makers of this nation, not to have been duly consulted and not to have consented to the project. [However, EDC believes TC Energy] has demonstrated a great ability to manage environmental and social risks.”

Furthermore, BMO Global Asset Management has signed this statement in support of governments enforcing mandatory human rights due diligence requirements. BMO is also financing the TC Energy Coastal GasLink pipeline.

Next steps

The full resolution passed by the European Parliament can be read here.

The European Commission is expected to table a law in June based on this resolution passed by Members of the European Parliament.

The next round of talks on the Binding Treaty on transnational corporations and human rights is expected to take place in October.

The Global Campaign notes: “The UN and the European processes are neither in opposition nor in contradiction, on the contrary, they should complement each other and evolve together to ensure high levels of prevention, administrative, civil and criminal liability of the corporations, as well as the remedy for affected communities as soon as possible and at all levels.”

PBI-Canada will follow both processes.