Global civil society pushes for mandatory environmental and human rights rules in the EU
On 23 July 2020 a global network of NGOs working to strengthen corporate accountability for environmental destruction and human rights abuses, including Both ENDS, published an open letter to European Commission DG Justice Commissioner Reynders. The letter is a response to his recent commitment to propose legislation in 2021 on both corporate due diligence and directors’ duties as part of an initiative on sustainable corporate governance.
The letter is endorsed by European NGOs as well as indigenous peoples’ organisations and NGOs from tropical forest countries where the impacts of EU consumption of commodities like soy, palm oil and beef are felt the hardest.
In warmly welcoming commitment by the Commission, the letter calls on the EU to build a robust legal framework including new legislation on mandatory human rights and environmental due diligence requirements for EU companies, financiers and investors as well as new sustainability duties for directors and legal accountability for non-compliance.
Creating an explicit legal obligation on companies, financiers and investors to comply with their responsibility to respect human rights and the environment has the potential to ensure that European businesses and investors take active steps to avoid contributing to or facilitating the destruction of the environment of the violation of the rights of indigenous peoples or local communities. These obligations should include a corporate duty to respect indigenous peoples’ rights to land, self-determination and free, prior and informed consent - human rights recognised under international law, and should of course be adequately enforced and supported by sanction mechanisms.
Fragile global supply chains
Even prior to the COVID pandemic, the sustainability of EU consumption of commodities produced at industrial scale in tropical countires where deforestation, ecological destruction and human rights abuses are systemic was being increasingly questioned by European consumers and policy makers. In the aftermath of the COVID pandemic, the fragility of many global supply chains and the low cost of production on which they are viable have become more apparent.
Land ownership and local food production
The flow-on impacts of low-cost, large-scale production for local communities in production areas, like unreliable access to food and clean water, dispossesion of land, and an insecure livelihood, have also been compounded during the COVID pandemic. The emerging trend is that local communities who have retained their land ownership and local food production systems fare much better than those now dependant on wages from plantation companies dependent on export markets.
Balance between economic, environmental and social values
The new corporate governance framework has the potential to drive a transition away from cheap imports at the cost of people and planet, and refocus corporate decision-making around a genuine balance between economic, environmental and social values. In order to be effective, however, the new regulation must ensure that indigenous peoples and local communities in third countries affected by European investments and supply chains have access to effective grievance and remedy procedures – including direct access to remedy in European courts.
Both ENDS stands firmly in support of the need for mandatory environmental and human rights due diligence obligations for EU companies, financiers and investors, directors' duties to ensure those obligations are met, and civil and criminal sanctions for non-compliance.
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