European Parliament brings us one step closer to corporate accountability but key improvements are still needed

Clean Clothes Campaign, welcomes the European Parliament’s report on Corporate Sustainability Due Diligence Directive (CSDDD) approved on June 1st with a broad cross-political majority. This vote marks an important step towards due diligence obligations for companies and corporate accountability.

One month ago we commemorated the 10th anniversary of the Rana Plaza building collapse in Bangladesh which killed at least 1,138 workers and left thousands more injured. This gruesome tragedy devastated the lives of thousands of workers and their families.

It brought worldwide attention to rampant exploitation in the garment industry and the need for corporate accountability. Despite promises for changes, the voluntary commitments made by companies were not enough to bring significant change to the lives of garment workers.

Over the last years, workers, citizens, and civil society worldwide called for ambitious laws that would protect workers, communities and the environment worldwide and hold companies accountable for the negative impact of their business.

The text approved today shows the EU Parliament’s determination to fight for the respect of human rights and the environment worldwide. Members of the European Parliament improved the initial EU Commission’s proposal and subsequent Council General Approach on several elements.

The text now requires an increased number of companies to carry out due diligence throughout their value chain and on all their business relationships, in accordance with UN and OECD international standards. Companies would have to pay attention to a wider range of human and labour rights, including the ILO Conventions on Occupational Safety and Health and on Violence and Harassment in the World of Work, as well as the right to a living wage. Companies would be asked to assess how their business models and pricing practices can cause harm, thus acknowledging the role of unfair purchasing practices in many violations. Victims of corporate abuses will also find that some of the procedural hurdles they face when seeking justice will be lifted.

We regret however that the Parliament stopped short from embedding value chain mapping and transparency as part of the due diligence obligation. A comprehensive risk-identification process should include mapping and disclosure of individual suppliers. Moreover, despite countless reports on the failures of social auditing and verification initiatives in ensuring respect for human rights, the Parliament’s report still gives too much importance to such initiatives. Grievance mechanisms should have been further made an integral part of remediation. We are also concerned with the remaining limitations on civil liability including the absence of reversal of burden of proof in favour of those suffering from business-induced violations.

As million of garment workers across the world see their rights for freedom of association, occupational health and safety and living wages attacked every day, it is high time for the EU to bring change to the way business is done.

Following this vote, the negotiations between the three EU institutions will start shortly. We call on the co-legislators to follow the lead of the EU Parliament and incorporate those key improvements in the final version of the legislative text.