The European Parliament’s legal affairs committee adopted a report on 27 January 2021 calling on the European Union to legally require companies to protect human rights and the environment in their supply chains across all industry sectors.

The report urged the European Commission, the executive body of the EU, to propose mandatory due diligence requirements on all companies in the bloc.

Currently, only France out of 27 EU nations has such legislation, through the UK and Australia have their Modern Slavery Acts too. The German government more recently (12 February 2021) announced that it too will soon be proposing a human rights due diligence law (Lieferkettengesetz) on companies. However, multinational companies generally find piecemeal legislation by national authorities inefficient and would prefer that the EU enacts a uniform region-wide law.

Civil society has often found existing legislation too weak. Mostly the laws that exist call only for annual reporting of assessment of risks together with measures taken to mitigate risks, and they apply only to the largest companies. They tend also to have few avenues for remedies. The suggested EU-wide legislation may not be much better, but the disparate pieces of legislation it currently has tend to address only such sectors with the more egregious violations such as “blood diamonds”.

The report adopted by the legal affairs committee proposes drafting an EU law requiring companies to monitor, identify, prevent and remedy risks to human rights, the environment and governance in their operations and business relationships — including suppliers and sub-contractors. The proposal would give victims of human rights violations the right to take EU companies to court.

The full European Parliament will vote on the committee’s proposal in March, and the Commission is expected to table a draft law in the second quarter of this year.

A report “Towards a mandatory EU system of due diligence for supply chains” is available on the internet, but it is not clear whether this is the report that was adopted by the Legal Affairs Committee.