European Parliament resolution of 25 October 2016 on corporate liability for serious human rights abuses in third countries
On 25 October European parliamentarians overwhelmingly voted (569 for, 54 against) for a resolution inviting the EU Member States and the EU Commission to adopt regulations on corporate liability for serious human rights abuses throughout their global supply chains. MEPs also advocated creating a certified “abuse-free” product label at EU level. Although the resolution is in no way binding it does indicate that the debate over multinational company duty of care is extending beyond the borders of the countries where initiatives in this vein have already been undertaken (France and the UK).
The European Parliament notes that “increasing globalization and internationalization of business activities and supply chains will make the role that corporations play in ensuring respect for human rights more important.” Against this backdrop it “calls on the EU and the Member States to lay down clear rules setting out that companies established in their territory or under their jurisdiction must respect human rights throughout their operations, in every country and context in which they operate, and in relation to their business relationships, including outside the EU.” In welcoming “recent legislative developments at national level, such as the UK Modern Slavery Act’s Transparency in Supply Chains Clause and the French bill on duty of care represent important steps towards mandatory human rights due diligence, MEPs call “on the Commission and the Member States, as well as all states, to take note of this model with regard to the introduction of mandatory human rights due diligence.” Without actually indicating what type of consequences companies in violation of any duty of care plan or with an inadequate duty of care plan should actually assume (a controversial issue especially in France where it is intended that companies be liable for the damages caused), the MEPs clarified that firms’ human rights due diligence should follow “the steps required in the UNGPs and be guided by certain overarching principles related to the proactive identification of risks to human rights, the drawing up of rigorous and demonstrable action plans to prevent or mitigate these risks, adequate response to known abuses, and transparency.”
Transparency enabling consumers assume responsibility. In considering “that transparency and communication regarding measures taken to avoid human rights abuses in third countries are crucial to allow for proper democratic oversight and to allow consumers to make fact-based choices,” the European Parliament is also recommending “the creation of a certified ‘abuse-free’ product label at EU level, participation in which would be on a voluntary basis, to promote increased awareness among producers and consumers, monitored by an independent body governed by strict rules and endowed with powers of inspection, devoted to verifying and certifying that no abuse has been committed at any stage in the chain of production of the relevant good.”