Copublished with ActionAid, Amis de la Terre France, CCFD-Terre Solidaire, Notre Affaire à Tous, Oxfam France, Sherpa and Reclaim Finance
Paris, 14 December 2023 – Early this morning, negotiators from the three European institutions – the Parliament, the Council of the European Union, and the Commission – reached a political agreement on the directive on corporate due diligence. While it marks a turning point for the regulation of multinational companies, many aspects of the agreement are insufficient, notably due to France’s obstruction on the financial sector and climate obligations.
The directive on corporate due diligence aims to require large European companies (or companies operating in Europe) to implement measures to prevent certain human rights and environmental abuses resulting from their activities and those of their subsidiaries and supply chains.
While this directive marks an important step forward in the protection of the rights of workers and communities affected by the activities of multinationals, our organizations deplore its lack of ambition on several crucial points, including the narrow definition of environmental damage and harm covered by the directive, the exclusion of the Paris Agreement, the exclusion of financial services from the general due diligence requirements.
Although France was a pioneer in the field of due diligence in Europe, the French government, responding to the siren calls of the lobbies, did its utmost to counter the position of the European Parliament and of most Member States, by arguing for the exclusion of financial services and against the recognition of the rights of indigenous peoples.
The agreement reached excludes all financial services from the general obligation of vigilance, leaving their inclusion to future legislation that is as uncertain as it is distant. This exclusion is incomprehensible given these services are currently covered by the French law on due diligence (with BNP Paribas being the subject of two legal actions on this basis). In the rest of the EU, this exclusion could allow financial players to continue to support projects and companies that are dangerous for the environment and human rights without being held to account.
The European Parliament has nevertheless succeeded in obtaining the inclusion of certain measures aimed at facilitating access to justice for those affected, notably in terms of access to evidence and the ability of associations and trade unions to represent victims. But these measures are still far from sufficient, given the obstacle course that victims face in legal proceedings against multinationals.
The text also includes the obligation for large companies to adopt a climate transition plan and to put it into effect. However, the oversight of the content of the plans and the resources devoted to their implementation remain vague and these are what will determine the real impact of the measure.
Once it has been finalized at a technical level, the text will be put to the vote in the Council of the EU and the European Parliament early next year, before the next European elections in June 2024. It will then have to be transposed in each of the Member States.
Civil society, which is committed to putting an end to the impunity of multinationals, is therefore more than ever mobilized and vigilant about the next stages, particularly the transposition of the directive at national level, to guarantee respect for the rights of those affected and for the environment.
