EU Human Rights Due Diligence Webinar Series: An Overview

Background on the Webinar Series

In 2020, the EU announced it would adopt a directive on mandatory human rights due diligence (mHRDD) for companies. This would enshrine a human rights-based approach in the business world.

The Raoul Wallenberg institute perceived this decision to be consequential and organized a series of webinars discussing the forthcoming directive. The seminars took place in 2021 and were given on April 26th, May 17th, and June 14th. What follows is an overview of these webinars, highlighting key thematic areas and their relevance.

Webinar 1: The Momentum for mHRDD in the EU (April 26th).

This webinar looks at the emergence of EU mHRDD legislation by looking at past and current attitudes, developments, and opportunities. It does so by focusing on four thematic areas: the EU’s journey from voluntarism to mandatory due diligence, Sweden’s stance regarding EU mHRDD legislation, opportunities for stakeholder engagement and participation through mandatory due diligence, and the reception of the upcoming legislation in the business world.

Professor Radu Mares, also a researcher at the RWI, chronicled the EU’s movement towards mHRDD by contextualizing the recent decision. This was done by considering movements that aimed towards more stringent European-level corporate social responsibility (CSR) guidelines, United Nations guidelines for business and human rights, and national pushes for mandatory due diligence. Recent developments do not exist in a vacuum.

The second speaker, Cecilia Ekholm, discussed the current due diligence policy mix in Sweden. An action plan on business and human rights was adopted in 2015, and the Swedish government is an advocate of free reporting tools for companies that can be used when human rights and business practices are concerned. Ms. Ekholm also stated that the Swedish government is an ambitious and engaged advocate of EU mHRDD.

Professor Olga Martin-Ortega went through possible opportunities for stakeholder engagement offered by mHRDD legislation. She emphasized transparency and communication on the part of businesses. Obversely, she talked about stakeholders such as workers having the right to be represented, with trade unions being one possible medium of representation.

The last speaker, Greg Priest, provided us with an overview of mHRDD from the side of businesses – especially the Inter IKEA group. The group sees this legislation as a positive, having begun work on a human rights-based approach in 2000. Mr. Priest said that many companies have started reorienting their companies to be compliant with human rights principles since the beginning of the 2010s. EU human rights legislation would also let them operate in a more level playing field.

Still, there are some questions on the effectiveness of the total value chain approach mHRDD requires; companies operating in some regions or countries must strike a delicate balance to be able to operate.

Webinar 2: Precedents of mHRDD in the EU (May 17th)

The second webinar looked at mHRDD by looking at its legal precedents and their efficacy.

The second webinar’s thematic areas were the French Duty of Vigilance Law passed in 2017, a Dutch mHRDD law focusing on child labour, the status on mHRDD legislation in Germany, and supply chains in the context of mHRDD.

Lucie Chatelain talked about the French Duty of Vigilance Law of 2017, concentrating on some lessons. The first lesson: the law was not framed as an active human rights measure; instead, it was characterized as one of corporate accountability. The second lesson: the existence of a law does not guarantee companies will adhere to its spirit. Many French companies excused errors by stating that they complied with what was required, viz. the implementation of a vigilance plan, and their interpretation of the law as one focused more on methodology than results. Thirdly, it is common to see companies drag their feet in drafting and implementing vigilance plans due to a lack of transparency.

This segment of the webinar tempered expectations when it comes to due diligence laws, casting them as processes that need continuous refinement.

Joseph Wilde-Ramsing updated us on the Dutch child labour law, which had not gone into force by the time the webinar was broadcast. Mr. Wilde-Ramsing noted that the contours of the law were consistent with the European trend of asking for more corporate accountability and due diligence. More specifically, he detailed how the Dutch law requires companies selling goods and services to consumers to identify and prevent child labour in their supply chains. Like the French law of 2017, this law would require identifying the possibility of child labour being used in their supply chains. If a possibility is detected, then businesses would be obligated to publish an action plan that addresses the issue.

Though the law uses consumer law as a primary basis, it is among the first in Europe to implement an element of criminal liability for businesses which egregiously and repeatedly violate the law.

Daniel Heilmann then discussed mHRDD in Germany. Recent pushes for human rights due diligence in Germany are motivated by the realization that surprisingly few German businesses fully comply with UN guiding principles. The law, which was being drafted at the time the webinar was given, would initially apply to businesses with more than 3000 employees, including subsidiaries and temporary workers. It would have civil and not criminal liability and would apply to German companies. Companies would be obligated to outline their responsibilities, have a compliance officer, and develop a system for processing complaints. Businesses would be required to take measures to prevent further violations if any are detected.

Professor Almut Schilling-Vacaflor talked about supply chains and their potential limitations of mHRDD legislation in the EU based on experience. In many cases, vigilance plans are nebulous and lack specificity, making them unable to contend with on-the-ground situations.

Secondly, companies reporting on their activities, while good practice, is not always insightful. Professor Schilling-Vacaflor gives the example of a French company that reported stakeholder management supported by local mediators in South American communities. While good on paper, their work was criticized by local activists and communities. She emphasizes the importance of communication and cooperation between businesses and local communities – not just between businesses and their headquarter countries.

Though the four speakers discussed different topics, similarities between the Dutch, German, and French examples constantly appeared. They share various vulnerabilities. A closer look at these three measures can help detect problem areas.

Webinar 3: A New EU Business Model (June 14th)?

This webinar analysed mHRDD in the context of recent EU pushes, such as the 2019 Green Deal and current attempts at marrying EU trade policy and human rights.

The third webinar had four thematic areas: the link between the EU directive’s link to UN discussions on a treaty concerning business and human rights, the EU’s value-based trade strategy and mHRDD mandates, and a look at the topic through social perspectives.

Professor Radu Mares focused on the relationship between the EU directive and UN discussions on business and human rights, as well as the past developments vis-à-vis business and human rights. The UN Human Rights Council passed a resolution in 2014 that set up an intergovernmental working group directed to draft a business and human rights treaty. The treaty was in its third version by the time the webinar was broadcast.  It concerns itself with topics covered in the previous section on national due diligence legislation, such as the setting up of supervisory machinery, effective reporting, and the size of the net being cast (focusing on larger businesses or additionally including smaller ones).

A 2019 modification abandoned exemptions for smaller businesses and suppliers. This was caused by international pressure coming from governments, civil society, and academia from Global North countries. There are other areas of interaction and feedback, such as where civil liability is concerned.

Professor Axel Marx’s segment dealt with the EU’s value-based trading strategy and its relationship with EU mHRDD. Said trading strategy is one that is not purely economically focused. EU trade policies, at best, push for a more open and sustainable world and the promotion and protection of human rights. The EU does that by looking at the integration of human rights through a multilateral route: Trading partners are expected to ratify and implement international conventions.

The EU’s approach to trade has been criticized: many agreements adjacent to or directly regarding human rights do not stipulate roadmaps, do not have clearly defined benchmarks, and sometimes lack the capacity for operationalization. It is also difficult to come up with international enforcement mechanisms, let alone in the EU.

Åsa Beckius ended the webinar by looking at the EU’s trade policies and mHRDD through a gender-equality perspective. She spoke of how, given increasingly loud calls for responsible business conduct, businesses should operate with a greater awareness of stakeholder interests, thinking of the impacts their businesses can have on local communities. She listed current problems, such as the growing problem of land and water scarcity disproportionately affecting those in the Global South, the harassment of trade union leaders, and the hesitant approach some companies have regarding mHRDD and human rights-based approaches in general.

A takeaway: though progress has been made, current and future processes can be drastically improved and updated.

You can watch the webinar series here.

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