Eurocadres welcomes the long awaited proposal, in particular the intention to promote the “do no harm” culture in businesses worldwide and makes positive references to the OECD framework and UN Guiding Principles on Business and Human Rights, while also including the fundamental ILO Conventions.

One important element included in the proposal is the clause of non-regression. This clause takes into account existing laws in member states, ensuring their provisions are maintained. We welcome the fact that this directive explicitly completes and amends the whistleblower protection directive (EU) 2019/1937, as mentioned in the title of the directive.

However, we regret that the proposal fails to answer a certain number of the recommendations of the European Parliament as to the content of a directive on corporate due diligence, adopted on the 10th of March 2021. Especially, some important expertise in not referenced, with important sectors (including technical/governance) and conventions (such as protection of wages, labour inspection, workers’ representation, collective bargaining) omitted. We urge the Commission to include in the core text and not only the Annex references to fundamental European human rights instruments such as the European Convention on Human Rights, the European social charter and the Charter of fundamental rights including provisions on collective bargaining, access to information and consultation and workers’ participation. We also ask to include relevant ILO Declarations, such as the 2019 Centenary Declaration - preparing for the digital era of work and towards the recognition of occupational health and safety rights as fundamental rights, in the core text of the directive. The European Parliament’s report on this subject is comprehensive in its approach to the value chain. Art.1 in the Commission proposal states that the established business relationship condition may exclude subcontractors in the value chain, while the directive should cover all the value chain. The EP report mentions the business relationship only while the established business relationship is expected to be lasting and does not represent a negligible part of the value chain.

For Eurocadres it is crucial to highlight that in order for companies' due diligence processes to be effective, trade unions should have a clear and proactive role during the whole process. It is particularly alarming that trade unions workers’ representatives involvement is lacking in the Commission’s proposal of the due diligence process and only mentioned in Article 9 (complaints process), at the end of the chain, whereas the European Parliament underlines the importance of Member States guaranteeing the rights of trade unions at all level and workers’ representatives in the establishment and implementation of the due diligence strategy.

Concerning the scope, we welcome the fact that third country companies will be included. However, the scope of the current proposal would impact only 9,400 companies in the European Union from group one, with 3,400 companies impacted within group two. In addition to this, the definition of the company in the directive is restrictive. Non-listed companies are not mentioned, while the public service and state-owned companies are also not referenced throughout. Once again it us up to the European Parliament to enlarge the scope and ambition of this proposal. MEPs have already requested that small-medium enterprises (SMEs) are included in the scope of action, but included with the support of Member State’s readily available, given many will be impacted through the chain of value.

Additional points of concern include:

• The threshold limits outlined in the document are linked to turnover and number of employees, making it difficult to view the scope of companies to be included and the success of implementation should this information not be made available.
• The list of sectors labelled as “high-risk” is not complete, with certain sectors (such as finance, energy, mining) omitted. An exhaustive list must be made available to improve this point.
• The definition of stakeholders exclude workers’ representatives and civil society organisations, all of whom are crucial to work organisation and the protection of workers.
• Art 4.2, the impact of competition law should be better developed. As mentioned, companies can avoid the due diligence obligations claiming that competition law is being negatively impacted.
• The directive integrates voluntarist and unilateral corporate CSR tools into EU law (such as codes of conduct, preventive and corrective action plans etc) without guidelines on their content and references to their binding or non-binding nature.
• Art 20: We argue that European trade unions, as representatives of workers, should also be members of the European Network of Supervisory Authorities.
• Art24: The directors’ remuneration is a national competence and not a European one. In any case, directors include any member of the administrative, management or supervisory bodies of a company. This means that, in some cases, managers with no power of decision in a company may be sanctioned unjustly. It is important that the obligations for workers representatives in company boards do not become so extensive that it undermines the prerequisites for workers representation or weakens it in some other way. The possibility for workers representatives to protect themselves against liability (connected to board representation) must be further examined.
• The directive must neither lead to a weakening of national laws and rules concerning workers participation and information and consultation, nor weaken trade union rights or obligations of employers It is also important that the directive does not weaken EU-legislation concerning workers participation, such as the EWC-directive.

Despite the above concerns, Eurocadres welcomes many aspects of the proposal, including Article 10, which gives provisions monitoring the effectiveness of the identification and prevention of wrongdoings based on qualitative and quantitative indicators and subsequent updates to the due diligence policy according to the outcome of these assessments. Guidelines of the European Commission (included in article 13) and accompanying measures of Member States (article 14) are also welcome, while article 22’s inclusion of the protection of the persons reporting breaches in accordance to the EU directive on WB protection 2019/1937 is of great significance.