EURATEX releases position paper on EU's Due Diligence framework for corporate sustainability; group says EU proposal risks heavily shifting responsibilities to smaller players in supply chain, and should instead base criteria on companies' sizes, risks

BRUSSELS , November 10, 2022 (press release) –

EURATEX fully appreciates and supports the importance of establishing transparent and accountable value chains. However, we believe key improvements shall be introduced for the Directive to deliver on these goals, which as it currently stands is not the case.

The current draft proposal brings the risk of heavily shifting responsibilities to smaller players in the supply chain. To avoid this, EU Due Diligence framework must uptake existing global guidelines, using a risk-based approach, i.e., the UN Guiding Principles on Business and Human Rights (UNGP) and OECD Due Diligence Guidance for Responsible Supply Chain in the Garment and Footwear Sector (OECD), scope of which should be formed on proportionate, transparent criteria, relative to companies’ size and risk.

The different application of due diligence legislation across Europe is a serious risk because the proposal is a Directive and several proposal’s parts entail significant room for different interpretation. This endangers the level playing field for EU companies.

Harmonisation efforts should be introduced, like developing EU guidelines, and clear methodologies on carrying out due diligence, setting out precisely the scope of relevant legal actions under civil liability, and presenting more precise definitions.

To achieve concrete progress in the due diligence practices while avoiding unintended consequences, several concrete improvements shall further be applied: a mechanism to support SME’s and avoid disproportionate complexity, namely the bureaucracy that companies may find themselves requiring to manage, and civil liability to be limited to Tier 1, which is the level where actions can actually be better
controlled.

Climate mitigation efforts currently introduced in the draft proposal, go far beyond the framework of original due diligence. European Due Diligence should focus exclusively on human rights as protected by the UNGP guidelines.

You may read the full position paper here:

https://euratex.eu/wp-content/uploads/Position-Paper-Due-Diligence-2022.pdf

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.