Vigilance duty at European level?

On 1st December 2022, the European Council approved its common position on the proposal for a directive on the European duty of vigilance. Many criticisms from NGOs and MEPs have been heard.

First of all, the NGOs accuse the French government of having participated in a coalition with other Member States in order to reduce the ambitions of the text, and in particular of having wanted to exclude the financial sector from its scope. In a joint press release published the same day by the associations Sherpa, ActionAid France, Friends of the Earth France, Action Aid, CCFD-Terre Solidaire, the Ethics Collective on the label, the International Federation for Human Rights, Notre Affaire to Tous and Oxfam France, the following “flaws” were highlighted in particular:

• the scope of the duty of vigilance “does not include the use made of products marketed by companies, nor the activities of customers of service companies, nor the export of arms or surveillance equipment”,
• the obligations for the banks become “extremely limited, and in any case only optional for the Member States”;
• companies will “not be required to end their relationship with a supplier who is found to be violating human rights if this proves to be too harmful for their activity”;
• “the definition of damage to the environment, which is already incomplete, is further reduced, with the deletion of key terms such as the notion of ecological integrity”;
• the elements attacking the obligations and remuneration of directors “have simply been deleted”.

“We had already alerted at the start of the year to the flaws in the Commission’s text. That of the Council added others, very worrying, and highlighted the points on which the lobbies put the most pressure: civil liability, environmental/climate aspects, financial sector”, reacted Juliette Renaud, campaign manager – regulation of multinationals within the NGO Friends of the Earth.

Although “all companies” are covered by the directive, “regardless of their sector”, adds Manon Aubry, shadow rapporteur for the Left group in the European Parliament, “the definition of the ‘value chain’ for which the directive would open up corporate liability has been amended to become “chain of activities” and exclude the provision of services. A fortiori, it therefore excludes any liability of banks providing financial services that have financed violations of human rights or the environment”.

“The Council’s general guidance clarifies that Member States can opt for coverage of financial services as well. It’s very nice, but the precision is unnecessary – by default, States could opt for a wider application of the text – and certainly hypocritical. It is hard to imagine most European countries deciding on their own to cover their banks when those of other States are not covered”, continues Manon Aubry.

The government was quick to react. Last week, Bercy indeed published a press release in order to deny “the information reporting a request for exemption from the banks”.

What are the next steps ? In the European Parliament, MEPs tabled their amendments to the text of the proposed directive. It is now up to the rapporteur for the text, Lara Wolters, “to draft compromise amendments to integrate or not the additions of the other groups and to negotiate them”, explains a spokesperson for the Parliament.

In the spring, the votes will take place in the committees of the European Parliament and the plenary vote in May 2023. And finally, following these debates, the trialogue with the Council and the European Commission will begin, scheduled for summer 2023.

Leslie Brassac