### 4. reiterates that the public sector has an important new role to play in facilitating a just transition by promoting a green and fair energy transition , green and blue investments , the circular economy , as well as climate adaptation and risk prevention in all eu regions; ### 4. reiterates that the public sector has an important new role to play in facilitating a just transition by promoting a green and fair energy transition , green and blue investments , the circular economy , as well as climate adaptation and risk prevention in all eu regions; considers therefore that the co-financing costs of the various esi funds need to be excluded from calculations of the stability and growth pact;


### 4. reiterates that the public sector has an important new role to play in facilitating a just transition by promoting a green and fair energy transition , green and blue investments , the circular economy , as well as climate adaptation and risk prevention in all eu regions; ### 4. notes that the public sector has an important new role to play in facilitating a just transition by promoting a green and fair energy transition , green and blue investments , the circular economy , as well as climate adaptation of territories and risk prevention in all eu regions;


### 4. reiterates that the public sector has an important new role to play in facilitating a just transition by promoting a green and fair energy transition , green and blue investments , the circular economy , as well as climate adaptation and risk prevention in all eu regions; ### 4. reiterates that the public sector has an important new role to play in facilitating a just transition by promoting fair and efficient energy transition , new innovative investments , the circular economy , as well as climate adaptation and risk prevention in all eu regions;


### 6. believes that the eu should be attentive to preserving and developing an industrial strategy and production which ensure european strategic autonomy , as well as the availability and delivery of essential products and equipment for citizens if the need arises in the single market; ### 6. believes that the eu should be attentive to preserving and developing an industrial strategy and production which ensure european strategic autonomy in the geopolitical context , as well as the availability and delivery of essential products and equipment for citizens if the need arises in the single market;


### 7. considers that esif financial support should prioritise investments in new or transformed industrial production in carbon-intensive regions in order to facilitate achieving the goals of a just transition. ### 7. considers that esif financial support should prioritise investments in new or transformed industrial production in carbon-intensive regions in order to facilitate achieving the goals of a just transition , which leaves no one behind.


### - having regard to its resolution of 15 january 2020 on the european green deal (2019/2956(rsp))3 , ### deleted


### 2. endorses the priorities for action set out in the communication and expresses its commitment to engage actively in implementing the actions described; ### 2. takes note of the priorities for action set out in the communication and welcomes the actions described; highlights in particular the need to increase efforts to protect old growth forests;


### 4. calls for the forestry sector to feature strongly in the upcoming neighbourhood , development and international cooperation instrument (ndici) and for the full potential of the external investment plan and regional blending facilities to be exploited in leveraging private funding; ### deleted


### 5. stresses the importance of partnership with third countries in order to strengthen sustainable forest management , the wood-based circular economy and the strong relationship between them in combating deforestation; ### 5. stresses the importance of partnership with third countries in order to strengthen sustainable forest management , the wood-based circular economy and the strong relationship between them in combating deforestation; encourages member states to stop importing (residual) wood used for biomass from third countries as biomass is not a form of ‘sustainable energy’ since burning wood emits more co2; 20% more than coal and 95% more than gas; stresses furthermore that transporting wood from third countries to the eu uses a large amount of energy and contributes significant amount of carbon to the atmosphere;


### 5. stresses the importance of partnership with third countries in order to strengthen sustainable forest management , the wood-based circular economy and the strong relationship between them in combating deforestation; ### 5. stresses the importance of partnership with third countries in order to strengthen sustainable forest management , playing an important role in the wood-based circular economy , and to further develop the strong relationship between them in combating deforestation;


### — having regard to the ruling of the court of justice of the european union affirming the eu's competence to protect european forests1 , ### deleted


### a. whereas , despite all efforts so far , conservation and sustainable use of the world’s forests cannot be adequately ensured by current policies; ### a. whereas , despite all efforts so far , conservation and sustainable use of the world’s forests cannot be adequately ensured by current policies and legal frameworks;


### a. whereas effective forest policy requires reliable information on forest resources , their condition , and how they are managed and used , and also reliable information on land-use change; calls for the eu to support the monitoring of deforestation and forest degradation by using earth observation data from different sources; ### a. whereas effective forest policy requires reliable information on forest resources , their condition , and how they are managed and used , and also reliable information on land-use change; calls for the eu to support the monitoring of deforestation and forest degradation by using earth observation data from different sources , while ensuring close cooperation with the member states;


### 6. calls for raising consumer awareness about the need to reduce our consumption footprint on land and encourages people to consume products from supply chains that are ‘deforestation-free’. ### 6. calls for raising consumer awareness about the need to reduce our consumption footprint on land and on the production of biofuels such as palm oil and corn which requires enormous deforestation; encourages people to consume products from supply chains that are ‘deforestation-free’.


### 1. underlines that approximately 80% of global deforestation is caused by the expansion of land used for agriculture; stresses in this context that the commission communication on stepping up eu action to protect and restore the world’s forests of july 2019 recognises that union demand for products such as palm oil , meat , soy , cocoa , maize , timber , rubber , including in the form of processed products or services , is a large driver of deforestation , ecosystem destruction and human rights violations across the globe; ### 1. underlines that approximately 80% of global deforestation is caused by the expansion of land used for agriculture; stresses in this context that the commission communication on stepping up eu action to protect and restore the world’s forests of july 2019 recognises that union demand for products such as palm oil , meat , soy , cocoa , maize , timber , rubber , including in the form of processed products or services , is a large driver of deforestation;


### 1. recalls that the union addresses the risk of deforestation by means of eu timber regulation1 (eutr) , communication of the commission ‘forest law enforcement , governance and trade- proposal for an eu action plan’ (flegt) and renewable energy directive2 (red ii) , which include numerous rules the purpose of which is to minimise the risk of deforestation and illegal logging; ### 1. recalls that the union addresses the risk of deforestation by means of eu timber regulation1 (eutr) , communication of the commission ‘forest law enforcement , governance and trade- proposal for an eu action plan’ (flegt) and renewable energy directive2 (red ii) , which include numerous rules and could serve as a valuable basis to minimise the risk of deforestation and illegal logging;


### 2. supports the commission in its efforts to strengthen standards and certification schemes that help to identify and promote deforestation-free commodities; ### 2. supports the commission in its efforts to strengthen standards and certification schemes that help to identify and promote deforestation-free commodities only when certificates , such as fsc certificates , strictly adhere to the retention of the forest area; demands furthermore that fsc certificates be withdrawn when conversion to vegetation other than forest is permitted;


### 3. recommends that all new trade agreements include provisions on the conservation and sustainable management of forests and the obligation to ensure multilateral environmental agreements , such as the paris agreement and the convention on biological diversity , are implemented effectively; ### 3. recommends that all new trade agreements include , in their chapters on sustainable development , binding provisions on the conservation and sustainable management of forests and guarantee that multilateral environmental agreements , such as the paris agreement and the convention on biological diversity , are implemented effectively;


### a. whereas biologically diverse forests being natural carbon sinks are indispensable in the fight against climate change in line with the paris agreement’s goals to hold the increase in the global average temperature to well below 2°c above pre-industrial levels and pursue efforts to limit the temperature increase to 1 , 5°c above pre-industrial levels , as well as for climate change adaptation and biodiversity conservation; ### a. whereas biologically diverse and sustainably managed forests being natural carbon sinks as well as a source of materials and energy to replace more carbon-intensive alternatives are indispensable in the fight against climate change in line with the paris agreement’s goals to hold the increase in the global average temperature to well below 2°c above pre-industrial levels and pursue efforts to limit the temperature increase to 1 , 5°c above pre-industrial levels , as well as for climate change adaptation and biodiversity conservation;


### a. whereas deforestation can be in part tackled by securing the economic value of forests and by creating incentives for forest ownership; whereas , at the same time , it is crucial to maintain a balance between primary forests and regeneration of secondary forests; ### a. whereas deforestation can be in part tackled by recognising the value of forests , by creating incentives for forest ownership and by urging member states to end subsidies for biomass; whereas , at the same time , it is crucial to protect primary forests and stimulate the regeneration of secondary forests;


### 6. calls on the commission to include ambitious forest-specific provisions in all union trade and investment agreements; stresses that these provisions should be binding and enforceable through an effective monitoring and sanctions mechanism. ### 6. calls on the commission to include ambitious forest-specific provisions in all union trade and investment agreements; stresses that these provisions should be enforceable through an effective monitoring mechanism.


### — having regard to the commission communication of 17 may 2020 entitled ‘adjusted commission work programme 2020’ (com/2020/440 final ) and to president von der leyen's letter of intent to president sassoli and chancellor merkel of 16 september 2020 entitled ‘state of the union 2020’ , ### — having regard to the commission communication of 17 may 2020 entitled ‘adjusted commission work programme 2020’ (com/2020/440 final) and to the commission president's letter of intent to the president of the european parliament and the chancellor of the country holding the council presidency of 16 september 2020 entitled ‘state of the union 2020’ ,


### b. whereas 25 million smes generate more than half of the eu’s gdp , and employ about 100 million workers; whereas 98.9 % of enterprises in the eu’s non-financial business economy are small enterprises with fewer than 49 workers; ### b. whereas that before the covid19 25 million smes generated more than half of the eu’s gdp , and employed about 100 million workers; whereas 98.9 % of enterprises in the eu’s non-financial business economy are small enterprises with fewer than 49 workers;


### 1. underlines the decisive contribution of smes to innovation , job creation and an inclusive labour market; is extremely concerned about the rising unemployment rates in the eu and the risk of millions of people losing their jobs as a result of the covid-19 crisis; recognises that at present smes are faced with severe liquidity problems and , in this context , highlights the need for sustainable finance to bridge the current investment gap and to reinforce smes’ ability to innovate and move towards more sustainable , resource-efficient , circular and climate-neutral solutions , ensuring the successful implementation of the european green deal and the related just transition; ### 1. underlines the decisive contribution of smes to innovation , job creation and an inclusive labour market; is extremely concerned about the rising unemployment rates in the eu and the risk of millions of people losing their jobs as a result of the covid-19 crisis; recognises that at present smes are faced with severe liquidity problems and , in this context , highlights the need for finance to bridge the current investment gap and to reinforce smes’ ability to innovate and move towards more resource-efficient and long term effective;


### 2. stresses the importance of comprehensive , binding and enforceable provisions on social , labour and environmental standards , especially in the trade and sustainable development (tsd) chapters of free trade agreements (ftas); stresses the importance of effective monitoring and sanctions mechanisms that allow individuals and communities , whether outside or within the eu , to seek redress; calls for the systematic use of comprehensive ex ante and ex post impact assessments on trade sustainability , including with regard to human rights; ### 2. stresses the importance of comprehensive , binding and enforceable provisions on social , labour and environmental standards , especially in the trade and sustainable development (tsd) chapters of free trade agreements (ftas); stresses the importance of effective monitoring that allow individuals and communities , whether outside or within the eu , to seek redress; calls for the systematic use of comprehensive ex ante and ex post impact assessments on trade sustainability , including with regard to human rights;


### 5. stresses that the implementation of the paris agreement should be supported by eu trade policy; calls for the inclusion of specific provisions and targets to achieve these commitments in ftas , notably on the implementation of the national determined contributions , on loss and damage associated with the adverse effects of climate change , and on technology transfer. ### 5. stresses the impact of the paris agreement on the eu trade policy; calls for the inclusion of specific provisions and targets to achieve these commitments in ftas , notably on the implementation of the national determined contributions , on loss and damage associated with the adverse effects of climate change , and on technology transfer.


### 1. considers that voluntary due diligence standards have severe limitations and that the union should urgently adopt minimum requirements for undertakings to identify , prevent , cease , mitigate , monitor , disclose , account , address and remediate human rights , environmental and governance risks in their entire value chain; believes that this would be beneficial for stakeholders , as well as for businesses in terms of harmonization , legal certainty and a level playing field; stresses that this would enhance the reputation of eu undertakings and of the union as a standard setter; ### 1. considers that the union should adopt standard requirements for undertakings voluntarily to identify , prevent , cease , mitigate , monitor , disclose , account , address and remediate possible fundamental rights risks; believes that this would be beneficial for stakeholders , as well as for businesses in terms of harmonization , legal certainty and a level playing field; stresses that this would enhance the reputation of eu undertakings;


### 1. notes that the article 21 of the treaty on the european union requires the union to promote and consolidate the universality and indivisibility of human rights and fundamental freedoms , as protected by the european convention for the protection of human rights and fundamental freedoms (echr) and charter of fundamental rights of the european union (the ‘charter’) , to ensure sustainable development and consistency between its external action and other policies; ### 1. notes that the article 21 of the treaty on the european union requires the union to promote and consolidate the universality and indivisibility of human rights and fundamental freedoms , as protected by the european convention for the protection of human rights and fundamental freedoms (echr) , to ensure sustainable development and consistency between its external action and other policies;


### 1. acknowledges that there is sufficient strong evidence that shows that the voluntary efforts of union companies to prevent and mitigate the negative impacts of their behaviour on developing countries have failed as violations of human rights of individuals , in particular worker’s rights , and of local communities are still taking place at the end of the supply chain; ### 1. acknowledges that there is sufficient strong evidence that shows that the voluntary efforts of union companies to prevent and mitigate the negative impacts of their behaviour on developing countries have not been sufficient as violations of human rights of individuals , in particular worker’s rights , and of local communities are still taking place at the end of the supply chain;


### 6. a more general approach was taken by the non-financial reporting directive5 , which imposes on some large undertakings the obligation to report on the policies they pursue in relation to environmental , social and employee matters , respect for human rights , anti-corruption and bribery matters , including due diligence. however , the scope of that directive is limited and the obligation is based on a comply-or-explain principle. ### 6. a more general approach was taken by the non-financial reporting directive5 , which imposes on some large undertakings the obligation to report on the policies they pursue in relation to environmental , social and employee matters , respect for human rights , anti-corruption and bribery matters , including due diligence.


### 7. in some member states the need to make businesses more responsive to human rights and to environmental and governance concerns has led to the adoption of national due diligence legislation. in the netherlands , the child labour due diligence act requires undertakings operating in the dutch market to investigate whether there is a reasonable suspicion that the goods or services supplied have been produced using child labour and , in the event of reasonable suspicion , to adopt and implement an action plan. in france , the law on a duty of vigilance of parent and ordering companies requires from some large companies the adoption of a due diligence plan to identify and prevent human rights , health and safety and environmental risks caused by the undertaking , its subsidiaries or suppliers. in many other member states , debate is ongoing as to the introduction of mandatory due diligence requirements for undertakings. ### 7. in the netherlands , the child labour due diligence act requires undertakings operating in the dutch market to investigate whether there is a reasonable suspicion that the goods or services supplied have been produced using child labour and , in the event of reasonable suspicion , to adopt and implement an action plan. in france , the law on a duty of vigilance of parent and ordering companies requires from some large companies the adoption of a due diligence plan to identify and prevent human rights , health and safety and environmental risks caused by the undertaking , its subsidiaries or suppliers. in many other member states , debate is ongoing as to the introduction of mandatory due diligence requirements for undertakings. consequently , the union should not legislate in areas where the member states have already introduced legislation or are doing so , and should simply set out a non-binding framework for straightforward , joint application so as not to distort competition between european companies and between them and companies from third countries.


### 8. in order to ensure a level playing field the responsibility for companies to respect human rights under international standards should be transformed into a legal duty at union level. by coordinating safeguards for the protection of human rights , the environment and good governance , this directive will ensure that all undertakings operating in the internal market are subject to harmonised minimum due diligence obligations , which will improve the functioning of that market. ### 8. in order to ensure a level playing field and allow companies to establish respect for fundamental rights as a business strategy , this directive should guarantee a simple , harmonised and straightforward due diligence process for companies , both european and non-european , operating in the internal market.


### 9. the establishment of mandatory due diligence requirements at eu level will be beneficial to businesses in terms of harmonization , legal certainty and the securing of a level playing field , and will give companies subject to them a competitive advantage inasmuch as societies are increasingly demanding from undertakings that they become more ethical and sustainable. this directive , by setting a european due diligence standard , could help foster the emergence of a global standard for responsible business conduct. ### deleted


### 10. this directive is aimed at preventing and mitigating adverse human rights , governance and environmental impacts throughout the value chain , as well as ensuring that undertakings can be held accountable for these risks and that anyone who has suffered harm in this regard can effectively exercise the right to obtain remedy. ### 10. this directive is aimed at preventing and mitigating adverse fundamental rights impacts of possible company actions , as well as ensuring that undertakings can be held accountable for these risks and that anyone who has suffered harm in this regard can effectively exercise the right to obtain remedy.


### 11. this directive should not prevent member states from maintaining or introducing further general or sector-specific due diligence requirements , provided that they do not hamper the effective application of the due diligence requirements as provided for in this directive. this directive is not aimed at replacing eu due diligence legislation already in force or preclude further sector-specific eu legislation from being introduced , and , consequently , it should apply without prejudice to further due diligence requirements established in union sector-specific legislation , in particular regulation (eu) no 995/20106 and regulation (eu) 2017/8217. this directive establishes in this regard a conflict of norms rule. in case of insurmountable incompatibility , the sector-specific legislation should apply. ### 11. this directive should not prevent member states from maintaining or introducing further general or sector-specific due diligence requirements , provided that they are in keeping with the voluntary nature of this legislation and maintain the exemption for small and medium-sized enterprises provided for in this directive. this directive is not aimed at replacing eu due diligence legislation already in force or preclude further sector-specific eu legislation from being introduced , and , consequently , it should apply without prejudice to further due diligence requirements established in union sector-specific legislation , in particular regulation (eu) no 995/20106 and regulation (eu) 2017/8217. this directive establishes in this regard a conflict of norms rule. in case of insurmountable incompatibility , the sector-specific legislation should apply.


### 12. the implementation of this directive should in no way constitute grounds for justifying a reduction in the general level of protection of human rights or the environment. in particular , it should not affect other existing subcontracting , posting or supply chain liability frameworks. the fact that an undertaking has carried out its due diligence obligations under this directive does not exempt it from its obligations under other existing liability frameworks and therefore any legal proceedings brought against it based on other existing liability frameworks should not be dismissed on account of that circumstance. ### 12. the implementation of this directive should in no way constitute grounds for justifying a reduction in the general level of protection of fundamental rights. in particular , it should not affect other existing subcontracting , posting or supply chain liability frameworks. the fact that an undertaking has carried out the due diligence process under this directive does not exempt it from its obligations under other existing liability frameworks and therefore any legal proceedings brought against it based on other existing liability frameworks should not be dismissed on account of that circumstance.


### 13. the directive applies to all undertakings governed by the law of a member state or established in the territory of the union regardless of their size , sector , and whether they are private or state-owned. all economic sectors , including the financial sector , are covered by this directive. ### 13. the directive applies to all large undertakings with more than 5 000 employees that are governed by the law of a member state , are established in the territory of the union or are established in third countries but operate in the eu market , regardless of their sector and whether they are private or state-owned. all economic sectors , including the financial sector and online trading , are covered by this directive. this directive will also apply to eu and national public administrations , and to associations , foundations and ngos that receive any type of aid , appropriation or subsidy from european , national , regional or local funds , regardless of the quantity involved.


### 14. a degree of proportionality is built into the due diligence process , as this process is contingent on the risks a company is exposed to. this would imply that many small and medium-size undertakings and micro-enterprises may need less extensive and formalised due diligence processes. an undertaking that , after carrying out a risk assessment , concludes that it does not identify any risks in its business relationships , would only need to fill in and communicate a statement , which should in any case be reviewed in case of changes to the undertakings’ operations or operating context. micro-enterprises in most sectors tend to encounter low risks in their business relationships and , consequently , it is considered appropriate to allow member states to decide whether micro-enterprises should be exempted from the application of the requirements in this directive. ### 14. the due diligence process laid down in this directive will under no circumstances apply to the self-employed , small and medium-size undertakings and micro-enterprises. moreover , an undertaking that , after carrying out a risk assessment , concludes that it does not identify any risks in its business relationships , would only need to fill in and communicate a statement , which should in any case be reviewed in case of changes to the undertakings’ operations or operating context. member states will under no circumstances be able to require small and medium-sized undertakings , micro-enterprises or the self-employed to adhere to obligatory due diligence processes. member states may decide that other undertakings should be exempted from the application of the requirements in this directive.


### 15. for undertakings owned or controlled by the state , the fulfilment of their due diligence obligations should require that they procure services from undertakings which have complied with due diligence obligations. member states are encouraged not to provide extraordinary state support to companies that do not comply with the objectives of this directive. ### deleted


### 16. due diligence is defined in this directive as the process put in place by an undertaking in order to identify , cease , prevent , mitigate , monitor , disclose , account for , address and remedy the risks posed to human rights , including social and labour rights , the environment , including climate change , and to governance , both by its own operations and its business relationships. ### 16. due diligence is defined in this directive as the process put in place by an undertaking in order to identify , cease , prevent , mitigate , monitor , disclose , account for , address and remedy the risks posed to the fundamental rights enshrined in the charter of fundamental rights of the european union , especially the rights of the child and the prohibition of child labour , both by its own operations and its business relationships.


### 17. in relation to human rights risks , this directive lists a number of instruments undertakings should take into consideration when assessing their potential risks. the list is conceived as non-exhaustive , undertakings being strongly encouraged to take into consideration other human rights instruments that would enable them to carry out a complete due diligence process to prevent any risk for human rights. ### 17. in relation to fundamental rights risks , this directive lists a number of instruments undertakings can use when assessing their potential risks. the list is conceived as non-exhaustive , undertakings being strongly encouraged to take into consideration other fundamental rights instruments , especially those pertaining to children , that would enable them to carry out a complete due diligence process to prevent any risk for fundamental rights.


### 18. environmental risks are often closely linked to human rights risks. the united nations special rapporteur on human rights and the environment has stated that the rights to life , health , food , water and development , as well as the right to a safe , clean , healthy and sustainable environment , are necessary for the full enjoyment of human rights; furthermore , the united nations general assembly has recognised , in resolution 64/292 , the right to safe and clean drinking water and sanitation as a human right. the covid-19 pandemic has underlined not only the importance of safe and healthy working environments , but also that of undertakings ensuring they do not cause or contribute to health risks in their value chains. consequently , those rights should be covered by the legislation. ### 18. environmental risks are often closely linked to human rights risks. the united nations special rapporteur on human rights and the environment has stated that the rights to life , health , food , water and development are necessary for the full enjoyment of human rights. consequently , those rights should be covered by the legislation.


### 19. this directive establishes a non-exhaustive list of environmental risks. to contribute to the internal coherence of eu legislation and to provide legal certainty , this list is based on regulation (eu) 2020/852 on the establishment of a framework to facilitate sustainable investment in which undertakings may find guidance for assessing their risks. ### deleted


### 20. this directive also requires undertakings to carry out due diligence in order to prevent any adverse impact on the good governance of the countries , regions or territories in which they carry out their business activities. in particular , undertakings should comply with the oecd anti-bribery convention and take measures to prevent any undue influence being exercised on public officials with a view to obtaining privileges or unfair favourable treatment that is in breach of the law. undertakings should also abstain from improperly influencing local political activities and should strictly comply with the applicable tax legislation. ### deleted


### 21. environmental , governance and human right risks are not gender-neutral. undertakings should be encouraged to integrate the gender perspective into their due diligence processes. they can find guidance in the un booklet gender dimensions of the guiding principles on business and human rights. ### deleted


### 22. adverse impacts or violations of human rights and social and environmental standards by undertakings can be the result of their own activities or of those of their business relationships , in particular suppliers , sub-contractors and investee undertakings. in order to be effective , undertakings’ due diligence should encompass the entire value chain. ### deleted


### 23. due diligence is primarily a preventative mechanism that requires companies to identify potential or actual adverse impacts and to adopt policies and measures to cease , prevent , mitigate , monitor , disclose , address , remediate them , and account for how they address those impacts. undertakings should be required to produce a document in which they make explicit their due diligence strategy with reference to each of those stages. this due diligence strategy should be duly integrated into the company’s overall business strategy. ### 23. due diligence is primarily a preventative mechanism that requires companies to identify potential or actual adverse impacts and to adopt policies and measures to cease , prevent , mitigate , monitor , disclose , address , remediate them , and account for how they address those impacts. undertakings will produce a standard document in which they set out their due diligence strategy with reference to each of those stages.


### 24. due diligence should not be a ‘box-ticking’ exercise but should consist of an ongoing assessment of risks , which are dynamic and may change on account of new business relationships or contextual developments. undertakings should therefore in an ongoing manner monitor and adapt their due diligence strategies accordingly. those strategies should cover every actual or potential adverse impact , although the severity of the risk should be considered if the establishment of a prioritisation policy is required. ### 24. these due diligence strategies should cover every actual or potential adverse impact , although the severity of the risk should be carefully considered if the establishment of a specific policy is required.


### 25. undertakings should first try to address and solve a potential or actual risk in consultation with stakeholders. should this attempt be unsuccessful , and the company’s responsible disengagement becomes an option , the company should also consider the potential adverse impacts of that decision and take appropriate measures to address them. ### 25. undertakings should first try to address and solve a potential or actual risk in consultation with stakeholders.


### 26. sound due diligence requires that all stakeholders be consulted effectively and meaningfully , and that trade unions in particular be appropriately involved. the consultation and involvement of stakeholders can help companies to identify risks more precisely and to set up a more effective due diligence strategy. this directive therefore requires the consultation and involvement of stakeholders in all stages of the due diligence process. furthermore , their involvement and consultation may help to push back against pressure from financial markets and short-term investors and give voice to those with a strong interest in the long-term sustainability of the company. stakeholder participation may help improve the long-term performance and profitability of companies , as their increased sustainability would have positive aggregate economic effects. ### 26. sound due diligence requires that all stakeholders be consulted effectively and meaningfully , and that trade unions in particular be appropriately involved. the consultation and involvement of stakeholders can help companies to identify risks more precisely and to set up a more effective due diligence strategy. this directive therefore allows for the consultation and involvement of stakeholders in the due diligence process.


### 27. the concept of stakeholder should be broadly interpreted and include all persons whose rights and interests may be affected by the decisions of the company , which includes , but is not limited to , workers , local communities , indigenous peoples , citizens’ associations and shareholders , and organisations whose statutory purpose is to ensure that human and social rights , environmental and good governance standards are respected , such as trade unions and civil society organisations. ### 27. the concept of stakeholder should be interpreted to mean those persons and/or groups of persons whose legitimate rights or interests could be directly affected by the fundamental rights risks caused by a company or its business relationships , including , in exceptional cases , trade union organisations.


### 30. this directive requires undertakings to make all necessary efforts to identify all their suppliers. in order to be fully effective , due diligence should not be limited to the first tier downstream and upstream in the supply chain but should encompass all suppliers and sub-contractors , particularly those that , during the due diligence process , might have been identified by the undertaking as posing major risks. this directive , however , recognises that not all undertakings have the same resources or capabilities to identify all their suppliers and therefore makes that obligation subject to the principles of reasonableness and proportionality , which in no case should be interpreted by undertakings as a pretext not to comply with their obligation to make all necessary efforts in that regard. ### deleted


### 31. for due diligence to be embedded in the culture and structure of a company , it is necessary that the members of the administrative , management and supervisory bodies of the company be responsible for the adoption and implementation of the due diligence strategy. the board of directors should have the appropriate knowledge , training and experience in due diligence matters. the directive requires that large companies have an advisory committee from whose expertise on due diligence matters the undertaking should benefit. this directive also requires that remuneration policies be brought in line with the objectives of this directive. ### 31. the directive requires that large companies have an advisory committee from whose expertise on due diligence matters the undertaking should benefit.


### 32. coordination of undertakings’ due diligence efforts at sectoral level could enhance the consistency and effectiveness of their due diligence strategies. to this end , this directive provides that member states could encourage the adoption of due diligence action plans at sectoral level. to avoid stakeholders’ views being ignored , the directive requires that stakeholders participate in the definition of these plans. ### 32. coordination of undertakings’ due diligence efforts at sectoral level could enhance the consistency and effectiveness of their due diligence strategies. to this end , this directive provides that member states could encourage the adoption of due diligence action plans at sectoral level. to avoid stakeholders’ views being ignored , the directive proposes that stakeholders participate in the definition of these plans.


### 33. in order to be effective , a due diligence framework should include grievance mechanisms at company or sector level and in order to ensure that such mechanisms are effective the participation of stakeholders should be ensured. those mechanisms should allow stakeholders to raise concerns and should function as early-warning risk-awareness systems. grievance mechanisms should be entitled to make suggestions as to how risks should be addressed by the undertaking. they should also be entitled to propose an appropriate remedy when it is brought to their attention that the undertaking has caused or contributed to harm. ### deleted


### 34. member states should designate one or more national authorities to supervise the correct implementation by undertakings of their due diligence obligations and ensure the proper enforcement of this directive. those national authorities should be entitled to carry out appropriate checks , on their own initiative or based on complaints received from stakeholders and third parties , and impose penalties , in order to ensure that undertakings comply with the obligations set out in the legislation; at union level , a european committee of competent authorities should be set up by the european commission. ### 34. member states should designate one or more national authorities to supervise the correct implementation and enforcement by undertakings of this directive. those national authorities should be entitled to carry out appropriate checks , on their own initiative or based on substantiated complaints received from stakeholders and third parties , and impose penalties , in order to ensure that undertakings comply with the provisions of the legislation.


### 35. repeated infringement by an undertaking of the national provisions adopted in accordance with this directive , intentionally or with serious negligence , should constitute a criminal offence. ### deleted


### 37. in line with the ungps , conducting human rights due diligence should not absolve undertakings per se from liability for causing or contributing to human rights abuses or environmental damage. however , having a robust due diligence process in place may help undertakings to avoid causing or contributing to harm. ### deleted


### 39. member states should introduce further legislation to ensure that undertakings can be held liable for damage caused by undertakings under their control where they have , in the course of business , committed violations of internationally recognized human rights or international environmental standards. they should not be held liable however if they can prove that they took all due care to avoid the loss or damage , or that the damage would have occurred even if all due care had been taken. when introducing liability regimes , member states should consider adopting appropriate limitation periods and introducing the loser pays principle. ### 39. member states may introduce further legislation to ensure that undertakings can be held liable for damage caused by undertakings under their control where they have , in the course of business , committed violations of internationally recognized fundamental rights or international environmental standards. they should not be held liable however if they can prove that they took all due care to avoid the loss or damage , or that the damage would have occurred even if all due care had been taken. when introducing liability regimes , member states should consider adopting appropriate limitation periods and introducing the loser pays principle.


### 40. in order to create clarity and certainty and consistency among the practices of undertakings , in particular small , medium-sized and micro-enterprises , this directive requires the commission to prepare guidelines in consultation with member states and the oecd and with the assistance of a number of specialised agencies. a number of guidelines on due diligence produced by international organisations already exist which could be used as a reference for the commission when developing guidelines under this directive specifically for eu companies. in addition to general guidelines which could guide smes in the application of due diligence in their operations , the commission should envisage producing sector-specific guidelines and provide a regularly updated list of country fact-sheets in order to help companies assess the risks of their business operations in a given area. those fact-sheets should indicate in particular which list of conventions and treaties among those listed in article 3 of the directive have been ratified by a given country. ### 40. in order to create clarity and certainty and consistency among the practices of undertakings , in particular small , medium-sized and micro-enterprises , this directive requires the commission to prepare guidelines in consultation with member states and the oecd and with the assistance of a number of specialised agencies. in addition to general guidelines which could guide smes in the application of due diligence in their operations , the commission should envisage producing sector-specific guidelines and provide a regularly updated list of country fact-sheets in order to help companies assess the risks of their business operations in a given area. those fact-sheets should indicate in particular which list of conventions and treaties among those listed in article 3 of the directive have been ratified by a given country.


### 1. this directive is aimed at ensuring that undertakings operating in the internal market fulfil their duty to respect human rights , the environment and good governance and do not cause or contribute to risks to human rights , the environment and good governance in their activities and those of their business relationships. ### 1. this directive is aimed at ensuring that limited liability undertakings operating in the internal market fulfil their duty to respect the fundamental rights enshrined in the charter of fundamental rights of the european union , especially the rights of the child and the prohibition of child labour.


### 2. undertakings shall communicate their due diligence strategy to their workers and business relationships and to one of the national competent authorities designated pursuant to article 14. ### 2. undertakings that establish a due diligence strategy shall communicate it to their workers and business relationships and , where appropriate , to one of the national competent authorities designated pursuant to article 14.


### 3. member states shall establish a centralised platform and ensure that undertakings upload on that platform their due diligence strategies or the statement referred to in article 4. ### 3. member states shall establish a centralised platform so that undertakings can upload on that platform their due diligence strategies or the statement referred to in article 4.


### article 7 ### deleted


### this directive is without prejudice to the obligations imposed on certain undertakings by directive 2013/34/eu to include in their management report a non-financial statement including a description of the policies pursued by the undertaking in relation to , as a minimum , environmental , social and employee matters , respect for human rights , anti-corruption and bribery matters , and the due diligence processes implemented. ### deleted


### article 9 ### deleted


### 1. undertakings shall establish a grievance mechanism , both as an early-warning risk-awareness and as a remediation system , allowing any stakeholder to voice concerns regarding the existence of a human rights , environmental or governance risks. member states shall ensure that undertakings are enabled to provide for such a mechanism through collaborative arrangements with other undertakings or organisations. ### deleted


### 2. grievance mechanisms shall be legitimate , accessible , predictable , safe , equitable , transparent , rights-compatible and adaptable as set out in the effectiveness criteria for non-judicial grievance mechanisms in principle 31 of the united nations guiding principles on business and human rights. they shall provide for anonymous complaints. ### deleted


### 3. the grievance mechanism shall provide for timely and effective responses to stakeholders , both in instances of warnings and complaints and in instances of remediation. ### deleted


### 4. undertakings shall publish concerns raised via their grievance mechanisms as well as remediation efforts and regularly report on progress made in those instances. ### deleted


### 5. grievance mechanisms shall be entitled to make proposals to the undertaking on how risks should be addressed. ### deleted


### 6. grievance mechanisms shall be developed in partnership with stakeholders , in particular workers representatives , and be managed in cooperation with them. workers representatives shall be given the necessary resources to carry out their responsibilities in this area , including in order to establish connections with trade unions and workers in the undertakings with which the main undertaking has business relationships. ### deleted


### 1. member states shall ensure that when an undertaking identifies , in particular through its grievance mechanism , that it has caused or contributed to harm , it provides for or cooperates with remediation. ### 1. member states shall ensure that when an undertaking identifies , in particular through its grievance mechanism , that it may have caused or contributed to harm , it provides for or cooperates with remediation.


### 2. the remedy may be proposed via the grievance mechanism laid down in article 9. ### deleted


### 4. undertakings shall prevent additional harm through guarantees of non-repetition. ### deleted


### article 11 ### deleted


### 1. member states shall ensure that the members of the administrative , management and supervisory bodies of an undertaking , acting within the competences assigned to them by national law , have collective responsibility for ensuring that the due diligence process and an the undertaking’s business decisions , including remuneration policies , are consistent with this directive. ### deleted


### 2. member states shall ensure that their laws , regulations and administrative provisions on liability , at least towards the undertaking , apply to the members of the administrative , management and supervisory bodies of the undertakings , as regards breach of the duties referred to in paragraph 1. ### deleted


### 1. member states shall ensure that the governing body of the undertaking has the necessary qualifications , knowledge and expertise as regards due diligence. ### deleted


### 2. large undertakings shall set up an advisory committee tasked with advising the governing body of the undertakings on due diligence matters and propose measures to cease , monitor , disclose , address , prevent and mitigate risks. advisory committees shall include stakeholders and experts in their composition. ### 2. large undertakings shall set up an advisory committee tasked with advising the governing body of the undertakings on due diligence matters and propose measures to cease , monitor , disclose , address , prevent and mitigate risks.


### 1. member states may encourage the adoption by undertakings of sectoral due diligence action plans aimed at coordinating the due diligence strategies of undertakings within an economic sector. ### 1. member states may encourage the adoption by undertakings of voluntary sectoral due diligence action plans aimed at coordinating the due diligence strategies of undertakings within an economic sector.


### 4. sectoral grievance mechanisms shall be developed in partnership with stakeholders and be managed in cooperation with them. ### deleted


### 2. member states shall ensure that the national competent authorities designated in accordance with paragraph 1 are independent and have the necessary personal , technical and financial resources , premises , infrastructure , and expertise to carry out their duties effectively. ### deleted


### 3. member states shall inform the commission of the names and addresses of the competent authorities by [date of transposition of the directive]. member states shall inform the commission of any changes to the names or addresses of the competent authorities. ### deleted


### 6. member states shall ensure that if the failure to comply with this directive could lead to irreparable harm , a competent authority may order the adoption of interim measures by the undertaking concerned , or order the temporary suspension of activities. ### 6. member states shall ensure that if the behaviour or actions of an undertaking could lead to irreparable harm , a national authority may order the adoption of interim measures by the undertaking concerned , or order the temporary suspension of activities. member states may ask the commission to initiate , following agreement with parliament and the council , infringement proceedings leading , in the most serious cases , to an express ban on operating anywhere in the internal market , either for a temporary or undefined duration or until the damage is remediated or compensated.


### 9. records of the checks referred to in paragraph 1 shall be kept for at least five years. ### 9. records of the checks referred to in paragraph 1 shall be kept for no more than five years.


### 1. in order to create clarity and certainty for undertakings , in particular small , medium-sized and micro undertakings , as well as ensure consistency among their practices , the commission , in consultation with member states and the oecd , and with the assistance of the fundamental rights agency , the european environment agency and the european agency for small and medium enterprises , shall publish general non-binding guidelines for undertakings on how best to fulfil the due diligence obligations set out in this directive. those guidelines shall provide practical guidance on how proportionality may be applied to due diligence obligations depending on the size and sector of the undertaking. the guidelines shall be made available no later than 18 months after the date of entry into force of this directive. ### 1. in order to create clarity and certainty for undertakings , in particular small , medium-sized and micro undertakings , as well as ensure consistency among their practices , the commission , in consultation with member states and the oecd , and with the assistance of the fundamental rights agency and the european agency for small and medium enterprises , shall publish general non-binding guidelines for undertakings on how best to fulfil the due diligence set out in this directive. those guidelines shall provide practical guidance on how proportionality may be applied to due diligence obligations depending on the size and sector of the undertaking. the guidelines shall be made available no later than 18 months after the date of entry into force of this directive.


### 2. the commission , in consultation with member states and the oecd , and with the assistance of the fundamental rights agency , the european environment agency and the european agency for small and medium enterprises , may prepare specific non-binding guidelines for undertakings operating in certain sectors. ### 2. the commission , in consultation with member states and the oecd , and with the assistance of the fundamental rights agency and the european agency for small and medium enterprises , may prepare specific non-binding guidelines for undertakings operating in certain sectors.


### 3. in preparing the non-binding guidelines referred to in paragraphs 1 and 2 above , due account shall be taken of the united nations guiding principles on business and human rights , the ilo tripartite declaration of principles concerning multinational enterprises and social policy , the oecd due diligence guidance for responsible business conduct , the oecd guidelines for multinational enterprises , the oecd guidance for responsible mineral supply chains , the oecd due diligence guidance for responsible supply chains in the garment and footwear sector , the oecd guidance for responsible business conduct for institutional investors , and the oecd-fao guidance for responsible agricultural supply chains. ### deleted


### specific measures in support of small , medium-sized and micro-enterprises ### exemption measures for small and medium-sized enterprises , the self-employed and micro-enterprises


### 1. member states shall ensure that a specific portal for small , medium-sized and micro undertakings is available where they may seek guidance and obtain further support and information about how best fulfil their due diligence obligations. ### 1. member states shall ensure that a specific portal for small , medium-sized and micro undertakings is available to provide guidance , support and information about the voluntary due diligence processes.


### 2. small , medium-sized and micro undertakings shall be eligible for financial support to perform their due diligence obligations under the union’s programmes to support small , medium sized and micro enterprises. ### 2. small , medium-sized and micro undertakings shall be eligible for financial support to implement voluntary due diligence strategies under the union’s programmes to support small , medium sized and micro enterprises.


### 1. the commission shall set up a european committee of competent authorities to facilitate the coordination and convergence of regulatory and supervisory practices , and monitor the performance of national competent authorities. ### deleted


### 2. the commission , assisted by the european union agency for fundamental rights , the european environmental agency , and the european agency for small and medium enterprises shall publish , based on the information shared by national competent authorities and in cooperation with other public sector experts and stakeholders , an annual due diligence score-board. ### 2. the commission , assisted by the european union agency for fundamental rights and the european agency for small and medium enterprises shall publish , based on the information shared by national competent authorities and in cooperation with other public sector experts and stakeholders , an annual due diligence score-board.


### 2. member states shall ensure that a repeated infringement by an undertaking of the national provisions adopted in accordance with this directive constitutes a criminal offence , when committed intentionally or with serious negligence. member states shall take the necessary measures to ensure that these offences are punishable by effective , proportionate and dissuasive criminal penalties. ### deleted


### the fact that an undertaking has carried out due diligence in compliance with the requirements set out in this directive shall not absolve the undertaking of any civil liability which it may incur pursuant to national law. ### the fact that an undertaking has carried out due diligence in compliance with the requirements set out in this directive shall absolve the undertaking of any civil liability which it may incur pursuant to national law.


### 6. the present regulation further introduces a new article 26a incorporating a forum necessitatis that should be conditional on two elements , namely a risk of denial of justice in the third country where a human rights violation has taken place and a sufficiently close connection to the member state concerned. this kind of provision already exists in eu law , for example in article 11 of regulation 650/2012 on succession matters and in article 7 of regulation 4/2009 on maintenance obligations. this new provision exceptionally gives jurisdiction to member states’ courts , where they do not have jurisdiction pursuant to any other provision of regulation (eu) no 1215/2012 , to decide on business-related civil claims on human rights violations brought against undertakings located in third-countries , but within the supply chain of an eu undertaking , provided that proceedings cannot reasonably be brought or conducted or would be impossible in that third country with which the case is closely related. the provision further requires that the claim have a sufficient connection with the member state of the court seized. ### 6. the present regulation further introduces a new article 26a incorporating a forum necessitatis that should be conditional on two elements , namely an actual and proven denial of justice in the third country where a human rights violation has taken place and a sufficiently close connection to the member state concerned.


### (5) in matters relating to business civil claims for human rights violations within the value chain within the scope of directive xxx/xxxx on corporate due diligence and corporate accountability , an undertaking domiciled in a member state may also be sued in the member state where it has its domicile or in which it operates when the damage caused in a third country can be imputed to a subsidiary or another undertaking with which the parent company has a business relationship within the meaning of article 3 of directive xxx/xxxx on corporate due diligence and corporate accountability. ### (5) in matters relating to business civil claims for fundamental rights violations within the scope of directive xxx/xxxx on corporate due diligence and corporate accountability , the existing procedural rules in each member state shall be applied. if no such rules exist , the rules in the country where the damage was caused shall apply.


### regarding business-related civil claims on human rights violations within the value chain of a company domiciled in the union or operating in the union within the scope of directive xxx/xxxx on corporate due diligence and corporate accountability , where no court of a member state has jurisdiction under this regulation , the courts of a member state may , on an exceptional basis , hear the case if the right to a fair trial or the right to access to justice so requires , in particular: (a) if proceedings cannot reasonably be brought or conducted or would be impossible in a third state with which the dispute is closely connected; or (b) if a judgment given on the claim in a third state would not be entitled to recognition and enforcement in the member state of the court seised under the law of that state and such recognition and enforcement is necessary to ensure that the rights of the claimant are satisfied; and the dispute has a sufficient connection with the member state of the court seised. ### regarding business-related civil claims on fundamental rights violations within the value chain of a company domiciled in the union or operating in the union within the scope of directive xxx/xxxx on corporate due diligence and corporate accountability , the existing procedural rules in each member state shall be applied. if no such rules exist , the rules in the country where the damage was caused shall apply.


### have adopted this regulation: ### deleted


### amendment to regulation (ec) no 864/2007 of the european parliament and of the council of 11 july 2007 on the law applicable to non-contractual obligations (rome ii) ### deleted


### article 23 ### deleted


### regulation (eu) no 864/2007 is amended as follows: ### deleted


### (1) the following article is inserted: ### deleted


### article 6a ### deleted


### business-related human rights claims ### deleted


### in the context of business-related civil claims for human rights violations within the value chain of an undertaking domiciled in a member state of the union or operating in the union within the scope of directive xxx/xxxx on corporate due diligence and corporate accountability , the law applicable to a non-contractual obligation arising out of the damage sustained shall be the law determined pursuant to article 4(1) , unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred or on the law of the country in which the parent company has its domicile or , where it does not have a domicile in a member state , the law of the country where it operates. ### deleted


### — having regard to the united nations 2030 agenda for sustainable development , adopted in 2015 , in particular the 17 sustainable development goals (sdgs) , ### deleted


### — having regard to the un booklet ‘gender dimensions of the guiding principles on business and human rights’13 , ### deleted


### — having regard to the paris agreement adopted on 12 december 2015 (‘the paris agreement’) , ### deleted


### — having regard to the eu action plan: financing sustainable growth14 , ### deleted


### — having regard to the european green deal15 , ### deleted


### — having regard to regulation (eu) 2019/2088 of the european parliament and of the council of 27 november 2019 on sustainability‐related disclosures in the financial services sector20 (‘the disclosure regulation’) , ### deleted


### — having regard to regulation (eu) 2020/852 of the european parliament and of the council of 18 june 2020 on the establishment of a framework to facilitate sustainable investment , and amending regulation (eu) 2019/208821 (‘the taxonomy regulation’) , ### deleted


### — having regard to the commission guidelines on non-financial reporting (methodology for reporting non-financial information)22 and to the commission guidelines on non-financial reporting: supplement on reporting climate-related information23 , ### deleted


### — having regard to the briefings of the directorate-general for external policies of the union of june 2020 entitled ‘eu human rights due diligence legislation: monitoring , enforcement and access to justice for victims’31 and ‘substantive elements of potential legislation on human rights due diligence’32 , ### deleted


### a. whereas the globalisation of economic activity has in many instances given rise to and aggravated adverse impacts on human rights , including social and labour rights , the environment and the good governance of states; ### a. whereas the globalisation of economic activity has in many instances given rise to and aggravated adverse impacts on human rights , including social and labour rights , the loss of sovereignty , the environment and the good governance of states;


### b. whereas companies should respect human rights , the environment and good governance and should not cause or contribute to causing any adverse impacts in this regard; ### b. whereas companies should respect human rights , the environment and good governance and should not cause or contribute to causing any adverse impacts in this regard , bearing in mind , however , that their objective is to generate profit;


### c. whereas the covid-19 crisis has exposed some of the severe drawbacks of global supply chains and the ease with which certain undertakings are able to shift negative impacts on their business activities to other jurisdictions; ### c. whereas the covid-19 crisis has exposed some of the severe drawbacks of global supply chains and the ease with which certain undertakings are able to shift negative impacts on their business activities to other jurisdictions , in addition to the vulnerability of citizens and small traders as a result of the negative effects of production being relocated to countries outside the eu;


### d. whereas according to ilo statistics around the globe there are around 25 million victims of forced labour , 152 million victims of child labour , 2.78 million deaths due to work-related diseases per year and 374 million non-fatal work-related injuries per year; whereas the ilo has developed several conventions to protect workers , but their enforcement is still lacking , especially with reference to the labour markets of developing countries; ### d. whereas according to ilo statistics around the globe there are around 25 million victims of forced labour , 152 million victims of child labour , of which around 96% are outside europe , 2.78 million deaths due to work-related diseases per year and 374 million non-fatal work-related injuries per year; whereas the ilo , although lacking any legislative authority , has developed several conventions to protect workers , but their enforcement is still lacking , especially with reference to the labour markets of developing countries;


### e. whereas this alarming situation has prompted a debate as to how to make businesses more responsive to the adverse impacts they cause or contribute to; ### deleted


### f. whereas that debate has led , among other things , to the adoption of due diligence frameworks and standards within the un , the oecd and the ilo; whereas these standards are however voluntary and , consequently , their uptake has been limited; ### deleted


### i. whereas the union has already adopted legislation that pertains to due diligence , such as the conflict minerals regulation and the timber regulation; ### i. whereas the union has already adopted legislation that pertains to due diligence in very specific sectors , such as the conflict minerals regulation and the timber regulation;


### 2. recalls that due diligence is primarily a preventative mechanism and that companies should be first and foremost required to identify risks or adverse impacts and adopt policies and measures to address them; highlights that if an undertaking causes or contributes to an adverse impact it should provide for a remedy; ### 2. stresses that it is the responsibility of states and governments to safeguard human rights in their countries and that this responsibility shall not be transferred to private actors; recalls that due diligence is primarily a preventative mechanism and that companies should be first and foremost required to identify risks or adverse impacts and adopt policies and measures to mitigate them;


### 2. recalls that due diligence is primarily a preventative mechanism and that companies should be first and foremost required to identify risks or adverse impacts and adopt policies and measures to address them; highlights that if an undertaking causes or contributes to an adverse impact it should provide for a remedy; ### 2. recalls that due diligence is primarily a preventative and voluntary mechanism and that it should , above all , continue to be voluntary for companies; highlights that if an undertaking causes or contributes to an adverse impact , for reasons directly within its control , it should provide for a remedy;


### 2. believes that there is strong need for a mandatory , harmonised framework at union level to ensure a level playing field for business and welcomes the commission’s ongoing work on legislation requiring that union companies conduct due diligence on respect for human rights and environmental obligations throughout their supply chains; ### 2. believes that there is strong need for a harmonised framework at union level to ensure a level playing field for business and welcomes the commission’s ongoing work on legislation requiring that union companies conduct due diligence on respect for human rights and environmental obligations throughout their supply chains; underlines the importance of multilateral cooperation aimed at defining and agreeing on clear standards based on common principles , against which the activities of the various actors can be assessed;


### 2. believes that there is strong need for a mandatory , harmonised framework at union level to ensure a level playing field for business and welcomes the commission’s ongoing work on legislation requiring that union companies conduct due diligence on respect for human rights and environmental obligations throughout their supply chains; ### 2. believes that there is strong need for a harmonised framework at union level to ensure a level playing field for business and welcomes the commission’s ongoing work on legislation requiring that union companies conduct due diligence on respect for human rights and environmental obligations throughout their supply chains;


### 3. stresses that human rights abuses and breaches of social and environmental standards can be the result of a company’s own activities or of those of its business relationships; underlines therefore that due diligence should encompass the entire value chain; ### 3. stresses that human rights abuses and breaches of social and environmental standards can be the result of a company’s own activities or of those of its business relationships;


### 3. stresses that human rights abuses and breaches of social and environmental standards can be the result of a company’s own activities or of those of its business relationships; underlines therefore that due diligence should encompass the entire value chain; ### 3. stresses that human rights abuses and breaches of environmental standards can be the result of a company’s own activities or of those of its business relationships; underlines therefore that due diligence should encompass direct suppliers in the first tier of the supply chain outside the european union.


### 3. regrets that many businesses’ decisions are primarily guided by lower costs and higher profits with inadequate consideration of adverse impacts on human rights and the environment down their global value chains , while severe human rights violations often occur at primary production level , in particular when sourcing raw material and manufacturing products; ### 3. regrets that many businesses’ decisions are often guided by lower costs and higher profits with inadequate consideration of adverse impacts on human rights and the environment down their global value chains , while severe human rights violations often occur at primary production level , in particular when sourcing raw material and manufacturing products;


### 3. calls on the commission to apply a human rights-based approach to the future legislation which shall be designed , implemented , monitored and evaluated respecting the core human rights principles of transparency and access to information , inclusion and non-discrimination with a special focus on the most vulnerable; ### 3. calls on the commission to apply a human rights-based approach to the future legislation which shall be designed , implemented , monitored and evaluated respecting the core human rights principles of transparency and access to information , inclusion and non-discrimination with a special focus on the most vulnerable; emphasises the need for structural solutions that intervene before the human rights harm occurs;


### 4. considers that the scope of any future mandatory eu due diligence framework should be broad and cover all undertakings governed by the law of a member state or established in the territory of the union , including those providing financial products and services , regardless of their size or sector of activity and of whether they are publicly owned or controlled undertakings; ### 4. considers that the scope of any future voluntary eu due diligence framework should be simple and clear and should cover the undertakings governed by the law of a member state or established in the territory of the union and all those who trade or sell their services and/or products in europe , even if they are based in third countries; stresses that it is crucial to ensure that voluntary due diligence also includes companies that trade primarily online as well as those providing financial products and services , regardless of their size or sector of activity and of whether they are publicly owned or controlled undertakings of european countries or third countries , including national and eu public administrations;


### 5. considers that small , medium-sized and micro-enterprises may need less extensive and formalised due diligence processes , and that a proportional approach could take into account , amongst other elements , the sector of activity , the size of the undertaking , the context of its operations , its business model , its position in value chains and the nature of its products and services; ### 5. considers that small , medium-sized and micro-enterprises and the self-employed should never be subject to the due diligence processes; notes that in the current situation most of these businesses are in a critical situation and that their economic recovery could take a long time; is concerned that a costly due diligence procedure could result in them having to close prematurely;


### 5. highlights that the obligation to respect and protect human rights , the environment and to avoid the risk of corruption should be embedded throughout whole global value chains , products , services and business relationships; ### 5. highlights that the requirements with regard to respect and protection of human rights , the environment and to avoid the risk of corruption should be embedded throughout whole global value chains , products , services and business relationships;


### 6. underlines that due diligence strategies should be aligned with the sustainable development goals and eu policy objectives in the field of human rights and the environment , including the european green deal , and eu international policy; ### 6. underlines that due diligence strategies should not be guided by partisan agendas or , in particular , ideological agendas given that the eu’s credibility as a legislator is at stake , as is the future of thousands of companies and smes;


### 6. is of the opinion that the new legislation should apply to all sectors , to all types of enterprises , whether public or private , and of all size across the union; considers that the focus should be placed on the risks; ### 6. is of the opinion that the new legislation should follow the sectorial approach , be impact assessed and should pay special attention to small and medium-sized enterprises to avoid excessive burdens;


### 7. stresses that due diligence should not be a ‘box-ticking exercise’ and that due diligence strategies should be in line with the dynamic nature of risks; considers that those strategies should cover every actual or potential adverse impact although the severity of the risk should be considered in the context of a prioritisation policy; ### 7. stresses that due diligence should not be a ‘box-ticking exercise’ and that due diligence strategies should be in line with the dynamic nature of risks; considers that those strategies should cover actual or potential adverse impacts although the severity of the risk must be considered in the context of a prioritisation policy; requires that , before any initiative is proposed , a robust impact assessment is carried out focusing on the administrative burden on businesses , the value added by eu companies , the employment by eu companies and the engagement of eu companies in international markets.


### 7. stresses that due diligence should not be a ‘box-ticking exercise’ and that due diligence strategies should be in line with the dynamic nature of risks; considers that those strategies should cover every actual or potential adverse impact although the severity of the risk should be considered in the context of a prioritisation policy; ### 7. stresses that due diligence should be a verification process that is easy , straightforward , cheap and simple for companies , although it should be in line with the changing economic situation; welcomes the fact that that process covers every possible actual or potential adverse impact although the severity of the risk should always be considered in the context of a prioritisation and proportionality policy;


### 7. is of the opinion that the future legislation should establish mandatory and effective corporate due diligence processes covering companies’ activities and their business relationships , including their supply and subcontracting chains; ### 7. is of the opinion that the future legislation should establish effective corporate due diligence processes covering companies’ activities and their business relationships , including their supply and subcontracting chains;


### 8. points out that oecd guidelines for multinational enterprises and due diligence guidance for responsible business conduct further describe how businesses can avoid and address adverse impacts related to workers , human rights , the environment , corruption , consumers and corporate governance that may be associated with their operations , supply chains and other business relationships; is of the view that union legislation should progressively and constructively build on the ungps and that guidance; ### 8. points out that oecd guidelines for multinational enterprises and due diligence guidance for responsible business conduct further describe how businesses can avoid and address adverse impacts related to workers , human rights , the environment , corruption , consumers and corporate governance that may be associated with their operations , supply chains and other business relationships; recalls on the importance of regular revision of the application of the due diligence regulation by companies and member states , when monitoring market trends; calls for specific technical assistance to our companies , especially smes , so that they may comply with due diligence requirements as efficiently and effectively as possible;


### 9. expresses the opinion that the future legislation should establish a comprehensive system of liability that includes administrative , civil and criminal liability , and a sanctioning mechanism to enforce compliance with the new legislation and ensure enforcement , including through penalties and sanctions of all nature; ### 9. expresses the opinion that the future legislation should establish a comprehensive system of liability that includes administrative , civil and criminal liability to enforce compliance with the new legislation;


### 10. considers that , to enforce due diligence , member states should designate national authorities to share best practices as well as to supervise and impose sanctions , including criminal sanctions in severe cases; ### 10. considers that , to enforce due diligence , member states could designate national representatives to share best practices , strategies and advice and to provide the tools to allow companies who want to do so to fulfil their objective;


### 10. points out that corruption in the context of judicial proceedings can have a devastating effect on the lawful administration of justice and judicial integrity , and intrinsically violate the fundamental right to a fair trial , the right to due process and the victim’s right to effective redress; stresses that corruption generally leads to systematic abuse of human rights in the business context , for example , by preventing individuals from accessing goods and services that states are obliged to provide to meet their human rights obligations , by encouraging wrongful acquisition or appropriation by businesses of land , or by granting licences or concessions to businesses in the extractive sector; ### 10. points out that corruption in the context of judicial proceedings can have a devastating effect on the lawful administration of justice and judicial integrity , and intrinsically violate the human right to a fair trial , the right to due process and the victim’s right to effective redress; stresses that corruption generally leads to systematic abuse of human rights in the business context , for example , by preventing individuals from accessing goods and services that states are obliged to provide to meet their human rights obligations , by encouraging wrongful acquisition or appropriation by businesses of land , or by granting licences or concessions to businesses in the extractive sector;


### 11. regrets that despite attempts by european companies to implement their corporate responsibility policies to respect human rights , and various polices and laws in place to encourage or require due diligence across different member states , only 37% of businesses are currently undertaking due diligence in their supply chains and only 16% cover the entire value chain; stresses that protection of human rights and prevention of business-related abuses and violations cannot be achieved with current policies and that binding union legislation is necessary to bridge this gap; ### 11. notes that despite attempts by european companies to implement their corporate responsibility policies to respect human rights , and various polices and laws in place to encourage or require due diligence across different member states , only 37% of businesses are currently undertaking due diligence in their supply chains and only 16% cover the entire value chain; is concerned with mandatory due diligence’s impact as regards the competitiveness of eu businesses; calls for detailed analysis and fitness check of additional costs and obligations and their impact on eu businesses , resulting from due diligence rules , in particular smes; calls on member states to provide for improved assistance to eu businesses in implementing due diligence guidelines and relevant rules and regulations;


### 12. further considers that in order to enable victims to obtain remedy , undertakings should be held liable for the damage the undertakings under their control have caused or contributed to where the latter have , in the course of their business relationships with the former , committed violations of internationally recognized human rights or have caused environmental harm; ### 12. further considers that in order to enable victims to be compensated , undertakings could be held liable as long as it can be demonstrated that they could have identified and avoided effectively and exclusively the damage the undertakings under their control have caused or contributed to where the latter have , in the course of their business relationships with the former , committed violations of internationally recognized human rights or have caused environmental harm , always taking care not to disregard the principle of the presumption of innocence or reverse the burden of proof;


### 12. notes that corporations and investors are calling for mandatory human rights due diligence at union level , to harmonise standards , and secure a global level playing field and greater legal and business certainty; ### 12. is concerned that some corporations and investors are calling for mandatory human rights due diligence at union level; underlines the additional and potential excessive administrative costs and burdens in particular on smes need to be duly taken into account for any possible future due diligence legislation; calls on the commission to conduct a thorough impact assessment beforehand;


### 13. considers that conducting due diligence should not absolve undertakings from liability for the harm they have caused or have contributed to; further considers , however , that having a robust due diligence process in place may help undertakings to avoid causing harm; ### 13. considers that conducting due diligence should not absolve undertakings from liability for the harm they have caused or have contributed to , as long as that harm could have been identified and avoided through sustainable action that was economically different to that taken; further considers that having a robust and effective due diligence process in place may help undertakings to avoid causing harm;


### 13. urges the commission to propose union mandatory human rights and environmental due diligence legislation imposing legal obligations on union companies and companies domiciled or operating in the union internal market and establishing effective monitoring , enforcement and remedy mechanisms; ### deleted


### 14. considers that , in line with the un ‘protect , respect and remedy' framework considerations on the rights of victims to a remedy , the jurisdiction of eu courts should be extended to business-related civil claims brought against eu undertakings on account of harm caused within their value chain on account of human rights violations; further considers necessary the introduction into eu law of a forum necessitatis to give access to a court to victims who risk being denied justice; ### deleted


### 14. considers that , in line with the un ‘protect , respect and remedy' framework considerations on the rights of victims to a remedy , the jurisdiction of eu courts should be extended to business-related civil claims brought against eu undertakings on account of harm caused within their value chain on account of human rights violations; further considers necessary the introduction into eu law of a forum necessitatis to give access to a court to victims who risk being denied justice; ### 14. considers that the courts of the member states could in exceptional cases hear liability claims against european undertakings for events that have taken place abroad as long as two conditions are met: firstly , that the injured party can prove beyond any doubt that they have not had access to justice and , secondly , that there is a sufficient link to the european country in question;


### 14. recommends that due diligence as required by union legislation be extended to all potential or actual adverse impacts which the company has or may have caused , contributed to or with which it may be directly linked; this extends to , but is not limited to , abuses across the entire value chain , including the parent undertaking , all subsidiaries , direct and indirect suppliers and subcontractors or other business partners; ### 14. recommends that due diligence as required by union legislation be extended to all actual adverse impacts which the company has caused;


### 15. stresses that victims of business-related adverse impacts are often not sufficiently protected by the law of the country where the harm has been caused; considers , in this regard , that victims of human rights abuses committed by eu undertakings should be allowed to choose the law of a legal system with high human rights standards , which could be that of the place where the defendant undertaking is domiciled; ### 15. stresses that victims of business-related adverse impacts are often not sufficiently protected by the law of the country where the harm has been caused , especially when those countries are outside the eu;


### 15. recommends that union legislation cover all companies and all sectors , including state-owned enterprises , the banking sector and financial institutions , including the european investment bank; ### 15. recommends that existing union legislation cover all companies and all sectors , including state-owned enterprises , the banking sector and financial institutions , including the european investment bank;


### 16. requests that the commission submit without undue delay a legislative proposal on mandatory supply chain due diligence , following the recommendations set out in the annex hereto; considers that , without prejudice to detailed aspects of the future legislative proposal , articles 50 , 83(2) and 114 tfeu should be chosen as legal bases for the proposal; ### 16. requests that the commission submit a proposal on voluntary due diligence;


### 16. stresses that all human rights are universal , indivisible , interdependent and interrelated and should be promoted and implemented in a fair and equitable manner; recommends that due diligence obligations should apply to all business-related human rights abuses; ### 16. recalls that all human rights are universal , indivisible , interdependent and interrelated and should be promoted and implemented in a fair and equitable manner; recommends that due diligence obligations should apply to all business-related human rights abuses;


### 17. considers that the requested proposal does not have financial implications for the union budget; ### 17. considers that the requested proposal does not have financial implications for the union budget , although it could hurt the member states and/or the companies involved;


### 17. recommends that union mandatory due diligence legislation be adopted to require companies to identify and address their impacts with reference to all internationally recognised human rights including , as a minimum , those encompassed by the udhr , all nine core international human rights treaties , the ilo declaration on fundamental principles and rights at work and all fundamental ilo conventions , as well as the echr and icescr , which are binding on council of europe member states and also bind member states as a result of union law and the common constitutional traditions of the member states; ### deleted


### 1. the debate on the responsibilities of business in relation to human rights became prominent in the 1990s , when new offshoring practices in clothing and footwear production drew attention to the poor labour conditions that many workers in global value chains faced. at the same time , many oil , gas , and mining companies pushed into increasingly remote areas , often displacing indigenous communities without adequate consultation or compensation. ### 1. the debate on the responsibilities of business in relation to fundamental rights became prominent in the 1990s , when new offshoring practices in clothing and footwear production drew attention to the poor labour conditions that many workers , including children , faced.


### 4. businesses thus currently have at their disposal an important number of international due diligence instruments that can help them fulfil their responsibility to respect human rights. while it is difficult to overstate the importance of these instruments for businesses that take their duty to respect human rights seriously , their voluntary nature hampers their effectiveness and their effect has indeed proved limited , with a restricted number of businesses voluntarily implementing human rights due diligence in relation to their activities and those of their business relationships. respect for human rights continues to play a marginal role in undertakings’ policies and strategies. this is exacerbated by many undertakings’ excessive focus on short-term profit maximisation. ### 4. businesses thus currently have at their disposal an important number of international due diligence instruments that can help them fulfil their responsibility to respect human rights. respect for human rights continues to play a marginal role in undertakings’ policies and strategies. this is exacerbated by many undertakings’ excessive focus on short-term profit maximisation.


### 5. in light of the limitations of voluntary due diligence , the union has adopted mandatory due diligence frameworks in specific areas with the aim of combating the financing of terrorism , and deforestation. in 2010 , the union adopted the timber regulation3 , which subjects operators that place timber and timber products on the internal market to due diligence requirements and requires traders in the supply chain to provide basic information on their suppliers and buyers to improve the traceability of timber and timber products. the conflict minerals regulation4 establishes a union system for supply chain due diligence in order to curtail opportunities for armed groups and security forces to trade in tin , tantalum and tungsten , their ores , and gold. ### 5. the union has adopted mandatory due diligence frameworks in very specific areas with the aim of combating sectors that harm the interests of the union or its member states , such as the financing of terrorism or deforestation. in 2010 , the union adopted the timber regulation3 , which subjects operators that place timber and timber products on the internal market to due diligence requirements and requires traders in the supply chain to provide basic information on their suppliers and buyers to improve the traceability of timber and timber products. the conflict minerals regulation4 establishes a union system for supply chain due diligence in order to curtail opportunities for armed groups , terrorist groups and/or security forces to trade in tin , tantalum and tungsten , their ores , and gold.


### to this end , it establishes minimum requirements for undertakings to identify , prevent , cease , mitigate , monitor , disclose , account , address and remediate the human rights , environmental and governance risks that those activities may pose. by coordinating safeguards for the protection of human rights , the environment and good governance , those due diligence requirements are aimed at improving the functioning of the internal market. ### deleted


### 2. this directive further aims to ensure that undertakings can be held accountable for their adverse human rights , environmental and governance impacts throughout their value chain. ### 2. this directive further aims to make it possible for undertakings to be held accountable in some instances for the adverse fundamental rights impacts of actions that have been under their direct and immediate control.


### 3. this directive shall apply without prejudice to further due diligence requirements established in union sector-specific legislation , in particular regulation (eu) no 995/20108 and regulation (eu) 2017/8219. ### 3. this directive shall apply without prejudice to further due diligence requirements established in union sector-specific legislation , in particular regulation (eu) no 995/20108 and regulation (eu) 2017/8219 , or in the various existing national laws.


### in case of insurmountable incompatibility , the sector-specific legislation should apply. ### in case of insurmountable incompatibility , the national and/or sector-specific legislation should apply.


### 4. this directive should not prevent member states from maintaining or introducing further general or sector-specific due diligence requirements , provided that they do not hamper the effective application of the due diligence requirements as provided for in this directive. ### 4. this directive should not prevent member states from maintaining or introducing further general or sector-specific due diligence requirements.


### 5. the implementation of this directive should in no way constitute grounds for justifying a reduction in the general level of protection of human rights or the environment. in particular , it shall be applied without prejudice to other existing subcontracting , posting or chain liability frameworks. ### 5. the implementation of this directive should in no way constitute grounds for justifying a reduction in the general level of protection of fundamental rights.