<< Previous: Chapter 4 // International Laws
Proposal
On February 23, 2022, the EU adopted a proposal70 for a directive on corporate sustainability due diligence, which aims to foster sustainable and responsible corporate behavior in supply chains. Companies will be required to identify, prevent, end, or mitigate adverse impacts of their activities on human rights, such as child labor and the exploitation of workers.
National governments would define the financial penalties for companies violating these rules. Victims could sue for compensation in domestic courts of EU member nations even if the harm occurred outside the bloc.
The proposal would initially apply to companies with more than 500 employees and annual revenue over 150 million euros (or about US$170 million), a group that includes about 10,000 EU businesses. Around 2,000 companies based outside the bloc but doing business in the EU with annual revenue of more than 150 million euros would also be covered. After two years, the range would be expanded to include smaller businesses in high-impact sectors, such as textiles, food products, and mining.
The final draft will require passage by EU lawmakers and member nations.
>> Up Next: // Endnotes