Mr. Didier Reynders European Commissioner for Justice European Commission Rue De La Loi 200 B-1049 Brussels

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Mr. Didier Reynders European Commissioner for Justice European Commission Rue De La Loi 200 B-1049 Brussels PALAIS DES NATIONS C 1211 /ENEDA 10, SWITEERLAND www.ohchr.org C TEL: 121 22 717 7000 C FA0: 121 22 717 7008 C E8MAIL: registry9ohchr.org Mandate of the Working Group on the issue of human rights and transnational corporations and other business enterprises REFERENCE: SP:/SHD//NF//F/ff 22 October 2020 Dear Commissioner Rey ders, The -nited Natio s Worki g /roup o the issue of huma rights a d tra s atio al corporatio s a d other business e terprises (FWorki g /roupG) welcomes your commitme t to a proposed Europea -nio (E-) Directive o huma rights a d environme tal due dilige ce in 2021 as part of the E-Hs CODID819 recovery package a d the Europea /ree Deal. 1 The Worki g /roup is pleased to share our recomme datio s with you regardi g key eleme ts to be i cluded i the proposed Directive, as well as the process by which it will be developed. The Worki g /roup is a group of five indepe de t experts appoi ted a d ma dated by the -nited Natio s Huma Rights Council (resolutions 17/2A 26/22, 35/7, a d 44/15) to promote disseminatio a d impleme tatio of the -N /uiding Pri ciples o :usi ess a d Huma Rights , which provide the globally recogni.ed a d authoritative framework for the respective duties a d respo sibilities of governme ts a d business e terprises to ide tify, preve t, mitigate, a d address business8related huma rights impacts. The expectations set out i the /uiding Principles have bee i tegrated i other leading sta dards for respo sible business co duct, i cluding the OECD /uidelines for Multi atio al E terprises . Background Si ce the unanimous e dorseme t of the /uiding Principles by the -N Human Rights Council i 2011, a ew era of socially respo sible a d sustai able business has take shape a d co ti ues to build mome tum. -nder the /uiding Pri ciples, all business e terprises have a respo sibility to respect huma rights, 2 a d the process of co ti uously 1 We also ote the draft report from the European Parliame tHs Committee on Legal Affairs with recomme datio s to the Europea Commissio o corporate due dilige ce a d corporate accountability, available at https://www.europarl.europa.eu/doceo/document/J-RI8PR8657191_EN.pdf . 2 /uidi g Pri ciples 11-24, available at https://www.ohchr.org/documents/publicatio s/guidingpri ciplesbusi esshr_e .pdf K Office of the High Mr. Didier Reynders Europea Commissio er for Justice Europea Commissio Rue de la Loi 200 :81049 :russels TRIAL MODE − a valid license will remove this message. See the keywords property of this PDF for more information. 3 co ducti g huma rights due dilige ce (HRDD) 3 is a core requireme t for businesses in fulfilling that respo sibility. HRDD is a key tool i the global efforts to build forward better i the wake of the CODID819 pa demic. 2 HRDD e ables companies to focus their atte tio o the most severe huma rights risks a d ide tify actual or pote tial risks to people as part of a y respo se to the pa demic. The /uiding Pri ciples also clarify that StatesH i ter atio al huma rights law obligatio s i clude the duty to protect agai st huma rights abuse by business. I The /uiding Pri ciples set out the legal a d policy implicatio s for how to operatio ali.e this duty through a Fsmart mix“ of measures that i clude legally binding measures, 6 particularly where volu tary measures co ti ue to leave significa t gaps i huma rights protectio s. 7 A wave of respo sible business legal reL,ireme ts is impacti g markets across the world, with ma datory huma rights due dilige ce (mHRDD) regimes already in place or i developme t 8 across a growi g umber of Murisdictio s, particularly i the E- co text. I creasi gly, businesses a d investors, 7 alo gside civil society organi.atio s, 10 are calling for effective mHRDD legislatio . Recommendations I light of the Worki g /roupHs prior work related to mHRDD, we recogni.e that legislative i itiatives like the o e proposed at the E- level are critical for speeding and scaling up business respect for huma rights. In particular, we have highlighted key features of HRDD a d how stakeholders ca a d should co tribute to effective HRDD in our report to the 2018 -N /e eral Assembly . We also poi t to our other releva t work throughout the recomme dations below. Commissio er for Human Rights (OHCHR), FThe Corporate Respo sibility to Respect: A I terpretative /uide,G available at www.ohchr.org/Docume ts/publications/hr.puB.12.2_en.pdf . 3 Report of the Worki g /roup on the issue of human rights a d tra snatio al corporatio s and other busi ess e terprises, 73th sessio of the -N /e eral Assembly, A/73/163, FCorporate huma rights due dilige ce N emergi g practices, challe ges, a d ways forward,G July 2018, available at https://ap.ohchr.org/documents/dpage_e.aspx?siPA/73/163 . For more on the Worki g /roup‘s reports a d efforts i this area, see https://www.ohchr.org/EN/Issues/:usi ess/Pages/CorporateHRDueDilige ce.aspx . 2 See the Working /roup‘s statement, FE suri g that busi ess respects human rights duri g the Covid-19 crisis a d beyo d: The releva ce of the -N /uiding Pri ciples o :usi ess a d Human Rights, available at https://www.ohchr.org/EN/NewsEve ts/Pages/DisplayNews.aspx?NewsIDP25837&La gIDPE . See also the Worki g /roup‘s recomme datio s, FThe busi ess a d human rights dime sio of sustainable developme t: Embeddi g ”Protect, Respect a d Remedy‘ in SD/s impleme tatio ,G available at https://www.ohchr.org/Documents/Issues/:usi ess/Sessio 18/I foNoteW/BHR_SD/Recomme datio s .pdf . I /uidi g Pri ciples 1-10. 6 Comme tary to /uidi g Pri ciple 3. 7 As recogni.ed by the recent Europea Commission study o due dilige ce requirements through the supply chai A available at https://op.europa.eu/en/publication-detail/8/publication/8ba0a8fd-4c83-11ea8 b8b7-01aa75ed71a1/la guage-e . 8 For a mapping of these developme ts, see the :usi ess & Human Rights Resource Centre (BHRCC)‘s mHRDD portal, available at https://www.busi ess-humanrights.org/e /ma datory-due-dilige ce . 7 See BHRRC‘s mappi g of companies a d i vestors in support of mHRDD, available at https://www.busi ess-humanrights.org/en/big-issues/ma datory-due-dilige ce/companies-i vestors-i 8 support-of-mhrdd/ . 10 See, e.g., FAn E- ma datory due dilige ce legislation to promote busi esses‘ respect for human rights a d the e viro ment,G https://corporateMustice.org/pri cipal-elements-of-a -e,8mhredd-legislatio .pdf . TRIAL MODE − a valid license will remove this message. See the keywords property of this PDF for more information. I additio , we take ote of the Office of the High Commissio er for Human Rights (OHCHR)Hs Ju e 2020 issues paper outlining key co sideratio s for policymakers i the E- a d elsewhere to co sider i developing mHRDD regimes, as well as the recomme datio s submitted to the Europea Parliame tHs Subcommittee on Huma Rights i two briefing papers . We have set forth below te key recomme dations for the E- as it develops the proposed Directive. These preliminary recommendatio s build o our past a d o goi g work. 1. The irective should be based on the key expectations set out in the Guiding Principles. - der /uiding Pri ciples 17-21, HRDD is a way for e terprises to proactively ma age pote tial a d actual adverse huma rights impacts with which they are involved. The four core compo e ts of HRDD under the /uidi g Pri ciples are: a. Ide tifying a d assessing actual or pote tial adverse huma rights impacts that the business may cause or co tribute to through its ow activities or which may be directly li Bed to its operations, products, or services by its business relatio shipsK b. I tegrati g findings from impact assessme ts across releva t busi ess processes a d taki g appropriate actio accordi g to its involveme t i the impactK c. Tracki g the effective ess of measures a d processes to address adverse huma rights impacts i order to B ow if they are worki gK a d d. Communicati g o how impacts are bei g addressed a d showing stakeholders N i particular affected stakeholders N that there are adequate policies a d processes i place. The preve tio of adverse impacts o people, i cludi g i relatio to impacts on the pla et, is the mai purpose of HRDD. It co cerns risks to people, ot risks to business, although there may be converge ce betwee the two. HRDD should be o goi g, as risks to people may cha ge over time, a d be i formed by meaningful stakeholder e gageme t, i particular with affected stakeholders, human rights defe ders, trade unions, a d grassroots organi.ations.
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