This EU Directive has to go through three bodies: the EU Commission, the Council of the EU, and the European Parliament. The Commission released their draft of the Directive last year: it created a new legal duty for companies to do due diligence on both human rights and environmental breaches. “It is quite comprehensive,” says Walsh, “but there are significant weaknesses as well.” One of these is that it is narrow in scope, “it should have greater ambition, and should apply to a wider set of businesses.” The draft Directive will only apply to 1% of European companies.
Later in the year, the Directive then made its way to EU Member States in the Council, where it was further weakened, which was “deeply disappointing”, in particular the exclusion of the finance sector. “It would be at the discretion of the member state to include the finance sector which is de facto an exclusion,” says Walsh. “Cutting out finance means pension funds, asset managers won’t have to check their assets and the harm they can create. Me personally, paying my monthly pension, I don’t want that connected to labour rights abuses or deforestation.”
“It’s simply not good enough that it’s been cut out, but the good news is that it’s not over yet.”
The Directive now goes to Parliament where “key committees come together to develop their position, and then the Commission, Council and Parliament will come together later in the year to finalise.”
Irish MEPs are active on some of the key committees, including MEP Barry Andrews who is steering the Trade Committee’s deliberations on this Directive. He has managed to secure a majority in a key vote on Tuesday to strengthen the Directive, including widening the number of companies that would be covered, and including finance as a ‘high risk sector’.
“This legislation is a vital cog in holding large businesses to account to ensure that they meet their environmental and human rights obligations” tweeted Andrews following Tuesday’s vote.
On the internal market committee, MEP Deirdre Clune will be steering that committee towards its position, and other Irish MEPs will also have a chance to cast their vote in crucial decisions on this Directive in coming weeks.
“If this law is done well, it could be a game-changer,” says Walsh, “a weak directive would be very disappointing for the communities we work with. If it becomes a glorified tick box, it’s a waste of everyone’s time. It creates more bureaucracy without solving the problems on the ground.”
Prevention and resolution will be evidence of a successful Directive, but it will take time. “Proof of this will be actually preventing harms on the ground to communities. Trócaire wants to see abuses and harms to the people we work with to be prevented and for communities to be able to seek justice.”
A strong Directive would create a “level playing field,” emphasises Walsh. “Irish people are fed up of products they consume and services they subscribe to being connected to unsustainable or harmful practices such as child labour, and people are increasingly sceptical of green-washing.
“At the moment, it’s hard as a consumer to know who to trust and there are still many reports of high-profile brands that are connected to abuses. A strong law would make it a requirement that there are rules that everyone follows.”
“Our campaign is not anti-business, we want responsible business in a level playing field.”