EU The new law was to prevent the deterioration of the environment and the use of child labor – Now the project is tangled and the Finnish representative suspects that there is “inappropriate influence” in the background

Brussels

Saisiko be the running shoes that made a minor child in poor working conditions? Or a cell phone whose extraction of the metals needed to produce it irreversibly destroyed the environment?

The consumer would like to trust that his purchases are responsible, but for now, he will have to trust business assurances and volunteering.

In the European Union, the aim is to change this so that companies are forced by law to close their supply and production chains and prevent human rights abuses and environmental damage.

Two proposals for directives are forthcoming from the EU Commission, one on ‘corporate responsibility based on diligence’, namely supply chains, and the other on the sustainable management of companies.

Read more: EU raises widespread and mandatory corporate responsibility across Europe – Hautala Greens: others suffer from free riders

But where does the Commission’s proposal on corporate responsibility linger? It was due to come as early as the summer of 2021. The show was then postponed until the fall until it suddenly disappeared from the Commission’s to-do list before Christmas. Now it is promised for February-March.

Heidi Hautala (green) is one of the MEPs who has pushed for the bill and put pressure on the Commission to act. He set up an informal, cross-party group in the European Parliament four years ago to promote responsible business.

According to Hautala, commissioned by the Prime Minister’s Office a report on the human rights performance of Finnish companies shows that there are many promises and speeches in Finland, but less concrete.

According to the study, Finnish companies are widely committed to respecting human rights, at least at a general level, but in practice, human rights responsibility and monitoring have not yet been systematically incorporated into companies’ core functions. Finnish companies also publish little information about their human rights responsibilities.

“The EU is the right player here. Global rules are created in such a way that someone with market power sets in motion, ”says Hautala.

The bill the delay indicates that the presentation is demanding in detail and, according to Hautala, includes “hot potatoes”. For example, it is still open what size companies would be affected by the law and what penalties would be imposed for violating it.

On the other hand, a delay may indicate that an attempt is being made to influence the content of the presentation. While companies are happy to say they are responsible, not everyone is happy to enforce it by law.

Before Christmas, Hautala, along with a few of his colleagues, submitted a request for documents to find out what exactly had happened.

It is suspected that the Commission’s body for monitoring the quality of drafting has not kept pace: it has not only monitored quality but has taken a position on content that is a matter for political decision. Parliamentarians also suspect that quality controllers have been subjected to “inappropriate influence”.

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“The aim is not to clear our consciences, but to bring about change in the countries in which companies operate.”

Monessa the company has been focusing on accountability for years, with violations now rampant and consumer judgment fast and ruthless. For example, retail is already an experienced player in responsibility.

Hautala’s goal is a binding corporate responsibility law that would apply widely to all industries and would not be limited to large companies. Companies should take care of the human rights, environment and good governance of their value chains under the threat of punishment.

The law would impose a so-called due diligence obligation on companies, which would require them to make repairs if, for example, workers’ rights were violated in their supply chains, deforestation was promoted or business was boosted by corruption and corruption.

Hautala compares corporate responsibility with, for example, the EU’s data protection regulation, which has spread from EU regulation to worldwide use. According to him, EU development cooperation is also needed to support it.

“No children can get to school from cocoa fields if the state is unable to fulfill its basic functions. The aim is not to clear our consciences, but to bring about change in the countries in which companies operate. ”

Hautalan according to the pioneers of companies will suffer if responsibility is left to volunteering alone. The playing field is leveled when everyone is forced to act and no one gets a competitive advantage by looking at human rights violations through their fingers, for example.

The legislation would also reduce green laundering, ie the unsecured promises of companies to be responsible.

The rationale has not convinced all business leaders. Last spring, the Nordic corporate advocacy organizations sent a financial magazine to the Financial Times joint letter, in which they demanded that the EU withdraw from its liability legislation. From Finland, the signatory was the CEO of the Confederation of Finnish Industries (EK) Jyri Häkämies.

“It would be thought that responsible Nordic companies would be helped to make the same people in the back seat follow the same principles,” says Hautala of the criticism.

Companies it seems annoying in particular what the preliminary information has said about the second part of the package, the proposal on sustainable management.

For example, the Commission has assessed that current management remuneration systems and government skills gaps make it difficult to achieve sustainability goals.

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According to Kaisa Soro-Pesonen, Director of EK’s Brussels office, the Commission’s ideas on sustainable governance are “far from realistic”.

Companies have also been baffled by the information in the proposal that they should take into account the “long-term interests of their stakeholders” in their decision-making. In Finland the Parliament’s Finance Committee evaluatesthat this could require a rewriting of the Finnish Companies Act.

Director of EK’s Brussels office Kaisa Soro-Pesonen according to the Commission, the idea of ​​sustainable governance is “far from everyday realism”.

“Instead, on the supply chain side, our starting point is to support the goal. We are well aware that there is a need to improve accountability, especially in third countries. The vast majority of Finnish companies take responsibility really seriously, ”says Soro-Pesonen.

“It is important that the criteria and the rules of the game are set at a level that does not prove to be completely oversized, for example in the SME sector.”

In France The same type of responsibility legislation covering all industries has been in force since 2017.

The current government program of the Finnish government also promises to enact its own national legislation. The groundwork has already progressed.

According to Hautala, the national preparations should be continued, as the Netherlands and Germany are also planning. The progress of responsibility would then not depend on the EU alone.