Business Human Rights Resource Centre
BHRRC
The Business Human Rights Resource Centre is an international NGO dedicated to advancing human rights in business and eradicating abuse.
ID: 139172541931-81
Lobbying Activity
Response to Postponement of deadlines within the Accounting Directive for the adoption of certain ESRS
14 Dec 2023
Business and Human Rights Resource Centre is concerned about the recent proposal to delay the adoption of sector-specific standards, particularly for the mining industries. As pressure intensifies to extract the minerals critical for the global energy transition, human rights abuses remain a damning feature of the sector. The Resource Centres Transition Minerals Tracker (https://www.business-humanrights.org/en/from-us/transition-minerals-tracker/), which spotlights the human rights implications of transition mineral mining, now includes 510 allegations of abuse from 2010 2022 associated with the mining of six key minerals for the energy transition: cobalt, copper, lithium, manganese, nickel and zinc. Sixty-five new cases of alleged abuse were recorded in 2022, including widespread violations of environmental, land and Indigenous Peoples rights, coupled with an increase in corruption cases. Those abuses fuel local conflicts compounded by absent or limited rule of law and aggravated governance risks created by irresponsible corporate behaviour. The OECD (https://mneguidelines.oecd.org/duediligence/Responsible_is_Reliable.pdf) and the IEA (https://www.iea.org/reports/sustainable-and-responsible-critical-mineral-supply-chains) have recently pointed out that the key to reliable mineral supply chains is to ensure they are truly responsible. Many end users companies of those minerals and investors have been vocal about the need for enhanced disclosures on how upstream mining companies manage ESG risks. Delaying the sector-specific standard for mining not only means that risks of human rights abuses may still remain unaddressed, but will also undermine efforts by EU companies and investors to achieve the objective of a fast energy transition, and ultimately be detrimental to their value proposition in a globalized economy. This delay in the development of the mining sector-specific standard is even less acceptable in a context where the Critical Raw Materials Act has been fast-tracked. Mining companies will soon be submitting applications for strategic projects and they will have to demonstrate those projects will be implemented in compliance with sustainability criteria. The absence of a sector-specific reporting standard for the mining sector will not allow for clear, effective and comparable sustainability reporting data. Delaying the development and adoption of sector-specific standards puts at risk consistency across EU legislation as well as creating a non-harmonized framework, which may jeopardise effective compliance with sustainability criteria for strategic projects in the proposed CRMA. In line with other civil society organisations, we make the following recommendations for EU policy-makers: - By the end of 2024 or early 2025 (depending on EFRAGs due process and the EU legislative calendar) the EU Commission must guarantee the adoption of the high impact sector standards that have been already worked on by EFRAG. This is feasible taking into consideration the technical work already produced by EFRAG on Oil and Gas, Mining, Road Transport and Textiles. - By 2026, all high-impact sectors already identified by EFRAG should be covered. EFRAG has the capacity of delivering these standards if sector-specific work is prioritized again. Since there is a clear market need, a delay in delivering these standards would be based only on a political decision by the EU Commission, rather than for practical reasons. - The EU Commission must provide a clear mandate for EFRAGs Sustainability Reporting Pillar to prioritize the development of proposals and consultation for the rest of the sector-specific standards over other work which the Commission requested from EFRAG. The standards must be developed as soon as possible, as already from 2024, companies must start applying sector-agnostic reporting requirements which include requirements to report sector-specific information.
Read full responseResponse to European Sustainability Reporting Standards
7 Jul 2023
We welcome the publication of the draft Delegated Act on the European Sustainability Reporting Standards (ESRS) by the Commission, as well as the opportunity to provide feedback. However, as members of the Alliance for Corporate Transparency, we are extremely concerned that the draft Delegated Act departs from the technical advice provided by EFRAG in November 2022 in a number of areas, which serve to significantly reduce their scope and ambition. Particular concerns include making mandatory disclosure requirements (except ESRS general disclosures) subject to a materiality assessment, making disclosures related to working conditions of non-employees and biodiversity plans voluntary, as well as introducing additional phase-in rules. The changes in these areas put the effectiveness of the ESRS as a tool to ensure the disclosure of meaningful, reliable and comparable sustainability information at risk, as well as undermining the reliability of information available to investors, and by extension their ability to meet their own reporting requirements. These changes also risk undermining company alignment with expectations under existing internationally accepted standards on due diligence, including the updated OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. It may also be at odds with forthcoming expectations on companies to conduct due diligence on their adverse human rights and environmental impacts under the proposed Corporate Sustainability Due Diligence Directive (CSDDD). To this end, we urge the Commission to: 1. Not further reduce the ambition and content of the standards. 2. Respect the rules for materiality assessment as put forward by EFRAG. 3. Maintain a core set of mandatory metrics, including at a minimum key own workforce metrics, including non-employee workers, collective bargaining coverage, gender pay gap, whether own workers are paid an adequate (living) wage and covered by social protection, and greenhouse gas emissions. These are universally material, and should therefore not be subject to a companys own materiality assessment. Removing their mandatory status increases the complexity of reporting, will lead to incomplete data and creates greenwashing risks. 4. Reintroduce provisions on mandatory reporting for those indicators that cover and correspond to at a minimum the basic information needed by asset managers and investors to meet their own reporting obligations under the Sustainable Finance Disclosure Regulation. This would also ensure overall consistency and coherence of the EU policy framework. 5. Remove the voluntary loophole for corporate reporting on working conditions of non-employee (primarily agency) workers and biodiversity. This is material information for a significant share of companies, however making these disclosures voluntary would risk greenwashing and allow a company to omit relevant information even where it has determined through its materiality assessment that it has material impacts in these areas. 6. Remove the phase in approach to standards on biodiversity and social topics for companies with less than 750 employees, as it serves no meaningful purpose and risks creating confusion. The Corporate Sustainability Reporting Directive already sets later application dates for newly covered companies, listed SMEs and third country corporate groups. If it is retained, the Commission should make clear that the delay does not relieve companies of their obligation to identify and assess their material impacts, risks and opportunities in these areas and report on their actions to address them, which is clearly expressed in the CSRD. We would also like to draw your attention to this joint statement by 93 investors, which raises many of the same concerns: https://www.unpri.org/driving-meaningful-data/joint-statement-from-efama-eurosif-iigcc-pri-and-unep-fi-on-european-sustainability-reporting-standards/11525.article
Read full responseResponse to European Critical Raw Materials Act
29 Jun 2023
The CRMA must ensure full respect of the rights of affected communities and Indigenous peoples, including their participation rights, in compliance with human rights and environmental due diligence standards, international human rights and environmental laws. First, it must include measures to reduce virgin raw material consumption by at least 10% by 2030 to avoid further intensification of mineral extraction and reduce its impact on human rights and the environment. Second, it needs to ensure adequate safeguards are in place to identify, prevent and remedy human rights abuses when new mining cannot be avoided. Preventing and responding to human rights abuses: Our recent research (Transition Minerals Tracker, attached), records 510 allegations of human rights abuses related to the extraction of 6 key minerals (copper, cobalt, nickel, lithium, manganese and zinc). Mining operations have multiple real-world impacts: 112 allegations are associated with impacts on both local communities and their environment. Less than half of the companies associated with allegations of abuse have human rights policies in place. According to our database of attacks (https://www.business-humanrights.org/en/from-us/human-rights-defenders-database/) against human rights defenders, mining is the most dangerous sector. The current approach of the CRMA lacks a truly global justice dimension to achieve the objectives of a just transition. It risks further aggravating human rights and environmental abuses and lock-in resource-rich countries development pathways. We recommend the CRMA includes (1) setting up a sub-group on sustainability and human rights within the critical raw materials board (Art. 34), including civil society and Indigenous peoples representatives. (2) establishing a grievance and remedy mechanism, to alert the EU Commission in case of violations of human rights and the environment in one of the strategic projects. Human Rights Due Diligence: Certification and audits can never replace ongoing risk assessment and due diligence processes laid down within the UN Guiding Principles on Business and Human Rights (UNGP). They are a tool to assess projects sustainability, but cannot replace companys responsibility to adopt human rights policies and related due diligence. Reference to the upcoming Corporate Sustainability Due Diligence Directive (CSDDD) is insufficient. As it has not been finalised yet, whether its final provisions and scope of application are sufficient to address the specific nature of risks to human rights in the extraction of transition minerals remains uncertain. We recommend (1) language in Annex III allowing project promoters to attest compliance with sustainability criteria solely through certification schemes be removed (2) Art. 29, Annex III and IV to reference UN Declaration on the Rights of Indigenous Peoples (UNDRIP), ILO Convention 169, Art. 27 of the International Covenant on Civil and Political Rights (ICCPR), the Escazú Agreement, Art. 1 of the International Covenant on Economic, Social and Cultural Rights, the International Convention on the Elimination of All Forms of Racial Discrimination, and the Convention on the Elimination of All Forms of Discrimination against Women. (3) Art. 5 to include provisions to exclude companies with a record of poor corporate conduct from becoming project promoters covering convictions for corruption, abuses against the environment, human rights, and Indigenous rights. Public participation and engagement: We strongly recommend that language on facilitating public acceptance (Art. 6 §1) is removed. Instead, the CRMA must guarantee the full realisation of public participation rights and the protection of Indigenous peoples rights, and emphasise respect for the principles of Free, Prior, and Informed Consent (FPIC). Art. 13 shall reference the complete Aarhus Convention instead of only Art. 6 and 7 and corresponding international agreements such as the Escazú-Agreement.
Read full responseMeeting with Lara Wolters (Member of the European Parliament, Rapporteur) and Front Line Defenders
26 Jun 2023 · Staff level: CSDD Directive
Meeting with Heidi Hautala (Member of the European Parliament, Shadow rapporteur)
2 Mar 2023 · Due Diligence
Meeting with Lara Wolters (Member of the European Parliament, Rapporteur)
1 Mar 2023 · Roundtable on Tech and CSDDD
Meeting with Heidi Hautala (Member of the European Parliament, Shadow rapporteur) and European Coalition for Corporate Justice
28 Feb 2023 · Due Diligence
Response to European Critical Raw Materials Act
24 Nov 2022
The Business and Human Rights Resource Centre is an international human rights organisation dedicated to advancing human rights in business and eradicating corporate abuse. Our research on the human rights impacts of mining can be found here: https://www.business-humanrights.org/en/from-us/transition-minerals-tracker/. Our comprehensive response is attached. Increasing mineral extraction to secure EUs mineral supply chains without reducing demand for raw materials or harnessing the potential of recycling/re-using of minerals, is unsustainable. Under the current business model, mining operations have differentiated yet overall significant impacts on people and the planet. The Critical Raw Materials Act (CRMA) must ensure that it proposes a coherent and strategic framework for action that ensures the protection of human rights and the planet. This can be achieved through clear prioritisation of actions: (i) The CRMA must favour the use of secondary over primary raw materials and ensure that a dedicated percentage of all investments are on secondary sourcing. This must be complemented by policies that reduce demand, e.g. through the reduction of the number of private vehicles through scaled-up investments in public transportation. The use of CRMs must be prioritised for the manufacturing of equipment for renewable energy projects, including solar panels and wind turbines. (ii) Guaranteeing that the EU has strong social, human rights and environmental regulations in place to ensure that any new mining projects, in the EU or with support through trade agreements or public finance support outside of the EU, respect human rights and the environment. The proposed CSDDD should require companies to respect the right of Indigenous Peoples to give or withhold their FPIC. It needs to ensure the protection of human rights defenders. Greater corporate reporting transparency must also be achieved in the EU mining sector through the development of the sector-specific standard for mining under the responsibility of the European Financial Reporting Advisory Group (EFRAG). The finalised standard must thoroughly address the environmental, social and human rights impact dimensions of mining. States considering extension of existing projects, or approval of new mining projects, and where Indigenous populations inhabit, should ratify ILO convention n°169. The EU, Member States and companies should embrace new legislation and update and enforce existing EU legislation to ensure high social and environmental standards, including the EU Water Directive, Environmental Impact Assessment Directive, the Habitats Directive and updating the EU Extractive Waste Directive. The EU should consider mandating the realisation of Social Impact Assessments (SIA) and Human Rights Impact Assessments (HRIA) to contribute to the full realisation of public participation rights. A list of strategic projects can only be developed after the EU has clearly established what its demand-reduction objective is at the European level: it should strive to avoid rushed and unaligned initiatives by its Member States and avoid proliferation of new mining projects. Strategic projects must include a certain percentage of secondary raw materials projects, which must be prioritised. The process to determine such projects must be conducted in a transparent and participatory manner.They must have the consent of affected communities and Indigenous peoples in respect of their right to FPIC. Companies involved must fulfil their obligation to respect human rights as per the UNGPs. Exploration and extractive projects should not take place in specified no-go zones e.g., protected areas. Projects that support the development of local communities through community ownership programs in which local communities acquire an equity stake in the project, should be considered. Contracts (and annexes, EIAs and SIAs) between host governments and mining companies must also be made public.
Read full responseMeeting with Lara Wolters (Member of the European Parliament, Rapporteur)
26 Sept 2022 · Meeting to to discuss the CSDD proposal together with two human rights defenders
Response to Sustainable corporate governance
23 May 2022
The release of the CSDD proposal is a crucial first step towards mandating respect for people & planet for EU-operating businesses. While we highlight some ‘good practices’, our benchmarks and allegations data show that progress is glacial. Between 2020 & 2021, we approached European companies over 600 times in response to allegations of abuse, with 500 of those cases occurring outside Europe – and many more unreported.
The draft has promising elements, but considerable gaps must be closed to ensure the law can fulfill its historic potential and bring tangible benefits for workers & communities along global value chains. For instance, the personal scope must be broadened to include all EU-operating companies in a proportionate manner, as must the material scope of abuses to be tackled – to cover all environmental & human rights impacts and relevant intl. instruments, incl. ILO190 and the UN Decl. on Human Rights Defenders, as well as climate change impacts as an explicit due diligence aspect. Also, the way in which the Annex is set up risks creating a hierarchy between a (too limited) list of rights spelled out, and other rights just covered through a ‘catch-all’ clause.
While it is positive that the due diligence obligation, in principle, extends to EU-operating companies’ up- & downstream value chains, the proposed restriction to ‘established business relationships’ undermines the UNGP/OECD-outlined focus of action on where in the value chain a company’s salient risks & impacts are. The law should incentivise long-term supply chain relationships & transparency as important building blocks for due diligence, rather than, at worst, creating perverse incentives for ‘supplier-hopping’. The draft also limits financial actors’ obligations to one-off due diligence before the financial service is provided, and to relationships with large (non-SME) clients, which is concerning. So is the lack of reference to special due diligence attention needed for gender and vulnerable groups & communities, incl. re: product impacts, and to heightened due diligence in conflict.
The Resource Centre & many others have catalogued the failure of a due diligence that overly relies on codes of conduct, contractual clauses, social audits & industry initiatives to cascade requirements down supply chains and verify ‘compliance’. Cementing such an approach, as the draft appears to do, risks shifting responsibility onto suppliers and being ineffective. The law should explicitly require lead firms to use other, more effective ways to influence suppliers across the value chain, incl. adjustments to lead firms’ own problematic business models and purchasing & pricing practices.
The key element for human-centric due diligence is effective & safe engagement with affected stakeholders, incl. workers, unions and human rights & environmental defenders: while we see starting points for such engagement in the draft, it could be interpreted as merely optional where it is central. Related to this, the lack of explicit references to defenders, and to Afro-descendants’ & Indigenous peoples’ right to self-determination and FPIC must be corrected.
Importantly, the proposal includes a civil liability regime. However, exceptions esp. beyond tier 1 risk creating another major obstacle to victims’ access to justice. This must be rectified, as does the question of burden of proof in civil cases – which should not fall to victims – and unfair statutes of limitation among other barriers. The draft’s preamble warns of a “risk of excessive litigation”. Based on our experience this is simply not the case; rather, it is those speaking out against corporate abuse that face increasing (SLAPP) litigation risks.
We urge the EU to make sure affected rightsholders are consulted in the legislative process, and that accompanying measures include support to grassroots organisations, e.g. for community-based monitoring. The EU should also formally engage in intl. Treaty negotations.
Read full responseMeeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis) and Front Line Defenders
11 Jan 2022 · Mandatory human rights and environmental due diligence
Meeting with Werner Stengg (Cabinet of Executive Vice-President Margrethe Vestager), Werner Stengg (Cabinet of Executive Vice-President Margrethe Vestager) and Global Witness
12 Nov 2021 · EU Sustainable Corporate Governance