European Parliament votes on due diligence directive

June 3, 2023

The European Parliament adopted its position on the Corporate Sustainability Due Dilligence Directive (‘CSDDD), said a letter written jointly by Fair Trade Advocacy Office, Solidaridad, Fairtrade and the Rainforest Alliance. This proposed directive provides a chance to enhance business reponsibility for human rights and the environment.

“This is a significant improvement to the proposed directive for workers and farmers who ultimately pay the price of Unfair Trading Practices (UTPs),” stressed May Hylander, Policy and Project Officer at the Fair Trade Advocacy Office.

The Parliament also improved the Commission’s proposal by recognising the right to a Living Income, alongside the right to a Living Wage. This is particularly prevalent in the cocoa sector, where farmers earn very little.

According to Fairtrade Africa, one third of the food we consume is produced by smallholder farmers who earn an income rather than receiving a wage. Many struggle to earn enough to afford a decent standard of living for their household, let along adopt more sustainable production practices.

“Elevating the recognition of the right to a living income within the CSDDD can prompt companies to closely examine their purchasing practices, making meaningful contributions to lifting smallholder farmers out of poverty,” said Catarina Vieira, EU Policy Advisor for Solidaridad.

The undersigning organisations appreciate the Parliament’s clarification that disengagement is only to be done as a last resort – which takes into account the potential adverse human rights or environmental consequences.

“In line with international norms, a company should do everything in its power to end or mitigate the adverse impact, and only disengage as a last resort if it lacks the leverage to do so,” said Fanny Gauttier, EU Public Affairs Lead at the Rainforest Alliance.

The Parliament’s position is not perfect, the letter concluded, as it failed to reverse the burden of proof, key to ensuring access to justice for victims and eliminates the article that outlines the duty of directors in setting up and overseeing a company’s due dilligence process.

Last year in December 2022, the European Union agreed on a law to fight global deforestation and forest degradation attributed to the production of goods including palm oil, soy, coffee, cocoa, timber and rubber as well as derived products such as beef, furniture or chocolate.

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