Corporate due diligence legislation in the EU. Goodbye ‘should’, hello ‘must’?

Earlier this year, the final report of a study, prepared for the European Commission by a research group led by the British Institute of International and Comparative Law earlier this evaluated four regulatory options available at the EU level in terms of human rights due diligence:

option 1: no change;

option 2: new voluntary guidelines;

option 3: new reporting requirements; or

option 4: the introduction of mandatory due diligence requirements.

Option 4 was the preferred option and the study concluded that that any new law ought to be cross-sectoral and applicable to all businesses, regardless of their size. This now seems to be the view of the European Commissioner for Justice, Didier Reynders, who on 29 April 2020 announced that the EU plans to develop a legislative proposal by 2021 requiring businesses to carry out due diligence in relation to the potential human rights and environmental impacts of their operations and supply chains. The draft law is likely to be cross-sectoral and to provide for sanctions in the event of non-compliance.

It remains to be seen whether the UK intends to enact any similar legislation.

 

Published by

Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to five editions and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment. He has also written and taught extensively on commercial law, trusts and environmental law. Simon will be a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he will teach on both the LLM (Carriage of Goods by Sea, Land and Air and Oil and Gas Law) and LLB programmes at Swansea.

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