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Due Diligence Law

It’s a big deal to be given a legislative file in the European Parliament.

At the start of September I was appointed by my group to be rapporteur on the Trade Committee’s opinion on proposed EU-wide Due Diligence legislation. In plain language, this new law will mean companies will have to thoroughly check to make sure that their supply chains are clean.

A practical example of the idea hit the headlines last week.

The decision by Primark to launch a new label known as Primark Cares has attracted a lot of attention. The global fashion industry contributes a lot to waste and human rights abuses.

Primark, or Penneys as they are known to Irish shoppers, produce fast fashion at affordable prices. But many campaigners have asked how it is possible to sell as such low prices.

The suspicion all along was that clothes were made in far-flung places in far from ideal conditions.

Primark made two key announcements. Firstly, all of its clothing will be made from recycled or more sustainably sourced materials by 2030. Secondly, the company says it will seek to improve the lives of the people who make Primark products.

Almost 10 years ago, in November 2012, a fire broke out in a garment factory in Dhaka, Bangladesh. The factory employed 1600 workers and produced clothing for C&A, Walmart, IKEA and others.

The fire started on the ground floor of the nine-story building. With so much yarn lying about and inadequate emergency exits, many were trapped on the upper floors and 117 workers died in the blaze.

The following year, also in Dhaka, another garment factory collapsed killing 1,134 people. Protests ensued at Primark’s headquarters in London and at Benneton’s shop on Oxford Street.

Since then, major international efforts have got underway to clean up supply chains and make sure that they don’t comply with basic human rights and environmental standards.

The climate crisis has added to the urgency of getting this right.

The UK has a Modern Slavery Act but it only applies to the largest companies and, as the title suggests, to the prohibition of forced labour of any kind. Companies have to make a statement that they have no human trafficking has taken place.

In France there is a Due Diligence Law allows anyone to take a court action against French companies suspected of not properly checking their supply chains.

The Dutch and German Parliaments are the latest to set out clear rules in this area.

Law making in the EU tends to be a bit slower and the right of initiative lies with the Commission before the Parliament and the European Council (EU Prime Ministers) vote on the proposal.

The Commission’s proposal is due to be published at the end of October.

There are three main questions that will be eagerly anticipated in the proposal.

First of all, which companies will the legislation apply to. Naturally, small and medium sized companies lack the capacity of bigger companies to carry out these checks while others argue that the law should apply to all.

Secondly, what types of human rights violations should be covered. The UK Modern Slavery Act is limited in its scope whereas the French Due Diligence Law applies to the most severe violations.

Finally, how far along the supply chain should obligations apply. Arguably, the most vulnerable groups are at the end of the supply chain. Think of the cobalt that goes into electric batteries, most of which is sourced from the Democratic Republic of the Congo and some of which is mined by children.

The legislation will ensure that consumers are better informed and help them understand the impact of their shopping habits on the environment and the right of some of the most vulnerable people in the world.

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