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Due diligence, spyware, Rotterdam

Four related things happened last week. If not already obvious, I will explain the connection at the end. But in summary, for those of us working on cleaning up European supply chains, there was good news and bad news.


Firstly, Lighthouse Reports published an investigation that identified an Irish company selling spyware to the Sudanese Government.


The investigation found that a white Cessna landed at Khartoum staying just 45 minutes on the ground. The cargo off-loaded was high end surveillance technology which can harvest information from smart phones.


The technology was for the Rapid Response Forces, formerly the Janjaweed. Selling tech to an organisation responsible for crimes against humanity should not be tolerated.


The ultimate beneficial owner of the company producing the software is an Israeli called Tal Dilian. His company has a registered office in Ireland benefitting from Ireland’s low corporate tax.


Secondly, on Tuesday I spent a day in the port of Rotterdam. It is Europe’s largest port and has already seized 50,000 tonnes of cocaine this year (about one tenth of what gets through).


One of the tasks of the port customs officials will be to seize goods that are made with forced labour - not an easy task.


My committee in the European Parliament is preparing legislation to give effect to such a ban.


Thirdly, I met Dara Calleary, Ireland’s Trade Minister ahead of his meeting in Brussels with other EU Trade Ministers to decide on another piece of EU legislation, on supply chain due diligence. I will be the rapporteur for the legislation in the European Parliament.


The supply chain law will make EU companies check that their supply chains are not causing harm to human rights or to the environment.


Finally, the European Court of Justice made a ruling that journalists could no longer access registers that identified the Ultimate Beneficial Owner of companies in the EU for data privacy reasons. Journalists have used the UBO register to successfully identify Russian oligarchs’ ownership of yachts, golf courses and stately homes.


This is a very negative judgment. If EU data rules require UBO registers to be shut down, the EU data rules need to be changed.


So how are these four related?


You and I as consumers want to know that the goods and services that we use and that we produce are not causing harm to the human rights of others and that they are not causing damage to the environment. The supply chain law should forbid companies from selling surveillance software to dodgy governments and the forced labour ban will ensure that the goods you consume are not made by, for example, Uigher prisoners in Xianxang.


It will be up to customs officials, like those in Rotterdam, to identify the export or import of these types of goods especially when they are misdescribed in Customs Declarations. But how will they know if a product is made with forced labour? They will rely on NGOs and journalists to provide them with tip-offs on certain products.


So the good news from last week is that the relevant legislation is on its way and customs officials are preparing to enforce it.


The bad news is that journalists are losing a very important investigative tool to uncover the type of behaviour that ruthless businesses try to conceal. Also, under the current draft of the supply chain law, the company selling spyware is too small to be ‘in scope’. It will only apply to companies with more than 500 employees.


So in just a few short days I saw why laws are made, how laws are made and how they are enforced.

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