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Dhaka Tribune

Landmark EU law mandates corporate accountability in global supply chains

The timing holds particular significance, coinciding with 11th anniversary of the tragic Rana Plaza building collapse

Update : 24 Apr 2024, 07:38 PM

In a significant move towards corporate accountability, the European Parliament voted on April 24 to approve the proposed European law requiring large companies to prevent and remedy human rights and environmental abuses in their global supply chains.

The landmark decision marks a crucial step forward in ensuring greater transparency and responsibility among corporations operating within the European Union.

The proposed EU Corporate Sustainability Due Diligence Directive (CSDDD) aims to introduce legal obligations for large corporations to conduct human rights and environmental due diligence in their global supply chains.

Specifically, the law mandates large companies, defined as those with more than 1,000 employees on average and more than €450 million in net worldwide revenue in the previous financial year, to conduct due diligence in their own operations and value chains.

Regulators will be empowered to take action against companies failing to comply, and victims of corporate abuses will have avenues to seek justice through European courts.

The timing of the Parliament’s vote holds particular significance, coinciding with the 11th anniversary of the tragic Rana Plaza building collapse in Bangladesh, which claimed the lives of 1,138 garment workers and injured over 2,000 others.

The disaster serves as a poignant reminder of the urgent need for robust legislation to prevent similar tragedies and hold corporations accountable for their actions.

Human Rights Watch, among other rights groups and social movements, has been instrumental in advocating for the adoption of this legislation.

Despite challenges and setbacks during the legislative process, including attempts to narrow its scope and delay its implementation, the parliament’s approval signals a resolute commitment to upholding human rights and environmental standards in corporate practices.

The next crucial step involves final approval by ministers of EU member states, which is expected in late May.

Human Rights Watch urges ministers to support the proposed law and usher in a new era of corporate accountability in global supply chains.

“The European Parliament’s vote sends a strong message that the EU should no longer let large corporations get away with human rights and environmental abuses,” Aruna Kashyap, associate director on corporate accountability at Human Rights Watch, said.

“Ministers from EU member states should give a final nod to the text and pave the way for a new chapter on corporate accountability in global supply chains,” he added.

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