EU agrees on law on corporate liability for human rights violations

The European Parliament and EU governments have reached agreements under the law, under which corporations will be held accountable for cases of human rights violations or serious environmental harm at some point in their supply chains.

The new law makes companies (registered both in the EU and outside the EU) liable for the use of child labor, slavery and labor exploitation by their suppliers, for environmental pollution, illegal deforestation, excessive water consumption or other damage to ecosystems.

A wide range of companies are covered by the law. In particular, the law will apply to companies registered in the EU with more than 500 employees and a global turnover of more than €150 million. The new rules will also apply to companies with more than 250 employees and a turnover of more than €40 million, if not less The company receives €20 million in one of the following sectors: textile production and wholesale, clothing and footwear, agriculture, including forestry and fisheries, food production and trading of agricultural raw materials, materials, mining and wholesale of mineral resources or production of related products and construction. Finally, the law will apply to non-EU companies and parent companies with equivalent EU turnover.

Compliance with the law will be monitored by the governments of individual EU countries. They themselves will set penalties, including imposing a fine of up to 5% of the company’s global turnover.

Why SpaceX employees complain about non-compliance with safety standards – in the Kommersant FM article “SpaceX doesn’t take care of its own”.

Kirill Sarkhanyants