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Europe takes a big step towards companies having ‘duty of care’ on #HumanRights

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Last week, just prior to taking over the European Union presidency, the new Finnish government announced plans to make it compulsory for companies to conduct human rights checks. A year ago, this would have seemed out of the ordinary. But growing recognition of the human cost of weak regulations on business, coupled with an erosion of public trust in markets, has led to momentum around initiatives to ensure companies halt abuse in their supply chains, writes Business & Human Rights Resource Centre Executive Director Phil Bloomer.

On 14 May, the Dutch Senate adopted new legislation that says companies have a ‘duty of care’ to fight child labour in their supply chains. This year had already seen rumbles of debate around supply chain legislation in Germany, where a ministerial draft law became public in February, and related parliamentary debates kicking-off in the Danish parliament. On 3 June, the new Finnish government coalition published its programme, which includes a commitment to work towards such legislation nationally, but also at the European level, where it will control the EU presidency from 1 July.

The EU has passed legislation on specific issues such as illegally harvested timber or 'conflict minerals' in the past. But to regulate each issue separately has its limits. It was France that passed the first legislation with a general scope in 2017, the ‘Duty of Vigilance’ law. And this track has been followed in the political debates in Germany, the UK, Denmark, Norway, Finland, Switzerland and Luxembourg.

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These ideas are not radical. In 2011, the United Nations and the Organisation for Economic Co-operation and Development (OECD) adopted by consensus new, coherent standards on how business should ensure it respects human rights in its global chains. A core element was the requirement to conduct due diligence on human rights risks in order to prevent such adverse impacts. Since then, the OECD has developed more detailed guidance on what good due diligence looks like. However, countries have been slow to turn this international soft law into hard law. Until now.

Companies seem to recognize this. William Anderson, in-house counsel for German footwear giant adidas, wrote for our blog series this week that “In short, it is not a question of if, but when such laws will be in place and how they will impact current business operations and practices”. In fact, a growing number of companies support this type of legislation, including BMW, Coca-Cola, and Trafigua, arguing that these laws level the playing field for responsible businesses and provide legal certainty of their responsibilities.

In the case of the Dutch child labour law, it was the chocolate company Tony's Chocolonely which launched a campaign in support of the legislation, and managed to rally larger industry peers such as Nestlé Nederland, Barry Callebaut and other major Dutch companies such as Heineken behind a supportive letter to parliament. In Finland the dynamics went one step further: businesses and civil society campaigned to have such legislation in the new government programme as a joint coalition, comprising 140 entities from Attac to Coca-Cola Finland.

But most companies aren’t prepared, and that is why we need these laws. Last November, the Corporate Human Rights Benchmark found that 40 out of 101 of some of the biggest companies in the world were failing to carry out proper human rights due diligence. Looking at 100 companies’ reports under the EU’s Non-Financial Reporting Directive, the Alliance of Corporate Transparency found that while 90% reported a commitment to respect human rights, only 36% describe their human rights due diligence system in any detail.

The stakes couldn’t be higher. At least 150 people died when Vale’s dam collapsed in Brumadinho, Brazil, on 25 January, and there are hundreds of high-risk dams out there. 166 million hidden workers are toiling for the world’s 50 biggest companies with no direct relationship or responsibility. The growing power of major tech companies like Facebook and Google increasingly impact all our privacy. Mandatory human rights due diligence on companies would go some way to ensuring that companies rid their operations and supply chains of abuses and are held responsible when they fail to act.

It’s good that many European countries seem to be recognizing this, and now they cannot afford to falter.

Employment

Only 5% of total applications for long-term skilled work visas submitted in first quarter came from EU citizens, data shows

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The figures released by the UK Home Office give an indication of how Britain’s new post-Brexit immigration system will affect numbers of EU citizens coming to the UK to work. Between January 1 and March 31 this year EU citizens made 1,075 applications for long-term skilled work visas, including the health and care visa, which was just 5% of the total 20,738 applications for these visas.

The Migration Observatory at the University of Oxford said: “It is still too early to say what impact the post-Brexit immigration system will have on the numbers and characteristics of people coming to live or work in the UK. So far, applications from EU citizens under the new system have been very low and represent just a few percent of total demand for UK visas. However, it may take some time for potential applicants or their employers to become familiar with the new system and its requirements.”

The data also shows that the number of migrant healthcare workers coming to work in the UK has risen to record levels. 11,171 certificates of sponsorship were used for health and social care workers during the first quarter of this year. Each certificate equates to a migrant worker. At the start of 2018, there were 3,370. Nearly 40 percent of all skilled work visa applications were for people in the health and social work sector. There are now more migrant healthcare visa holders in the UK than at any time since records began in 2010. Although the number of sponsor licences for healthcare visas dropped to 280 during the first lockdown last year, it has continued to rise since, a pattern which was unaffected by the third lockdown this winter.

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Conversely, the IT, education, finance, insurance, professional, scientific and technical sectors have all seen a drop in the number of migrants employed so far this year, despite rallying during the second half of 2020. The number of migrant IT workers is still significantly lower than pre-Covid levels. In the first quarter of 2020 there were 8,066 skilled work visas issued in the IT sector, there are currently 3,720. The number of migrant professionals and scientific and technical workers has also dipped slightly below pre-Covid levels.

Visa expert Yash Dubal, Director of A Y & J Solicitors said: “The data shows that the pandemic is still affecting the movement of people coming to the UK to work but does give an indication that demand for skilled work visas for workers outside the EU will continue to grow once travel has been normalised. There is particular interest in British IT jobs from workers in India now and we expect to see this pattern continue.”

Meanwhile the Home Office has published a commitment to enable the legitimate movement of people and goods to support economic prosperity, while tackling illegal migration. As part of its Outcome Delivery Plan for this year the department also pledges to ‘seize EU exit opportunities, through creating the world’s most effective border to increase UK prosperity and enhance security’, while acknowledging that income it collects from visa fees may decrease due to reduced demand.

The document reiterates the Government’s plan to attract the "brightest and best to the UK".

Dubal said: “While the figures relating to visas for IT workers and those in the scientific and technical sectors do not bear this commitment out, it is still early days for the new immigration system and the pandemic has had a profound effect on international travel. From our experience helping facilitate work visas for migrants there is a pent-up demand that will be realised over the coming 18 months.”

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Economy

NextGenerationEU: Four more national plans given thumbs up

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Economy and finance ministers today (26 July) welcomed the positive assessment of national recovery and resilience plans for Croatia, Cyprus, Lithuania and Slovenia. The Council will adopt its implementing decisions on the approval of these plans by written procedure.

In addition to the decision on 12 national plans adopted earlier in July, this takes the total number to 16. 

Slovenia’s Finance Minister Andrej Šircelj said: “The Recovery and Resilience Facility is the EU’s programme of large-scale financial support in response to the challenges the pandemic has posed to the European economy. The facility’s €672.5 billion will be used to support the reforms and investments outlined in the member states’ recovery and resilience plans.”

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Reforms and investments

The plans have to comply with the 2019 and 2020 country-specific recommendations and reflect the EU’s general objective of creating a greener, more digital and more competitive economy.

Croatia plans to implement to reach these goals include improving water and waste management, a shift to sustainable mobility and financing digital infrastructures in remote rural areas. 

Cyprus intends, among other things, to reform its electricity market and facilitate the deployment of renewable energy, as well as to enhance connectivity and e-government solutions.

Lithuania will use the funds to increase locally produced renewables, green public procurement measures and further developing of the rollout of very high capacity networks.

Slovenia plans to use a part of the allocated EU support to invest in sustainable transport, unlock the potential of renewable energy sources and further digitalise its public sector.

Poland and Hungary

Asked about delays to the programmes of Poland and Hungary, the EU’s Economy Executive Vice President Valdis Dombrovskis said that the Commission had proposed an extension for Hungary to the end of September. On Poland, he said that the Polish government had already requested an extension, but that that might need a further extension. 

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Economy

EU extends scope of general exemption for public aid for projects

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Today (23 July) the Commission adopted an extension of the scope of the General Block Exemption Regulation (GBER), which will allow EU countries to implement projects managed under the new financial framework (2021 - 2027), and measures that support the digital and green transition without prior notification.

Executive Vice President Margrethe Vestager said: “The Commission is streamlining the state aid rules applicable to national funding that fall under the scope of certain EU programmes. This will improve further the interplay between EU funding rules and EU state aid rules under the new financing period. We are also introducing more possibilities for member states to provide state aid to support the twin transition to a green and digital economy  without the need of a prior notification procedure.”

The Commission argues that this will not cause undue distortions to competition in the Single Market, while making it easier to get projects up and running.  

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The concerned national funds are those relating to: Financing and investment operations supported by the InvestEU Fund; research, development and innovation (RD&I) projects having received a “Seal of Excellence” under Horizon 2020 or Horizon Europe, as well as co-funded research and development projects or Teaming actions under Horizon 2020 or Horizon Europe; European Territorial Cooperation (ETC) projects, also known as Interreg.

Projects categories that are considered to help the green and digital transition are: Aid for energy efficiency projects in buildings; aid for recharging and refuelling infrastructure for low emission road vehicles; aid for fixed broadband networks, 4G and 5G mobile networks, certain trans-European digital connectivity infrastructure projects and certain vouchers.

In addition to the extension of the scope of the GBER adopted today, the Commission has already launched a new revision of the GBER aimed at streamlining state aid rules further in light of the Commission priorities in relation to the twin transition. Member states and stakeholders will be consulted in due course on the draft text of that new amendment.

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