EU announces intention to bolster efforts on supply chain due diligence

The European Union has pledged to bolster the transparency requirements for multinational supply chains in a bid to prevent regional conflicts over natural resources.

Conceding that ‘making trade work for development requires much more than lowering tariffs’, the EU’s latest communication on trade, growth and development outlines a series of commitments to do more on supply chain due diligence.

The EU says it is to explore ways of improving transparency throughout supply chains, including on aspects of due diligence, and has committed to “increasingly shift the focus of trade policies to regulatory and other behind-the-border issues”. It will also promote the OECD Guidelines for Multinational Enterprises with greater vigour, it says.

The move follows regulation in the US requiring due diligence from companies to ensure their operations are not fuelling conflict – legislation drawn up in response to problems in the Democratic Republic of Congo diamond sector.

The EU stance follows a renewed enthusiasm for CSR as outlined in its recent white paper. The latest communications notes: “Corporate social responsibility plays an increasing role at the international level as companies can contribute to inclusive and sustainable growth by taking more account of the human rights, social and environmental impact of their activities.”

NGOs have welcomed the move, but would like to see the EU draw up legislation and a full strategy on the issue.

Annie Dunnebacke of Global Witness said: “The communication is an encouraging first step towards conflict-free supply chains in Europe and beyond. The EU must now follow the US example and introduce regulation obliging companies to do due diligence and make sure their business activities aren’t funding war – in DRC or elsewhere. It’s no longer acceptable for companies to be allowed to claim ignorance about where their products come from and how they’ve been produced.”