EBCAM POSITION PAPER
Beussels, 06 August 2021
Earlier this year, the European Parliament adopted a proposal made by the European Commission on a binding draft EU Human Rights Due Diligence Legislation where companies have to prove that their international supply chains respect due diligence obligations (human rights, environment and good governance).
The European Business Council for Africa (EBCAM) fully agrees that human rights and environmental violations need to be tackled. Nevertheless, we note that this law might cause opposite effects from those intended for and will harm the sustainable development of local economies in the African continent. We would like to highlight that:
- it is quite impossible for EU companies to guarantee “zero risk” on their supply chains in Africa,
- European medium-sized enterprises and large companies will deliberate even more carefully about
whether they can engage in African countries,
- especially the issues of the informality in the agricultural and agri-food sectors and the deforestation need
to be taken into account.
We would like to invite the EU Institutions to consider that this Law will make EU companies very hesitant before investing in Africa, will risk damaging their reputation and will give an advantage to our competitors, notably Chinese.
In addition, a few more important points need to be taken into account:
- this EU legislative framework is not binding for the African states which is contrary to the spirit of the new
- European SMEs would face a new competitive disadvantage as they are more sensitive to bureaucracy,
associated costs, the risk of sanctions and less able to diversify risks,
- the role of OECD National Contact Points (NCP) which help to resolve issues are often more efficient than
lengthy judicial procedures,
Therefore, EBCAM proposes:
- the expansion of the dialogue with African partner countries in the framework of enhancing the advisory
and support structures for companies with focus on skills transition,
- the support of existing EU initiatives such as the online portal 'due diligence ready!',
- the creation of an expert circle on Sustainable Corporate Governance to identify best practices on
stakeholder engagement and maximise sustainable value creation.
You can read the full paper here.