EU to oblige firms to cut forced labor, pollution

BRUSSELS

The European Parliament endorsed on Thursday the draft of a due diligence act, pushing companies to cut child labor, slavery, pollution, and biodiversity loss.

The lawmaking body said in a statement that its plenary session “adopted its position for negotiations with member states on rules to integrate human rights and environmental impact into companies’ governance.”

Proposed by the European Commission last year, the EU regulation would oblige firms to mitigate or completely cut the negative impact of their activities, including child labor, slavery, environmental pollution or degradation, and biodiversity loss.

Besides production conditions, the law would imply sale, distribution, transport, storage, and waste-management criteria.

The regulation would cover EU-based companies employing more than 250 people and having a worldwide turnover of over €40 million (approximately $43 million).

The law would also apply to parent companies with over 500 employees and a worldwide turnover exceeding €150 million, as well as non-EU companies generating in the EU at least €40 million of their global turnover if it is higher than €150 million.

Companies that fail to observe the new rule could face a penalty worth at least 5% of their global turnover.

The European Parliament and the Council of the EU will soon start negotiations on the final version of the law.