Respecting human rights is good business

When I invited him to the parliament, where his case was discussed, it was agreeable to hear how the EU commissioner for trade, Cecilia Malmström, addressed the Thai government in her speech, claiming all companies need to understand and not underestimate European consumers' demands for products free of labour abuse.

Commissioner Malmström's "Trade for All" communication very clearly says that trade policy must take responsibility for supporting and promoting the EU’s values and to engage with partners to promote human rights, labour rights and environmental protection.

In March this year, France passed a law on Corporate Duty of Vigilance. This law puts legal obligations onto business to ensure respect for human rights in their activities and business relationships.

The topic has gained important political momentum and initiatives to improve corporate accountability have increased at national, European and international levels.

The law in France shows that respect for human rights and the environment can be legally mandated into business activities.

And this is not the only example: Just three months ago, the EU reached a major breakthrough in responding to the problem of conflict minerals.

Blood minerals

The EU adopted a binding legal act, which obliges companies involved in the extraction and trade of minerals to verify that their supply chains are not linked to armed conflicts and human rights abuses.

The commission and the Council of the EU originally aimed for voluntary self-certification measures. But voluntary means were not enough for the parliament, and it should not be enough for the European citizens.

What is more, the forerunners among companies – who already have understood the necessity of due diligence in supply chains – are suffering from the lack of a level playing field.

The French Corporate Duty of Vigilance Law and the Conflict Minerals Regulation are first steps. Binding due diligence will inevitably need to be expanded to cover all relevant sectors expanding the obligations over the whole chain of actors.

The EU parliament is calling for a legislative proposal to be put forward in the garment and footwear sectors. Similarly, it recently called for concrete regulatory measures to ensure that the supply chains and transactions of companies linked to Europe are free from deforestation and forest degradation.

Furthermore, the parliament demands a legislative proposal to ensure the traceability of the supply chains of agricultural commodity importers – all the way to the origins of their raw materials.

However, the good news is that we already have a notable amount of information on imported products with the EU customs system.

Public access

Public access to the relevant customs information would already be a major step forward in traceability efforts. At the same time, it would also enable companies to use this information as a competitive advantage.

The sector-specific initiatives are dots that we need to eventually connect together with lines – to arrive at the creation of general cross-cutting obligations. And the EU parliament is already aiming to connect these dots.

We want to support and promote human rights in the whole global value chain, and trade policy is a mighty tool to do that.

A year ago the commission hinted at an EU action plan on responsible business conduct. By soon putting forward this awaited action plan, the commission can show that it’s really standing by its words.

Another project currently on the commission’s drafting board, which is meant to replace the current investment protection system, is the Multilateral Investment Court. This is an opportunity to really make it trade for all, and not just trade for the privileged few.

The court’s mandate should be formulated in a way that gives it the authority to make judgments, not only concerning violations of corporations’ and investors rights, but equally in regard to environmental and social rights of individuals.

The human rights, environmental rights and sustainable development chapters in EU trade agreements need to be made as binding and enforceable as the investment protection chapters. And, in case of violations, the victims need to be guaranteed access to this international court.

Now that's what I would call trade for all.

Heidi Hautala is a Finnish member of the European Parliament, and the trade spokesperson for the Greens/EFA