Lara WOLTERS (S&D, NL), Rapporteur, Didier REYNDERS, European Commissioner for Justice, and Gonzalo García Andrés, Secretary of State for Economy and Business Support, hold a press conference on the deal on due diligence rules for companies in Strasbourg. This transcription is a result of an authomatic process. Please check against delivery.

Strasbourg

press conference

REYNDERS, Didier (BE, EC)

WOLTERS, Lara (S&D, NL)

Press conference by Lara WOLTERS (S&D, NL), Rapporteur, and Didier REYNDERS, European Commissioner for Justice on the deal on due diligence rules for companies

https://api.multimedia.europarl.europa.eu/documents/20125/73988211/1702543034384_I250887Chapters%5BSD-EN%5D.srt

SOUNDBITE (English), Lara WOLTERS (S&amp;D, NL), Rapporteur, I think we have a scraped up rather well after what was a very long night and I think a cumulative 0 hours of sleep. And I think that our efforts have been worth it. I am very proud of what we have achieved here. Responsible business conduct is going to become the norm in Europe, and this is a huge milestone. And I want to thank the two gentlemen that I share the stage with here today and all the advisors and others involved in this deal who stayed awake with us through the night and negotiated almost until daylight to make this possible.

SOUNDBITE (English), Lara WOLTERS (S&D, NL), Rapporteur, This new European law will mean that companies must take responsibility for possible abuses in their value chain. Abuses such as child labour, to extract cobalt for smartphones, rainforest degradation for soil, ending up in our supermarkets, fruit pickers on European fields. These are just some of the examples of irresponsible business practices that now companies can no longer look away from.

SOUNDBITE (English), Lara WOLTERS (S&D, NL), Rapporteur, The European Parliament has been successful in securing a range of obligations, obligations to consult stakeholders from workers to environmental defenders, and for companies to pay out remediation where due. If the worst does happen, if harm does occur, then this legislation makes it possible for victims to sue companies who fail to take their due diligence seriously. And what is more, any failure to do due diligence comes with hefty administrative penalties, including a fine from 5% onwards for the gravest of cases.

SOUNDBITE (English), Lara WOLTERS (S&D, NL), Rapporteur, According to the political agreement that was reached, companies will have to make climate transition plans in line with the goals of the Paris Agreement, including concrete targets and measures that will lead their value chains to climate neutrality by 2050. In five year steps starting in 2030. This is one of the major victories of last night.

SOUNDBITE (English), Lara WOLTERS (S&D, NL), Rapporteur, Finally, on the financial sector, we have resisted. The Member State push to completely exclude this sector from any of the due diligence obligations. Financial institutions have to put in place climate plans just like any other company and adapt their remuneration schemes accordingly.

SOUNDBITE (English), Lara WOLTERS (S&D, NL), Rapporteur, Lastly, I want to finish on today's result being a breakthrough in thinking about the position of businesses in society. The law that we have made here comes ten years after the Rana Plaza tragedy. The disaster in Bangladesh in 2013 was a wake up call for all I think. And while we can never put right the wrongs of ten years ago, I think that this law is a tribute to the victims of tragedies such as Rana Plaza. That is at the forefront of my mind today. And I thank the gentleman here for the agreement that we were able to reach.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, Good morning. Good morning. It is a great pleasure to be here with Lara Wolters and Commissioner Reynders to celebrate a great achievement, which is first and foremost the outcome and the fruit of our joint work in the European Union, led as it should be by the Commission. Already all the work that came with the proposal, all the consultation with business, with NGOs, and then all the process through the legislation, the codecision process in which we at the Council and Parliament reached our mandates, our positions on on that text.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, This has been a difficult negotiation because this directive will be a major innovation. It is about a new step in a system which hitherto was based on recommendations, international standards, the OECD, the UN principles. But I think with all this joint effort, we kind of enter into a new stage which will continue to ensure that European businesses at the avant garde of the sustainability, transformation of the economy, and they are fully engaged in their business, in their strategies, the need to avoid and take into account the impact of their actions on human rights and on the environment.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, I think this this will be done through a system, which is innovative and therefore has the required a lot of technical work by our teams that hopefully some of them are already sleeping. And and it is I think it is a system that will will work well based on the responsibility of the companies first to have the policies to really to take these elements into account and then two mechanisms of enforcement, one through administrative supervision and sanction and one which is, I think, very important for the effectiveness of this directive, which is that civil liability and that the ability of those that have suffered damage to claim in court compensation.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, I think from the point of view of the Spanish presidency, this was a priority. It was it was a challenge. And we have put all the efforts into a text that really, I think, shows that the transformation that the EU economy is undergoing is ambitious.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, But at the same time and this was something that was a key element in the council's mandate, it is done in a proportionate, in a clarity, legal certainty way for companies taking into account the abilities and the capacities of companies of different size, adopting the obligation to risk and also to the capacity of of companies and making those companies that have more resources, more capacity to lead.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, In any case, as in any innovation will be an evolutionary process. So we will have to continue to work, I think and I persuaded that with the directive that we have agreed provisionally today, this system will depart, I think, on a solid footing. But as in other innovators, we will have to continue to work to learn from the experience and to improve the system going forward. Thank you.

SOUNDBITE (English), Didier Reynders, Commissioner, Thank you. Thank that the Parliament and the Council Presidency and rapporteur Lara Wolters for the support to the proposal made by the Commission. Because I start to work on such a proposal at the beginning of our mandate. So just less than four years ago, we have started consultations with the business community, with many civil society organisations, but also of course with the Member States and already with members of the Parliament to try to have everybody on board from the beginning.

SOUNDBITE (English), Didier Reynders, Commissioner, The main goals were first to move from a voluntary approach that we have at the international level in the OECD, in the UN, to a mandatory approach. It's of course very different. We need to adapt the practices to be sure that it is possible to have an obligation for the large companies to engage such a kind of process of all the due diligence.

SOUNDBITE (English), Didier Reynders, Commissioner, The second goal was to avoid fragmentation in the EU. We have had a very two laws in France and then in Germany, and there were many discussions in many other member states with some part of legislations. And of course the risk was to have not only one approach at the EU level, but maybe after a year till 27 different approaches. And we have had the support from the business community for that reason. The way to avoid such a fragmentation.

SOUNDBITE (English), Didier Reynders, Commissioner, The third objective was to not to work sector by sector, but to try to take into account all the companies, of course the large companies in all the different sectors to ask to them to organise a due diligence process on environment and human rights, so to identify, and to mitigate or to avoid the risk for the environment and human rights. And we have add also the request to organise a transition plan for the fight against climate change because it is very important to have the companies on board as so in such a way.

SOUNDBITE (English), Didier Reynders, Commissioner, And I must say that in our proposal we have tried to take on board all the sectors. It is the case also because we have seen many discussions of that and we have had many discussion the financial sector, because we will have also such an obligation for the financial sector to come with a transition plan and also under the control of supervisory bodies in all the member states.

SOUNDBITE (English), Didier Reynders, Commissioner, Because it was said we have to system to control the process while in administrative control by the supervision bodies in all the member States, a network of different agencies, authorities in the Member States, but also the civil liability, the fact that it's possible to go to justice and certainly with a real very smooth mechanism to give an access to justice for the victims, possible victims of heart, of the environment, of violation of human rights, but also is a representation by different kind of actors, trade unions, also a civil society organisation, but also the different Institute for Human Rights that we ask to all the member states to put into place in the European Union.

SOUNDBITE (English), Didier Reynders, Commissioner, And it is very important to to have such an access to defend the different element that we have put into place and in fact is the same kind of process that the process that we have had in the Representative Action Directive for the collective action in justice in the way to protect the consumers. And with such a proposal, which was sought to give an idea about the future international standard for a mandatory approach, we will continue to work in the OECD, in order for to do that.

SOUNDBITE (English), Didier Reynders, Commissioner, I want just to add that now we have a new work to start with the Member States. It will be important to next year to organise a transposition. It's a directive, so we need to have the national text and the Commission will provide guidelines and some support for all the different companies involved in the process in different phases three, four, five years from now, with the entry into force of the new attacks and the new system.

SOUNDBITE (English), Didier Reynders, Commissioner, And we are very open, of course, to give a support to all the different actors, but certainly to give a social support to the SMEs. We have try to protect the SMEs in such a process to put this out of the process, except that they are in the value chain of many companies and there have also some obligations due to that in the value chain. So I will try to give a solid real support to the SMEs in such a process.

SOUNDBITE (English), Didier Reynders, Commissioner, But again, I am very. Paul that was possible after four years to have now such a political agreement thanks to the Parliament and thanks to the the Council and the Presidency, it was a real priority for the rapporteur and for the Spanish Presidency. And now again after the breakfast of this morning, maybe some hours of sleep in the day, we will start the transposition to be on time and I am sure that should be the case in all the member States. Thank you.

Q&A Question regarding on Poland's frozen EU funds.

Q&A Question regarding on companies who struggle to perform due diligence in regions, which are suspected to have human rights issues.

SOUNDBITE (English), Lara WOLTERS (S&D, NL), Rapporteur, -

SOUNDBITE (English), Didier Reynders, Commissioner, -

Q&A Questions regarding on the directive's impact on the financial sector.

SOUNDBITE (English), Gonzalo García Andrés, Secretary of State for Economy and Business Support, -

Q&A Question regarding on how the European Commission will help SMEs (Small and Medium Enterprises).