Key ESG Developments – May 2022
NGOs are asking for the proposed Corporate Sustainability Due Diligence Directive to be strengthened
In May 2022, a group of over 220 Non-Governmental Organizations presented a joint statement in which they welcomed the European Commission’s Draft Directive on Corporate Sustainability Due Diligence, whilst also calling on the European Parliament and the EU member States to make a number of amendments in order to improve the proposal “in a gender-responsive manner” and “to guarantee that the law will effectively prevent corporate harm to human rights, the environment and climate; as well as provide victims of corporate abuse with access to effective remedies”.
Burkina Faso investigates the death of 4 workers in relation to the activities of canadian-based Trevali Mining Corp
On the 16th of April 2022, a mining disaster occurred at the Perkoa zinc mine in Burkina Faso owned and operated by Canadian-based Trevali Mining Corp following a heavy rainfall in which 8 workers were trapped more than 500 meters underground. After 39 days of searching in the depths of the zinc mine, the bodies of 4 of the workers were found whilst searches still continued for the other 4 workers.
In Burkina Faso, where the mining sector has been growing for the past years, the disaster has also given rise to a public outcry. The families of the victims have filed a complaint against the Canadian-based company for “involuntary attempted manslaughter,” “endangering the lives of others” and “failure to assist a person in danger.” Burkina Faso’s prime minister, Mr Albert Ouedraogo stated the local managers of the company’s activities have been banned from leaving the country until investigations are settled, and blamed “irresponsibility” by those in charge at the mine, reinforcing that several days before the accident “dynamite was used on the open-air [part of the] mine, which weakened the [underground] gallery and enabled the flooding”. Other workers at the site described that in the first days rescue teams were very slow and underestimated the gravity of the situation, and it was only three weeks later that more efficient electric pumps arrived from Ghana and South Africa.
The president and CEO of the group has stated that the company is “working in solidarity with all levels of government and as fast as we possibly can using all available resources in the country, as well as importing additional machinery and equipment to assist with locating our missing colleagues”.
Coalition of organizations calls for the inclusion of bauxite, cooper and iron in the new incoming EU Batteries Regulation
About 16 organizations- including Amnesty International, Earthworks, Finnwatch, Germanwatch, Human Rights Watch, Inclusive Development International, INKOTA, PowerShift, RAID and SOMO- and human rights activists from producer countries are calling for the inclusion of bauxite, cooper and iron in the new EU regulation for batteries, which is under negotiations since April 2022.
The new regulation aims to deal with complex global supply chains of batteries entering the EU, requiring companies to conduct due diligence. However, the draft has been meeting resistance from the Council of the EU, with attempts to water it down and more recently National Governments wanting to exclude bauxite, copper, and iron. A coalition of organizations and human rights defenders have brought attention to the fact that without the inclusion of these materials efforts to free supply chains from human rights and environmental harm will fall shortly, with Bauxite being part of the production process of aluminum, a key material for electric car batteries, and copper being used in battery anodes and electric wiring.
The Financial Reporting Council (‘FCR’) released the “Modern Slavery Reporting Practices in the UK
A study carried out by Lancaster University and commissioned by FCR, in collaboration with the UK Independent Anti-Slavery Commissioner, and summarizing the evidence on how companies listed on the London Stock Exchange’s Market report on Modern Slavery, was published in the FRC “Annual Review of Corporate Governance Reporting (2021)”.
The study showed that 12% of the companies did not provide a modern slavery statement, and that less than 50% of the entities have failed to have clear and informative conclusions of the modern slavery concerns in their structure and supply chains.
Additionally, the report showed that the majority of companies’ statements did not identify emerging issues nor a long-term strategy and that only 28% of the companies analysed had disclosed an action plan grounded on the risks identified.
The report concluded that “…when boards make it [reporting on modern slavery] a priority, companies can drive outcomes and provide insightful disclousures on slavery risk for their stakeholders”.
A new green Dutch State Loan bond issuance was announced by The Netherlands:
Following the recent update of the Green Bond Framework by the Dutch State Treasury Agency, a new green Dutch State Loan bond is expected to be issued on June 14. The issuing of bonds aims to raise four to five billion euros to finance climate change mitigation and projects regarding adaptation. The country had already issued Green Bonds in 2019, raising 10.4 billion euros and the report was made available in May 2021.
According to The Netherland’s government, the country is the first to align its green bond issuance framework with the European Union’s taxonomy.
Two US Senators introduced a bill to clarify the extraterritorial application of Alien Tort Statute in order to ensure companies are held accountable for human rights abuses raised abroad
In May 2022, two US Senators introduced the Alien Tort Statute Clarification Act (ATSCA).
Adopted as part of the Judiciary Act passed by the First Congress in 1789, the Alien Tort Statute grants jurisdiction to US Federal Courts over claims filed by non-US citizens for torts committed in violation of International Law.
The objective of the amendment is to clarify that the Act is applicable to extraterritorially corporate human rights abuses, and that the victims of those abuses can initiate proceedings in the United States against US companies.
Authors: Ana Carina Duarte, Rafaela Oliveira and Mariana Ferreira