Policy and Advocacy

New EU corporate accountability law ‘riddled with loopholes’

99% of Irish businesses to be excluded from new EU rules aimed at preventing corporate damage to the environment and exploitation of communities.

A coalition of Irish humanitarian aid organisations, trade unions and academics has today criticised new rules proposed by the EU aimed at cleaning up global supply chains and minimising negative global impacts of business on workers, communities, and the environment, warning that they are inadequate and full of flaws and exemptions.

Under the proposed law, some EU companies would be required to undertake ‘due diligence’ checks along their full supply chains to prevent human rights and environmental abuses. However, it will apply only to companies with an annual turnover of over €150 million and more than 500 employees. In high-risk industries like agriculture and fashion, companies with more than 250 employees would be covered. All other businesses would be exempt.

Sorcha Tunney, Coordinator of the Irish Coalition for Business and Human Rights (ICBHR), established to champion greater corporate accountability, said: “This is a crucial step forward but we need to get it right. Communities around the world have been waiting years for new EU rules to end exploitation and prevent abuses along global supply chains.”

She added: “We need to take forced labour, deforestation and oil spills out of our shopping baskets once and for all, but this proposal just doesn’t go far enough and is riddled with loopholes. It looks like an ineffective tick-box exercise that only very few companies will be required to undertake.”

The coalition said that by limiting its scope to so few companies, the proposal turns a blind eye to many harmful business impacts. The European Commission has stated that, if passed in its current form, 99% of companies would be exempt. Based on latest CSO data, the ICBHR estimates that less than 700 Irish companies will have to do checks, including several in particularly high-risk sectors.

Conor O’Neill, Head of Policy & Advocacy at Christian Aid Ireland, said: “Neither turnover nor staff size alone can properly measure a company’s capacity to harm human rights or the environment. We work with communities badly impacted by the infamous Cerrejón mine in Colombia, now facing pollution of their air and water. While the coal is mined and shipped to Europe, the Dublin-based Coal Marketing Company (CMC) that sells it would not be covered as it has only 27 employees. How can we clean up supply chains if so many businesses are exempt?”

Earlier this month, over 100 high profile companies, investors, business associations and initiatives, including IKEA, Primark, Danone and Patagonia, called for ambitious and mandatory corporate human rights and environmental due diligence (mHREDD) legislation from the EU. They state that “many European SMEs, including signatories to this statement, acknowledge that responsibility for human rights and the environment is not a matter of company size”, arguing that all businesses should be required to carry out proportional checks along their supply chains.

Jim Clarken, CEO of Oxfam Ireland, said: “Businesses, including businesses in Ireland, have been calling for a level playing field which will allow them to actively separate themselves from the worst human rights and environmental abuses around the world. But this proposal is a long way from the Commission’s ‘gamechanger’ aspirations. We need a law that makes all companies, not just the biggest, responsible for their human rights and environmental violations, and provides real certainty for business, workers and consumers.”

In October the ICBHR published a report “Make it Your Business” highlighting corporate human rights abuses in low-income countries around the world by Irish companies. It sets out the need for strong corporate accountability legislation requiring businesses operating in Ireland, to identify and prevent human rights abuses and environmental damage occurring in their operations, anywhere in the world. An effective law would ensure companies can be liable for any harm done to communities affected by their activities.

Caoimhe de Barra, CEO of Trócaire, another coalition member said: “Our leaders need to fix this draft EU law and make it work. As the legislation is hammered out in Brussels, the Irish Government and MEPs must step up and ensure it’s free of loopholes. We need this new law to be strong and effective if we’re to clean up the supply chains of Irish and EU companies, keep people safe from harm and help prevent runaway climate change. It should apply to all Irish businesses, put clear responsibilities on companies to prevent abuses in their supply chains, and allow communities to seek justice in Irish courts if abuses happen.”

Andrew Anderson, Executive Director of Front Line Defenders, said: “While we welcome this significant move towards holding companies to account for their actions, moving forward any future legislation should acknowledge that engaging with human rights defenders and rightsholders on the ground is crucial for companies to effectively identify and address harm.

While we are happy to see the expansion of Directive (EU) 2019/1937 (the Whistle-blower directive) to also cover the protections of persons reporting breaches in this new directive, we regret that the draft law makes no explicit reference to human rights defenders or to the risks that they face despite the high levels of attacks against human rights defenders around the world, and despite effective due diligence relying on the information human rights defenders share. The EU has made significant commitments to the protection of human rights defenders, and we expect the forthcoming legislation to reflect these commitments.”

The new EU Proposals:

  • Human rights and environmental due diligence: Under the proposed law, some EU companies would be required to undertake ‘due diligence’ along their full supply chains to prevent human rights and environmental abuses. Due diligence is a process of identifying, preventing, ceasing, mitigating and accounting for the negative impacts of business activities, including those of subsidiaries, subcontractors, and suppliers.

  • Limited scope: the proposed legislation will apply only to companies with an annual turnover of over 150 million euro and over 500 employees. In high-risk industries like agriculture and fashion, companies with more than 250 employees would be covered, while all other businesses would be exempt.

  • Dangerous loophole: while companies will have a duty of care for their entire supply chains, the proposed law contains a dangerous loophole. The extent of a company’s duty of care can be weakened through contractual agreements with companies lower in the supply chain, which could effectively allow companies to offload their due diligence obligations onto their suppliers.

  • Barriers to taking cases against Irish companies: under the proposed law, companies could be held liable for harms committed at home or abroad by their subsidiaries and contractors along their supply chains, and their victims will have the opportunity to file lawsuits before Irish courts. However, the draft law does nothing to address the serious legal hurdles that communities face to take such cases – including high costs, short time limits, limited access to evidence, and a disproportionate burden of proof. The Commission wants companies to adopt a climate transition plan in line with the 1.5 degree target of the Paris climate agreement. However, the proposal does not foresee any specific consequences for the breach of this duty, which risks making the climate duty ineffective.

  • Community consent not included: A corporate obligation to obtain consent from indigenous peoples when business projects may affect their land, territory and resources, is also missing from the text. Around the world, indigenous peoples are dispossessed or denied rights to their land and attacked, threatened, and killed for defending their territories, often from corporate activities.

  • Stakeholder engagement is not included: The Directive does not require engagement with rightsholders only saying that companies shall carry out consultations with potentially affected groups where relevant.

  • Human rights defenders are not named as key stakeholders: The proposal does not name human rights defenders as key to the HREDD process and there are no requirements to address reprisal risk against human rights defenders and other participants in consultations or complainants to grievance mechanisms.

  • Irish public support: a national opinion poll conducted through IPSOS/MRBI in June 2021 for the Irish Coalition for Business & Human Rights showed strong public support for strong new corporate accountability laws for Irish businesses, with 81% of Irish people believing that an Irish company acting unethically in a low-income country should be subject to regulation here in Ireland.

The Irish Coalition for Business and Human Rights is a coalition of civil society organisations, academic experts and trade unions working collaboratively to progress corporate accountability, based on respect for human rights and the environment.

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In a region brought to its knees, inequality kills

In the Middle East and North Africa region, already one of the most unequal in the world, billionaires saw their wealth increase by 23% during the pandemic.
In the Middle East and North Africa region, already one of the most unequal in the world, billionaires saw their wealth increase by 23% during the COVID-19 pandemic. Photo: Pablo Tosco/Oxfam

Blog by Diana Kallas, Senior Inequality Policy Advisor - Oxfam in MENA

In the months after the pandemic was declared, Oxfam warned that huge and dangerous increases in inequality across the MENA region were likely.

Back then, in just a matter of months the region’s richest had amassed more wealth than the IMF and the UN combined had provided in aid for the coronavirus response. As we warned almost 45 million people were on the precipice of being pushed into poverty, the wealth of these elites has only climbed, lining their pockets at the expense of everybody else.

While last month the world’s leaders and elites gathered online for the Davos Agenda, discussing among other issues global social contracts and vaccine equity, this annual talk fest only paid lip services to the global good and hasn’t, so far, resulted in anything meaningful for the billions of people around the world who continue to lose out because of the inequalities translating into vaccine apartheid and gross disparities between rich and poor.

Pandemics are good for business

Almost two years on from the pandemic, the data is staggering. Not only has the chasm between the rich and the rest widened, but the small, powerful and exclusive club of millionaires and billionaires has grown. Their obscene wealth increased during the pandemic and so has their number. Pandemics are clearly good for business. In the Middle East and North Africa region, already one of the most unequal in the world, billionaires saw their wealth increase by 23% during the pandemic, while the bottom 90% of people saw their wealth drop in 2021.The 3 richest people (all of them men) own more wealth ($26,3bn) than the bottom 222,5 million MENA citizens ($25,5bn) combined. The number of people whose net worth was 5 million USD or more also in these countries increased by almost 40%, while in the entire nine years preceding the pandemic the increase was 24%. In Egypt, Jordan and Morocco, business was even better for the rich where there was a 39% combined percent increase in total wealth of millionaires and billionaires according to WealthX data. Moroccan billionaires saw their wealth triple during the pandemic.
This wealth does not trickle down to benefit others, and despite what they might argue to the contrary, these rich men are not contributing to their economies.

More rich people only means higher wealth concentration, more money in the hands of too few. Some of this increase could have gone into government coffers to help fund access to health care, education, sanitation systems, water and electricity.

Instead, because of a complete lack of reforms and governance to enable progressivity and redistribution, we saw more millionaires and billionaires as well as more people pushed into poverty, and more people dead from Covid because they couldn’t access the basic services they needed.

The MENA region needs a new, fair, and equitable economic model

Inequality kills, but it didn’t have to be this way. If governments had taxed the rich their fair share, and ensured those taxes worked to protect the most vulnerable and everyone in-between, the ramifications of the economic impact of the most recent pandemic crisis, in addition to decades of austerity measures that did little to improve the lives of ordinary people, could have been lessened.

If a progressive annual wealth tax was applied to the wealth of multimillionaires and billionaires in the region it would have generated US$ 79.3 billion a year, enough to increase public health spending across the region by half, or completely eliminate often unaffordable out of pocket health costs.  In Lebanon, a country in the throws of multiple crises, this would have allowed for a $1.1 billion USD annual increase to the government health budget.

The MENA region needs a new, real, social contract, and a new economic model where distribution of income and wealth is fair and equitable and where austerity is history. It needs redistributive policy measures that prevent the accumulation of wealth in the hands of the few and channel resources towards the good of society as a whole.

Inequality is not simply that some have more than others. Wealth that stays in the hands of the wealthy breeds societies where injustice is rife and public services and opportunities for those who need it most are inaccessible.

Inequality does and will continue to kill until we switch the game. Political and economic decision making must start working for the collective good, instead of the private interests of a few. It drives conflict, societal disintegration and hardship.

Until then, if we let the gap keep widening the inequalities it breeds will multiply just like the virus that keeps supercharging it, with disastrous consequences for all.

EU set to bin 25 million more vaccine doses than it has donated to Africa in 2022

February 16th 2022

The EU and Ireland have betrayed Africa by blocking proposals which would allow manufacturers on the continent to make their own COVID-19 vaccines while hoarding millions of doses set to expire at the end of the month, warns Oxfam.

Ahead of tomorrow’s meeting of African and European leaders at the AU-EU Summit, new analysis from Oxfam highlights how the EU will have to throw away 55 million doses of COVID vaccines by the end of February, significantly more than the 30 million doses they have donated to Africa so far in 2022. Ireland, who have not donated any vaccines to low-income countries so far this year, are throwing out hundreds of thousands of vaccines.

Despite the rhetoric of a special relationship with Africa, the EU – which is now the world’s biggest exporter of vaccines – has prioritised selling vaccines made on EU soil to rich nations and just eight per cent of its vaccine exports have gone to the African continent. The figures for Germany are even worse – just one per cent of vaccine exports from BioNTech, the German pharmaceutical company behind the Pfizer vaccine, have gone to Africa.

At the same time, EU member states, including Ireland, have been a major blocker of proposals tabled by South Africa and India and supported by the African Union and over 100 countries for an intellectual property waiver which would allow the generic production of COVID-19 vaccines, tests and treatments. Leaked drafts of the summit declaration show a divide between the EU and the AU, with the AU insisting language on the waiver is included. Last summer, French President Emmanuel Macron - who is hosting the AU-EU summit - announced his support for the waiver but has done little since to challenge the EU’s stance on it.

Jim Clarken CEO of Oxfam Ireland, said: “The European Commission said at the beginning of the pandemic that the vaccine should be a global public good. Instead, they have ensured it is a private profit opportunity, raking in billions for Big Pharma and the EU, while almost 9 out of 10 people in Africa aren’t fully vaccinated, two years into this deadly pandemic. This is shameful.”

“It is estimated that almost 7,000 people in Africa have died per day as a result of COVID-19 in 2022, a quarter of a million since the beginning of the year. Due to very low vaccine supplies, just 11 per cent of people on the continent have received their first two COVID-19 vaccines to date.”

The EU has made much of plans to support the set-up of vaccine factories in Africa under the monopoly control of European pharmaceutical corporations – but this still wouldn’t give countries autonomy on vaccine supplies produced. BioNTech recently announced plans to produce 50 million vaccines in Africa once fully operational, however, this is less than their factory in Germany produces each month.

Clarken said: “It is shameful that Ireland continues to support the EU’s policy of blocking African producers from making their own doses of COVID-19 vaccines. If there truly is a common agenda between the Unions, then the EU would stop putting the interests of pharmaceutical companies, who have reaped billions from the pandemic, ahead of African lives.

“These vaccines were publicly funded and the recipes should be shared with the world to allow all qualified producers to make these vital shots.”

The EU have contributed €3 billion in funding to COVAX, the initiative designed to help developing countries to access vaccine doses, but the scheme has now run out of funds after failing to reach its target of vaccinating 20 per cent of people in poorer countries by the end of 2021. Meanwhile, Germany alone has received €3.2 billion back in tax revenue from BioNTech.

Clarken concluded: "Ireland and the EU claim they are promoting a ‘prosperous partnership of equals’ with the African Union and yet they are dumping more vaccine doses than they are donating to Africa, while continuing to block a waiver on vaccine patents which would enable African countries to produce our own vaccines. What's equal about that?

“This vaccine apartheid - perpetuated by the EU and Ireland - has a brutal human cost. Livelihoods continue to be destroyed, economies are being shattered and health workers pushed beyond the brink.

“It is encouraging that the African Union is standing up to the EU and asking for a reference to the TRIPS waiver to be included in the Summit's outcome document. We need the TRIPS waiver now and the EU and Ireland must stop standing in the way.”

One woman's fight against inequality saves lives in her neighbourhood

Janet Fuentes leads a march in her community of Santa Rosa in Lima, Peru. Miguel Villalobos/Oxfam

In Peru, Janet Fuentes mobilised her community to save lives during the pandemic while they received little to no support from the government.

Peru is the country with the most COVID-19 deaths per capita in the world. When COVID-19 hit in Santa Rosa, a neighbourhood of Lima, people weren’t just dying from getting sick, but also from starvation. Janet Fuentes witnessed dozens of her neighbours fall seriously ill and sometimes die, while the government provided no support and their local health centre shut down.

“The levels of inequality are horrendous... When [a family] waved a white flag from a house, it meant they didn’t have anything left to eat,” Fuentes says. “People are dying in Santa Rosa and nobody is coming."

Fuentes brought together members of her community to found the Anti-COVID Committee to support her neighbours at the height of the crisis. The committee collected and distributed medicine and bottles of oxygen, organised food deliveries to vulnerable families, took care of children with ill parents, and distributed masks. Fuentes’s efforts likely save hundreds of lives in her community.

“Something that hurts us deeply is that these deaths could have been avoided if we had a government that truly cared,” she says.

Janet Fuentes delivers food and aid to her neighbours suffering during the pandemic. Miguel Villalobos/Oxfam

Tackling the root of the problem

When the pandemic hit Peru, there were only 248 intensive care beds for more than 30 million people. That number has now increased to 3,700 ICU beds through contributions from organisations like Oxfam in Peru and its partner ‘Foro Juvenilde Izquierda’ (Leftist Youth Forum), a grassroots organisation led by young activists promoting among other initiatives the Anti-Covid Community Committees. However, while groups like these are making strides within their communities, the systems and those in control of them are stilling failing people every day.

“We are facing a neo-liberal system that only prioritises wealth,” says Fuentes. “How is it possible that this pandemic has made billionaires out of the pharmaceutical companies?”

Now, Fuentes and the Anti-COVID Committee are demanding responses from the Peruvian government to address the systemic problems in their country that were made worse by the pandemic. They are asking the government to provide their communities with proper healthcare and to denounce “pandemic profiteers”—the transnational companies profiting from vaccines, medicines, and treatments—while Peruvians still lack decent public health coverage.

Through the work of ‘Foro Juvenilde Izquierda’, committees like the one in Santa Rosa are participating in grassroots democratic discussion, engagement, and advocacy with public authorities, and targeting structural problems in the national health system, beyond the immediate context of the pandemic.

Oxfam’s recent report, Inequality Kills, found that inequality results in the death of one person every four seconds. Communities like Fuentes' are hit the hardest when a crisis strikes, meanwhile billionaires continue to amass wealth at a disgusting rate. Enough is enough.

“It’s an insult when money is more important that people’s lives,” Fuentes says.

Together we can fight inequality.