Brussels, April 24 2024 – Today marks a pivotal moment in the fight for corporate justice as the European Parliament adopted the Corporate Sustainability Due Diligence Directive (CSDDD). Eleven years after the tragedy of Rana Plaza in Bangladesh, the co-legislator endorsed rules requiring businesses to put measures in place to prevent harm to their business operations.  

Back in 2013, the Rana Plaza tragedy marked the need to establish effective rules to ensure businesses’ responsibility to prevent harm to human rights impacts, the exploitation of workers, and impacts on Indigenous Peoples’ rights and other traditional communities and natural ecosystems linked to corporate operations.

On 24 April 2013, the eight-storey Rana Plaza building which illegally housed many garment factories collapsed killing 1,138 workers and injuring many more. Though structural cracks had been discovered and publicly reported the day before, workers had been forced to return to work to ensure the supply for multinational apparel companies all over the world. Already at the time, this tragedy highlighted not only the responsibility of multinationals for human rights abuses in global value chains but also the urgent need to regulate their actions and ensure access to justice for victims. In fact, it influenced the first-ever due diligence law in France, passed in 2017 and nicknamed the ‘Rana Plaza law’. 

Never again.

11 years after the tragedy of the Rana Plaza collapse, we remember the lives lost and the lessons learned.

Today, the European @Europarl_EN votes on the #CSDDD, an EU directive reflecting on past mistakes to enforce corporate justice. pic.twitter.com/8yPr1YSb6I

— European Coalition for Corporate Justice (@ECCJorg) April 24, 2024

Today’s approval of the CSDDD by the Parliament is not just about EU policy; it’s about honouring these lives and ensuring rules for accountability for corporate impacts on people and the planet. However, the true potential for game-changing progress lies in ensuring those affected people have a voice in crafting solutions during the implementation phase and in the new design of the business.

With a bittersweet and ambivalent sentiment, today’s vote is undoubtedly cause for celebration. It has game-changing potential, as it cements the principle that companies must not harm people and the planet when operating. 

Yet, due to political gameplay, the law has seen many limitations – including cuts to the downstream part of the chain of activities and the normative scope, namely the number of human rights and environmental prohibitions covered by the law.  

Although we are close to passing a milestone EU law to hold companies accountable for irresponsible actions, its reach is limited. It will only apply to 0.05% of the companies initially proposed by the Council for inclusion in the CSDDD’s scope.

In contrast, the Parliament was successful in introducing to and securing access to justice rules in the CSDDD, necessary for victims to access remedy when harmed. Thanks to the Parliament‘s strong position on this issue, the CSDDD will now provide some basic legal safeguards for those seeking justice – including reasonable time limits to file claims, the possibility to be represented in court by mandated trade unions or NGOs and a better-defined framework for seeking evidence necessary to prove their case.  

While it is impossible to answer this question with certainty, we do believe that having a strong due diligence law in place at the time would have largely reduced the probability as well as the severity of the Rana Plaza disaster.   

Had the CSDDD been in effect before 2013, companies would have been obligated to identify and tackle potential risks, including those to the building’s structural integrity and workers’ safety following the illegal use of an office building for industrial production, potentially preventing such a catastrophic outcome.  

Additionally, stronger protections for freedom of association would have facilitated the establishment of trade unions in factories, which could in turn have empowered workers to voice safety concerns and refuse to enter an unsafe building collectively, reducing the pressure to face repercussions from their employers individually.  

The economic vulnerabilities that forced workers to risk their lives for a day’s wage might have been lessened under CSDDD requirements for companies to ensure fair compensation contributing to a living wage.  

Finally, the directive’s provisions on civil liability would have enabled victims to seek justice against the companies involved. To this day, no corporations sourcing from the factories in Rana Plaza or otherwise involved in the disaster – such as the auditing company – were ever prosecuted and condemned to pay damages for their implication in the disaster. 

The European Council is expected to adopt the directive before the EU elections, following today’s successful plenary vote of the European Parliament. More concretely, on May 15, EU ambassadors will meet in COREPER to formally approve the text, and on May 24, EU Ministers will give the final political approval during the COMPET Council meeting.

After its publication in the Official Journal (20 days after adoption in the Council), EU member states will have two years to transpose the directive into national law. Then, the timing of when the CSDDD will come into effect will depend on the company’s size.