Universal Periodic Review

Create legal regulations that impose binding and enforceable due diligence obligations to respect human rights and the environment on all Austrian companies and groups of companies domestically and abroad (mandatory human rights and environmental due diligence) and commit to the creation of a general cross-sectoral regulation at EU level

Proponent:

Remarks to progress by Liga (last modified Apr 1, 2025):

In Austria, the introduction of binding due diligence obligations to respect human rights and environmental standards for companies is being actively pursued, particularly in connection with the new EU Supply Chain Directive (Corporate Sustainability Due Diligence Directive). This directive obliges large companies in the EU and those with a significant business volume in the EU to identify, minimise or prevent and document negative impacts of their business activities along their entire supply chain. Under the directive, Austria is obliged to transpose the corresponding EU requirements into national law by 26 July 2026. The measures are aimed at companies that have to ensure human rights and environmental standards in their global activities by taking their „activity chain“ into account, and could also indirectly affect smaller companies, for example through contractual requirements from larger trading partners. The directive provides options and forms of support for these companies.
   Austrian companies will be obliged to integrate civil liability issues and compliance requirements into their business strategies and to develop transition plans in line with the climate goals of the Paris Agreement in order to minimise or prevent potential negative impacts of their business activities. In future, an official supervisory authority will also be able to impose sanctions if companies fail to fulfil their due diligence obligations. For the Austrian economy, this represents an adjustment to the now mandatory EU-wide standards. (More information on the EU Supply Chain Act on HRW: https://www.hrw.org/de/news/2024/05/24/neues-eu-lieferkettengesetz-fuer-unternehmen-fragen-und-antworten). A § 8 BMG Commission for dialogue processes between the administration and civil society was newly established in the BMK. This commission promotes the exchange between the administration (represented by the) and organised civil society (represented by the managing directors of Ökobüro and Umweltdachverband). However, a climate protection law and other tangible legal progress are still lacking, which is also clearly criticised by civil society (see e.g. on the website of the climate referendum: https://klimavolksbegehren.at/). On 23 February 2022, the European Commission published a draft directive on „Corporate Sustainability Due Diligence“ (CDSDD, see draft on the European Union website: https://eur-lex.europa.eu/legal-content/DE/TXT/HTML/?uri=CELEX:52022 PC 0071 from=EN). On 1 December 2022, the European Council agreed on its position and on 1 June 2023, the European Parliament will adopt its position, which will be followed by trilogue negotiations between the three institutions (Proposal for a Directive of the European Parliament and of the European Council on corporate due diligence in relation to sustainability and amending Directive (EU) 2019/1937 as PDF: https://data.consilium.europa.eu/doc/document/ST-15024-2022-REV-1/en/pdf). The Federal Ministry of Justice and the Federal Ministry of Labour and Economic Affairs have initiated a good consultation process following the publication of the Commission’s draft directive. The government should again fully involve stakeholders in the future implementation of the directive in Austria.
  It is to be welcomed that the Directive that has been adopted and entered into force includes civil liability and sanctions by public authorities. However, in order for the directive to effectively protect human rights and the environment along global supply chains, access to justice for those affected by rights violations needs to be improved. An important civil society initiative on this topic is „Human rights need laws“ (campaign by the organisation Netzwerk Soziale Verantwortung for a supply chain law in Austria and the EU: https://www.nesove.at/menschenrechte-brauchen-gesetze/).
  On 26 February 2025, the EU Commission presented a package which, according to the Commission, is intended to simplify sustainability rules. Proposed amendments concern the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy and the Corporate Sustainability Due Diligence Directive (CSDDD). Although a mere simplification and reduction of redundant and overlapping reporting points was announced, a massive watering down of the CSDDD in important points is now proposed: The erosion of the risk-based approach, as the due diligence obligations would only extend to direct business partners* with a few exceptions; monitoring of due diligence measures would only be carried out every 5 years instead of annually as previously envisaged; deletion of an EU-wide harmonised regulation on civil liability; deletion of the turnover-related minimum maximum penalties for violations; deletion of the obligation to implement climate transition plans, deletion of the possibility of representative actions, etc. (see: here). As part of the Government Plan 2025-2029, the Federal Government is pursuing this goal through close cooperation with all stakeholders (see Government Plan 2ß025-2029: https://www.bundeskanzleramt.gv.at/bundeskanzleramt/die-bundesregierung/regierungsdokumente.html).