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THE NEW EU DIRECTIVE ON DUE DILIGENCE – A RELEVANT STEP TOWARDS ENDING CORPORATE IMPUNITY?

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This is a critical time at the European Union (EU) when it comes to human suffering and climate impacts caused by transnational corporations, with particular emphasis on fossil fuel corporations, who continue to take deliberate actions to burn the planet. An important new law has been put forward, called the EU Due Diligence Act, which is still being discussed.

However, this law leaves much to be desired, and in its current form, can provide companies, investor states and financial institutions with an easy tick-box exercise, and loopholes, that will enable them to continue creating devastation of the earth, climate and peoples with impunity. The case of the gas industry in Cabo Delgado, northern Mozambique, is a concrete example of how this can happen and is already happening.

Many organisations in Europe including Friends of the Earth Europe have been fighting the passing of this law in its current form and partnered with JA!’s activists at the EU Commission in Brussels in May, to speak to Ministers in the European Parliament (MEP).

To see the full report by Friends of the Earth Europe, ‘‘INSIDE JOB: How business lobbyists used the Commission’s scrutiny procedures to weaken human rights and environmental legislation’’, click here: https://friendsoftheearth.eu/wp-content/uploads/2022/06/INSIDE-JOB_-How-business-lobbyists-used-the-Commissions-scrutiny-procedures.pdf

The majority of players in the Cabo Delgado gas industry are international, and many are from countries within the EU, such as Total from France, Eni from Italy, Galp from Portugal and French, Portuguese, Dutch, Swedish and Danish banks, to name a few.

Many of these oil, coal and gas companies register subsidiaries in the country where they operate, such as Mozambique, and because the current draft EU law says that only ‘big’ companies can be held accountable, this will enable these subsidiaries to get away with their abuses and violations at a domestic level, especially in countries with weakened systems of justice.

Another major issue is that the topic of Free Prior and Informed Consent (FPIC) needs to be clear and strong. For one, it is only mentioned in an annex, and uses the term ‘consultation’ rather than consent, meaning that communities will only have to be informed of the project. It fails to ensure a clear right to say ‘no’, when local communities do not accept a specific project in their territories for fearing its foreseeable impacts. Secondly, it does not take into account the difficulties that come with actually obtaining this consent, the fact that even consent can be bought, coerced or threatened into. This related to what is meant by ‘a legitimate consultation’. For example, in Cabo Delgado, Total’s consultation process with affected communities has been a sham. When Total representatives visited and visit communities for these consultation meetings, they are accompanied by a military entourage. This, along with the presence of leaders who have a beneficial relationship with the company, means that community members are too afraid to speak out and dissent, even if they disagree, and ultimately many signed compensation agreements in public and in a language they did not understand. Yet Total was able to tick the boxes required for a legitimate process.

In general, there is not enough emphasis on preventing harm, and far more on remedy. It does not deal with what should be the foundation of the discussion, which is that there should be no harm or violations committed in the first place, and that appropriate punitive and coercive sanctions must be put in place when they are committed.

Burden of proof is too high.

In many laws, including in this draft EU law, the burden is on the claimant to prove the crime, which in this case means that corporations are innocent until proven guilty, and the assumption is that communities are not telling the truth. Communities are expected to show that their human rights were violated, amongst all difficulties linked to the asymmetry of power and complicity with national governments, while companies will only need to show that they followed the required processes needed for a project to be developed in that area. In order for community complaints to be considered ‘credible’, they are expected to provide information that is not easy for them to come by, such as written documentation and emails, video and photographic evidence, and named testimonies and witnesses, to show that the companies did not act in compliance with the law and international norms and standards. Amidst global overlapping crisis strongly linked to the power and impunity of these transnational corporations, the burden of proof should be on the companies to prove they are not responsible for the harm, or that they cannot control companies in their global value chains.

The legislation does not recognise that people cannot provide this information – they often do not have access to technology, knowledge of the language used, information in writing and in many cases their lives would be at risk for speaking out.

In the case of Cabo Delgado many mainstream media articles coming out toe the government line and there have been instances where journalists who tell the truth have been arrested and tortured, or even disappeared. Media, civil society and government officials who enter the gas area are accompanied by a military and government entourage, which makes it unlikely that communities will talk about their experiences honestly. These obstacles are not taken into account.

And on climate change

The draft EU law is not clear about companies’ compliance with the Paris Agreement and keeping below the 1.5 oC degree emissions target. Instead, it speaks of ‘compatibility’ which leaves much room for industry to claim that the agreement is ‘open to interpretation’ as they have done before several times.

As long as essential issues in the draft EU law are not addressed, including binding law on compliance with climate agreements, the reversal of the burden of proof and the establishment of clear provisions to deal with neocolonial power dynamics and systemically exploitative nature of big transnational companies , it will be yet another stamp with which the industry will show off its deceiving processes to ‘meet requirements’.

When governments are questioned on their unwillingness to sanction companies and financiers, they often claim that ‘holding dialogue’ with these companies is more effective in the long run. They have said, in several instances, that sanctioning companies should be the last resort, and will lead to them having no input into companies’ actions whatsoever. This system of continued dialogue is clearly not working -companies are continuing to act with impunity – and instead, institutions like the EU need to take ‘take responsibility for the harms of its companies, with great impacts in the global South, and take a step further to actually sanctioning them.

The insufficiency and limitations of a regional legislation

At a broader level, and even though EU corporate regulation laws are undoubtedly needed, this Due Diligence directive will not solve the global problem of corporate impunity. A regional directive – especially one linked with such a weak concept as ‘due diligence’ – must complement the process towards a UN legally binding instrument to regulate transnational companies in international human rights law (the ‘UN binding treaty on TNCs’), ongoing since 2014. Surprisingly enough, the reluctance of the EU and most of its member States to adequately engage in the UN binding treaty negotiations has been reaffirmed session after session and, unsurprisingly, heavily criticized by civil society from across the world.

Without a global level playing field, companies will continue choosing the best places to violate human rights and cause economic, social, environmental and climate impacts. Or choosing the best jurisdiction to register their parent companies. Both the EU and UN laws must include direct legal obligations to companies, affirm the primacy of human rights over trade and investment agreements, and establish judicial enforcement mechanisms. The negotiations of these or any laws aimed at regulating corporate activities should logically be protected from corporate capture and influence. The EU must include several key elements in its new directive in order for it to be meaningful – and this effort must be accompanied by the EU finally taking up its responsibility to start engaging actively and constructively in the negotiations for an ambitious and effective UN binding treaty.

Ending corporate impunity must necessarily mean that we close the legal loopholes and gaps which allow transnational corporations to evade responsibility – at national, regional and international levels.

Source: ja4change.org

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NGO WORK

World Bank Fails to Remedy Harms it Caused in Tanzania, Despite a Scathing Investigation by its Inspection Panel

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Oakland, CA – A scathing investigation by the Inspection Panel of the World Bank confirms the responsibility of the Bank in enabling the expansion of Ruaha National Park and related severe human rights abuses in Tanzania. The Panel confirms “critical failures” of the institution in the planning and supervision of the Resilient Natural Resource Management for Tourism and Growth (REGROW) project that resulted in “serious harm” to communities and violated Bank’s safeguards and operating procedures.1

“The independent Inspection Panel has confirmed the Bank’s grave wrongdoing which devastated the lives of communities. Pastoralists and farmers who refused to be silenced amidst widespread government repression, are now vindicated, and Bank’s efforts to sweep human rights abuses under the rug laid bare,” said Anuradha Mittal, Executive Director of the Oakland Institute.

The REGROW project enabled the government to expand the Ruaha National Park and move ahead with eviction plans – formalized in October 2023 through Government Notice 754. The Bank directly funded TANAPA rangers who committed atrocities with no oversight. In a drastic turn from its initial defense of the project, the financial institution has been forced to recognize “weaknesses in the project design, preparation, implementation, and Bank supervision.” As a result, at least 84,000 people from 28 villages face eviction while pastoralists and farmers have suffered gruesome human rights abuses by Bank-funded rangers and over US$70 million in economic damages.

In documents made available today, the Bank’s management concedes that by “enhancing TANAPA’s capacity to enforce the law,” the project “increased the possibility of violent confrontations” between rangers and villagers. The Inspection Panel found the Bank to have failed to adequately supervise TANAPA and to be unaware of the agency’s operating framework which permits the rangers to use “excessive force,” in violation of international standards. As documented by the Institute, over the course of the project, at least 11 individuals were killed by police or rangers, five forcibly disappeared, and dozens suffered physical and psychological harm, including beatings and sexual violence. The Bank provided TANAPA rangers with 21 different types of equipment to strengthen their patrolling capacity in the project area – including bush knives that the Panel found “could potentially have been used to burn or strip naked” Maasai women in a May 2023 incident.

The Panel’s report documents the timeline of Bank’s failure to act after April 2023, when it was informed by the Oakland Institute about the abuses and violations of its safeguards. Instead, the Bank disbursed over US$33 million to the project over the next year. REGROW task team leader, Enos Esikuri, even publicly stated that the Bank was “very impressed with what is going on,” when meeting with government agencies implementing the project. In April 2024, disbursements were finally suspended as a result of Tanzania’s noncompliance with Bank safeguards, followed by cancelation of the project in November 2024.

“The World Bank failed to act after it was informed of the harms it was financing. It continued disbursements for a full year, allowing cattle seizures and farm closures to drain family savings, kept children out of school, and let TANAPA rangers murder more innocent villagers with impunity. No institution is above law and can be allowed to get away with crimes like this,” said Mittal.

The Bank’s Executive Directors, however, approved the Management Action Plan (MAP) that does not address the Panel’s findings. In blatant disregard of the facts and official documentation, the World Bank has conveniently refused to acknowledge its responsibility in allowing the park expansion, which it falsely claims took place prior to the project.  It is this expansion of Ruaha National Park that triggered murders, evictions, and decimated livelihoods. The MAP delusionally places trust in the government that there will be no resettlement while it is already well underway. The impacted communities conveyed their rejection of the MAP to the Bank’s Board and called for it to remedy the harms caused by park’s expansion by reverting boundaries to the 1998 borders, suspending livelihood restrictions, resuming basic services, and providing justice and reparations for victims.

“Instead of remedying harms identified by the Panel, the MAP patches together two projects that have nothing to do with REGROW and are in no way designed to provide redress. The Action Plan put forward by the World Bank is beyond shameful. Suggesting that tens of thousands of people forced out of their land can survive with “alternative livelihoods” such as clean cooking and microfinance is a slap on the face of the victims. It demonstrates World Bank’s continued lack of remorse for harms financed by tax dollars and makes a mockery of its own accountability mechanism. Financing of this institution – responsible for misery of the poor instead of ending poverty – must be challenged,” commented Mittal.

Despite fear of retribution from Tanzania’s repressive regime, the impacted communities were relentless in demanding justice till they forced the cancellation of the project. “For years we have waited for the World Bank to fix the disaster it created. Today the Board of the Bank has undoubtedly failed in its own mission, but we will not give up, no matter what it takes,” said a community representative.

“The World Bank’s financing commitments for operations in Tanzania amount to US$10 billion. It does have the leverage and authority to fix this catastrophe. The United States, as the largest shareholder and funder of the World Bank Group, must also take responsibility,” concluded Mittal.

Source: oaklandinstitute.org

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NGO WORK

The World Bank Must Be Held Accountable for Harm Inflicted on Tanzanian Communities by Tourism Project

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The World Bank’s Board of Executive Directors is reviewing the Action Plan (MAP) prepared by the Bank’s management to address the findings of the Inspection Panel’s investigation into the Resilient Natural Resource Management for Tourism and Growth (REGROW) project in Tanzania. The investigation followed a complaint filed by the Oakland Institute in June 2023 on behalf of impacted communities. While the Panel’s findings and MAP will only be made public after its approval by the Board, the Oakland Institute urges the Bank to ensure that demands of impacted communities are addressed by the MAP to redress the harms caused.

“The Bank is responsible for the devastating crisis which has left over 84,000 lives hanging in the balance. For several years, using tax-payer dollars, it financed a project that blatantly violated its operating procedures and safeguards around human rights abuses and forced resettlement. It failed to act when made aware of the violations and continued pouring money into the project. Now the Bank cannot hide behind lame excuses and should fulfil the demands of communities harmed by its financing,” said Anuradha Mittal, Executive Director of the Oakland Institute.

Beacon marking expansion of Ruaha National Park to consume Luhanga village and make communities trespassers in their own lands
Beacon marking expansion of Ruaha National Park to consume Luhanga village and make communities trespassers in their own lands

The US$150 million REGROW project in Tanzania began in 2017 as a credit from the International Development Association (IDA). It was cancelled on November 6, 2024 after nearly two years of advocacy by the Oakland Institute and affected villagers to hold the Bank accountable for enabling the expansion of Ruaha National Park (RUNAPA) and supporting TANAPA, the paramilitary Tanzania National Parks Authority. Its rangers, equipped and financed by the Bank, are responsible for egregious human rights abuses, including extrajudicial killings, forced disappearances, and crippling livelihood restrictions that have terrorized local communities. Forced resettlement was initiated by the Tanzanian government in complete disregard for the Bank’s safeguards that require proper consultation and adequate compensation for affected communities.

“We call on the World Bank to fully assume its responsibility and urgently take these necessary steps to answer our pleas for justice. Our lives are on hold as the threat of eviction looms over us every single day. Our livelihoods have been undermined for years, our children are out of school, our farms sit fallow and our cattle are still being forcibly seized. We cannot continue living like this. The Bank must adequately address our past and ongoing suffering.”

Statement by impacted villagers in Mbarali, January 2025

In December 2024, the Institute worked with the impacted communities to carry out a thorough assessment on the ground to evaluate the consequences of the REGROW project. This research lays bare the devastation caused by the expansion of the park – formalized during the project in October 2023 through Government Notice 754. While the Tanzanian government claims only five villages are now inside RUNAPA, the December assessment found that 28 villages across 10 wards and home to over 84,822 people are located inside the area added to the park. As Tanzanian law forbids settlement in National Parks, these farmers and pastoralists will be forcibly evicted unless the expansion is revoked.

Livelihood restrictions enforced by TANAPA rangers have decimated these communities. Thousands of farmers have been barred from farming by the government. For 551 members of two farmer associations stopped from cultivating rice over the past three years, the economic loss is over US$66 million.1

Herders have also been massively impacted by the restrictions of access to pasture land, cattle seizures, and violence committed by TANAPA rangers. Since 2021, 52 pastoralist families have had cattle seized, losing 7,579 cattle for a value of over US$6 million.2 Since 2018, 39 families have paid the equivalent of US$212,175 in fines to recover 4,757 cattle confiscated by TANAPA within disputed park boundaries. These fees and fines have pushed families into destitution.

Over the course of the project, at least 11 individuals were killed by police or rangers, five forcibly disappeared, and dozens suffered physical and psychological harm, including beatings and sexual violence. Victims and their relatives have lost hope of seeing TANAPA rangers brought to justice while continued repression has stopped many from speaking out.

“The World Bank claimed the project was intended to benefit local communities; it has instead destroyed their lives. It must take responsibility for enabling violence and displacement and ensure that the expansion of the park is revoked,” concluded Mittal.

Impacted communities are demanding that the MAP address the following urgent issues:

  1. Removal of beacons placed marking the expansion of the park and to officially revert park boundaries to the 1998 borders established by GN 436a.
  2. Provide comprehensive compensation for damages incurred by livelihood restrictions and violence inflicted by TANAPA rangers, including:
    1. Value of fines paid by pastoralists to reclaim cattle illegally seized.
    2. Value of cattle auctioned.
    3. Compensation for the loss of agricultural production for three seasons (2023, 2024, 2025).
    4. Compensation for the victims of violence and killings by TANAPA.
  3. Establish a multistakeholder independent mechanism to oversee reparations.
  4. Restore social services to villages impacted by GN 754.
    1. Complete construction on Luhanga Secondary School and provide it with government teachers.
    2. Reopen Mlonga Primary School that was closed in October 2022.
    3. Ensure all villages located within GN 754 boundaries are provided with the power, water, and social services they are entitled to like other villages.

S0urce: oaklandinstitute.org

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Business, UN, Govt & Civil Society urge EU to protect sustainability due diligence framework

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As the publishing date for the European Commission’s Omnibus Simplification Package proposal draws closer, a coalition of major business associations representing over 6000 members, including Amfori and the Fair Labor Association, has called on the EU to uphold the integrity of the EU sustainability due diligence framework.

Governments have also joined the conversation, with the Spanish government voicing its strong support for maintaining the core principles of the CSRD and CSDDD.

Their call emphasises the importance of preserving the integrity of the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD).

These powerful business voices have been complemented by statements from the UN Working Group on Business & Human Rights, alongside 75 organisations from the Global South and 25 legal academics, all cautioning the EU against reopening the legal text of the CSDDD.

Additionally, the Global Reporting Initiative has urged the EU to maintain the double materiality principle of the Corporate Sustainability Reporting Directive, meanwhile advisory firm Human Level published a briefing exploring the business risks of reopening level 1 of the text.

Concerns stem from fears that reopening negotiations could weaken key human rights and environmental due diligence provisions, undermine corporate accountability and create legal uncertainty for businesses.

The European Commission’s Omnibus proposal is expected to be published on 26 February.

Source: Business & Human Rights Resource Centre

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