By extensively building on the legal obligations of corporations, the accountability of companies would significantly improve. However, the effectiveness of any regulation rests on effective enforcement. Evidence of company breaches of environmental and human rights standards often comes from the victims who generally do not have the ability, time or financial resources to consider legal action. ECCJ therefore considers as a priority the following changes to the EU legal framework:

Any victim or citizen shall have the right to bring a lawsuit to a EU court against any company that violates human rights and environmental conventions and standards in and outside EU territories.

In litigation against corporations, EU citizens and any victim of human rights violations shall be relieved of the burden of proof, granted access to evidence held by the wrongdoing company, and absolved from having to pay cost recoveries. These conditions should apply even in the light of an unsuccessful action provided that the case was brought to court in a manifestly reasonable manner.

Going to court, however, should always be the option of last resort as it inevitably entails major logistical, financial and psychological obstacles. For those cases where legal action is not advisable, ECCJ also advocates that:

New quasi-judicial bodies should be established in EU Member States to investigate human rights and environment related complaints. The bodies would provide for effective, swift and inexpensive remedies. They would also administer sanction measures where company operations are found to breach existing standards and conventions in and outside EU territories.

Corporations are all too often not directly liable for human rights violations that they cause or in which they are complicit. They benefit from impunity as long as their behaviour is condoned by the state in the country where the contested corporate activity took place. Furthermore, multinational enterprises normally consist of many separate legal persons. The twin concept of separate legal personality and limitations on their liability shields parent companies (and their directors) from being liable for misconduct of their subsidiaries and contractors unless they take an active role in managing these subsidiaries at the operational level. Regulation and a change in corporate culture are required to ensure corporations fulfil their environmental and human rights obligations. ECCJ therefore considers as a priority the following changes to the EU legal framework:

Companies operating within the jurisdictions of EU Member States shall have a duty of care not to commit or be complicit in human rights abuses.

Companies operating within the jurisdictions of EU Member States shall have a duty of care to prevent and mitigate human rights abuses in their sphere of responsibility, which includes their subsidiaries and commercial partners.

Directors and responsible corporate officers shall be liable for ensuring that their corporations comply with the liabilities imposed by the measures described above.

The information that companies include in their annual reports on their environmental and human rights impacts can provide a means through which to prove that they are liable for those impacts. Reporting can help to effectively evaluate performance and also be used by stakeholders to acquire relevant information. Where companies are obliged to do so, they do report on their impact on human rights and the environment. However, a coherent reporting obligation is missing at the EU level.

Coherent and comparable reporting codes should be used by companies. The most effective way to achieve this standardisation would involve reforming the existing reporting obligations of companies so that they include (i) Data about the structure of the enterprise, its sphere of responsibility and its decision making process (ii) Data about the human rights and environmental liabilities and risks facing the corporation in its sphere of responsibility, and about the ways in which these risks are managed (iii) Quantitative information with respect to the human rights and environmental impacts of the corporation’s activities. Conflict of interest should be avoided to ensure fair management process and decision making. ECCJ therefore considers as a priority the following changes to the EU legal framework:

Corporations of a certain size shall be obliged to report defined information in respect of their human rights, environmental and social liabilities, risks and impacts. These obligations must be backed by sanctions against corporations that do not comply.

ECCJ also advocates that on a broader scale corporate justice cannot be obtained if corporate interests continue to be given privileged access to decision makers and policy creation at the EU level. Therefore ECCJ supports the following changes to the EU legal framework:

Information, including financial, about lobby contacts between EU officials and corporations and corporate lobbyists should be disclosed and open to public scrutiny. These obligations must be backed by enforceable regulation on privileged access (to stop decision makers from listening primarily to corporate lobbyists), on revolving doors (to prevent decision makers from moving directly to private sector lobby functions) and on conflicts of interest (to sanction those officials who prioritise their interests at the expense of the interests that they have the duty to promote and defend in their public functions).