European companies must be more socially responsible, say MEPs

European companies must be more
socially responsible, say MEPs
13.03.2007 - 17:43 CET | By Helena Spongenberg
EUOBSERVER / BRUSSELS – The European Parliament has called on the European
Commission to push EU companies to show more social and environmental
responsibility wherever they operate in the world.
MEPs meeting in Strasbourg on Tuesday (13 March) adopted a report on Corporate
Social Responsibility (CSR) written by UK Labour MEP Richard Howitt.
"This is a clear signal for the commission to take an activist stance on CSR," Mr Howitt
told EUobserver after the vote.
"CSR is accepted as voluntary but annual reporting should be mandatory and the most
extreme cases of corporate abuse should be tackled by legal means," he said.
The report urges the commission to strengthen the responsibility of directors of
companies with more than 1,000 employees making it mandatory for the directors to
minimise any harmful social and environmental impact of the companies' activities.
It also wants the commission to implement a system where victims of the most extreme
cases of corporate abuse – including non-EU nationals – can take the company in
question to court in the respective member state to seek compensation.
Division on CSR
Mr Howitt wrote the own-initiative report as a response to a commission communication
on corporate social responsibility launched in March last year.
In it, the EU executive proposed setting up an alliance of companies with the aim of
raising awareness of CSR and developing open cooperation in the area.
But the communication steered away from suggesting formal legislation in the area
leading critics to say that they were appeasing big European businesses which do not
want their competitiveness on the world market undermined by regulation.
A leaked internal letter from the European employers group BusinessEurope - then called
UNICE - at the time called the proposal a "true success" because "concessions to other
stakeholders...will have no real impact."

In December last year, the European Coalition for Corporate Justice (ECCJ) and
international federation of human rights (FIDH) boycotted a forum hosted by the
commission because it only addressed voluntary measures for CSR.
The NGOs said the approach adopted by the commission is "unpromising and
misguided."
Mr Howitt said he hopes the adopted report will forge new consensus between the NGOs
and businesses, adding it was needed to develop a European CSR policy.
No consensus in sight
But an accord between the two sides still seems a long way off.
"We applaud MEPs for passing a meaningful report despite strong pressure from business
lobbies," Paul de Clerck from the European Coalition of Corporate Justice said in a
statement after the vote.
"This report tells the Commission that it needs to fill the gaps left by its communication
on CSR," he said.
But he added that the parliament resolution fell short by having only a half-hearted call
for environmental and social reporting making the report significantly weaker than the
original text passed by the MEPs in the parliament's employment and social affairs
committee.
Meanwhile, the European Association of Craft, Small and Medium-sized Enterprises
(UEAPME) saw the deletion of compulsory reporting clauses and additional liabilities as
a positive outcome.
"Today's vote on CSR must be seen as a valuable damage limitation exercise", said Hans-
Werner Mueller, head of UEAPME, adding that the parliament limited the scope of
reporting on CSR activities in line with his association's requests.
© EUobserver.com 2007
Printed from EUobserver.com 14.03.2007