Government must not put financial interests above human rights, says Chris MacManus MEP

“EU Member States are close to establishing their joint position on a new EU law on business and human rights, yet the Irish government has been pushing for laxer rules for investment funds,” said Chris MacManus, MEP for the Midlands Northwest. “To properly tackle human rights and environmental abuses in supply chains, we also need to look at where the money is coming from. Removing responsibility from large investment firms will drastically reduce the effectiveness of this new law.”

The Corporate Sustainability Due Diligence Directive is a proposal for new EU legislation that would require large companies (and those that finance them) to ensure that there are no human rights and environmental abuses along their supply chains. The European Commission’s original proposal placed due diligence responsibilities on all large financial companies, requiring them to identify any risks to human rights and the environment before issuing credit, loans or other financial services. However, the Council is expected to reach an agreement on its common position this Thursday 1 December. In this common position, asset managers and investment funds will be excluded, with banks and insurers remaining covered by the directive. 

“It is worrying to see that the Irish and Luxembourgish governments have been to the fore of efforts to remove investments funds from the scope of this directive. Both countries are home to a large number of investment funds, and it is disappointing while not surprising to see the Irish government putting financial interests above human rights, environmental needs and the interests of consumers,” said MacManus. 

Negotiators for the government cited administrative burdens for occupational pension schemes as justification for the exclusion of all investment funds and asset managers from the new human rights legislation. MacManus noted, “people do not want their pensions funding human rights abuses and environmental degradation around the world – the strength of the divestment movement in Ireland has shown this. Constructive solutions could be found if needed to help pension funds comply with the Due Diligence Directive. The answer is not sweeping measures to exclude all investment funds – many of whom are responsible for funding companies with poor track records on human rights and environmental protection.”

MacManus concluded, “The government’s stance does not represent the views of the Irish people, who have shown strong support for better corporate and financial responsibility for human rights and environmental protection. They want to know that the products they buy are not exploiting others around the world. Irish representatives should be pushing for a stronger due diligence law, not taking steps to water it down.” ENDS