Belgium Proposal for a Value Chain Duty of Vigilance and Responsibility Law
Governmental Agency: Belgian Government
Jurisdiction: Belgium
Ref no: DOC 55 1903/003
Status: IN REVIEW
The Belgian government is currently reviewing a proposal for a law establishing a value chain duty of vigilance and responsibility for companies. It would require businesses to:
- Identify all existing and potential negative social (e.g. human rights, labour rights) and environmental impacts associated with the company and its value chain, take all reasonable and appropriate measures to prevent them, and remedy any damage caused.
- Public reporting on due diligence activities and outcomes.
Expected measures include value chain mapping exercises, regular risks analyses, developing plans to mitigate impacts, and termination of business relationships in the case of clear social and environmental impact that are not remedied.
The bill as of the official parliament website was in discussion as of January 2023, no further details have been provided on its status.
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"The proposed law would apply to any business established or active in Belgium. Specifically it will apply to:
- Large companies: A business that exceeds the following criteria on the closing date of the last financial year, the threshold of an average workforce of 250 workers during the financial year AND has either annual turnover excluding value added tax €50,000,000 or a balance sheet total of €43,000,000.
- Public interest companies: Companies within the financial sector, financial services, credit institutions, insurance companies and settlement institutions.
- Small and medium-sized businesses active in designated high-risk economic sectors or in high-risk regions.
For those obligated businesses, the implementation and operation of all necessary systems to monitor, address & report on corporate responsibility are likely to result in increased costs. Those that do not comply with the legislative requirements may result in requirements to fully remedy the breach in responsibility including provision of compensation. For those who, through these measures, are found to have issues with regard to their corporate social responsibility, there may be additional reputational issues.
There will also be knock-on impacts for those smaller businesses that work with obligated entities, who will be required to meet the obligated businesses' due diligence requirements."
