A judicial analysis of CSR regulation to be launched
The Ministry of Economic Affairs and Employment has commissioned a judicial analysis of regulation and legislation on corporate social responsibility. An analysis will be prepared of ways in which human rights and environmental due diligence could be incorporated into legislation affecting companies. The analysis will focus on establishing a method for nationally implementing corporate social responsibility legislation based on a due diligence obligation.
- Although most Finnish companies already act responsibly, a delightfully large number of companies support even more comprehensive corporate responsibility, Minister of Labour Timo Harakka notes.
The concept of due diligence will be explored extensively from different perspectives. The key objective is to outline the nature of the legal due diligence obligations, based on international standards for responsible business, that could be imposed on companies.
- Action to promote corporate social responsibility must be taken not only at the national level, but especially at the EU level. The European Union is our most effective channel for influencing global developments. That is why we have made sure responsibility remains a key theme during Finland’s Presidency of the EU Council, Minister Harakka explains.
The analysis will examine current national legislation in order to establish how the duty of diligence would function in the framework of the existing legislation, and how it would account for different sectors and companies of different sizes. It will also explore various means of implementation measures that could be provided for in legislation, and the consequences of non-compliance. In addition, other countries' legislation will be analysed, and steering instruments other than legislative ones will be assessed.
The Ministry of Economic Affairs and Employment has just published an invitation to tender for the judicial analysis. The procurement procedure is open, which means tenders may be submitted by all parties familiar with corporate responsibility and corporate law.
The analysis is to be prepared in Finnish, and a translation in English will be published. Completion is required by 31 May 2020.
Analysis to be carried out in consultation with stakeholders
The Ministry of Economic Affairs and Employment will appoint a steering group for the preparation of the analysis, which will include key ministries. The Committee on Corporate Social Responsibility will act as an advisory body.
- It is extremely important that the analysis, and discussion regarding corporate social responsibility on a more general level, is conducted in consultation with various stakeholders, including the business sector, employee organisations and non-governmental organisations, Minister Harakka concludes.
A hearing of stakeholders will be organised during the preparation of the analysis. The author will be required to participate in the planning of the event, and to present the analysis at the event.
After the completion of the analysis, the Ministry of Economic Affairs and Employment will organise an open consultation round, in which stakeholders will be requested to provide their opinions of the analysis in writing. Decisions regarding potential further actions will then be taken separately.
The Ministry of Economic Affairs and Employment will provide information of the exact dates and the next steps as soon as possible after the tendering process has been completed.
Jenni Karjalainen, Special Adviser to the Minister of Labour, Ministry of Economic Affairs and Employment, tel. +358 40 751 5496
Linda Piirto, Senior Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 7028
Background: Objectives set out in the Government Programme
The Government Programme includes three objectives on corporate responsibility with regard to due diligence:
• p. 62: In cooperation with the business sector, Finland will develop a binding regulatory framework on corporate responsibility as a part of the reform work under way in the UN and the OECD.
• p. 71: The possibility to legislate at European level on corporate social responsibility based on due diligence, which takes into account companies of different sizes and international value chains, will be investigated.
• p. 108: A report will be prepared with the objective of enacting a corporate social responsibility act based on due diligence requirements that companies must meet in their operations both in Finland and abroad. This report will be prepared together with confederations and organisations for industries, entrepreneurs and employees, paying special attention to the position of small and medium-sized enterprises. Measures will be taken to pursue the same objectives in the EU.