A comparison of the “Spëtzekandidaten” (leading candidates) at the level of “human rights and business”

Despite the excellent study by Dr. Başak Bağlayan commissioned by the Ministry of Foreign Affairs (in line with the coalition program) and the realization that effective national legislation is achievable, the outgoing government was unwilling to take responsibility as was done in neighboring countries (France and Germany). Instead of initiating a real process of corporate accountability, the Ministry of Foreign Affairs preferred to launch a voluntary pact with the Union des entreprises luxembourgeoises (UEL). At this stage, this National Pact is nothing more than a social and greenwashing exercise. The Initiative pour un devoir de vigilance (IDV), composed of 17 civil society organizations, sent a questionnaire to the “Spëtzekandidaten” of the political parties. This questionnaire asked the leading candidates whose political parties had spoken during the legislative period to make clear and unambiguous statements about future legislation in Luxembourg regarding human rights and business.

Questions to the “Spëtzekandidaten”

The questionnaire to the “Spëtzekandidaten” considered two different scenarios, both leading to national legislation.

If you were to assume responsibility in a future government, would you commit yourself to addressing the following human rights, environmental and climate challenges?

Should the trialogue fail to produce a European directive, would you support the drafting and adoption of a national law in line with international standards on corporate due diligence, as exists in neighboring France and Germany?

If a European directive is finalized at the EU level, what human rights, environmental and climate due diligence challenges are you prepared to address when implementing the European Corporate Sustainability Due Diligence Directive into national law?

Leading candidates Paulette Lenert, Sam Tanson, Marc Baum, Sven Clément and Luc Frieden responded to the questionnaire; for the DP, Lex Delles responded on behalf of Xavier Bettel, and Fred Keup (ADR) did not respond. It should be noted that ADR’s position on certain points is known from their statements in other contexts.

The results allow us to draw some important conclusions about who is willing to take on what responsibilities with respect to human rights and business.

SCENARIO 1: Failure to negotiate a directive at the EU level

Unfortunately, this scenario remains a possibility, as some political and especially business circles are betting on the failure of negotiations at the EU level.

What do Luc Frieden, Lex Delles and Fred Keup have in common?

The study commissioned by the government on the possibility of legislation on human rights and business has produced a clear and unambiguous result. But the work of the interministerial committee dragged on and on because of tensions between the ministries involved.

When asked who would be in favor of national legislation if the draft directive failed, the “Spëtzekandidaten” of the three political parties in the current government, Sam Tanson (déi gréng) and Paulette Lenert (LSAP), are in favor of legislation in Luxembourg as it has been introduced in our neighboring countries. Only Lex Delles (DP) is against such a law. So we can also see who has been most opposed to progress during this legislative period.

The “Spëtzekandidaten” Marc Baum and Sven Clement are also in favor of national legislation. Luc Frieden (CSV), like the DP candidate, is against national legislation. As for the representative of the ADR, who did not answer the questionnaire, the party’s position is well known: the ADR is against any national legislation that would make companies responsible for human rights.

SCENARIO 2: Transposition of a European Directive into national law in Luxembourg

If the Corporate Sustainability Due Diligence Directive is adapted at the European level, it will have to be transposed into national legislation. EU Member States – including Luxembourg – will also be able to go beyond the Directive in certain areas.

Paulette Lenert, Sam Tanson, Marc Baum and Sven Clement with the victims

It should be noted that, compared to the position of other EU member states, the current government’s commitment to stand by victims is one of its most positive points in the Brussels negotiations on a directive.

Who is in favor of reversing the burden of proof in favor of victims of human rights abuses to ensure effective access to justice? The position of Sam Tanson, the current Minister of Justice, was supported by the “Spëtzekandidaten” Marc Baum, Sven Clement and Paulette Lenert, while Lex Delles and Luc Frieden are against reversing the burden of proof in favor of victims.

On a second point, there was unanimity among the “Spëtzekandidaten” who responded to the questionnaire: all answered “yes” to the question “that courts should be able to order the disclosure by the company of evidence under its control in accordance with national procedural law, subject to Union and national rules on confidentiality and proportionality”.

Luc Frieden for accountability of the whole financial sector – Lex Delles against

Regarding the accountability of the entire financial sector, and in particular the inclusion of investment funds, it should be noted that the current government’s position is in fundamental contradiction with international standards, and in particular the United Nations Guiding Principles. It should be noted that the United Nations Working Group on Business and Human Rights intervened in the discussions on this directive and stated in July 2023 that the UN Guiding Principles clearly indicate that the responsibility to respect human rights applies fully to all financial institutions.

Given that there are still major challenges at the level of investment funds and a very limited responsibility for the banking sector at the level of the UN Guiding Principles, this issue is of great importance if Luxembourg really wants to be in line with international standards, which is clearly not the case in this area.

Like Marc Baum, Sven Clement, Sam Tanson and Paulette Lenert, Luc Frieden of the CSV (former Minister of Finance) is in favor of including the financial sector, and in particular investment funds, in the legislation, taking into account the specificities of the sector. However, Paulette Lenert points out that competitive risks must be analyzed and that a gradual approach is needed.

Lex Delles does not agree with the proposal because investment funds only have the task of managing investors’ assets and these assets are subject to the provisions of the Directive.

As a result, it should be noted that all the “Spëtzekandidaten” who responded to the questionnaire are in favor of making the entire financial sector responsible, with the exception of the DP representative. This reflects the current position of the Ministry of Finance.

Which companies should be included in the legislation?

Who is in favor of including companies with 250 or more employees and a turnover of 40 million, and who is in favor of including the entire corporate value chain in the legislation?

All participating “Spëtzekandidaten” answered “yes” to these two questions, except for the company threshold (250 employees and turnover), which the “Spëtzekandidat” of the DP did not want to answer at this stage.

(Almost) all in favor of a duty of climate vigilance

All “Spëtzekandidaten” who took part in the questionnaire answered this question with “yes”, except Lex Delles (DP), who justified his abstention with the argument that there were still discussions at trialogue level in the EU and he didn’t want to prejudge.

Paulette Lenert, Sam Tanson, Marc Baum and Sven Clement: a strong coalition for human rights

If we also take into account the question of national legislation in the event of a failure of the trialogue, we can see that the “Spëtzekandidaten” Marc Baum (déi lenk), Sven Clement (Piraten), Sam Tanson (déi gréng) and Paulette Lenert (LSAP) of the following political parties would clearly be the most in line with international human rights and corporate standards with a “yes” to all seven questions. “Spëtzekandidat” Luc Frieden of the CSV also demonstrated a commitment to human rights and business with 5 positive answers out of 7 questions. Lex Delles of the DP, on the other hand, did not give a clear answer to two questions and gave three negative answers out of seven. The ADR candidate did not participate in the questionnaire, but his party states in its election platform that it is generally in favor of the UN Guiding Principles on Business and Human Rights, without providing the details requested in our questionnaire.

In this context, it should be noted that political parties and governments generally declare themselves in favor of the UN Guiding Principles, but do not hesitate to oppose them when it comes to introducing concrete legislative measures. Indeed, the current Luxembourg government also declares itself “in favor of alignment with international norms and standards on due diligence”. On the other hand, in negotiations at the EU level, Luxembourg currently supports a lowering of the international standard for responsible corporate conduct, especially in the financial sector (including investment funds).

The Duty of Care Initiative calls on the “Spëtzekandidaten” and their political parties to position themselves in possible coalition negotiations for a future government and to strive for compliance with the UN Guiding Principles in order to:

• Respect the will of 92% of the resident population to adopt a national law and implement national legislation in accordance with international standards,
• Commit in parallel to the proposed Directive on Corporate Sustainability Due Diligence, with a clear and transparent position in favor of effective and strengthened legislation,
• Ensure that the state, state-owned enterprises and state institutions fully and immediately guarantee compliance with the UN and OECD Guiding Principles on Business and Human Rights in their own economic activities.

The victims of human rights violations must not be forgotten in these negotiations, and respect for human rights and a commitment to sustainable development must become part of the DNA of business in 21st century Luxembourg.

Press release of the Initiative pour un devoir de vigilance au Luxembourg, September 21, 2023