Progress towards adoption of the Belgian corporate vigilance and accountability act

The proposed law is intended to apply to all companies established or active in Belgium, and imposes a duty of vigilance requiring every company (i) to respect human rights, labour rights and the environment and (ii) to continuously identify, prevent, mitigate and cease environmental harm, human rights and labour rights violations, or any risks thereof, throughout their value chain. The Belgian Vigilance Proposal further envisages an extensive liability regime for breaching the duty of vigilance, which ranges from criminal liability to collective redress actions.

The Belgian Vigilance Proposal is now being considered in a specialised commission of the Chamber of Representatives, which gathered stakeholder comments at a hearing on 22 September 2021. The Belgian Council of State has since followed suit and published its opinion on the proposed legislative text on 29 September 2021. In its opinion, the Council of State criticised the lack of clarity and precision of the terms used in the Belgian Vigilance Proposal, which is problematic in light of the principle of legality of criminal offences and sanctions, as the obligations in the Belgian Vigilance Proposal are subject to criminal sanctions. The Council of State also drew the lawmakers’ attention to the current lack of effectiveness of the duty of vigilance imposed on SMEs, as no sanctions are imposed on them for breaching this duty. Finally, the Council of State also pointed out certain difficulties with the proposed text in terms of enforcement by the supervisory authority (probably the FPS Economic Affairs) and the jurisdiction of the Belgian courts.

The Belgian Vigilance Proposal will now be reconsidered and, possibly amended, to take the observations of the Council of State into account. It will then be debated and, again, possibly amended, during plenary sessions. Once the Chamber of Representatives has adopted a final text, it will be submitted for formal approval to the King. Based on the proposed text, the law will then enter into force six months after its publication in the Moniteur belge.

Companies established in Belgium or active in Belgium with complex value chains should monitor these developments very closely in order to timeously adapt to comply with their upcoming duty of vigilance and to mitigate their exposure to litigation. If you wish to know more about how the Belgian Vigilance Proposal might impact your organisation, please contact Camille Leroy, Gauthier van Thuyne, Joost Everaert or Nanyi Kaluma.

_{[1] Proposition de loi instaurant un devoir de vigilance et un devoir de responsabilité à charge des entreprises tout au long de leurs chaînes de valeur / Wetsvoorstel houdende de instelling van een zorg- en verantwoordingsplicht voor de ondernemingen, over hun hele waardeketen heen, Doc. Parl., Chambre, 2020-2021, n° 55-1903/001, available at: www.lachambre.be/FLWB/PDF/55/1903/55K1903001.pdf.}