Living Income Must Be Included In EU Sustainability Directive

Civil society organisations and farmer groups are calling on European lawmakers to ensure the right to a living income and fair purchasing practices are enshrined in the Union’s due diligence regulation (EUDR).

The advocacy group says it welcomes the EU’s new Corporate Sustainability Due Diligence Directive (CSDDD) as included in the position of the European Parliament.

The CSOs say they are particularly interested in the CSDDD’s goal to address the human rights and environmental impacts of companies’ global value chains.

“However, in order for it to lead to positive change, it must take into account the interests and needs of rightsholders, especially those in the most vulnerable position in global value chains,” it said in a press statement.

It emphasised, “Smallholders and Indigenous Peoples and local communities (IPLCs) are some of the most marginalised actors in global supply chains. Yet these people are essential for feeding the global population and sustaining precious natural ecosystems.”

According say smallholders produce a third of the world’s food supply, while approximately one-quarter of global forests, or 1 billion hectares, are estimated to be managed by IPLCs.

The importance of small-scale food producers – particularly women, Indigenous Peoples, family farmers and pastoralists – is explicitly recognised in SDG Target 2.3.

These rightsholders form the backbone of the economy in many countries and often rely on export-related incomes to meet their basic needs, with limited options for alternative income.

Their dependence on large operators that buy their products makes them particularly vulnerable to low prices (which sometimes do not even cover the costs of production) and unfair purchasing practices.

This adds to the instability of their communities’ livelihoods and overall well-being.

The lack of a decent standard of living is often combined with other human rights violations such as discrimination and land grabbing – e.g., Indigenous Peoples are nearly three times as likely to be living in extreme poverty as their non-indigenous counterparts.

Even when in wage and salaried work, Indigenous Peoples earn on average 18 per cent less than their nonindigenous counterparts.

Poverty also has direct environmental impacts: smallholders may encroach into forests and degrade their environment as an attempt to secure the short-term subsistence of their families – while directly suffering from the consequences in the long term.

It is crucial that the CSDDD addresses the root causes of harm faced by these people, including unfair purchasing practices and lack of living income.

In this regard, “we welcome the explicit reference to living wages and a decent standard of living as a human right in Part I A of the Annex of the Commission’s proposal, as well within the Council’s General Approach and the Parliament’s position.”

However, unless a specific reference to living income is included as well, non-wage workers such as smallholders or selfemployed workers will not benefit from that provision.

While a wage is the payment a worker receives from their employer for a particular amount of time worked, an income is earned by an independent worker through the sale of their goods or services and is often composed of different sources.

In the agricultural sector, that might include the net income earned from the sales of crops and any food that is produced and consumed at home, as well as additional income earned separately by the family farm to supplement the farm income.

Both living wage and living income are essential for combating poverty. The European Parliament included a reference to living incomes in its position (Part I of the Annex, subheading 1, point 7).

According to the Parliament, the right to enjoy just and favourable conditions of work, including remuneration that provides for a decent living, “includes both the right to a living wage for employees and the right to a living income for self-employed workers and smallholders.”

This addition is grounded in the authoritative interpretation of General Comment No. 23 (2016) on the Right to just and favourable conditions of work (article 7 of the International Covenant on Economic, Social and Cultural Rights), which clarifies that the right to enjoy just and favourable conditions of work includes self-employed workers.

It is also aligned with companies’ demands, in particular in the cocoa sector.

The European Parliament also underscores the need for companies to address their purchasing practices as part of the due diligence process, by including this obligation throughout articles 5-8, beyond a simple reference in recitals.

As highlighted by several CSOs and companies, if companies are not required to adopt responsible purchasing practices, the right to living income and living wage is unlikely to materialise.

The CSOs and producer organisations, therefore, urged the EU legislators to align with the European Parliament on these elements, by including an explicit reference to living income alongside living wage in the annex and referencing purchasing practices in the operative articles of the CSDDD.

“This way, you will enable millions of vulnerable rightsholders like small farmers and IPLCs to harness the potential of the CSDDD and to truly benefit from it,” they insisted.

Editor at Cocoa Post
Kojo is passionate about projecting the voices of cocoa. He also believes in cocoa value addition at origin as a model to redistribute industry wealth.
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