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"Due diligence in the downstream value chain: case studies of current company practice", 20. February 2023
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Many companies are already conducting some form of due diligence in the downstream. While certain sectors at higher risk of impacts in this part of the value chain, such as tech, have more established practices on downstream due diligence,1 companies across a range of sectors are taking a full value chain approach which includes conducting due diligence on their downstream human rights impacts. As the case studies in this publication show, this can be done in a number of ways. Examples include conducting human rights impacts assessments (HRIAs) on the full value chain, enabling a company to become aware of and act on its downstream human rights impacts; adapting existing, well-understood processes, such as know your customer (KYC) checks or anti-bribery and corruption processes to consider human rights impacts; or developing responsible approaches to marketing of products.
These case studies have been developed based on company interviews, drawing from company processes and policy commitments, and informed by a closed roundtable for businesses convened by the Danish Institute for Human Rights in October 2022, which discussed common challenges and practical approaches to addressing downstream human rights impacts under Chatham House rules. [...]
4 WHAT IS NEEDED TO HELP ADDRESS HUMAN RIGHTS IMPACTS IN THE DOWNSTREAM?
As noted above, companies are seeing renewed impetus to more actively address adverse human rights impacts in the downstream. However, calls for companies to better address these impacts are hindered by the absence of clear guidance which builds on the strong foundation of the UNGPs and OECD GL. During a closed roundtable discussion convened by DIHR in October 2022 a number of company representatives expressed frustration at a lack of operational guidance or tools to further develop due diligence in this segment of the value chain. [...]
As a number of the case studies set out below note, the value chain approach has helped companies understand expectations and build internal buy-in to drive action in the downstream. In some cases this has been driven by the approach taken in forthcoming regulation. A consistent approach across regulatory initiatives is needed to ensure a coherent regulatory space which sets clear requirements and meets the current practice of companies which are already conducting human rights due diligence in the downstream part of the value chain. It should be noted that a number of statements on behalf of high profile companies have expressed support for any regulation in this area to take a full value chain approach.
5 COMPANY PRACTICE
Many companies are already undertaking some form of due diligence which covers human rights impacts in the downstream part of the value chain. Some do so explicitly, adopting policy commitments and taking a full value-chain approach to their human rights due diligence. Others do so through existing processes which, though not framed as such, nonetheless consider human rights impacts.
There are a range of strategies and processes which can be used to manage downstream human rights impacts, including:
Making policy commitments to address human rights throughout their value chains;
Mapping risks, including through undertaking human rights impact assessments, across the value chain and using the findings to inform action plans;
Ensuring that products are designed responsibly through interventions at the research and development stage;
Adapting sales processes and KYC checks or anti-bribery and corruption processes to include due diligence on human rights;
Developing responsible marketing practices to manage human rights impacts;
Ongoing engagement with business customers to address human rights risks, monitor effectiveness of mitigation measures, and encourage improvement;
Exploring how to increase leverage, for example through design features, ongoing service contracts or collective action efforts;
Ensuring that end-of-life disposal is conducted in a manner which respects rights;
Engagement with rightsholders and affected communities;
Ensuring that ongoing risk management processes allow for escalation of risk, both by employees and external stakeholders; and
Making complaint and grievance mechanisms accessible to rightsholders affected by downstream human rights impacts.
As the case studies set out below show, these practices are employed across a range of sectors, country contexts, and business models, designed to address a range of human rights impacts.
GNI supports "key improvements" proposed by the JURI Committee. The multistakeholder initiative recommends that the Directive: (i) take a comprehensive approach to the scope of due diligence; (ii) adopt a risk-based approach across the full value chain, (iii) clarify key concepts such as meaningful stakeholder engagement, (iv) take a consistent and holistic approach to the scope of rights and sectors covered in line with international frameworks and existing expectations; and (v) help identify and incentivize participation in meaningful, credible multistakeholder initiatives.
The report has two key aims. The first is to express concern over the current trajectory
of HRDD legislation and its capacity to effect meaningful change for workers and trade unions. The second key aim of the report is to offer guidance on how HRDD could be legislated in such a way as to drive meaningful change for workers in transnational supply chains.
This briefing outlines Amnesty International’s key concerns for the CSDDD, detailing where the proposals from the European Commission and the Council fail to live up to international human rights standards and what these gaps could mean for the victims of corporate harm. It also presents Amnesty’s key recommendations to address those gaps.
As the Parliament goes on to finalise its position and the trilogue process begins, the institutions must improve the text, ensuring that the role of human rights defenders and the risks they face are fully taken into account, says UN Special Rapporteur Mary Lawlor
Briefing from Shift offering recommendations for the EU's Corporate Sustainability Due Diligence Directive based upon interviews with businesses and other stakeholders in Bangladesh, Kenya, Tanzania and Thailand.
MEPs are set to decide how to include the financial sector in the corporate due diligence directive on 1 June. Their decision could either strengthen or distort the European financial market and enable corporate abuses of people and the planet, Uku Lilleväli writes.
JURI position does not deliver the necessary access to justice for victims of corporate abuse or provided adequate measures to prevent climate destruction, says Friends of the Earth Europe
MEPs agreed on the rules to be applied from the production to the sale, distribution and waste management of products or services provided by a company, leaving out due diligence and liability provisions regarding the use of products or services.
Polling reveals majority of Europeans across Austria, Belgium, Finland, France, Germany, Ireland, Netherlands, Poland, Slovenia and Spain want companies operating in the EU to be compelled to reduce emissions
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Publication by the Danish Institute for Human Rights: "How do the pieces fit in the puzzle? Making sense of EU regulatory initiatives related to business and human rights"
Reacting to reports that proposed EU business legislation will exempt companies from addressing the human rights risks linked to how their products are used, including arms, tools of torture or surveillance equipment, Amnesty International calls for the exemption on use to be reversed.
"A proposed EU law to prevent environmental and human rights abuses by multinationals has been cautiously welcomed by global Indigenous leaders seeking to highlight the damage done by extractive industries. However they say the text needs to go further if it is to protect Indigenous populations from mining companies."
The EU corporate sustainability due diligence directive represents a key opportunity to advance women’s rights and gender equality in companies’ international value chains. However, the draft text fails to integrate a gender lens and risks leaving women behind.
Even though the Chilean Andina mine is exacerbating the water shortage in the region, numerous European manufacturers of mining machines and mining equipment had business relationships with the mine. The case study shows why the legal regulation of due diligence obligations in downstream value chains is necessary within the framework of the currently discussed Corporate Sustainability Due Diligence Directive.
This report by the Global Business Initiative on Human Rights (GBI) provides key questions for companies to ask when establishing downstream human rights due diligence, and offers an overview of the expectations contained in international standards. Companies are already conducting due diligence in downstream contexts. Yet, in current policy debates at the EU and OECD, the scope of human rights due diligence is being contested
Members of the European Parliament’s environment committee voted on Thursday (9 February) to strengthen requirements on climate protection in the proposed EU rules on corporate accountability.
The European Parliament’s environment committee has voted to include an obligation for large companies and SMEs in certain risky sectors to risk-assess their global value chains for abuses like oil spills and pollution, but the improvements are not yet sufficient to prevent and end the vast impacts of companies on climate change, said the European Coalition for Corporate Justice.
A key vote is taking place in the European Parliament's Environment Committee this Thursday, when MEPs will decide whether or not to include climate in their corporate due diligence directive.
As the world faces a growing array of environmental and social challenges, it is more important than ever for businesses to take a proactive and responsible approach to sustainability, writes WWF.
European technology companies and investors that fail to do risk-based downstream due diligence risk contributing to severe human rights violations committed by repressive regimes, such as in Iran
In 2016, the Honduran environmental activist Berta Cáceres was killed trying to protect her ancestral lands against the Agua Zarca hydroelectric project, bankrolled by European financial institutions. The CSDDD could stop companies profiting from projects linked to the repression and murder of environmental defenders - but not if it lets investors off the hook, says Global Witness
The study commissioned by The Left in the European Parliament sets out the various ways that subcontracting undermines labour laws in the EU and enables exploitation of workers. It among other things calls for a new European Regulation on decent work in the subcontracting chain and amending the Corporate Sustainability Due Diligence Directive.
In an interview with EURACTIV Lara Wolters highlighted that due diligence is also about downstream activities. According to her, this aspect has become even more relevant after the recent accusations that allege Qatar bribed European lawmakers. The rapporteur asserts that good governance, bribery and corruption should be part of due diligence discussions.
ShareAction, Accountancy Europe, Eurosif, Frank Bold, Finance Watch and WWF, as members of the Informal Group on Sustainable Finance, have released a joint statement on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD).
After the adoption of a position by the Council, Amnesty International criticises that the exclusion of banks and financial institutions and waivers for companies that sell high-risk security equipment and surveillance technologies undermine the directive.
The general approach reached today completes the negotiating position agreed by the Council and provides the Council presidency with a mandate to start negotiations with the European Parliament.
Ahead of Thursday’s (1 December) meeting of EU industry ministers, the fight over whether to include the financial sector in the scope of the Corporate Sustainability Due Diligence Directive (CSDDD) is still ongoing with France, Italy, and Spain threatening to block a common member state position.
If the proposals were adopted, they would severely limit access to justice for victims of corporate abuses, seriously undermining the effectiveness of the directive, the letter says.
The statement outlines four key areas which need particular attention if the Directive is to effectively aid in transforming the tech sector: scope of companies subject to the law; scope of rights; value chains and business relationships; and stakeholder engagement & access to justice and remedy
The letter calls for a General Approach that covers the full value chain including downstream impacts and the full coverage of the financial sector; expands the scope of rights and impacts covered; and strengthens access to justice provisions and addresses barriers to justice often faced by claimants in business-related human rights and environmental cases.
The European Commission’s proposal for a directive on corporate sustainability due diligence includes a dangerous overreliance on industry schemes, multi-stakeholder initiatives, and third-party auditing, a briefing paper by SOMO concludes.
On 24 November, Eurosif, the Investor Alliance for Human Rights and the PRI, supported by 142 signatories, released a statement of support for an ambitious and effective EU directive on corporate sustainability due diligence (CSDDD)
As EU member states close in on a common negotiating position on the Corporate Sustainability Due Diligence Directive (CSDDD), they are fighting over whether companies should do due diligence for their entire value chain or just the supply chain.
Luxembourg, Ireland and Germany have indicated they want to exclude asset managers and institutional investors from scope, with France and Italy going further and calling for the entire financial sector to be left out, an EU diplomat familiar with the negotiations said.
The EU’s long anticipated Directive on Corporate Sustainability Due Diligence is set to fail to hold ICT companies to account for human rights abuses and environmental damage if key shortcomings including on scope and stakeholder consultation are not addressed.
EU-based financiers and their subsidiaries have played central roles in financing projects that have caused human rights violations and environmental damage, and have been linked to land grabbing, deforestation, and violence against communities and land and environmental defenders.
On 26 September, the German Federal Ministry for Economic Cooperation and Development held a virtual conference to discuss how the Directive can have a positive impact on developing countries.
Host Richard Howitt speaks frankly and personally about what moves policy makers, businesses, and activists to make responsible business the norm and redefine business.
A coalition of cocoa and chocolate manufactures and other organisations welcomes the EU Directive on Corporate Sustainability Due Diligence and calls for improvements in new position paper.
UN Human Rights is concerned about the proposition being advanced by some stakeholders that the requirements of CS3D should not apply to downstream impacts on human rights that a company may be involved in. Such an exclusion would not align with the UNGPs and could undermine the international consensus about the scope of the Corporate Responsibility to Respect Human Rights.
The campaign, launched on 6 September in Brussels, calls for "no more exploitation, no more environmental destruction, no more unjust business practices by European companies".
On this page, you will find selected responses in support of effective legislation aligned with international standards from companies and business associations/initiatives who submitted feedback along with other respondents.
This piece argues that for legislation to succeed in advancing the rights of the most affected and to lead to better human rights outcomes for rights-holders, it is crucial to anchor such laws and regulations with not only the perspective of rights-holders but their ongoing involvement.
The in-depth analysis requested by the European Parliament's Subcommittee on Human Rights compares the Draft Directive proposed by the European Commission with the positions adopted by the European Parliament and by the Foreign Affairs Committee. It recommends various changes to the Draft Directive, for example in regards to the scope of human rights and environmental standards and the corporate due diligence duty and process.
The CSDD Directive must transform the situation on the ground for the impacted communities and human rights defenders, particularly women and indigenous peoples, says the ICBHR.
An alliance of over 60 companies and initiatives are calling on the European Parliament, Commission and EU member states to ensure that living wages and incomes are included in the final corporate sustainability due diligence directive (EU CSDDD) and that their definitions should not be compromised.
OHCHR highlights five areas where they believe further attention and discussion are needed in
order to improve alignment with the UNGPs, and to create an EU regulatory framework that is capable of meeting the EU’s stated goals, including: company scope; subject-matter scope; taking action; compliance, enforcement and remedy; and stakeholder engagement.
The GIHR provided comments with regards to: scope of value chain, due diligence in "established business relationships", scope of companies covered, civil liability & administrative enforcement
While the draft directive has promising elements, we highlight considerable gaps that must be closed to ensure the law can fulfil its historic potential and bring tangible benefits for workers and communities along global value chains (also includes an overview of relevant resources).
The EU's directive on Corporate Sustainability Due Diligence could represent a landmark step forward, but the proposal contains significant flaws which risk preventing its urgently-needed positive impact for people, planet and climate. We join 220+ organisations calling for an effective law.
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The briefing addresses shortcomings in the parts of the proposal that relate to corporate governance, directors’ obligations and the responsibilities of the financial sector and makes recommendations for appropriate changes.
The document seeks to guide the formulation of effective accompanying support to the implementation of the legislation that maximizes the opportunities of mandatory due diligence.
The coalition successfully campaigned for a supply chain law in Germany. However, due to resistance from the business lobby, this law still has gaps and weaknesses, which is why an even stronger EU supply chain law is needed.
To close women’s month, 82 civil society organizations from across Europe sent an open letter to European Commissioners, Members of Parliament and Permanent Representations involved in the co-legislation of human rights and environmental due diligence legislation, urging them to make sure the gender-responsiveness gap is addressed.
All feedback received will be summarised by the European Commission and presented to the European Parliament and Council with the aim of feeding into the legislative debate.
DIHR examines foundational aspects such as personal and material scope, business relationships and the scope of due diligence across the value chain, use of contractual assurances as well as enforcement and liability. It then goes on to consider each element of the due diligence obligation.
The authors analyse some of the weaknesses of the EU due diligence proposal by highlighting where the draft law falls short in providing better outcomes for people and planet
This two-part blog explores in detail the EU's draft Directive on Corporate Sustainability Due Diligence, arguing it provides a strong legal basis to enhance corporate accountability and to create a standard for responsible and sustainable business conduct.
Robert McCorquodale and Stuart Neely consider how the existing duties of directors might be affected if human rights due diligence becomes a mandatory obligation for companies.
Letter sent to President von der Leyen and Commissioners Breton and Reynders by the International Labour Organization, the Organisation for Economic Co-operation and Development (OECD), and the Office of the UN High Commissioner for Human Rights (OHCHR).
Anti-Slavery International raises concerns around loopholes in accountability for long supply chains, coverage, and meaningful stakeholder engagement and inclusion of civil society and trade unions.
With the right framing, a Directive could advance better outcomes for people and planet. However, for these significant opportunities to be realized, and for the Directive to meet its stated ambition, it is critical that the Directive is firmly grounded in the key international standards on sustainability due diligence adopted by the UN and the OECD.
The European Commission’s new corporate due diligence proposal needs significant improvements to prevent and address human rights abuses and environmental harm
ActionAid International raises concerns about the European Commission's proposal for a Sustainable Corporate Due Diligence Directive, specifically on the lack of inclusion of any reference to women and other marginalised groups
Frank Bold argues that the EU's legislative proposal on corporate accountability presents just some elements that foster integration of sustainability and long-term thinking in corporate governance rules, creating the risk of a tick-the-box exercise
The proposed EU law to stop corporate abuse fails to guarantee justice or make companies liable for their climate impacts, says Friends of the Earth Europe
The newly published Corporate Sustainability Due Diligence Directive falls short on involving workers and trade unions in shaping and monitoring sustainable business due diligence strategies, says the European Trade Union Confederation
On 23 February 2022 the European Commission published a long awaited legislative proposal laying down rules for companies to respect human rights and environment in global value chains
The European Coalition for Corporate Justice identifies areas for improvement in the EU Commission's newly released proposal for a Directive on corporate sustainability due diligence
The EU's proposal falls short on a number of fronts in its promise to promote sustainable business and investor practices and ensure accountability for harms, says the Investor Alliance for Human Rights
A leaked copy of the soon to be proposed EU Directive on Corporate Sustainability Due Diligence includes a reduced scope of the law to cover only big business, and a civil liability regime
Business has a duty to respect human rights, even when and where states waver in their responsibilities to safeguard workers, communities and our natural environment, writes Andre Hoffmann from Roche.
The Escazú Agreement and its principles must be integrated into the list of relevant international conventions that companies must comply with as part of the due diligence measures prescribed in the regulation, the organisations write.
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The request, made on the 15th December 2021, asked for all correspondence and (e)meetings with stakeholders and members of the RSB, related to the proposal, as well as the RSB opinion and the Commission Impact Assessment.
The European Coalition for Corporate Justice has identified a set of provisions that would make an EU mandatory human rights due diligence law effective and comprehensive
A network of NGOs from the DRC calls on EU Commissioners to consider risks to human rights defenders and how to address them in the upcoming EU Sustainable Corporate Governance initiative
NGOs raise concerns that the delay may be symptomatic of a risk that the Commission is parting from its initial ambition to tackle sustainability gaps in corporate governance.
14 industry associations and responsible business initiatives express their support for the EU’s objective to ensure respect for human rights and the environment through an EU-harmonised regulatory approach to due diligence.
MEPs Lara Wolters, Heidi Hautala, Manon Aubry and Pascal Durand have sent an access to document request to the Commission, requesting access to the 2 opinions of the Commission’s internal quality control body, the Regulatory Scrutiny Board and communication between interest groups and the RSB on the Commission’s Sustainable Corporate Governance initiative.
Signatories express their concerns about the delay and urge President von der Leyen and the Commission to ensure it is used for positive impact and action on the proposal is expedited.
The European Commission should keep its promises and uphold corporate human rights obligations according to an open letter sent to President Ursula von der Leyen on 8 December signed by 47 civil society and trade union organisations.
Socialist and Democrat Members of the European Parliament call on the European Commission to come forward with draft legislation without further delay.
In a debate in Parliament Dutch Minister for Foreign Trade and Development Cooperation announced that due to the "very disappointing" and "indefinite" delays at the European Commission, the Dutch government will immediately start work on ambitious national binding due diligence legislation.
The press kit outlines the main key points that should be included in the upcoming EU law, as well as a thorough analysis of its significance through case studies and testimonies.
On International Women Human Rights Defenders Day, over 60 civil society organisations sent an open letter to European Commissioners, Members of Parliament, and Council of the European Union Representatives, urging them to make the forthcoming corporate human rights and environmental due diligence law gender-responsive.
While the discussions on sustainable corporate governance and supply chain due diligence continue at EU level and a proposal for a directive has been postponed several times, Germany is sending a strong signal.
The struggle of the Lenca people, of Bertha and her daughter, is only one example of the daily struggle of indigenous and peasant communities to protect land, water sources, forests and our human family from the negative impacts of corporate activities. The upcoming Sustainable Corporate Governance proposal could be a game-changer for communities faced with corporate abuse worldwide.
Campaign calls on Commission Vice-President Věra Jourová, Commissioner for Justice Didier Reynders and Commissioner for the Internal Market Thierry Breton to introduce an ambitious legislative proposal on mandatory human rights and environmental due diligence.
In a letter to President von der Leyen, and Commissioners Reynders and Breton, MEPs stressed the importance of addressing barriers to justice for victims of corporate abuse in the upcoming due diligence law proposal
To effectively stop human rights violations and negative environmental impacts in global supply chains, EU policymakers should ensure the upcoming legislation leads to positive impacts for rightsholders and improves the situation and the livelihoods of smallholders.
In her letter to the presidents of EPP, S&D, Renew, GreensEFA and the Left political groups, President Von der Leyen stresses the importance of ensuring consistency in developing a sustainable framework for economic operators, and that the initiative will be adopted in 2021
"By passing world-leading legislation now to ensure transparency, liability for environmental and human rights abuses and remedy for the individuals affected, the EU can point the way to a safer, more sustainable planet, and establish frontrunner status in sustainability and justice" - MEP Toine Manders, European People's Party, and Steve Trent, Environmental Justice Foundation
Saeeda Khatoon has been fighting for a long time to hold those who are responsible for a fatal fire at the Ali Enterprise garment factory in Karachi, Pakistan to account.
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This paper takes into consideration the EU draft Directive on Corporate Due Diligence
and Corporate Accountability and examines ways to better design and integrate environmental due diligence
Ferrero, Mars Wrigley, Mondelez International, Nestlé, Tony’s Chocolonely & Unilever shared a joint letter to Commissioners Reynders, Breton and Sinkevičius, calling for the adoption of a legislative proposal without further delay.
Letter to Executive Vice President for the European Green Deal & EU Commissioner for Justice: NGO support for the EU Commission plans on Sustainable Corporate Governance and response to criticism
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John Ruggie voices three reservations: (1) directors are not the main driver of short-termism; (2) opposition to addressing directors’ duties may jeopardize the initiative; and (3) doing so may be largely unnecessary, as properly designed mandatory due diligence will itself change directors’ duties, he writes.
Richard Gardiner from Global Witness explains how a due diligence law would present a chance for the EU to reshape the often problematic relationship between corporations, people and the planet.
The European Commission hold a virtual exchange with three business & human rights advocates from the Global South as part of a public consultation for the proposed corporate human rights and environmental due diligence law
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