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Article

European Brands Association (AIM) representing 2500 businesses releases paper on mandatory due diligence & addresses liability question

"EU Mandatory Human Rights Due Diligence - AIM contribution to the debate", 16 October 2020

... We believe that mHRDD legislation has a role to play in promoting respect for human rights, among a broader range of approaches where all businesses and states need to meet their respective responsibilities and/or duties – particularly in the context of the COVID-19 crisis...

A mHRDD framework should encourage robust HRDD processes that are fully embedded in governance and company culture, ultimately leading to better outcomes for people, rather than a mere “tick-the-box” exercise...

mHRDD legislation should address the responsibility of businesses to provide remedy where a business causes or contributes to human rights harm, while bearing in mind the role of the State in setting the foundations for effective remedy...

[C]ompanies should be held liable for failure to establish and maintain a reasonable HRDD process, or for knowingly making false or misleading statements about their process...

If the legislation were to include liability for current and future harms, that liability should be clearly framed as civil liability and be limited to severe human rights harms caused by the company’s own activities or activities of controlled companies, which could have been prevented had the company fully complied with the requirement to conduct human rights due diligence. What constitutes a “severe human rights harm”, a “controlled company”, and “a reasonable HRDD process” would need to be defined in the legislation or interpretative guidance following constructive dialogue...