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Article

30 Nov 2022

Author:
ISEAL

Sustainability standards alliance ISEAL confirms third-party verification or industry initiatives cannot remove companies' civil liability

'ISEAL Statement on the role of verification and multi-stakeholder initiatives in the EUCSDDD', 30 November 2022

...In advance of the Ministerial meeting in December, which discusses an approach for the Directive on Corporate Sustainability Due Diligence, we highlight below key points from the paper ‘Recommendations on strengthening the role of credible verification and multi-stakeholder initiatives within the EU Corporate Sustainability Due Diligence Directive proposal’.

The use of third-party verification or industry initiatives does not remove company due diligence responsibilities

Critical decisions within human rights and environmental due diligence (HREDD) processes can only be made by companies. The responsibility and liability should not be shifted to third-party verifiers or sustainability schemes that facilitate due diligence processes, nor should the use of such initiatives create a ‘safe harbour’ to protect companies. The responsibility for establishing and running a due diligence process, including providing or cooperating in access to remedy to ensure compensation/restitution of harms to individuals/groups, should always lie with the company as laid out in the United Nations Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct. ISEAL welcomes the wording on industry initiatives in the text approved by COREPER (25 November), which – while suggesting a strong role for industry schemes, multi-stakeholder initiatives and third-party auditing in companies’ due diligence – makes clear these cannot replace a company’s HREDD process.

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...Robust and rightsholder-driven sustainability schemes can support companies at both ends of the supply chain when they implement HREDD processes... As third-party verification schemes, they can provide relevant and reliable information, which can be used by companies as part of their efforts to comply with the Directive. As industry or multi-stakeholder initiatives, they can provide support, coordination and facilitation that can make due diligence implementation more effective, impactful and equitable.

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