Under international law companies must respect all human rights. If due diligence obligations don’t cover the entire human rights body, they fall short of international standards. This is the case for the Council of the EU’s position on the Corporate Sustainability Due Diligence Directive, as agreed on 1 December 2022, which aims not only to limit the material scope but also to limit the reach of the due diligence obligations through introducing a series of complex conditions.

Call:

All human rights must be included in the scope of companies’ due diligence obligations. To provide businesses with clarity about their expected conduct, the Commission should develop practical guidance on the due diligence obligations, including on specific risks and sectors.

Analysis:

Current suggestions propose undue limitations on the material scope in relation to human rights protection In its proposal, the Council seeks to significantly change the definition of human rights adverse impacts. It proposes cutting the list of human rights and international instruments which should be included in the due diligence process and adds a set of conditions under which certain instruments would fall in the scope of due diligence obligations. Despite naming legal certainty and simplification as one of the reasons to introduce changes to the European Commission’s proposal, the suggested amendments in the Council proposal lack clarity not only regarding the language used but also in relation to the objective of the suggested text.

Conclusion:

The Council’s General Approach seeks to drastically limit the human rights scope of the legislation. It does so by limiting the range of human rights applicable, but also by attaching a string of conditions under which only due diligence obligations for a limited list of human rights would be triggered. These conditions undermine the objective and concept of due diligence and would therefore question the purpose of the legislation.

Instead, the co-legislators should ensure that companies must carry out due diligence regarding all human rights. Where businesses are in need for further clarity about their expected conduct, the Commission should develop practical guidance on the due diligence obligations, including on specific risks and sectors.