For the past decade, supply chain legislation has focused on forced and child labor and the lack of accountability and enforcement measures. However, a proposed EU directive on corporate sustainability due diligence has the potential to change the scope of the business and human rights landscape from a corporate social responsibility topic to a compliance issue for global employers. To address these challenges, HR Policy Global hosted a group of experts to discuss the expansive risks and actions companies can take now to minimize risk.
The panelists shared practical steps to prepare for the changes:
- Conduct ongoing risk assessment and mapping to identify human rights and environmental risks and take appropriate measures to prevent, mitigate or remediate the risks and adverse impacts.
- Create a comprehensive and explicit code of conduct for suppliers and make sure the expectations are communicated.
- Contribute to the achievement of a living wage for employees and a living income for self-employed workers and smallholders to meet the needs of their families.
- Establish a consistent, actionable, and measurable grievance mechanism.
- Engage meaningfully with affected stakeholders throughout the due diligence process. This includes providing information on the value chain and actual or potential adverse impacts on the environment, human rights and good governance.
- Retain due diligence responsibilities rather than transferring them to business partners and suppliers and create fair and reasonable contractual measures.
Patchwork of requirements could complicate company reporting obligations. Ms. Smith noted that once the EU approves the Directive, each member state will incorporate it into its own laws. Companies will then have to translate these due diligence expectations into contract language for business partners and suppliers who will have to cope with diverse reporting obligations in different member states. We are hoping the EU will harmonize or standardize the requirements consistently across all member states.
On the DOL’s work, Mr. Gyenes stated that the U.S. government is in constant communication with colleagues at the EU parliament and member state/commission level. Ms. Salle shared helpful resources such as the International Child Labor & Forced Labor Reports and Comply Chain: Business Tools for Labor Compliance in Global Supply Chains.
