Calling on EU lawmakers to include downstream due diligence in upcoming directive
11 April 2023
A new policy paper examines how companies in sectors characterized by substantial downstream human rights risks, could and should have prevented human rights impacts. Swedwatch and the other organisations behind the paper call on EU lawmakers to include downstream due diligence obligations in the upcoming Corporate Sustainability Due Diligence Directive.
Since the European Commission presented its proposal for the EU Corporate Sustainability Due Diligence Directive (CSDDD) in February 2022, debates on what should be in and out of the directive have been raging in both the European Parliament and Council of the EU. With critical negotiations coming up it is important to iterate that the directive must cover businesses’ due diligence responsibilities across the entire value chain – including the end-use and disposal of company products and services – in line with the risk based approach codified in the OECD Guidelines for Multinational Enterprises and United Nations Guiding Principles (UNGPs).
“Our message is simple: there is a clear international consensus around the need for companies to conduct downstream due diligence. As civil society we find it deeply disturbing to see attempts by some lawmakers to water down the current proposal based on false claims and misinterpretations regarding this issue”, says Charlotte Junghus, researcher at Swedwatch and co-author of the paper.
With the aim to inform ongoing debates on mandatory human rights and environmental due diligence, the policy paper A little downstream goes a long way: How downstream due diligence can prevent and mitigate harm discusses businesses’ responsibilities to conduct risk-based due diligence across their value chains by examining case studies through the lens of the OECD Guidelines and UNGPs. Authors of the briefing along with Swedwatch are SOMO (Centre for Research on Multinational Corporations), ECCHR (European Center for Constitutional and Human Rights), OECD Watch and ECCJ (European Coalition for Corporate Justice).
“Based on our analysis, we see no reason why downstream due diligence should not be feasible for companies to carry out, nor why the due diligence directive should let companies off the hook. To the contrary; it has proven to be practical, achievable and impactful for rightsholders”, says Charlotte Junghus.
The paper zooms in on five different sectors, many of which characterized by substantial downstream human rights risks, including manufacture and export of military and mining equipment, investments in fossil fuels and the sale of products such as pesticides. All companies mentioned in the briefing were provided the opportunity to review and comment on the briefing (download company statements on the right).
The practical steps suggested in the policy paper confirm that the same logic and due diligence steps that are relevant for preventing and mitigating human rights abuse in upstream relationships also apply to the end-use and disposal of company products and services.
Swedwatch and the other organisations behind the paper call on EU lawmakers to ensure that the CSDDD includes full value chain coverage, a risk-based approach, inclusion of the financial sector, and the arms and dual-use items sectors.
The six steps of due diligence as outlined in the OECD Guidelines
1️⃣ Embed in policy: Make a policy commitment to conduct downstream due diligence.
2️⃣ Identify: Develop clear downstream due diligence processes and protocols.
3️⃣ Prevent and mitigate: Conduct risk mapping to identify the risks and impacts in downstream business relationships. Determine the severity of each and the type of relationship (contributing or directly linked).
4️⃣ Track: Conduct a “know your customer” risk analysis. Embed respect for human rights and due diligence commitments as contractual provisions in sales and services agreements. Use leverage with customers and clients to encourage the party causing the risk or impact to cease doing so.
5️⃣ Communicate: Communicate to the public and, in particular, to rightsholders how downstream risks and impacts are addressed.
6️⃣ Remediate: Contribute to the remediation of any impacts to which the company contributed.
Our message is simple: there is a clear international consensus around the need for companies to conduct downstream due diligence.
ECCHR response to Syngenta’s comment
The Volvo Group
More on the topic:
A CSO joint statement on the need for the directive to address due diligence in high risk- and conflict areas (2022)
Joint CSO policy brief explaining why downstream due diligence is must-have for the Directive (2023)
The Swedwatch report Still Overlooked: Communities affected by jade mining operations in Myanmar, and the responsibilities of companies providing machinery (2020)