The EU corporate sustainability due diligence directive

The Directive specifically identifies the UN Convention on the Rights of the Child (UNCRC) as the legal basis for the due diligence obligation. This means that businesses will need to perform due diligence according to the rights set out in the UNCRC and that judges and supervising authorities will need to use the UNCRC as the reference to assess whether companies have performed adequate due diligence and whether they have abused child rights.

The Directive also explicitly highlights some specific child rights:

• Right to highest attainable standard of health (art. 24)
• Right to education (art. 28)
• Right to an adequate standard of living (art. 27)
• Right to be protected from economic exploitation, and from performing any work that is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral or social development, (art. 32)
• Right to be protected from all forms of sexual exploitation and sexual abuse and to be protected from being abducted, sold or moved illegally to a different place in or outside their country for the purpose of exploitation (arts. 34 and 35)

The fact that a short list of children’s rights is included in the first part of the Annex does not mean that due diligence should only be conducted and assessed on this narrow normative scope. The UNCRC as a whole is included in the Annex and business can have adverse impact on the whole range of children’s rights as outlined in the UNCRC. 

In addition, the two ILO Conventions on minimum age (138) and on the worst forms of child labour (182) also form the legal basis for the due diligence obligation. Finally, as children have the same fundamental rights as adults, in addition to those specific to them, the other human rights and human conventions listed in the Annex apply to children too.

Adverse impacts on children can also occur when their parents, caregivers or communities’ human rights are not respected. As such, abuses of rights for specific categories and groups listed in the Annex, such as the right to a fair wage and adequate living income, decent working conditions, right to lands and resources, etc... might also cause adverse impacts on children’s rights.   

Children and their legitimate representatives, regardless of whether they live in the EU or outside of the EU, will be able to seek remedies in EU courts for damages deriving from failure to conduct adequate due diligence. To remove some of the barriers that children and other groups in vulnerable or marginalized situations face in accessing justice, EU Member States will have to: 

• allow NGOs, national human rights institutions and trade unions – provided they meet certain criteria – to bring a case on their behalf;
• provide for the possibility for claimants to seek injunctive measures while the case is ongoing;
• ensure the cost of the proceedings for claimants is not prohibitively expensive; 
• provide for judges to have the power to compel companies to disclose relevant evidence; 
• allow enough time for victims to bring a complaint, which at a minimum should be 5 years.

In addition, children and their legitimate representatives will be able to submit substantiated concerns about a company not complying with the legislation to the national supervisory authorities enforcing the Directive, which also could start an investigation on their own. 

When children or their legitimate representatives submit substantiated concerns, measures to protect their identity should be put in place. Children and their legitimate representatives who submit a substantiated concern have also the right to be informed of the outcome of the investigation by the authority and, if they have a legitimate interest in the matter, they can ask a court to review the legality of such outcome.  

As children are explicitly recognised as stakeholders and rightsholders in the Directive, and companies need to pay special attention to impacts on individuals at higher risk of adverse impacts (recital 33), companies will need to seek children’s views as part of their meaningful engagement with stakeholders. This will ensure that companies will better identify adverse impacts on children and devise adequate due diligence measures and remediation for children, among others. 

As it might not always be reasonably possible to consult with children directly, the Directive recognises that companies might consult additional experts on children’s rights. In the case of children, indirect consultation with children’s legitimate representatives and experts might include NGOs, IGOs, teachers, social workers, parents, guardians, etc...

Companies are required to consider and address specific barriers to participation and risks of retaliation for children. Within this framework, engagement with children should be voluntary, in an accessible and understandable format, safe, meaningful, culturally appropriate and specific to issues relevant to them.

Children will be able to submit complaints to companies for abuses of their rights: 

• in their own capacity;
• through their legitimate representative, such as a parent, guardian, NGOs and human rights defenders; 
• through their trade union representative or workers’ representatives if they are legally employed.

Companies will need to design complaints mechanisms that are accessible to children and complainants. This also means that children and their legitimate representatives, have the right to receive follow up information about their complaint, meet with the company to discuss their complaint and be provided with the rationale about the decision about their complaint. 

In doing so, companies should ensure that follow-up information is communicated in an understandable and age-appropriate manner. 

Children and any other person or entity can also submit information or concerns regarding adverse impacts on their rights to companies. Notification mechanisms should equally be designed so that they are accessible to children.

Companies will have to consider and address specific barriers to participation and risks of retaliation for children in using the notification mechanism and complaints procedure. 

The explicit inclusion of children’s rights in the Annex, strengthened by the explicitly stated need for companies to consider impacts on groups in vulnerable and marginalised situations (in recital 33), creates the legal obligation for companies to consider adverse impacts on children’s rights as part of their sustainability due diligence processes and act on them. 

In practice, this means that companies must assess whether they have adverse impact on children’s rights and, when necessary, prioritise accordingly. In addition, companies will have to identify adequate measures to prevent, mitigate and remediate adverse impacts when it comes to children. As the UNCRC is included in the Annex, companies will need to consider children’s best interests (art. 3 UNCRC) when adopting preventative, mitigating and remediating measures. For example, focusing merely on removing children from a supply chain instead of considering alternative safe and legal work options, when these exist and are available, might not be in a child’s best interests as it might push children into more exploitative situations. 

The Directive explicitly mentions some preventative and mitigation measures of due diligence, which can also contribute to addressing child rights abuses. For example, changes in purchasing practices (arts. 10 and 11) can effectively contribute to addressing and reducing child labour exploitation as well as other child right impacts. Equally, changes in business strategies, including design strategies (arts. 10 and 11), can effectively contribute to preventing known adverse child rights impacts stemming from use of products.   

Adverse child rights impacts occur in every step of a company’s value chain. However, the Directive has limited its application to ‘companies’ own operations, the operations of their subsidiaries and the operations of their business partners in the chains of activities of those companies’ (art. 1(a)). 

Issues such as ‘sale, marketing and advertising, end use and waste management’ do not appear in the definition of downstream chain of activities. Despite the lack of explicit mention, it needs to be noted that some of these functions are performed by the companies themselves as part of their own operations or companies provide instructions to their business partners that eventually deliver these functions. Child rights impact in the downstream value chain can be linked to business decisions and strategies taken at the early stages where the company has control over, as it is part of its own operations, or a significant influence. As such, they can be prevented by embedding child rights considerations into these phases already. Indeed, the EUCSDDD recognise change in business strategies, including design strategies, as a due diligence measures and “product development” as an upstream activity in scope of the due diligence obligation. Therefore, the due diligence obligation under the EUCSDDD can be considered as covering impacts on child rights arising from end use and commercialisation in some circumstances.  

The Directive encourages the European Union and its Member States to use their development and international cooperation mechanisms, including trade agreements, to support third countries and local economic partners in addressing adverse impacts on human rights and the environment, including through working in partnership to address their roots causes. This can contribute to creating an enabling environment for businesses to fulfil their sustainability due diligence obligations under the Directive and for third countries to benefit from the raising of human rights and environmental standards that the Directive aims to drive.

Some companies’ reaction to due diligence obligations might lead to approaches, such as the establishment of business-led compliance initiatives to address child labour, that might undermine local and national governments’ efforts or might result in the decision to divest from a country to avoid risks. These reactions might create additional risks for children and their families and negatively affect the economy of trading partners. As such, development and international cooperation mechanisms need to be designed in a way that avoids unintended consequences for children.

Legislation on sustainability due diligence needs to go hand in hand with investments in effective interventions on the ground that aim at addressing the root causes of adverse impacts on child rights, such as child labour. These investments can include public and private sector collaborations. In order to tackle the socioeconomic factors at the root of child labour, a multisectoral approach is needed that links the strengthening of laws and policies with the expansion of social protection, the building of a social services workforce, the promotion of equal access to quality education, as well as a focus on labour market policies and business practices which addresses child rights holistically including generating decent work for adults, parents and caregivers.  

Supporting system-strengthening approaches allows businesses to fulfil their responsibilities in contributing to preventing and mitigating child rights abuses that they are linked to. At the same time, it supports Governments and national authorities to strengthen national and local systems needed to uphold their child rights obligations. Ultimately, this will create a sustainable environment for both rightsholders and businesses, lowering the risks for children to be adversely impacted by business and for business to be involved in child rights abuses.