Where Do Human Rights Due Diligence Laws Apply?
Human rights due diligence laws already apply in some countries and will soon be introduced in others. That’s why we pulled together organisations from all over the world to support our platform. We want to make sure that you can access accurate advice, wherever you are based.
Here’s a quick look at some of the human rights due diligence laws proposed and those that are already in place.
France
French Duty of Vigilance Act
In force
French companies with more than +5000 employees
International companies operating in France with +10.000 employees
Germany
German Supply Chain Act
In force
As from 2023, German and non-German companies with +3.000 employees
From 2024, German and non-German companies with +1.000 employees
The Netherlands
The Dutch Human Rights and Environmental Due Diligence Law
In negotiation phase
Proposal implicates Dutch companies and foreign business that operate in the Netherlands and meet at least two of the following:
250 employees
€20 million total assets
€40 million net turnover
European Union
EU Directive on corporate sustainability due diligence
In negotiation phase
Group 1: all EU limited liability companies with 500+ employees and EUR 150 million+ in net turnover worldwide.
Group 2: EU limited liability companies operating in defined high impact sectors with more than 250 employees and a net turnover of €40 million worldwide and more.
Non-EU companies active in the EU with turnover threshold aligned with Group 1 and 2, generated in the EU.
High risk sectors: agriculture, garment and minerals
Norway
The Norwegian Transparency Act
In force
Norwegian and foreign companies operating in Norway that meet at least two of the following:
(1) +50 full time employees
(2) Annual turnover NOK 70 million
(3) A balance sheet of NOK +35 million
USA
Forced labour laws
In force
SEC-listed companies to disclose whether they use ‘conflict minerals’
California Transparency in Supply Chains Act requires retailers and manufacturers doing business in California with annual gross revenue exceeding $100,000 to disclose information about their efforts to eradicate human trafficking and slavery within their supply chains.
The Uyghur Forced Labor Prevention Act (UFLPA) establishes a “rebuttable presumption” that all goods produced in XUAR are made with FL and therefore banned from entering the US. It requires companies to determine their supply chain links to XUAR, and if so, reassure regulators that such links are not affected by FL.
Want to ensure you are ready to comply?
European Union
Corporate Sustainability Reporting Directive (CSRD)
In force
All (listed or non-listed) large companies with two of three criteria met:
More than 250 employees;
A turnover of more than €40 million; or
€20M Total Assests
This includes listed small and medium-size enterprises (SMEs), they will have an extra 3 years to comply.
European Union
EU Forced Labour Import Ban
In negotiation phrase
EU customs authorities will identify and stop products made with forced labour at EU borders. If forced labour is found in company products, the company will have to bear the costs of disposing of the prohibited product.
The entry into force of the Regulation with an adaptation period of 2 years is estimated for 2024-2025.
The Laws & How They Differ
OECD Elements
Embed Human Rights DD
Identify and Assess Adverse Impact
Cease, Prevent or Mitigate
Track
Communicate
Cooperate in Remediation
Additional Requirements
EU Directive
Le Loi de Vigilance
German Supply
Chains Act
Norwegian Due
Diligence Law
Member States shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy.
Any company that at the end of two consecutive financial years, employs at least five thousand employees within the company and its direct and indirect subsidiaries, whose head office is located on French territory, or that has at least ten thousand employees in its service and in its direct or indirect subsidiaries, whose head office is located on French territory or abroad, must establish and implement an effective vigilance plan.
Establishing a risk management system (section 4 (1)),
Designating a responsible person or persons within the enterprise (section 4 (3)), Issuing a policy statement (section 6 (2)),
Section 4. Duty to carry out due diligence
a) embed responsible business conduct into the enterprise's policies
The plan shall include the following measures:
“1° A mapping that identifies, analyses and ranks risks;
“2° Procedures to regularly assess, in accordance with the risk mapping, the situation of subsidiaries, subcontractors or suppliers with whom the company maintains an established commercial relationship;
Performing regular risk analyses (section 5),
Section 5. (1) As part of risk management, the enterprise must conduct an appropriate risk analysis in accordance with paragraphs (2) to (4) to identify the human rights and environment-related risks in its own business area and at its direct suppliers.
Section 4. Duty to carry out due diligence
b) identify and assess actual and potential adverse impacts on fundamental human rights and decent working conditions that the enterprise has either caused or contributed toward, or that are directly linked with the enterprise's operations, products or services via the supply chain or business partners
Member States shall ensure that companies carry out periodic assessments of their own operations and measures, those of their subsidiaries and, where related to the value chains of the company, those of their established business relationships, to monitor the effectiveness of the identification, prevention, mitigation, bringing to an end and minimisation of the extent of human rights and environmental adverse impacts.
“2° Procedures to regularly assess, in accordance with the risk mapping, the situation of subsidiaries, subcontractors or suppliers with whom the company maintains an established commercial relationship;
“5°(new) A monitoring scheme to follow up on the measures implemented and assess their efficiency.
The effectiveness of all measures must be reviewed once a year and on an ad hoc basis if the enterprise must expect a significantly changed or significantly expanded risk situation in its own business area or at the direct supplier, for example due to the introduction of new products, projects or a new business field.
Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a and 29a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in a language customary in the sphere of international business. The statement shall be published by 30 April each year, covering the previous calendar year.
Section 4. Duty to carry out due diligence
c) implement suitable measures to cease, prevent or mitigate adverse impacts based on the enterprise's prioritisations and assessments pursuant to (b)
1.Member States shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations, the operations of their subsidiaries and their value chains.
“4° An alert mechanism that collects reporting of existing or actual risks, developed in working partnership with the trade union organizations representatives of the company concerned;
“The vigilance plan and its effective implementation report shall be publicly disclosed and included in the report mentioned in Article L. 225-102.
7. establishing a complaints procedure (section 8),
Section 4. Duty to carry out due diligence
e) communicate with affected stakeholders and rights-holders regarding how adverse impacts are addressed pursuant to (c) and (d)
Section 5. Duty to account for due dilligence
The enterprise shall publish an account of due diligence pursuant to section 4
Section 4. Duty to carry out due diligence
d) track the implementation and results of measures pursuant to (c)
1.Member States shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and, where related to their value chains, from their established business relationships, in accordance with paragraph 2, 3 and 4.
Taking remedial action (section 7 (1) to (3)),
Section 7. (1) If the enterprise discovers that a violation of a human rights-related or an environment-related obligation has already occurred or is imminent in its own business area or at a direct supplier, it must, without undue delay, take appropriate remedial action to prevent, end or minimise the extent of this violation.
1.Member States shall ensure that companies take appropriate measures to prevent, or where prevention is not possible or not immediately possible, adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been, or should have been, identified pursuant to Article 6, in accordance with paragraphs 2, 3, 4 and 5 of this Article.
Documenting (section 10 (1)) and reporting (section 10 (2)).
(2) The enterprise must prepare an annual report on the fulfilment of its due diligence obligations in the previous financial year and make it publicly available free of charge on the enterprise’s website no later than four months after the end of the financial year for a period of seven years.
1.Member States shall ensure that companies referred to in Article 2(1), point (a), and Article 2(2), point (a), shall adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement. This plan shall, in particular, identify, on the basis of information reasonably available to the company, the extent to which climate change is a risk for, or an impact of, the company’s operations.
8. implementing due diligence obligations with regard to risks at indirect suppliers (section 9)
and
"5. laying down preventive measures in its own area of business (section 6 (1) and (3)) and vis-à vis direct suppliers (section 6 (4)),"
Section 6. (1) If an enterprise identifies a risk in the course of a risk analysis pursuant to section 5, it must take appropriate preventive measures pursuant to paragraphs (2) to (4) without undue delay.
“3° Appropriate action to mitigate risks or prevent serious violations;
1.Member States shall ensure that companies take appropriate measures to bring actual adverse impacts that have been, or should have been, identified pursuant to Article 6 to an end, in accordance with paragraphs 2 to 6 of this Article.
Section 4. Duty to carry out due diligence
f) provide for or co-operate in remediation and compensation where this is required.
7. establishing a complaints procedure (section 8),