Cocoa Coalition welcomes the EU Directive on Corporate Sustainability Due Diligence, calls for improvements, releases position paper.
The Cocoa Coalition welcome the publication of the proposed EU Directive on Corporate Sustainability Due Diligence (CSDD). In earlier position papers from 2019 and 2021, we have been calling for robust and effective policy action, including EU-wide harmonised regulation, to drive the necessary transformation of the cocoa and chocolate sector. In this regard, we find that the proposed EU Directive represents an important step forward.
For example, we welcome the detailed description in the proposal of the steps companies are to take in implementing their due diligence obligation, the many references to the need for support for SMEs affected by the EU Directive (which should encompass SMEs outside the EU as well as inside), and provisions to enable access to effective remedy, including civil liability, particularly as no such proposals were included in the Deforestation Regulation. However, we find important shortcomings in the proposal that need urgent attention. These shortcomings can be found in this position paper released today, September 19th 2022.
The main weakness of the proposal in our view is insufficient alignment with international standards set out in the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Due Diligence Guidance for Responsible Business Conduct. We believe that the restriction of the due diligence obligation to ‘established business relationships’ should either be removed or reworded to make it clear that companies are obliged to conduct due diligence across their entire supply chain.
The Directive should also reflect the UNGPs in that companies should be expected to take appropriate action to identify, prevent, mitigate, and account for their adverse human rights and environmental impacts depending on whether the companies caused, contributed, or were linked to an impact through a business relationship (we prefer this term to ‘established business relationship’), as well as the extent of their leverage on their suppliers and business partners. Similarly, the extent of civil liability should also take into account the extent of a company’s involvement in an adverse impact.
Partnership agreements: We welcome the recent announcement of the ‘Alliance for Sustainable Cocoa’ between the EU and cocoa-producing countries and the mention of partnership agreements in the Directive’s recitals. Given the importance of the enabling environment required to address the root causes of human rights abuses and environmental harms in global supply chains, we believe that partnership agreements should also be addressed in the Directive’s text itself.
Material scope: With reference in particular to land use and forests, and the production of agricultural commodities such as cocoa, we believe that this should be strengthened by the addition of references to the following two elements. First, the list of the rights of land tenure and access, which are critical to sustainable land governance and management, must be completed to include all relevant conventions and documents (including the UN Declaration on the Rights of Indigenous Peoples, ILO Convention 169). Second, it must include the right to an adequate standard of living including a living income, as a fundamental human right.
Engagement with stakeholders: We believe that the Directive should more clearly recognise the need for meaningful and continuous engagement with affected stakeholders or their legitimate representatives: A stronger requirement for meaningful and continuous engagement should be written into the Directive as part of each stage of the due diligence process. Special efforts should be made to engage with particularly vulnerable groups, including smallholders and indigenous peoples and local communities, and engagement strategies should be gender sensitive.
We look forward to a revised and improved version of the EU Directive on CSDD and will continue to engage with EU policy-makers and other stakeholders in the next stages of the legislative process.
Enquiries should be addressed to: Paolo Giro (Paolo.Giro@be.nestle.com)
The Cocoa Coalition is composed of a group of companies (Ferrero, the Hershey Company, Mars Wrigley, Mondelēz International, Nestlé, Tony’s Chocolonely, Toms Group), certification organisations (Fairtrade International, Rainforest Alliance), NGOs (Fair Trade Advocacy Office, VOICE Network) and multi-stakeholder organisations (International Cocoa Initiative).