Ferrero

Signatories call the EU to not reopen the Directive for renegotiation.

‘The undersigned companies and industry associations continue to support the goals of the European Union’s sustainability due diligence … We write now to urge at this critical juncture that you focus on delivering the much-needed practical implementation of these rules. Investment and competitiveness are founded on policy certainty and legal predictability. The announcement that the European Commission will bring forward an “omnibus” initiative that could include revisiting existing legislation risks undermining both of these. … Therefore, we urge the European Commission to publicly clarify that this “omnibus approach,” if embarked upon, will not allow already agreed and adopted legal texts to be reopened for renegotiation. We are particularly concerned about the potential reopening of the Corporate Sustainability Due Diligence Directive (CSDDD), especially as the CSDDD does not introduce any overlapping reporting requirements’

The undersigned entity strongly supports an EU wide due diligence regulation and urges legislators to come to a timely resolution.

"The Cocoa Coalition has consistently supported the proposed EU Directive on Corporate Sustainability Due Diligence. We believe that it represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector and in making human rights and environmental due diligence the norm in global value chains. We called for EU-wide due diligence legislation in the first position paper we published, in 2019.Accordingly, we urge support for finalising the text of the Directive as soon as possible and before the end of the current EU legislative term. Failure to do so would undermine the position of those companies aiming to put in place systems that protect human and labour rights and the environment. It would risk the emergence of a patchwork of national legislation in EU member states, increasing compliance costs without any benefit to the sector or consumers. This would be a major setback to sustainability in global supply chains."

Following the agreement of text of the CSDDD in December 2023, the signed entities urge the EU for timely approval and implementation of the CSDDD.

"The Cocoa Coalition ... welcomes the conclusion of a political agreement on the EU Corporate Sustainability Due Diligence Directive (CSDDD) on 13 December 2023. We believe that it represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector, and in making due diligence the norm in global value chains. We reiterate the critical importance of approving the CSDDD as soon as possible and before the end of the current EU legislative term. Failure to do so would significantly undermine the establishment of a level playing field across the European Union, lead to a fragmentation of national approaches and result in a major setback to sustainability in global supply chains."

The undersigned entity calls for no modifications of the CSDDD to be undertaken i relation to the Omnibus Package Proposal.

"In our view, the current CSDDD represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector and in making human rights and environmental due diligence the norm in global value chains. Through the Cocoa Coalition, we have called for EU-wide due diligence legislation since our joint paper in 2019.""A failure to implement the CSDDD on time would undermine the position of those companies aiming to put in place systems that protect human and labour rights and the environment. It would risk the emergence of a patchwork of national legislation in EU member states, increasing compliance costs without any benefit to the sector or consumers. This would be a major setback to sustainability in global supply chains. In order to prevent more uncertainty and delays, we urge the European Commission to focus on the preparations as required in the CSDDD. We call upon the European Commission not to undertake any modification of the adopted text of the CSDDD, nor to reopen it for renegotiation by the co-legislators."

The signed entities oppose several of the Omnibus proposal's amendments that are aimed at lowering the level of ambition of the CSDDD.

"The undersigned companies and civil society organisations in the cocoa and chocolate sector have consistently supported the principles behind the EU Corporate Sustainability Due Diligence Directive (CSDDD) which, we believe, represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector and in making human rights and environmental due diligence the norm in global value chains ... legislation that levels the playing field and makes due diligence the norm is needed.""We welcome the aim of simplifying reporting obligations under the CSDDD and the Corporate Sustainability Reporting Directive, but we believe that a number of the proposed amendments to the CSDDD included in the Omnibus proposal ... undermine some of the fundamental aims of the Directive.""The proposed amendment to extend the intervals in which companies need regularly to assess the adequacy and effectiveness of their due diligence measures from one year to five years risks critically undermining the impact of the CSDDD. The extent and nature of risks to human rights and the environment can change and emerge at speed, and for a risk-based approach to be effective companies need regularly to review and if necessary, adjust their due diligence systems. We suggest that this amendment should be dropped, and the one-year interval reinstated."

The undersigned entity supports an EU wide due diligence regulation.

"EU legislation and actions could make a real difference to cocoa farmers and their countries, if properly and fairly implemented and enforced.""Key priorities: Ensuring that the European Commission and EU member states do all they can to ensure the full implementation of the CSDDD."

The undersigned entity supports an EU wide due diligence regulation.

"A crucial element of an EU strategy to achieve this aim is the introduction of mandatory EU-wide due diligence legislation, including the cocoa sector – as we argued in our first joint position paper on the EU’s policy and regulatory approach to cocoa, in December 2019. This would help to create a framework for the sustainable and responsible consumption of cocoa (and other products) within the EU, the world’s largest consumer of cocoa and chocolate."

The undersigned entity welcomes the publication of the CSDDD and calls for strengthening of the regulation.

"The signatories to this position paper welcome the publication of the proposed EU Directive on Corporate Sustainability Due Diligence (COM(2022)71). We believe that the proposed Directive, alongside the proposed Regulation on Deforestation published in November 2021, represents an important step forward in driving the necessary transformation of the cocoa and chocolate sector, among many other areas of activity. We called for legislation for both these approaches to due diligence in the first position paper we published in 2019, and in our more detailed position paper published in October 2021.""We believe that the Directive could be further strengthened in a number of important respects ... partnerships agreements in the cocoa sector, ... due diligence process and business relationships, ... purchasing practices, ... material scope: human rights and environmental criteria, ... company size, ... engagement with stakeholders, ... due diligence process, ... access to justice, ... sectoral guidelines"

The undersigned entity makes proactive calls for the publication of an EU wide due diligence regulation

"An essential component of the regulatory and policy framework designed to secure the long-term sustainability of the cocoa supply chain is an EU regulation placing a due diligence obligation on all companies that place cocoa or cocoa products on the EU market." "We believe that this is necessary in order to achieve sector-wide change; to create a level playing field and consistency for companies operating in the sector; to identify the actions necessary to remove unsustainable practices; and to hold all actors accountable for any failure to apply due diligence in their supply chain, consistent with international standards, to identify and address adverse impacts on human rights and the environment." "An EU-wide regulation would have benefits for companies in the cocoa supply chain, providing a common framework through which they can show how they are seeking to identify and mitigate human rights and environmental risks. It would eliminate free riders and close loopholes, ensuring a level playing field for all companies. In addition, predictability and consistency with a single EU jurisdictional approach – rather than with many different systems at member-state level – would significantly increase legal certainty for companies and enhance the possibility to act at scale and in a consistent manner among different actors of the supply chain." "The due diligence obligation should be rooted in the UN Guiding Principles on Business and Human Rights, adopted by the UN Human Rights Council in 2011." "In line with this commitment, we call on the EU to begin a consultative process around our proposals for an EU-wide due diligence regulation within its first hundred days, aiming for a draft regulation to be published no later than the end of 2020."

The undersigned entity supports an EU wide due diligence regulation

"Consistently with the position we announced in 2019, the signatories to this position paper believe that the introduction of mandatory EU-wide due diligence legislation can have a positive impact in driving the necessary transformation of the cocoa and chocolate sector. We therefore call on the European Commission to bring forward two pieces of legislation. We call on DG Justice & Consumers to finalise proposals for human rights and environmental due diligence across companies’ entire operations and supply chains." "We recognise the valuable role that national and international standards, including those in certification schemes, and other voluntary initiatives, can play in assisting companies, including those in the cocoa sector, to ensure that they meet these obligations. Adherence to a standard by itself, however, is not a substitute for an effective system of due diligence." "We believe that this is necessary in order to achieve sector-wide change; to create a level playing field and consistency for companies operating in the sector; to identify the actions necessary to tackle unsustainable practices; and to hold companies accountable for failure to conduct due diligence in their supply chain, consistent with international standards, to identify, address and report on risks to human rights and the environment. Addressing human rights and environmental risks includes preventing and mitigating potential adverse impacts and remediating actual adverse impacts when companies cause or contribute to them." "We welcome the two processes currently under way within the European Commission to introduce legislative proposals for due diligence." "The due diligence obligation outlined in the cross-sectoral human rights and environmental due diligence legislation should be rooted in existing international frameworks, including in particular the UN Guiding Principles on Business and Human Rights, and should be in alignment with the OECD Guidelines for Multinational Enterprises, the OECD Due Diligence Guidance for Responsible Business Conduct and the OECD-FAO Guidance for Responsible Agricultural Supply Chains." "Implementing the due diligence obligation should not be a tick-box exercise; it should, rather, stimulate a continuous process of improvement in addressing human rights and environmental risks."

The undersigned entities support the CSDDD and call for the Italian government to support its adoption.

"We call on the Italian government to support the adoption of the Corporate Sustainability Due Diligence Directive""Since 2019, the signatories of this call, mainly via the Cocoa Coalition, have been calling for pragmatic, coherent and uniform legislation at EU level and therefore welcome the text of the directive provisionally approved by the Council and the European Parliament. The new agreement, reached by the EU institutions in December 2023, reflects a careful and pragmatic balance between the resolute commitment of countries to the protection of human rights and sustainability and the need for caution in imposing new obligations on a sector that is already facing uncertainty and complexity in the global market."

The undersigning entities request the Italian government to support the CSDDD

The statement indicates 'We, all representatives of different realities of the economic and productive world and of civil society,hope for the introduction of pragmatic, coherent and uniform legislation at EU level and for this reason wewelcome the text of the directive provisionally approved by the Council and theEuropean Parliament. The new agreement, reached by the Community institutions in December2023, reflects a careful and pragmatic balance between the resolute commitment of the countries to the protection ofhuman rights and sustainability and the need for caution in imposing new obligations on companies ina phase of uncertainty and complexity in the global market. The obligations provided for by thedirective ensure a high level of alignment with internationally recognized standards on due diligence. The harmonization proposal will provide common standards,instead of regulatory fragmentation that would only bring uncertainty and complexity, also forItalian companies. We believe in this system that would guarantee fairness for businesses across the EUand allow them to operate in a uniform context and a simplified regulatoryframework.Given Italy's role in these negotiations, we ask the Italian Government to promote the progressof the work and ask for a meeting to explain our position.'Translated text, original language Italian

The undersigned entity supports requiring human rights due diligence of all companies regardless of sector or size, recognising the additional support needs of SME's. The undersigned entity calls for the inclusion of companies larger than micro-enterprises in all sectors to be covered by the Directive.

"We also welcome the many references to the need for support for SMEs affected by the Directive (which should encompass SMEs outside the EU as well as inside)""As we have argued in our previous paper: ‘As recognised in the UN Guiding Principles, the responsibility to respect human rights applies to all companies regardless of their size, sector, operational context, ownership or structure … the human rights and environmental due diligence legislation should apply to all companies registered or operating in the EU regardless of their legal form or size, including state-owned enterprises. We recognise that smaller companies may possess simpler supply chains. We do not believe, however, that these companies should be exempted from the due diligence obligation. In a very fragmented end market, the inclusion of smaller players is critical to establish a level playing field and to ensure that all companies do their part and work closer together to improve the sustainability of the cocoa sector.’""Accordingly, we believe that all companies larger than micro-enterprises (defined as companies which employ fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed €2 million) in all sectors should be covered by the requirements of the Directive. (This is consistent with the position we have adopted with regard to the Deforestation Regulation.) We recognise that SMEs are likely to need additional support in introducing due diligence frameworks, but there are already several relevant provisions in the existing text. In addition, we suggest an extended implementation period for SMEs from the entry into force of the Directive."

The undersigned entity supports requiring human rights due diligence of all companies regardless of sector or size, recognising the additional support needs of SME's.

"The regulation should apply to companies regardless of where they are based or registered or their legal form or size." "While all companies should play their part in establishing due diligence throughout the supply chain, we recognise that smaller companies are likely to possess much simpler supply chains and are less likely to be the initial importers of cocoa beans to the EU market. We do not believe, however, that they should be exempted from the due diligence obligation. In a very fragmented end market, the inclusion of smaller players is key to both large-scale impact and consumer trust."

The undersigned entity supports requiring human rights due diligence of all companies regardless of sector or size, recognising the additional support needs of SMEs.

"Both pieces of legislation should be implemented as uniformly as possible across the EU, avoiding a patchwork of different member-state approaches, and should cover companies irrespective of their size" "As recognised in the UN Guiding Principles, the responsibility to respect human rights applies to all companies regardless of their size, sector, operational context, ownership or structure. Nevertheless, the scale and complexity of the means through which companies meet that responsibility may vary according to these factors and with the severity of the adverse impacts. Accordingly, the human rights and environmental due diligence legislation should apply to all companies registered or operating in the EU regardless of their legal form or size, including state-owned enterprises. We recognise that smaller companies may possess simpler supply chains. We do not believe, however, that these companies should be exempted from the due diligence obligation. In a very fragmented end market, the inclusion of smaller players is critical to establish a level playing field and to ensure that all companies do their part and work closer together to improve the sustainability of the cocoa sector."

The undersigned entity supports enforcement mechanisms.

"Enforcement of a company’s implementation of its due diligence obligations should take into account the extent of the company’s involvement and leverage over its suppliers"

The undersigned entity supports the enforcement of due diligence obligations.

"The legislation will need to be enforced, and its implementation monitored, by member-state government agencies with appropriate mandates, guidance mechanisms, resources and expertise to evaluate the design, adequacy and implementation of company due diligence systems, based on company and independent audit reports, investigations by the enforcement agencies and other sources of information."

The undersigned entity welcomes provisions to enable remedy for human rights impacts.

"As we argued in our 2021 due diligence paper, the Directive should require member states to fulfil the provisions of the UN Guiding Principles whereby states must take appropriate steps to ensure those affected by abuses have access to effective remedy through judicial, administrative, legislative and other appropriate means, including provisions for civil liability.""We welcome ... provisions to enable access to effective remedy, including civil liability""If a company has caused or may cause an adverse impact, it should cease, prevent or mitigate the impact and remediate any harm if the impact has occurred.""... It should also contribute to remediating the harm if the impact has occurred, to the extent of its contribution."

The undersigned entity welcomes provisions to enable remedy for human rights impacts

"In accordance with the elements listed above, the regulation should require companies to provide for or cooperate with remediation mechanisms when appropriate, based on their connection to the impact; as described in the OECD Guidelines for Responsible Business Conduct"

The undersigned entity supports provisions to enable remedy for human rights impacts.

"Addressing human rights and environmental risks includes preventing and mitigating potential adverse impacts and remediating actual adverse impacts when companies cause or contribute to them." "The legislation should therefore require companies to demonstrate that they are taking effective steps, through a risk-based approach, to prevent, identify, address, mitigate and remediate potential and actual negative impacts" "Principles, companies should be expected to take appropriate action depending on their involvement in adverse impacts, and to work together with affected stakeholders, including farmers, local communities and governments: If a company has caused or may cause an adverse impact, it should cease, prevent or mitigate the impact and remediate any harm if the impact has occurred ... It should also contribute to remediating the harm if the impact has occurred, to the extent of its contribution." "In order to fulfil these obligations, the legislation should require companies to provide for or cooperate with remediation mechanisms when appropriate, based on their connection to the impacts."

The undersigned entity supports exerting leverage to provide support with other parties

"the Directive should be consistent with the UN Guiding Principles, which encourage companies to take a risk-based approach and prioritise their efforts on the basis of: (1) the severity of the actual or potential harm to people and the environment; and (2) the extent of companies’ leverage over their suppliers.""Accordingly, and in line with the UN Guiding Principles, companies should be expected to take appropriate action to identify, prevent, mitigate and account for their adverse human rights and environmental impacts depending on their involvement and the extent of their leverage on their suppliers: ... • If a company has contributed or may contribute to an adverse impact, it should cease, prevent or mitigate its own contribution to the impact, and use or increase its leverage with other parties to prevent or mitigate it.""If a company has not caused or contributed to an adverse impact, but its operations, products or services may be linked to an impact through a business relationship, it should use or increase its leverage with other parties, including suppliers, to seek to prevent or mitigate the impact."

The undersigned entity supports exerting leverage to provide support with other parties.

"Accordingly, and consistently with the UN Guiding Principles, companies should be expected to take appropriate action depending on their involvement in adverse impacts, and to work together with affected stakeholders, including farmers, local communities and governments: ... If a company has contributed or may contribute to an adverse impact, it should cease, prevent or mitigate its own contribution to the impact, and use or increase its leverage with other parties to prevent or mitigate it. If a company has not caused or contributed to an adverse impact, but its operations, products or services may be linked to an impact through a business relationship, it should use or increase its leverage with other parties, including suppliers, to seek to prevent or mitigate the impact."

The undersigned entity supports providing remediation mechanisms.

"... the regulation should require companies to provide for or cooperate with remediation mechanisms when appropriate, based on their connection to the impact; as described in the OECD Guidelines for Responsible Business Conduct, these provide routes through which impacted stakeholders, rights-holders and their representatives can bring complaints to the attention of companies and seek to have them addressed through a variety of non-judicial and judicial mechanisms."

The undersigned entity supports the provision of grievance mechanisms for stakeholders.

"Operational-level grievance mechanisms that are accessible to stakeholders should therefore be established at company level, as described by the UN Guiding Principles, to help to provide early-stage resolution of problems."

The undersigned entity supports consultation with and involvement of rightsholders throughout the remediation process.

"Accordingly, and consistently with the UN Guiding Principles, companies should be expected to take appropriate action depending on their involvement in adverse impacts, and to work together with affected stakeholders, including farmers, local communities and governments ... In order to fulfil these obligations, the legislation should require companies to provide for or cooperate with remediation mechanisms when appropriate, based on their connection to the impacts."

The undersigned entity supports judicial enforcement particularly civil liability.

"As we argued in our 2021 due diligence paper, the Directive should require member states to fulfil the provisions of the UN Guiding Principles whereby states must take appropriate steps to ensure those affected by abuses have access to effective remedy through judicial, administrative, legislative and other appropriate means, including provisions for civil liability.""The extent of civil liability should take into account the extent of a company’s involvement""we welcome... provisions to enable access to effective remedy, including civil liability"

The undersigned entity supports including civil liability in the Directive.

"The absence or lack of a legally compliant company due diligence system should carry legal consequences which should be proportionate and dissuasive; this will help ensure that the due diligence system drives real change in the sector."

The signed entities oppose the Omnibus proposal's attempt to reduce value chain scope to solely direct business partners.

"In particular, the limitation of a company’s due diligence obligations to its direct business partners is not in line with international principles, as described in the UN Guiding Principles on Business and Human Rights ... The risks of human rights violations and environmental harms occur upstream in the supply chain, in the activities of indirect business partners. Placing the focus of due diligence primarily on a company’s own operations and those of its direct business partners contradicts the risk-based approach described in these international principles, and will lead to significantly less ownership and cooperation along value chains, resulting in limited impacts."

The undersigned entity supports a due diligence process covering the entire supply chain and calls for a rewording of established business relationships to include the entire supply chain.

"Both the UN Guiding Principles and the OECD Due Diligence Guidance stress the need for due diligence to be risk-based, for companies to identify, prevent, mitigate and account for how they address their adverse human rights impacts in their operations and supply chains, prioritising the most salient issues. However, this emphasis on risk is largely absent from the proposed Directive, which focuses instead on business contractual relationships.""On top of this, the Directive restricts the due diligence obligations to entities with whom a company has an ‘established business relationship’ (alongside the company’s own operations and subsidiaries) – a term which is difficult to define precisely and does not feature in the UN Guiding Principles or OECD Due Diligence Guidance. This unduly restricts the reach and impact of the due diligence process. In practice, it is entities in more remote parts of the value chain and with whom companies have less well-established business relationships that are often most likely to be associated with adverse human rights and environmental impacts.""We therefore believe that the restriction 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. Instead, the Directive should be consistent with the UN Guiding Principles, which encourage companies to take a risk-based approach and prioritise their efforts on the basis of: (1) the severity of the actual or potential harm to people and the environment; and (2) the extent of companies’ leverage over their suppliers.""Accordingly, and in line with the UN Guiding Principles, companies should be expected to take appropriate action to identify, prevent, mitigate and account for their adverse human rights and environmental impacts depending on their involvement and the extent of their leverage on their suppliers: ...""If a company has contributed or may contribute to an adverse impact, it should cease, prevent or mitigate its own contribution to the impact, and use or increase its leverage with other parties to prevent or mitigate it."

The undersigned entity is supportive of additional action generally.

"The legislation needs to encourage the establishment of closer and more long-term relationships between companies and their suppliers, including the provision of investment and capacity-building"

The signed entities are opposed to the Omnibus proposal's removal of contractual clauses that outline disengagement as a last resort and call for the reinstatement of stakeholder engagement as a requirement prior to terminating contracts with suppliers.

"The Omnibus proposal removes the obligation to terminate contracts with suppliers when there is no expectation that efforts to prevent or end actual or potential adverse impacts will succeed. We recognise that the obligation to suspend the business relationship remains available, but the requirement to consult with stakeholders before deciding on suspension has been removed. This is problematic because suspending a business relationship can have direct harmful impacts on stakeholders, and their input is crucial to understanding the potential consequences. In practice it will mean that companies will continue disengaging when they want, without being obliged to follow a responsible approach when doing so. We believe that consultation with stakeholders, as defined in Article 3(n) and described in Article 13 of the CSDDD, should be reinstated, and that disengagement is regulated to prevent harmful ‘cut and run’ behaviour."

The undersigned entity is supportive of stakeholder engagement throughout the due diligence process and calls for clearer recognition of its importance.

"The due diligence process described in the proposed Directive includes a number of references to engagement with stakeholders, but these are limited to consultations with potentially affected groups in gathering information on actual or potential adverse impacts (Article 6(4)), and in developing prevention action plans and corrective action plans (Articles 7(2)(a) and 8(3)(b)); and these consultations are only to take place ‘where relevant’, in the opinion of the company.""We believe that the Directive should more clearly recognise the need for meaningful and continuous engagement with affected stakeholders or their legitimate representatives: an ongoing process of interaction and dialogue between a company and its actually or potentially affected stakeholders that enables the company to hear, understand and respond to their interests and concerns, including through collaborative or joint approaches between a company and its suppliers to ensure a coordinated and coherent dialogue. 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."

The undersigned entity is supportive of stakeholder engagement throughout the due diligence process and calls for clearer recognition of its importance.

"The due diligence process described in the proposed Directive includes a number of references to engagement with stakeholders, but these are limited to consultations with potentially affected groups in gathering information on actual or potential adverse impacts (Article 6(4)), and in developing prevention action plans and corrective action plans (Articles 7(2)(a) and 8(3)(b)); and these consultations are only to take place ‘where relevant’, in the opinion of the company.""We believe that the Directive should more clearly recognise the need for meaningful and continuous engagement with affected stakeholders or their legitimate representatives: an ongoing process of interaction and dialogue between a company and its actually or potentially affected stakeholders that enables the company to hear, understand and respond to their interests and concerns, including through collaborative or joint approaches between a company and its suppliers to ensure a coordinated and coherent dialogue. 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."