Making human rights due diligence a legal requirement for companies including systems to identify, assess, mitigate or manage human rights risks and impacts to improve that process over time and to disclose the risks and impacts, the steps taken and the results.
The Company is in favour of making due diligence a legal requirement, and asks for the full harmonisation of the legislation.
The Company states that: 'the directive has the possibility to make this fragmented legislative landscape harmonized and genuinely promote the level playing field for businesses and human rights and environmental due diligence however, the draft directive leaves member states room to implement the legislation in a very broad manner .... Thus the proposal needs to aim to the full harmonisation of the legislations.'
In favour of legistlation and that part of the definition
The Company considers that "an EU legal framework is needed". It also indicates that 'while a global solution would be optimal ... it can be hard to reach for the time being. This is why an EU legal framework is preferred to an array of up to 27 national DD schemes that companies active on Single Market would have to follow'. Although it does not fully agree with the DDD definition provided in then consultation, it is due to the inclusion of environment and climate change, which is not covered by this research.
Requiring Human rights due diligence of all companies, regardless of sector and size, while still reflecting their individual circumstances.
The Company is in favour of covering all companies regardless sector and size.
The Company affirms that: 'to effectively manage the environmental and human rights risks in long supply chains, it is required that each part of the chain is engaged to the process and thus the sustainability due diligence legislation should cover all businesses regardless their size or business model.'
The Company is strongly in favour of DD being a requirement for all companies and sectors.
The Company advocates for an approach based on "minimum process and definitions", applicable to "all sectors". It argues that 'UNGP applies to all business regardless of their size or sector'. In this sense, "leaving SMEs completely out is against the spirit of UNGP: any company that has adverse human rights impacts must act to prevent and mitigate them within its sphere of influence and leverage'. Therfore it is in favour of including SMEs although "should be subject to lighter requirements" and receive different types of support.
Implementing an enforcement mechanism where companies fail to carry out due diligence as described.
The Company is in favour of an enforcement mechanism, as long as it does not entail liability and accountability for remediating down the chain. It does not clarify how it should be articulated
The Company indicates that: 'enforcement of due diligence should stay in line with UNGPs ... Alignement ... means that DD responsibilities must be separated from the question of liability ... Liability should be limited to instances where theere is a total lack of HRDD, false statements or gross negligence'. It also adds that 'in order to ensure effective implementation, an existing authority must be defined that would play a role in supporting companies in meeting their due diligence obligations.' It does not seem to clarify what it means by enforcement.
Including in the duties of directors and company law obligations to avoid human rights impacts or “harms”.
The company is critical of how the legislation establishes provisions around liability.
The Company affirms that: 'the provision around liability does not make it clear where a company's liability would start or end' ... SOK takes a critical stance towards the proposed provisions concerning directors' duty of care and liability for damages, which are ill-adaptable to the established framework of tort law and corporate law.'
Although this is not directly asked in the consultation, the Company is against of legal obligation in relation of having mechanism and procedores for identifying and addressing impacts.
Although Companies are not directly asked on directors/company law obligations to avoid impacts, they are asked aobut legal obligations to establish procedures to ensure that risks aiand impacts on different stkaeholders are identified, prevented and addressed. The Company's response is "I strongly disagree", indicating that 'Regulation should stay in line with UNGPs'. 'Strict legal requirements concerning the procedures or mechanisms would be counterproductive to the promotion of stakeholders' interests'.
Require companies to provide remedy for human rights impacts they have caused or contributed to.
The Company is in favour of providing and participating in remedy.
The Company states that: 'Companies must prevent and mitigate recognized human rights risks and cease activities that adversely affect the realization of human rights and take and participate in remedial measures with regard to actual adverse human rights effects'.
Require companies to exert leverage on and/or provide support to their counterparties in the remediation of human rights impacts that are linked to company activities through their business relationships (e.g their value chains).
The Company is in favour of use or build leverate.
The Company states the following: 'enforcement of due diligence should stay in line with UNGP's'. the Company indicates: 'When severe impacts occur in the value chain (when the company is linked to the impact through business rleationship), the company should use or build leverage to make the causing or contributing unit to stop the impact and prevent or mitigate re-ocurrence. However, company should not be held accountable for the remediation when it is linked to the adverse impact in its value chain.'
Require companies to provide grievance mechanisms for all stakeholders including those in the value chain.
Although the entity did not directly respond to the question on grievance mechanisms, its response to consultation mechanisms suggest that it does not support this measure.
The Company did not respond to question 20c which directly addresses the use of grievance mechanisms. It, however, strongly disagrees with question 20a. This and the subsequent clarification suggest that it is not in favour of a formalised requirement on stakeholder consultations (which may include grievance mechanism), and claims that legal requirements would be counterproductive to promoting stakeholders' interests, which allows one to infer that the company opposes mandatory grievance mechanisms as part of due diligence. The company put it as follows: "UNGP calls for consultation and dialogue with stakeholders but without any formal requirements and involvement in decision making."
Require companies to actively engage, consult and involve rights-holders at all stages of the remediation process.
Enabling judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.
The Company is critical with how the legislation establishes provisions around liability.
The Company affirms that: 'the provision around liability does not make it clear where a company's liability would start or end ... SOK takes a critical stance towards the proposed provisions concerning directors' duty of care and liability for damages, which are ill-adaptable to the established framework of tort law and corporate law.'
The Company is in favour of liability in case of not correct DD implementation, not because of harm. According to its position, due diligence responsibilities must be separated from the question of liability.
The Company indicates that businesses should be liable for harm 'limited to instances where there is a total lack of HRDD, false statements or gross negligence'. Hence, it states that 'DD responisbilities must be separated from the question of liability'.
Require companies to implement a due diligence process covering their value chain to identify, prevent, mitigate and remediate human rights impacts and improve that practice over time.
In favour of DDD for all companies but doesn't refer to upstream.
The Company seems to agree with the consultation's definition of DDD with the exception of the inclusion of environmental impacts and climate change, and is in favour of a "minimum process and definitions approach". However, the consultation doesn't include a reference to upstream chain and the company doesn't refer to it. The DDD definition refers to supply chain.
Require that companies identify their stakeholders and their interests.
The company strongly disagrees with the part of question 6 referring to the identification of stakeholder's interests
The company does not take position on question 5 regarding the consideration of relevant interests of the specific groups covered by the consultation. The company strongly disagrees with question 6 that asks if corporate directors should be required by law to identify stakeholders and their interests. It argued the following: 'as corporate law already requires the directors to act in the interest of the owners and also manage the risks of other stakeholders, when these are relevant, companies and their directors already take into account said interests, when these have direct impact on the long-term interests of the shareholders/owners.'
Require directors to establish and apply mechanisms or, where they already exist for employees for example, use existing information and consultation channels for engaging with stakeholders.
This is asked by the consultation and the company strongly disagrees.
The Company disagrees with this requirement and states that: 'UNGP calls for consultation and dialogue ... but without any formal requirements and involvement in decision making. This provides companies with much-needed flexibility in deciding how to do this ... Defining stakeholder dialogue in legal terms could easily lead to focus on fulfilling legal requirements, neglecting in the end what ultimately would in the best interest of the company and all its stakeholders.'
Require that corporate directors should manage the human rights risks for the company in relation to stakeholders and their interest including on the long run.
The consultation asks about this directly and the company disagrees to some extent.
The company disagrees to some extent when specifically asked about this in the consultation process. It argues the following: 'stakeholder engagement is included in the UNGPs but without any formal requirements, providing companies with much-needed flexibility in deciding how to do this. Strict legal requirements concerning the procedures or mechanisms would be counterproductive to the promotion of stakeholders' interests.'
| Legislation | Position |
|---|---|
| EU CSDDD | Neutral/Mixed |
| Trade Association | Performance band |
|---|---|
| Amfori | B- |