Some elements of the European Union (EU) Corporate Sustainability Due Diligence Directive (CSDDD) could harm trade and supply chains, according to EU trade associations representing the grain, oilseeds, crushing and animal feed sectors.
The associations issued a joint statement in response to a vote by the European Parliament’s legal affairs committee on 21 April to improve the consistency of the CSDDD with the principles and language of United Nations (UN) and Organisation for Economic Co-operation and Development (OECD) due diligence guidelines.
In the statement, the three trade associations – EU vegetable oil and protein meal industry association (FEDIOL), EU trade association for cereals, rice, feedstuffs, oilseeds, olive oil, oils and fats (COCERAL) and EU feed manufacturers’ federation (FEFAC) – said they supported the JURI Committee’s effort to improve consistency of the CSDDD with the principles and language of UN and OECD due diligence guidelines.
However, they said that other elements could be detrimental to trade and supply chains without added value to addressing harmful human rights and environmental impacts.
“We regret the inclusion of suspension of products from free circulation or export among the sanctions to be imposed by member states, as this disruption to trade and supply chains will not contribute to improvements in due diligence,” the 21 April statement said.
The associations said they welcomed the clarification in the Commission’s text that obligations were proportionate to the responsibility of a company in relation to a harm with the introduction of a distinction between harm “caused”, “contributed to”, or “directly linked to”.
“The strengthened risk-based approach and introduction of prioritisation of adverse impacts based on their severity and likelihood, if maintained, will ensure that companies’ efforts are targeted where they are most needed and can deliver the most impact. The risk-based approach is also more in alignment with the existing international frameworks on due diligence guidelines, which are built on best practices,” the statement said.
In addition, the provisions on civil liability offered greater legal certainty to companies and legal fairness by limiting it to situations in which a company has “caused” or “contributed to a harm”.
Other positive aspects included the obligation to develop sector-specific guidelines for agriculture, group-level due diligence, ensuring harmonisation at EU level as well as a level playing field for all companies in scope, and the introduction of minimum standards for independent third-party verification via a delegated act, the statement said.
The associations said they urged the European Parliament in its plenary vote and the Council during trilogue negotiations to cover other important and necessary adjustments to make the CSDDD “legally clear, fit for purpose, and effective in combating adverse environmental and human rights impacts of business operations”.