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EU Due Diligence Directive

When we talk about human rights, we need to include children’s rights

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We must embed accountability for corporations that includes children’s rights

BANGKOK—EU member states have agreed on the Corporate Sustainability Due Diligence Directive (CSDDD), an initiative that aims to make companies responsible for violations of human rights and environmental standards in their operations. We welcome this step in ensuring accountability and safety of the impact on human rights, including children’s rights.

Why is this directive important?

Environmental protection, adequate work conditions, and equal labour rights are just some of the goals outlined in the Sustainable Development Goals, aimed at improving the quality of life globally. 

However, ensuring these goals are achieved requires an understanding of how our collective actions, including that of large corporations, impact the planet and its people. 

Currently in the EU, the Non-Financial Reporting Directive (NFRD) requires companies to disclose non-financial information on their operations, including environmental impacts, how they plan to respect human rights, and how they promote diversity. However, the NFRD has largely been regarded as unreliable due to insufficient guidelines on reporting standards and audit requirements. 

Developed to address these gaps, the CSDDD aims to improve environmental protection and human rights standards in every aspect of business operations—from production to delivery, as well as the communities and environment in which they work. Large EU companies and non-EU companies (that are active in the EU) will be required to disclose information about the impacts their businesses have on society and the environment. This includes conducting due diligence across their supply chains to identify, mitigate, and account for any current or potential adverse impacts of their operations. Companies will also be subjected to independent auditing to certify the information provided is reliable. 

“Children must always be a part of every conversation about private sector responsibilities. There is no trickle-down effect from human rights to child rights as their needs are often left out of the conversation.

Amy Crocker, Head of Child Protection and Technology at ECPAT International 

What does it mean for children in the EU and beyond? 

Although the Directive is not specifically focused on children’s rights, it outlines a requirement for companies to conduct due diligence on any actual or potential adverse impacts on human rights, including child labour. 

But this is not enough. 

While ECPAT welcomes this step in the right direction, children’s rights need to be given specific focus and attention to ensure their protection in all situations—from environmental disasters to abuse and sexual exploitation . 

 “Children must always be a part of every conversation about private sector responsibilities. There is no trickle-down effect from human rights to child rights as their needs are often left out of the conversation.”
— Amy Crocker, Head of Child Protection and Technology at ECPAT International 

Is the directive enough to hold corporations accountable? 

The CSDDD has successfully addressed several gaps in the NFRD by mandating a larger number of companies to conduct risk  assessment, harmonising reporting standards, and introducing stricter auditing requirements. 

However, the exclusion of certain industries, such as the financial and investment sector, from the scope of the directive may result in entire industries neglecting to monitor their social and environmental impacts, placing the environment and people—including children—at risk. 

While the CSDDD outlines the minimum standards for how EU member states should develop national legislation on disclosure of environmental and social impacts, the responsibility lies on member states to monitor and ensure that companies are following the set standards, and to implement the appropriate penalties for non-compliance. 

How are other sectors responding/adapting/enforcing their own due diligence?

Some countries such as France, Germany and the Netherlands have (or are planning to) develop national due diligence rules, as is the case in Austria, Belgium and Denmark. These national-level measures and their enforcement vary, causing  legal uncertainty for companies across the European Union.  

The EU proposal applies to the company’s own operations, their subsidiaries and their value chains (direct and indirect business relationships), so while small and medium enterprises (or SMEs) are not directly required to report, their operations will be influenced through the supply chains of those companies that will have to report to, as per specific thresholds. For the travel and tourism sector this will affect a limited number of companies, but it will also have impact on companies from destination countries cooperation with EU companies.

What would we, as ECPAT, want to see done? 

The CSDDD is an important piece of legislation that has the potential to improve the environmental and human rights standards of companies. However, more focus and attention need to be given to children’s rights to protect them from child labour and other forms of exploitation. 

To improve child protection standards for companies in the EU, the CSDDD should specifically outline a requirement for companies to identify, prevent, mitigate and account for  harm to children resulting from adverse human rights and environmental impacts in the company’s own operations, as well as value and supply chains.