Practitioner “Accelerator” Group on the Corporate Sustainability Due Diligence Directive (CSDDD): Interpreting the term “Appropriate Measures” (Articles 10-11)

The Business and Human Rights Lawyers Association hosted this event, inviting attorneys and in house counsels from the US and EU nations, to discuss the interpretation of the term “appropriate measures” in Articles 10 and 11 of the Corporate Sustainability Due Diligence Directive (CSDDD). - Lessons from Human Rights Obligations Among State Governments The CSDDD transforms existing legislation, introducing complexities in comparison to conventional human rights frameworks in Europe. Articles 10 and 11 impose positive obligations on companies to proactively identify and prevent potential harm, contrasting with the traditional vertical negative obligations between the state and individuals. Notably, Recital 19 emphasizes due diligence in corporate practices, focusing on guaranteeing means rather than results. The new assessments highlight the importance of intentionality and the structural or functional nature of mitigation measures. Compared with the German Supply Chain Act that enacted in July 2021, CSDDD does differentiate between SMEs and multinational companies, but it ensures more detailed legal uncertainty.

Multistakeholder Initiatives, Anti-Bribery, and Jurisprudence MSIs are vital in various aspects such as risk analysis and supply chain management, contributing significantly to the success of the CSDDD. However, companies cannot rely solely on these initiatives and must assess and monitor their measures independently. It is crucial to present transparency and the continuous development of initiatives. Lessons from anti-bribery compliance reveal challenges in risk assessment and the importance of documenting due diligence efforts. Therefore, companies must demonstrate continuous and cautious improvement as the directive evolves. Emerging jurisprudence highlights the risk of inconsistent transposition among states, emphasizing the need for harmonized legislation. Meanwhile, courts’ interpretations of companies' compliance practices will play a critical role in shaping future legal standards.

Perspectives from In-House Counsel In-house counsel from multinational companies face the complexity of ensuring consistent regulations across their supply chains. The desire for harmonized regulations is strong, as inconsistencies can lead tosignificant compliance challenges. Multi-stakeholder initiatives are seen as beneficial, but companies must establish robust internal compliance programs for continuous improvement and adaptation to evolving legal standards.

Q&A Discussions centered on the definition of "adverse human rights impact" under the CSDDD compared to the UNGPs, noting a narrower scope and more prescriptive human rights considerations. The requirement for independent third-party verification of appropriate measures was also addressed, acknowledging the emerging need for experts in human rights and environmental matters.

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Speakers

‍Laura-Isabell Dietz, Senior Associate at Clifford Chance, Düsseldorf
Sam Eastwood, Partner at Mayer Brown, London
Michael Littenberg, Senior Partner at Ropes & Gray, New York
Stuart Neely, Disputes Partner at Norton Rose Fulbright, London
Meg Roggensack, Executive Officer at Business and Human Rights Lawyers Association, DC
Martijn Scheltema, Partner at Pels Rijcken, The Hague
Katie Shay, Associate General Counsel and Director of Human Rights at Cisco, Durham, NC
Robert Spano, Partner at Gibson Dunn, London