Week of 18 October 2021
Cocoa companies and civil society call on the European Commission to introduce mandatory EU-wide due diligence legislation with certain core requirements
Our key takeaway: Cocoa companies and civil society align around an ask of the European Commission: ensure companies of all sizes conduct human rights and environmental due diligence across their entire operations and supply chains, and ensure that cocoa, cocoa products and chocolate placed on the EU market respect forests, ecosystems and land rights.
Ferrero, Mars Wrigley, Mondelēz International, Nestlé, Tony’s Chocolonely, Fairtrade International, Fair Trade Advocacy Office, International Cocoa Initiative and VOICE Network published: ‘Joint position paper on the EU’s policy and regulatory approach to cocoa: Human rights and environmental due diligence’ calling on the European Commission to introduce mandatory EU-wide due diligence legislation:
- The sustainable corporate governance initiative (cross-sectoral human rights and environmental due diligence legislation): “We call on DG Justice & Consumers to finalise proposals for human rights and environmental due diligence across companies’ entire operations and supply chains.” The signatories argue that this mandatory EU-wide due diligence legislation “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.” The due diligence obligation should be grounded in the “UN Guiding Principles on Business and Human Rights and the OECD’s Due Diligence Guidance for Responsible Business Conduct.” The law should include “explicit respect for the right to an adequate standard of living as a fundamental human right: a ‘living income’, to be understood as a precondition to access other human rights.” The law should also impose respect for high standards of environmental sustainability, amongst other topics. Adherence to a certification or a standard can support due diligence, but “is not a substitute for an effective system of due diligence.” The focus should be on “a continuous process of improvement in addressing human rights and environmental risks”, instead of making agricultural supply chains “instantly … free of family child labour.”
- Market-related due diligence legislation for commodities and products associated with deforestation and harm to ecosystems: “We also call on DG Environment to come forward with proposals for due diligence legislation to minimise the risk of deforestation associated with cocoa products placed on the EU market, and to extend this to include forest degradation and ecosystem harm.” This law rests “on sustainability criteria that commodities and products should meet before companies place them on the market.” Specifically, the signatories note that a “company’s due diligence process must be capable of showing compliance with all the criteria underlying this obligation rather than assuming that these issues are addressed over time through a risk-based approach (the ‘continuous process of improvement’).” The risk of deforestation should be extended to capture “[r]espect for the protection of forests and ecosystems” and “[r]espect for international and national laws relating to the rights of ownership, tenure and access to land.” If cocoa, cocoa products and chocolate cannot be placed on the EU market unless certain criteria are met, these criteria “must be independently verifiable” – drawing on lessons learned from the EU Timber Regulation.
- Effectiveness and enforcement: The signatories make clear that smaller companies should not be exempt from either legislation: “[i]n 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 signatories highlight that “the effectiveness of such due diligence legislation will be limited unless it is coupled with the strengthening of the enabling environment required to make progress on sustainable cocoa farming within cocoa-producing countries.” This underscores the importance of bilateral partnership agreements established between the EU and cocoa-producing countries. In addition to penalties, the signatories highlight ways in which the legislation can be enforced and monitored by member-state government agencies.
For more, see Ferrero, Mars Wrigley, Mondelēz International, Nestlé, Tony’s Chocolonely, Fairtrade International, Fair Trade Advocacy Office, International Cocoa Initiative and VOICE Network, Joint position paper on the EU’s policy and regulatory approach to cocoa: Human rights and environmental due diligence (18 October 2021)