Legal interests protected by the CS3D

Corporate Sustainabilty Due Diligence

Our third post about Directive (EU) 2024/1760 on corporate sustainability due diligence ("CS3D") focuses on its material scope and on the need to look beyond the lists of environmental rights and treaties in the Annex of the Directive —see our previous posts The CS3D in Perspective and Who does the CS3D affect?—.

According to recital 32, the CS3D aims to comprehensively cover human rights. Recitals 9 and 13 point out the role of companies in the EU’s objectives and plans for a sustainable economy. However, the CS3D does not define its material scope by reference to other international standards. Instead of a general reference to all internationally recognized human rights and the environment, its Annex contains lists—subject to revision by the European Commission by means of delegated acts.

This post reviews the environmental rights and interests included in those lists. We also reflect on the best interpretive approach based on the CS3D’s guidelines.

Lists of rights and interests included in the Annex to the CS3D

The Annex to the CS3D lists the human rights and environmental interests within its scope:

• Part I of the Annex concerns human rights and contains two lists: one with specific rights and the other with international human rights instruments. In summary, the first list includes the following:
• Civil rights: such as the right to life, the prohibition of torture and degrading treatment, the right to liberty and security, the prohibition of unlawful interference with privacy, family, home and correspondence, the rights of the child, and freedom of thought, conscience and religion.
• Social and economic rights: such as the right to work under just and favorable conditions (including fair wages and adequate living wage or income; the right to safe and healthy working conditions, and reasonable limitation of working hours); the right to access to adequate housing for workers, if provided by the company; the right to access to food, clothing, water and sanitation in the workplace; the prohibition of child labor, forced labor and all forms of slavery and human trafficking; freedom of association and assembly; the right to organize and collective bargaining; and the prohibition of discrimination at work.
  
  In addition to the above, the Annex includes (subject to certain conditions) the rights recognized in the following international human rights instruments: 
  
  
• The International Covenant on Civil and Political Rights.
• The International Covenant on Economic, Social and Cultural Rights.
• The Convention on the Rights of the Child.
• The International Labor Organization’s core/fundamental conventions: Freedom of Association and Protection of the Right to Organize (No. 87); Right to Organize and Collective Bargaining (No. 98); Forced Labor (No. 29) and Abolition of Forced Labor (No. 105); Minimum Age (No. 138); Worst Forms of Child Labor (No. 182); Equal Remuneration (No. 100); and Employment and Occupation Discrimination (No. 111).
• Part II of the Annex defines the environmental interests by listing prohibitions and obligations under international environmental instruments, including the following:
• Obligations to protect biodiversity and endangered species.
• Prohibitions on the use of persistent organic pollutants.
• Prohibitions related to waste and controlled substances that deplete the ozone layer.
• Prohibitions on the import and export of hazardous waste.
• Obligations to protect natural heritage and ecosystems.
• Certain prohibitions and obligations in relation to maritime transport to prevent ocean pollution.

There has been some criticism on the limitations of the listing system: while the CS3D purportedly aims to ensure corporate due diligence regarding the potential adverse effects of companies’ operations and chains of activities on human rights and the environment, closed lists inevitably contain important omissions.

Among these omissions are the United Nations (UN) Declaration on the Rights of Indigenous Peoples (2007), the Convention on the Protection of the Rights of Migrant Workers and their Families (1990), the UN Declaration on Human Rights Defenders (1998), or the Convention on the Elimination of All Forms of Discrimination against Women (1979). Also absent is any reference to international humanitarian law.

A broader approach: the interplay among human rights, and between human rights and the environment 

However, the CS3D itself highlights the interdependence and indivisibility of human rights, as well as the correlation between human rights and a healthy environment.

• Thus, the Annex expressly includes:
• the right of individuals, groupings and communities to lands and resources, and the right not to be deprived of means of subsistence; and
• the prohibition of causing any environmental degradation of land, water and air, or excessive consumption of natural resources, that impairs the rights to access to food, water and sanitation; or that harms a person’s health, safety, normal use of land or lawfully acquired possessions; or that adversely affects ecosystem services that contribute to human wellbeing.
• Recitals 32 to 37 provide useful guidelines to interpret the Annex:
• Comprehensiveness and interrelation: the CS3D aims to comprehensively cover human rights and any measurable environmental degradation of soil, water, air or natural resources that affects people’s rights, health and wellbeing, including an express reference to the right to a clean, healthy and sustainable environment and to the “One Health” approach—which points to the interrelationship between human and environmental health.
• Case-by-case analysis: to integrate other international standards not listed in the Annex, depending on the specific circumstances of each business activity and the factors and context of each case—e.g., regarding the rights of Indigenous peoples, the elimination of discrimination against women or the rights of persons with disabilities.
• Finally, recital 17 recalls that the CS3D is without prejudice to specific due diligence obligations under other EU acts (e.g., regarding products associated with deforestation and their impact on the rights of Indigenous peoples and access to food; minerals originating from conflict-affected or high-risk areas; or batteries and their waste, for the environmental and human rights impact of their extraction). For further details, see our Legal Flash | Deforestation and forced labor due diligence. 

Comments

Instead of defining its material scope by means of general provisions, the CS3D opts for a revisable system of lists. This is a more specific approach, especially in a matter governed by international human rights law—until recently far removed from corporate operations.

It is debatable whether this increases legal certainty for the obligated companies. The CS3D itself highlights that human rights are indivisible, interdependent and interrelated with each other and with a healthy, clean and sustainable environment. Therefore, when identifying potential adverse effects on human rights and the environment, it will be key to go beyond the literal wording of the lists and take into consideration the circumstances and concurrent risk factors in each case.

In our next post we will discuss the risk approach to due diligence obligations.