Our key takeaway: What will the effect of EU supply chain legislation (especially the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) proposal) be on countries outside of the EU? This is a question that a new report commissioned by The Greens/European Free Alliance (Greens/EFA) group of the European Parliament seeks to answer. Four case studies in Brazil, Chile, Kenya and Uganda demonstrate that governments are already responding to this legislation and adapting their national laws—albeit to varying extents—and that many local companies are observing this with some anxiety because they lack clarity on how exactly the different laws will overlap and impact their business. Companies subject to the EU legislation in their supply chains are well advised to take several key steps: (1) account for country-specific differences in the legal and business landscape, including the differences in national human rights laws; (2) engage stakeholders in a rights-respecting, culturally appropriate manner to understand particular impacts of their business and sourcing practices and “ensur[e] the involvement of stakeholders towards the base of the value chain in due diligence processes”; and (3) engage with their suppliers to build capacity and technical knowledge of the legislation in order to encourage implementation of their own meaningful, effective human rights and environmental due diligence. They can also encourage their own governments and EU institutions to engage in constructive dialogue with Global South partner countries to facilitate their understanding of and compliance with EU legislation and ease the transition.
The Greens/European Free Alliance (Greens/EFA) group of the European Parliament has published Spillover Effects of EU Supply Chain Legislation – Perspectives from Third Countries (November 2023):