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From rushed reactions to proper preparedness: Corporate due diligence in times of armed conflict
Armed conflicts demand rapid decisions and actions by the private sector. Since the start of the Russian war in Ukraine, many European companies have struggled with the challenges of conducting business in the region responsibly, highlighting the urgent need for corporate human rights and environmental due diligence legislation.
Issues arose in relation to the provision of essential services to affected people and how to engage with employees on safety, protective measures, salaries and relocations. These uncertainties were accompanied by highly-publicised questions over whether, when and how to responsibly exit the Russian and Belarussian markets.
The scale and divergent nature of company reactions clearly showed that what is needed is a harmonised standard of responsible business conduct, including in times of armed conflict.
That’s where corporate due diligence comes in. It introduces human rights and environmental protection as a key element in business decision-making. With better procedures and processes in place, companies are prepared to take action when it matters most.
Various companies in the Russian market are now at risk of complicity in gross human rights violations such as war crimes. In the context of the war in Syria, charges against the French company Lafarge have been upheld, after having entered into agreements with the Islamic State and other armed groups to keep its cement plant in the region operational. Such situations underscore the importance of improved civil liability rules to ensure corporate harm can be effectively remedied.
In both conflicts, the effect of EU corporate due diligence legislation would have led to more effective prevention, mitigation and remediation of adverse impacts of the war derived from business operations and relationships. In short, it would have saved lives.
This briefing addresses the urgent need for due diligence rules to ensure that companies do not contribute to armed conflict and proposes recommendations for the EU Corporate Sustainability Due Diligence Directive.
