SUPPLY CHAIN DUE DILIGENCE DIRECTIVE MAY HAVE UNINTENDED CONSEQUENCES

                                                            Randy M. Mott JD

@All rights reserved.

The author has been invovled in waste management and remediation cases for over thirty years in the US, Canada and Europe. He is a graduate of the University of Iowa, a double honors major in politicla science and history, and a graduate of the Georgetown University Law Center. He is currently Director for Euorpe, Africa and the Middle East for CHWMEG Inc. (a nonprofit association devoted to waste stewardship). The views expressed here are his own. 

   While the pending Supply Chain Due Diligence Directive from the European Union has been widely discussed by law firms and environmental consultants and produced many different EU documents, there has been almost no discussion of its possible unintended consequences. This article will describe some key concerns from the standpoint of the companies that will be affected by the Directive. For this discussion we will refer to the last Parliament’s draft, noting where there may be possible changes as it is finalized in the negotiations between Parliament, the Commission, and the Council of Ministers.

   The Directive sets out to require companies with a large turnover within the EU to commit to due diligence of their entire global supply chain.[1] This will require the initial mapping of all of their suppliers and vendors, both upstream and downstream, including indirect relationships (companies where they have no direct contractual relationship. Once “mapped out,” each business partner [“vendor”]. will have to be initially assessed in a risk assessment scheme that examines possible adverse impacts to human rights and the environment. As discussed below, the yardstick to measure what adverse impacts are relevant has grown quite significantly since the early European Commission proposal. It also includes very general concepts from UN and OECD documents, not previously used as legal standards.

   Due diligence investigations of these vendors will be required based on a priority scheme of the possible risks presented. This effort cannot generally be met without onsite audits[2] followed by periodic monitoring, including possible follow-up audits.[3] The detailed review includes all international agreement affecting human rights (child labor, forced labor, working conditions, gender discrimination and others) and adverse environmental impacts (in addition to treaties on waste management, ocean pollution, and others). But the most expansive standard was added in the Parliament to require conformity with broad normally “soft” standards that do not have defined parameters.[4]

    The first problem in implementation will be defining what conditions present a sufficient adverse impact to require further action. This arises because the Directive will require that the company take remedial measures to eliminate the adverse impact caused by its vendor.[5]                  Companies are also required to take measures to prevent adverse impacts in the future.[6] In this fashion, the Directive will go far beyond simply requiring audits, monitoring, and reporting of impacts. The obligations growing out of due diligence inquiries raise the most serious issues and likely problems. Virtually no one has discussed publicly the very significant financial impact that these requirements will have on the covered companies.

    The current practices of many international companies include the periodic and continuous monitoring of downstream waste vendors for example. This is typified by CHWMEG,[7] the organization that does onsite detailed audits or reviews of waste vendors, including the full range of waste disposal, treatment, recycling, and interim storage for further actions. Other organizations also do similar activities.[8] CHWMEG alone has done over 6,500 such audits in over 50 countries for its manufacturing and laboratory members, now over 311 entities. All reports are produced based on requests from members in an annual cycle. The reports are considered the most comprehensive available. Shared costs among the members make this approach feasible.

   These comments then are from the perspective of this experience in actually investigating the environmental, public health, labor, safety, and financial risks of closure for these diverse types of facilities. To date, all these activities have been voluntary, but also have been significantly expanding as more companies establish international programs for their vendors. From the position of organizations and companies already actively engaged in such due diligence, there are serious concerns that the Directive may in some cases reduce due diligence results or provide other major disincentives for due diligence efforts in the future.

   Current audits of third-party waste vendors are not restricted to their legal compliance (although regulatory issues and enforcement history are examined). The reports look at general environmental, health and safety issues beyond mere compliance. The degree to which a company is willing to continue or form a business relationship with a waste vendor is its own decision on the risks it will tolerate. While this may lead to the company advising the vendor on problems it would like to see corrected, there is no general practice of mandating corrections or improvements. The most likely approach now is to find alternative vendors with better performance.

   In the case of waste vendors, the general rule is that “it is always your waste” and a company’s responsibility does not end with contracting waste services. The United States and many other jurisdictions impose strict liability for waste management on the generator or “waste producer.” Virtually every nation has laws that create some form of strict liability or a continuing duty of care for waste management.[9] This distinguishes downstream vendors from upstream vendors where such rules do not exist. The current rules generally applicable to upstream vendors[1] are more limited and are generally self-imposed standards of the individual company. These can be steps to protect the “corporate brand,” corporate social responsibility or ESG policies. “Upstream” policies are generally self-imposed and do not have the same legal consequences imposed on the use of waste vendors that create environmental problems. 

   So, the current system globally does have an incentive system enforced by potential legal liability that affects waste management. This has pushed waste into more carefully designed and operated facilities. Companies with international audit or review programs have gone beyond “legal compliance” by the waste vendor since their own liability and corporate reputation can be adversely affected in major ways. Moreover, legal compliance with waste laws is not generally a defense for liability for problems creating by use of those facilities.

   New requirements in the Directive to remediate or prevent adverse impacts seriously raise consequences of using facility with adverse impacts. This will greatly strengthen the incentive to avoid use of waste vendors with issues, accelerating the shift of waste to more proper management and incentivizing business investment in better waste management technologies (a trend that is already well-established).[2] Waste producers of hazardous waste now often have policies of avoiding landfills, even if they are legal under local regulatory schemes. There is also a growing effort to move to recycling where it is technically feasible. Some of this effort is voluntary in nature, but it is strongly affected by adverse legal consequences of improper waste management. The trend is global and generally ignores weak local law enforcement and similar issues, because virtually everywhere a problem waste site will cause legal and other problems for the waste producer as soon as it is publicized or noted by local officials.[3] 

   So specifically how does the Directive as it now stands affect the downstream due diligence?

   The initial issue with be access to the facilities to conduct an audit. Current practices maintain confidentiality of the audit between the facility and customers receiving an audit report. This assures that reports do not reach competitors of the facility which is critical to obtaining such access. Problems encountered at the facility can be discussed between the recipient of the report and the company that ordered it. Legal non-compliance is flagged with a notice that’s it must be reported to authorities by the facility. The failure to do so will normally lead to the company withdrawing as a customer. Even with confidentiality as to distribution of the audit reports, CHWMEG encounters non-cooperation in a number of cases every year. In some countries, this is a persistent problem.

   The broad public disclosure rules in the Directive passed by Parliament in particular[4] will alter the nature of an audit, enormously increasing the tendency of the facility to refuse to cooperate. This is one more unique feature of the waste management sector in that most facilities will have numerous customers, often dozens and sometimes hundreds. Where a large number of its customers are subject to the Directive requirements, over time the leverage will be irresistible. But outside of Europe and particularly in developing nations, the number of customers making these requests (or legally required to do so) will be far fewer. In addition, our experience is that the resistance of the facility management to onsite inspections is also be much greater if fewer and smaller customers are making the requests. 

   So there will be an inevitable reduction in facilities cooperation with audits to a greater or lesser degree based on the situation. The Directive as passed raises the consequences of using a facility with issues, but it also raises the negative effects on a facility that cooperates.

   The Directive in all versions requires companies to fund or conduct remediation of adverse impacts. This should be proportionate to their involvement[5] and in most cases, a waste generator will be only one of many customers. This quite different that the relationship generally discussed and assumed by the EU in its deliberations, which generally assumed a major relationship with the vendor as a serious part of the supply chain.[6] Particularly upstream where this is far more likely than in the case of downstream vendors.

   So even if access and cooperation were agreed to, the vendor may be presented with a list of adverse impacts that require more resources to correct than can be imposed on the small customer who has a very limited role in causing the problems. Most landfills and incinerators have dozens of customers. Their commercial business model requires this. A customer coming to find possible problems and then only required to provide a small part of the solution will not a welcomed guest. This tendency already exists in response to audit requests.

   This problem will arise both on remediation and preventive measures. So how does the Directive deal with lack of cooperation? The lack of cooperation at the threshold of doing due diligence may make information gathering from the vendor impossible, but the duty to investigate is not ended:

Article 6(4a): In the event that not all the necessary information regarding its value chain is available, the company shall explain the efforts made to obtain the necessary information about its value chain, the reasons why not all of the necessary information could be obtained, and its plans to obtain the necessary information in the future.

This poses real issues since obtaining detailed information can be impossible, difficult or prohibitively expensive without facility cooperation. This can also distort the resources to be allocated for due diligence based on risk (a low risk vendor with a high cost of gathering external information). This issue will be extremely important to deal with in the EU guidelines.

   The Directive recognizes “leverage” will be different in various types of relationships. Article 5 (2a) lists leverage as one factor in determining a company’s due diligence policy. Companies should also “consider using [their] leverage with responsible parties to enable the remediation of any damage caused by an impact.” Recital 41(a). The same applies to preventive measures. However, “the degree of leverage can influence the appropriate measures” a company chooses to adopt. Frankly, by placing requirements on companies to take actions involving parties that they do not control and may not have means of exerting leverage, the Directive will create many “gray zones.”

   Even where facilities cooperate due to sufficient leverage of customers, the implementation of the preventive or remedial measures will be under their control. These may be more technically difficult for them to achieve than conducting their own operations. Our experience is that most issues discovered in an audit are the result of problems in the management of the facility. Feeding such operations with more responsibility to conduct more things out of their competence is a normal reason to change vendors. See discussion below on “withdrawal.”

   Some issues will also strike at their whole operation, such as slave labor, child labor or the new requirement for a living wage. These problems along with major environmental, safety or health problems can raise their costs to customers leading to their closure. The added costs can make them non-competitive with local firms that do not have these issues, either because they have avoided the problems or because they ignore them.[7] This will normally jeopardize their financial viability raising more concerns about “stranded” waste volumes left on bankrupt or insolvent company’s site.

   The current system of liability for the wastes ultimate proper management allows customers to avoid facilities with issues that they refuse to correct for any reason. This is often the only leverage that exists with third parties. Consequently, customers will aggravate toward facilities that do not have the problems. Mandating that customers stick with a poorly-run facility will destroy the major leverage that they have to compel better performance.

   The self-selection process has resulted in a serious upgrading of the quality of waste management in the United States, Europe, and other markets. Where better facilities are not available, it creates an incentive for new facilities in that market. Virtually every properly designed landfill, new incinerator or recycling facility has come into existence due to this factor.

  The problems in this regard become worse under the Directive’s restrictions on disengagement or withdrawal.  In today’s conditions, a problematic waste vendor will normally be dropped. If they are the only available facility, as in some emerging economies, the customer may try to offer advice on fixing problems. Rarely will a customer assume the financial obligation of fixing major deficiencies. The main deterrent to this is lack of faith in the management, i.e. a problem usually exists because of a management issue or owner’s attitude (neither likely to be really changed by a limited technical fix).

   However, the Directive provides major hurdles for a customer trying to drop a facility with problems (adverse impacts).

In order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts, this Directive should ensure that disengagement is a last-resort action.” Recital 32 (emphasis added).

“[D]isengagement should be avoided where the impact of disengagement would be greater than the adverse impact the company is seeking to prevent or mitigate…” Id.    

   The Directive goes on to further restrict the ability to withdraw from using a problematic vendor:

“Often contractual terms are unilaterally imposed on a supplier by a buyer, and any breach thereof is likely to result in unilateral action by the buyer, such as termination or disengagement. Such unilateral action is not appropriate in the context of due diligence and would probably itself result in adverse impacts. In cases where the breach of such contractual provisions gives rise to a potential adverse impact, the company should first take appropriate measures to prevent or adequately mitigate such impacts, rather than considering ending or suspending the contract…” Recital34(b).

The Article of the Directive referred to by these recitals:

Article 7(5)(1): “As regards potential adverse impacts within the meaning of paragraph 1 that a company caused or contributed to and that could not be prevented or adequately mitigated, and where there is no reasonable prospect of change, the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen, and shall, where the law governing their relations so entitles them to, take the following actions as a last resort, in line with responsible disengagement…”(emphasis added).

   Accordingly, companies now using vendors with problems with be to a substantial extent locked into those relationships unless they can prove no mitigation or remedial measures can be implemented, agreed upon or would be effective (“no reasonable prospect for change”). Creating obstacles to withdrawal from poor-run facilities actually eliminates the major factor that currently creates leverage for customers to compel cooperation in audits and to pressure facilities to improve performance.

   This means that any company evaluating new suppliers/vendors at this point should take due diligence steps to assure that they do not enter into contracts with facilities that have existing adverse impacts. Alternatively, they will have to price the cost of addressing those issues into their projected costs for using that facility. The provisions also create strong incentives to find and substitute a better vendor before the effective date of the Directive in national law.

   Once these provisions are enacted and transposed, the result will be a market disincentive for competition to invest. Moreover, the best complying facilities cannot be used in these cases and their market share will be reduced. The Directive basically requires subsidies to the worst performers and penalizes the facilities already meeting the requirements. In many instances, the Directive may lower the quality of waste management in this manner.   

   On another issue, the revised Directive does not require third-party independent audits per se [Article 14(4a)],[8] but does require an “in-depth analysis” [Article6(2)(b)], described here:

“Member States shall ensure that, for the purposes of identifying and assessing adverse impacts based on, where appropriate, quantitative and qualitative information, including the relevant disaggregated data that can be reasonably obtained by a company, companies shall make use of appropriate methods and resources, including public reports, independent reports and information gathered through the notification and nonjudicial grievance mechanism provided for in Article 9. Companies shall also carry out meaningful engagement in accordance with Article 8d with potentially affected stakeholders including workers and other relevant stakeholders to gather information on as well as to identify and assess actual or potential adverse impacts”. Article 6)4).

    The Guidelines to be issued before the effective date on the Directive will hopefully address when an independent third-party audit is required or advisable. However, the current version places more burdens on a third-party independent auditor than on an internal auditor.[9] There are multiple incentives in the Directive for using a third-party independent auditors, including cost sharing in what the Directive describes as “industry-wide schemes.”  The required public consultations and disclosures would also make independent audits advisable and more credible with regulators and the public.

   The Directive as amended by Parliament seems to create a scheme of regulating third-party verifiers or auditors, including those in “industry-wide” schemes, that can potentially make it infeasible to conduct those activities:

“Recital 37: The Commission, in collaboration with Member States, the OECD and relevant stakeholders, should issue guidance for assessing the precise scope, alignment with this Directive, and credibility of industry schemes and multi-stakeholder initiativesCompanies participating in industry or multi-stakeholder initiatives or using third party verification for aspects of their due diligence should still be able to be sanctioned or found liable for violations of this Directive and damage suffered by victims as a result. The minimum standards for third-party verifiers to be adopted via delegated acts under this Directive should be developed in close consultation with all relevant stakeholders and reviewed in light of their appropriateness in accordance with the objectives of this Directive. Third-party verifiers should be subject to oversight by the relevant authorities and, where necessary, be subject to sanctions, in accordance with national and EU legislation.

   None of these restrictions seem to apply to internal company auditors that would be doing the same activities. Since it is advisable to encourage independent assessments, the Directive seems to create incentives that run the wrong way. Cost-sharing of independent audits is a powerful reason to use collective arrangements, like CHWMEG. But excessive regulations or requirements could reduce the incentive and alter the cost structure. This could result in both fewer onsite audits as well as reducing the incentives to use independent parties.

   By extending both the scope of audits and the number of vendor facilities that would have to be reviewed in a corporate risk assessment program, the Directive may also incentivize certification programs that do not involve onsite inspections and any real verification of self-reported information by the facilities. This would include current ESG systems that do not score individual facilities but whole companies and do not involve physical inspection of conditions at any of the company’s facilities.[10] This would seem to be the “check the box” approach that was condemned in early Commission background studies. Any certification also involves a “pass or fail” fallacy or a scoring system that can also be arbitrary. Most of the “adverse impacts” being examined under the mandatory due diligence standards are not binary. They will involve local environmental potential “receptors” based on specific conditions at that location. They will involve degrees of risk and not “pass or fail” conditions.      

   The Directive as amended by Parliament contains bold provisions that go beyond merely reporting carbon emissions or plans to require action to reduce greenhouse gas emissions. The amendments go well below simply reporting climate impacts. They require action plans. This will ostensibly extend to activities in the supply chain outside countries that have any applicable national climate rules.

“Recital (50)  In order to ensure that this Directive effectively contributes to combating climate change, companies should in consultation with stakeholders adopt and implement a transition plan in line with the reporting requirements in Article 19a of Directive (EU) 2022/2464 (CSRD) to ensure that the business model and strategy of the company are aligned with the objectives of the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement, as well as the objective of achieving climate neutrality by 2050 as established in Regulation (EU) 2021/1119 (European Climate Law), and the 2030 climate target. The plan should take into account the value chain and include time-bound targets related to their climate objectives for scope 1, 2 and, where relevant, 3 emissions, including, where appropriate, absolute emission reduction targets for greenhouse gas including, where relevant, methane emissions, for 2030 and in five-year steps up to 2050 based on conclusive scientific evidence, except where a company can demonstrate that its operations and value chain do not cause greenhouse gas emissions and that such emission reduction targets would therefore not be appropriate. The plans should develop implementing actions to achieve the company’s climate targets and be based on conclusive scientific evidencemeaning evidence with independent scientific validation that is consistent with the limiting of global warming to 1.5°C as defined by the Intergovernmental Panel on Climate Change (IPCC) and taking into account the recommendations of the European Scientific Advisory Board on Climate Change.” (emphasis added).

   The companies covered by the Directive will have their own European operations affected by existing European carbon restrictions and reduction policies. They will also have third-party vendors within Europe that they do not control. Finally, they will have operations in countries outside the EU that are not signatories to the Paris Accords or that have national implementation plans (““Nationally Determined Contributions””) that provide no basis for developing carbon plans in their sector or are seriously deficient.[11] Where a regulatory scheme is applicable to operations covered by this Directive, there may be a prospect for a realistic yardstick of compliance (although there will be few hard bright lines to determine compliance). Where the operations of a company or business partner/vendor are not covered by national regulations that set out individual sector targets, goals or standards efforts to achieve or enforce this requirement will be problematic.

Conclusion

    The Directive is ambitious in its goals and attempts to change corporate behavior in major ways. However, many provisions may reduce actual due diligence. The text from Parliament does not seem to consider the reality of current waste vendor or downstream audits. It assumes levels of control over vendors that are very atypical in the sector. It will penalize companies covered by the Directive in situations where most customers do not have obligations under the Directive. Many criteria for “adverse impacts” actually have no standards or yardsticks, too often using subjective terminology from “generic” references. The public participation requirements applied to the waste sector are very unrealistic, i.e. mandating public engagement by customers at facilities that they do not control and may not really strongly influence. Provisions that require commercial relationship to continue where a facility has a history of problems will have unintended impact on the market for better managed and designed facilities.

   The economic and regulatory consequences of many provisions will be unpredictable but potentially very far-reaching.



[1] Some treaties on the use of slave labor, child labor or other non-environmental issues may still be applicable in those who contract with other businesses that have these issues.

[2] “[F]irms actively make contracting decisions based on expected future liability costs.” Safavi, “Circuit Splits: Liability Reform and Likelihood of Environmental Risk in the Hazardous Waste Industry,” March 23, 2022. CHWMEG was created in 1995 out of concerns over the liability for hazardous waste after the passage of CERCLA (Comprehensive Environmental Liability and Compensation Act).

[3] The author did a study using an internet search for “toxic time bomb and waste” keywords in multiple languages that illustrated these concerns are now near universal. Once problems are in the media, they attract legal claims and enforcement efforts.

[4] Several provisions of the Parliament version have strong provisions: “Article 8d:  Carrying out meaningful engagement with affected stakeholders: 1. Member States shall ensure that companies take appropriate measures to carry out meaningful engagement with affected stakeholders that allows for genuine interaction and dialogue in their due diligence process. To this end, the engagement shall cover information and consultation of affected stakeholders and shall be comprehensive, structural, effective, timely and culturally and gender sensitive.”

[5]  Article 3(1) (q) provides for measures “proportionate and commensurate to the degree of severity and the likelihood of the adverse impact, and proportionate and commensurate to the size, resources, and capacities of the company. This shall take into account the circumstances of the specific case, including the nature of the adverse impact, characteristics of the economic sector, the nature of the company’s specific activities, products and services, the specific business relationship,” (emphasis added). 

[6] Contract manufacturing seems to be the dominant type of relationship assumed by the proposed rules. This is where the leverage would be compelling: the contract manufacture is basically an outsourced part of the company’s own operations.

[7] Two landfills operating in the same market could present a case where waste producers are using one that has issues requiring corrective measures. The price of the measures will have to be ultimately born by higher prices. The alternative landfill that was properly constructed can still have a pricing advantage (fixing problems is more expensive than preventing them). So ultimately the “repaired” landfill may have to impose higher prices deterring new customers or those not bound by the Directive “withdrawal” features. Likewise, customers not bound by the Directive may refuse to pay the higher prices, creating potential insolvency by the repaired facility. The variables are too great to predict any particular outcome, but it is clear that the result may not be better waste management.

 

[8]‘Independent third-party verification’ means verification of aspects of the due diligence of a company or parts of its value chain resulting from the provisions of this Directive either by an auditor or an audit firm that is approved in accordance with Article 3 of Directive 2006/43/EC or accredited in a Member State for conducting certifications, or by an independent assurance services provider as defined in Article 2, point (23), of Directive 2006/43/EC accredited in a Member State in accordance with Regulation (EC) No 765/2008 of the European Parliament and of the Council for the specific conformity assessment activity referred to in Article 14(4a) or by an independent third party that is accredited in a Member State for conducting certifications and which is independent from the company, free from any conflicts of interests, has demonstrated experience, expertise and competence in environmental, climate, and human rights matters, and is accountable for the quality and reliability of the audit or assessment, and meets the minimum standards set out in the delegated act as described in Article 14(4a).”

[9] Article 3(h) requires EU or national accreditation of independent auditors. Article 14(4a) provides that the Commission will set out additional requirements including on transparency. If this means that audit confidentiality is limited or eliminated, the barriers to cooperation by facilities will be quite significant. 

[10] ESG systems started as an effort to measure a company’s overall impact on the factors considered as a corporate investment. But it is now being used to measure a company’s alleged performance across its operations, without actually looking in any detail at those operations or locations. Tayan,”ESG Ratings: A Compass without Direction,” Harvard Law School Forum on Corporate Governance, August 24, 2022. Self-reported data and information from the corporate level is frequently not even an accurate reflection of the documents available at that level. Becchetti and Ciciretti, “Does Audit Improve the Quality of

ESG Scores? Evidence from Corporate Misconduct,” May 31, 2020. ESG scores do not evaluate all the required criteria set out in the due diligence directive and they certainly do not do it for individual locations and their specific conditions.

[11]The United Nations has sounded a warning that governments are not on track to meet their Paris goals, urging them to adopt much more ambitious decarbonization plans.” Council on Foreign Relations, September 15, 2023. Is there a mechanism to compel more effective national plans? “The short answer is that there is no hard enforcement in the Paris Agreement.” MIT Climate Portal. Michael Mehling, Deputy Director of the MIT Center for Energy and Environmental Policy Research, noted the focus is on accurate reporting. “’Every country has to send periodic reports on what they’re doing,’ says Mehling, ‘in the form of national emissions inventories and progress towards achieving their NDCs.’ The main formal consequence for a member failing to meet its targets is a meeting with a global committee of neutral researchers. The committee will work with struggling members to create new plans.” Id



[1] Basically, EU-based companies $150 million worldwide and non-EU companies $150 million in EU.

[2] Article6(2)(b) requires companies to “carry out in-depth assessments of prioritised operations, subsidiaries and business relationships in order to determine the nature and extent of specific actual and potential adverse impacts.”

[3] Article 10(1): Member States shall ensure that companies continuously verify the implementation and monitor the adequacy and effectiveness of their actions taken in accordance with this Directive.

[4] Annex 1, Part 1 (1)(18): The prohibition of causing any environmental degradation, such as harmful soil change, water or air pollution, harmful emissions, or excessive water consumption or other impact on natural resources, that: (a) impairs the natural bases for the preservation and production of food or (b) denies a person access to safe and clean drinking water or (c) makes it difficult for a person to access sanitary facilities or destroys them or (d) harms the health, safety, the normal use of property or land or the normal conduct of economic activity of a person or (e) affects ecological integrity, such as deforestation, in accordance with Article 3 of the Universal Declaration of Human Rights, Article 5 of the International Covenant on Civil and Political Rights and Article 12 of the International Covenant on Economic, Social and Cultural Rights,” (emphasis added).

[5] Article 8c: “Remediation of actual adverse impacts.”

[6] Article 7(1): “Member States shall ensure that companies take appropriate measures to prevent, or where prevention is not possible or not immediately possible, adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been, or should have been, identified pursuant to Article 6.”

[7] CHWMEG is a nonprofit association of companies that produce waste and seek to assure proper waste stewardship by reviews or audits of their vendors. See chwmeg.org.

[8] Waste Facilities Audit Association (WFFA). See wffa.eu.

[9] CHWMEG maintains a “Global Information Page” that contains descriptions and links for over a hundred countries including laws of waste producer liability.

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