### (42) companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should establish a procedure for dealing with those complaints and inform workers , trade unions and other workers’ representatives , where relevant , about such processes. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. this access should not lead to unreasonable solicitations of companies. ### (42) companies should establish the effective possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should establish a procedure for dealing with those complaints and comprehensively inform workers , trade unions and other workers’ representatives in due time about such processes and related measures. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies and enforcement. in accordance with international standards , complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint.


### (42) companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should establish a procedure for dealing with those complaints and inform workers , trade unions and other workers’ representatives , where relevant , about such processes. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. this access should not lead to unreasonable solicitations of companies. ### (42) companies should provide the possibility for persons , groups , communities , entities and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights , environmental , and climate adverse impacts. organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should establish a procedure for dealing with those complaints and inform workers , trade unions and other workers’ representatives , where relevant , about such processes. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. this access should not lead to unreasonable solicitations of companies.


### (43) companies should monitor the implementation and effectiveness of their due diligence measures. they should carry out periodic assessments of their own operations , those of their subsidiaries and , where related to the value chains of the company , those of their established business relationships , to monitor the effectiveness of the identification , prevention , minimisation , bringing to an end and mitigation of human rights and environmental adverse impacts. such assessments should verify that adverse impacts are properly identified , due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. in order to ensure that such assessments are up-to-date , they should be carried out at least every 12 months and be revised in-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen. ### (43) companies should monitor the implementation and effectiveness of their due diligence measures. they should carry out periodic assessments of their own operations , those of their subsidiaries and , where related to the value chains of the company , those of their business relationships , to monitor the effectiveness of the identification , prevention , minimisation , bringing to an end and mitigation of human rights and environmental adverse impacts. such assessments should verify that adverse impacts are properly identified , due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. in order to ensure that such assessments are up-to-date , they should be carried out at least every 12 months and be revised in-between if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen.


### (44) like in the existing international standards set by the united nations guiding principles on business and human rights and the oecd framework , it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies , processes and activities conducted to identify and address actual or potential adverse impacts , including the findings and outcomes of those activities. the proposal to amend directive 2013/34/eu as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. in order to avoid duplicating reporting obligations , this directive should therefore not introduce any new reporting obligations in addition to those under directive 2013/34/eu for the companies covered by that directive as well as the reporting standards that should be developed under it. as regards companies that are within the scope of this directive , but do not fall under directive 2013/34/eu , in order to comply with their obligation of communicating as part of the due diligence under this directive , they should publish on their website an annual statement in a language customary in the sphere of international business. ### (44) like in the existing international standards set by the united nations guiding principles on business and human rights and the oecd framework , it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies , processes and activities conducted to identify and address actual or potential adverse impacts , including the findings and outcomes of those activities. the proposal to amend directive 2013/34/eu as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive. notwithstanding the reporting requirements under directive 2013/34/eu , member states should ensure that companies report on the matters covered by this directive by publishing on their website , in an accessible and timely manner , their due diligence policies , prevention action plans , correction action plans , procedures for dealing with grievances , reports on the outcome of the assessments as well as other relevant information.


### (46) in order to provide support and practical tools to companies or to member state authorities on how companies should fulfil their due diligence obligations , the commission , using relevant international guidelines and standards as a reference , and in consultation with member states and stakeholders , the european union agency for fundamental rights , the european environment agency , and where appropriate with international bodies having expertise in due diligence , should have the possibility to issue guidelines , including for specific sectors or specific adverse impacts. ### (46) in order to provide support and practical tools to companies or to member state authorities on how companies should fulfil their due diligence obligations , the commission , using relevant international guidelines and standards as a reference , and in consultation with member states and stakeholders , the european union agency for fundamental rights , the european environment agency , the european union agency for criminal justice cooperation (eurojust) , the european union agency for law enforcement cooperation (europol) , the european public prosecutor’s office , the european anti-fraud office (olaf) and where appropriate with international bodies having expertise in due diligence , should have the possibility to issue guidelines , including for specific sectors or specific adverse impacts.


### (49) the commission and member states should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships , paying specific attention to the challenges faced by smallholders. they should use their neighbourhood , development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. this could include working with partner country governments , the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts. ### (49) the commission and member states should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships , paying specific attention to the challenges faced by smallholders. they should use their neighbourhood , development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. this could include working with partner country governments , the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts. in the same line , the commission and member states should provide targeted support to stakeholders in developing countries , in order to ensure their meaningful engagement in all due diligence processes. in particular , support should be provided to national and local civil society organisations to monitor corporate practices and hold companies accountable and dedicated measures and funds should ease access to justice.


### (49) the commission and member states should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships , paying specific attention to the challenges faced by smallholders. they should use their neighbourhood , development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. this could include working with partner country governments , the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts. ### (49) the commission and member states should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships , paying specific attention to the challenges faced by smallholders. they should use their neighbourhood , development and international cooperation instruments to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. this could include working with partner country governments , the local private sector and stakeholders on addressing the root causes of adverse human rights , environmental , and climate impacts.


### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. the company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage. ### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising from adverse impacts. companies should be strictly liable for damages arising from any adverse impacts and resulting from their own operations or those of their subsidiaries. for damages arising from adverse impacts resulting from the operations of partners with whom they have a business relationships , companies should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage.


### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. the company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage. ### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising due to its failure or the failure of a company under its control , to comply with the due diligence process. the company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and mitigate their extent , or provide remediation , and as a result of this failure the company caused or contributed to an adverse impact that should have been identified , prevented , mitigated , remediated , brought to an end or its extent minimised through the appropriate measures , and led to damage. the company should also be liable for failures by a company under its control. a company should be considered under the control of another company where the latter has the possibility to exercise decisive influence on another company , in particular through ownership or the right to use all or part of the assets of the latter , or through rights or contracts or any other means , having regard to all factual considerations , which confer decisive influence on the composition , voting or decisions of the decision making bodies of an undertaking. for example , a company may be considered as exercising decisive influence on another through franchise agreements , where the franchisor exercises control over the use of the trademark and know how that are licensed , as well as license agreements , subcontracting agreements or outsourcing agreements.


### (57) as regards damages occurring at the level of established indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. ### (57) as regards damages occurring at the level of established indirect business relationships , any person with a legitimate interest should be entitled to obtain from the company the full extent of damages resulting from any adverse impact and the company should benefit from a legal assurance to obtain compensation from the partners with whom it has an established business relationship and who are responsible for the adverse impact.


### (57) as regards damages occurring at the level of established indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. ### (57) as regards damages occurring at the level of indirect business relationships , any person with a legitimate interest should be entitled to obtain from the company the full extent of damages resulting from any adverse impact and the company should benefit from a legal assurance to obtain compensation from the partners with whom it has an established business relationship and who are responsible for the adverse impact.


### (58) the liability regime does not regulate who should prove that the company’s action was reasonably adequate under the circumstances of the case , therefore this question is left to national law. ### (58) the company should bear the burden of proof to demonstrate that the company’s action was adequate under the circumstances of the case.


### (71) the objective of this directive , namely better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights and environmental adverse impacts in companies’ value chains , cannot be sufficiently achieved by the member states acting individually or in an uncoordinated manner , but can rather , by reason of the scale and effects of the actions , be better achieved at union level. in particular , addressed problems and their causes are of a transnational dimension , as many companies are operating union wide or globally and value chains expand to other member states and to third countries. moreover , individual member states’ measures risk being ineffective and lead to fragmentation of the internal market. therefore , the union may adopt measures , in accordance with the principle of subsidiarity as set out in article 5 teu. in accordance with the principle of proportionality , as set out in that article , this directive does not go beyond what is necessary in order to achieve that objective. ### (71) the objective of this directive , namely better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights , environmental , and climate adverse impacts in companies’ value chains , cannot be sufficiently achieved by the member states acting individually or in an uncoordinated manner , but can rather , by reason of the scale and effects of the actions , be better achieved at union level. in particular , addressed problems and their causes are of a transnational dimension , as many companies are operating union wide or globally and value chains expand to other member states and to third countries. moreover , individual member states’ measures risk being ineffective and lead to fragmentation of the internal market. therefore , the union may adopt measures , in accordance with the principle of subsidiarity as set out in article 5 teu. in accordance with the principle of proportionality , as set out in that article , this directive does not go beyond what is necessary in order to achieve that objective.


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts , actual and potential environmental adverse impacts with respect to their own operations , products and services , those of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship ;


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts , and environmental and climate adverse impacts , with respect to their own operations , products and services , the operations , products and services of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship and


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse , including material impacts on climate change , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship and


### the nature of business relationships as ‘established’ shall be reassessed periodically , and at least every 12 months. ### deleted


### 2. this directive shall not constitute grounds for reducing the level of protection of human rights or of protection of the environment or the protection of the climate provided for by the law of member states at the time of the adoption of this directive. ### 2. this directive shall not constitute grounds for reducing the level of protection of human rights , including access to justice or of protection of the environment or the protection of the climate provided for by the law of member states at the time of the adoption of this directive.


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to all companies in the union , as referred to in principles 11 and 14 of the un guiding principles on business and human rights (ungp) and standards of the organisation for economic co-operation and development (oecd) , regardless of:


### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 150 million in the last financial year for which annual financial statements have been prepared; ### the company had more than 50 employees on average and had a net worldwide turnover of more than eur 8 million in the last financial year for which annual financial statements have been prepared;


### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 150 million in the last financial year for which annual financial statements have been prepared; ### deleted


### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 150 million in the last financial year for which annual financial statements have been prepared; ### the company had more than 250 employees on average and had a net worldwide turnover of more than eur 50 million in the last financial year for which annual financial statements have been prepared;


### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 150 million in the last financial year for which annual financial statements have been prepared; ### the company had more than 250 employees on average or had a net worldwide turnover of more than eur 40 million and/ or a balance sheet of more than 20 million in the last financial year for which annual financial statements have been prepared;


### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 150 million in the last financial year for which annual financial statements have been prepared; ### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 100 million in the last financial year for which annual financial statements have been prepared;


### the company did not reach the thresholds under point (a) , but had more than 250 employees on average and had a net worldwide turnover of more than eur 40 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors: ### deleted


### the company did not reach the thresholds under point (a) , but had more than 250 employees on average and had a net worldwide turnover of more than eur 40 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors: ### the company did not reach the thresholds under point (a) , but had a net worldwide turnover of more than eur 8 million in the last financial year and at least 50% of this net turnover was generated in one or more of the following sectors:


### the company did not reach the thresholds under point (a) , but had more than 250 employees on average and had a net worldwide turnover of more than eur 40 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors: ### the company did not reach the thresholds under point (a) , but at least 50% of its turnover was generated in one or more of the following sectors:


### the company did not reach the thresholds under point (a) , but had more than 250 employees on average and had a net worldwide turnover of more than eur 40 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors: ### the company did not fulfil one of the conditions under point (a) and point (b) , but had more than 10 employees on average or had a net worldwide turnover of more than eur 700 000 and/ or a balance sheet of more than eur 350 000 in the last financial year for which annual financial statements have been prepared , provided that at least 50% of its net turnover was generated in one or more of the following sectors:


### the company did not reach the thresholds under point (a) , but had more than 250 employees on average and had a net worldwide turnover of more than eur 40 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors: ### the company did not reach the thresholds under point (a) , but had more than 50 employees on average and had a net worldwide turnover of more than eur 10 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors:


### (iii) the extraction of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). ### (iii) energy , extraction , transports and handling of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products).


### (iii) the extraction of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). ### (iii) energy; extraction , transport , processing , refining and handling of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products).


### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and fulfil one of the following conditions: ### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and generated a net turnover of more than eur 8 million in the union in the financial year preceding the last financial year.


### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and fulfil one of the following conditions: ### 2. this directive shall also apply to all companies which are formed in accordance with the legislation of a third country in line with ungp principles 11 and 14.


### generated a net turnover of more than eur 150 million in the union in the financial year preceding the last financial year; ### deleted


### generated a net turnover of more than eur 150 million in the union in the financial year preceding the last financial year; ### generated a net turnover of more than eur 50 million in the union in the financial year preceding the last financial year;


### generated a net turnover of more than eur 150 million in the union in the financial year preceding the last financial year; ### generated a net turnover of more than eur 100 million in the union in the financial year preceding the last financial year;


### generated a net turnover of more than eur 40 million but not more than eur 150 million in the union in the financial year preceding the last financial year , provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1 , point (b). ### deleted


### generated a net turnover of more than eur 40 million but not more than eur 150 million in the union in the financial year preceding the last financial year , provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1 , point (b). ### generated a net turnover of more than eur 40 million in the financial year preceding the last financial year , provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1 , point (b).


### generated a net turnover of more than eur 40 million but not more than eur 150 million in the union in the financial year preceding the last financial year , provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1 , point (b). ### generated a net turnover of more than eur 10 million but not more than eur 100 million in the union in the financial year preceding the last financial year , provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1 , point (b).


### ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex , part ii; ### ‘adverse environmental and climate impact’ means an adverse impact on the environment or the climate resulting from the violation of one of the prohibitions and obligations established under international environmental law , including , but not limited to , a violation within the meaning of the directive (ue) .../... of the european parliament and of the council* , or an adverse impact contributing to the exceeding of planetary boundaries and on one of , but not limited to , the following categories:


### ‘adverse human rights impact’ means an adverse impact on protected persons resulting from the violation of one of the rights or prohibitions listed in the annex , part i section 1 , as enshrined in the international conventions listed in the annex , part i section 2; ### ‘adverse human rights impact’ means any adverse impact on persons or groups of persons resulting from the violation , unjustified restriction or removal of the enjoyment of one of the rights or prohibitions listed in the annex , part i section 1 , and in the international and european human rights instruments listed in the annex , part i section 2 which should be reviewed biennially including the subsequent case law;


### ‘business relationship’ means a relationship with a contractor , subcontractor or any other legal entities (‘partner’) ### ‘business relationship’ means a relationship between the company or one of its subsidiaries , a contractor , subcontractor or any other legal entities (‘partner’) within their value chain;


### ‘business relationship’ means a relationship with a contractor , subcontractor or any other legal entities (‘partner’) ### ‘business relationship’ of a company means a relationship between that company or one of its subsidiaries on the one hand and any other legal entities or individuals (‘partner’) within their value chain on the other hand


### ‘established business relationship’ means a business relationship , whether direct or indirect , which is , or which is expected to be lasting , in view of its intensity or duration and which does not represent a negligible or merely ancillary part of the value chain; ### deleted


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain’ means activities related to the production , distribution or sale of goods or the provision of services by a company , or any of its directly and indirectly-owned subsidiaries and branches , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream business relationships of the company.


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain’ means activities related to the production of goods or the provision of services by a company or its subsidiaries , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream business relationships of the company or its subsidiaries.


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established direct and indirect business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities;


### ‘independent third-party verification’ means verification of the compliance by a company , or parts of its value chain , with human rights and environmental requirements resulting from the provisions of this directive by an auditor which is independent from the company , free from any conflicts of interests , has experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit; ### ‘independent third-party verification’ means verification of the compliance by a company , or parts of its value chain , with human rights , environmental , and climate requirements resulting from the provisions of this directive by an auditor which is independent from the company , free from any conflicts of interests , has experience , expertise and competence in environmental , climate and human rights matters and is accountable for the quality and reliability of the audit;


### ‘severe adverse impact’ means an adverse environmental impact or an adverse human rights impact that is especially significant by its nature , or affects a large number of persons or a large area of the environment , or which is irreversible , or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact; ### ‘severe adverse impact’ means an adverse environmental and climate impact or an adverse human rights impact that is especially significant by its nature , or affects or could affect a large number of persons or a large area of the environment , or which is or could be irreversible , or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact;


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### ‘stakeholders’ means:


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### ‘stakeholders’ mean individuals or groups of individuals as well as their representatives whose rights or interests are or could be affected by the the products , services and operations of a company and its branches , its subsidies and all entities with whom the company or any of its subsidiaries or branches have business relationships. these stakeholders can be organisations whose statutory purpose is the defence of human rights , social and labour rights , the environment or good governance , including workers and their representatives , trade unions , whistleblowers , civil society organisations , non profit organisations , citizens’ associations , local communities and public entities , indigenous peoples , human rights defenders and the undertakings’ shareholders;


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### ‘stakeholders’ means the undertakings’ workers , the workers of its subsidiaries and/or branches and their trade union and worker’ representatives. in addition , stakeholders could be individual and collective human rights defenders , (i)ngos and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that undertaking , its subsidiaries and/or branches and its business relationships;


### 1. member states shall ensure that companies conduct human rights and environmental due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions: ### 1. member states shall ensure that companies shall respect human rights , the environment and climate by obliging them to conduct human rights , environmental and climate due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions:


### identifying actual or potential adverse impacts in accordance with article 6; ### identifying actual or potential risks and adverse impacts in accordance with article 6;


### preventing and mitigating potential adverse impacts , and bringing actual adverse impacts to an end and minimising their extent in accordance with articles 7 and 8; ### preventing potential and actual adverse impacts , mitigating and bringing actual adverse impacts to an end in accordance with articles 7 and 8;


### establishing and maintaining a complaints procedure in accordance with article 9; ### establishing and maintaining effective grievance mechanisms in accordance with article 9;


### monitoring the effectiveness of their due diligence policy and measures in accordance with article 10; ### monitoring and assessing the effectiveness of their due diligence policy and measures and reviewing it in accordance with article 10;


### publicly communicating on due diligence in accordance with article 11. ### disclosing relevant information and publicly communicating on due diligence in accordance with article 11;


### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall contain all of the following: ### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall be developed with meaningful engagement of stakeholders and shall contain at least all of the following:


### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall contain all of the following: ### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a functioning due diligence policy for the company , its subsidiaries , its branches and all entities with whom the company or any of its subsidiaries or branches have business relationships established with the comprehensive and effective involvement , consultation and information of workers , their representatives and trade unions. the due diligence policy shall contain in particular all of the following:


### a description of the company’s approach , including in the long term , to due diligence; ### a description of the company’s due diligence strategy , including in the short , medium and long term , which includes a comprehensive description of the company’s corporate structure , business relationships , and value chains , including inter alia a list of the company’s business relationships and production sites;


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct to be established with the full engagement of trade unions and workers’ representatives as well as other stakeholders , describing rules , principles and commitments to be followed by the company’s employees , subsidiaries and business relationships in the company’s entire value chain;


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct describing rules and principles to be followed across all functions and operations by the company’s management , its workers as well as its subsidiaries , its branches and all entities with whom the company or any of its subsidiaries or branches have business relationships;


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct to be established with the full involvement of trade unions and workers’ representatives that shall describe rules and principles to be followed by undertakings , subsidiaries and entities with whom the company or any of its subsidiaries have business relationships


### a description of the processes put in place to implement due diligence , including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. ### a description of the processes put in place to implement due diligence , including:


### 2. member states shall ensure that the companies update their due diligence policy annually. ### 2. member states shall ensure that the companies review , publish and update their due diligence policy once they identify any new actual and potential adverse impacts and at least annually.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and actual and potential adverse environmental impacts arising from their own operations or those of their subsidiaries and entities on the value chains with which companies have a business relationship , in accordance with paragraph 2 , 3 and 4.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts , as well as adverse environmental and climate adverse impacts arising from their own operations , products and services or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts , adverse animal welfare impact and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries from their business relationships , in accordance with paragraph 2 , 3 and 4.


### 2. by way of derogation from paragraph 1 , companies referred to in article 2(1) , point (b) , and article 2(2) , point (b) , shall only be required to identify actual and potential severe adverse impacts relevant to the respective sector mentioned in article 2(1) , point (b). ### 2. by way of derogation from paragraph 1 , companies referred to in article 2(1) , point (b) , and article 2(2) , point (b) , shall only be required to identify actual and potential adverse impacts relevant to the respective sector mentioned in article 2(1) , point (b).


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying and assessing the adverse impacts referred to in paragraph 1 based on quantitative and qualitative information , companies make use of appropriate resources , including independent reports and information gathered through the grievance mechanisms provided for in article 9. companies shall , also have an effective and meaningful engagement with all relevant stakeholders , and potentially affected groups to to identify and assess information on actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying and assessing the adverse impacts referred to in paragraph 1 based on quantitative and qualitative information , companies shall make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall carry out consultations with trade unions and workers’ representatives , potentially affected persons and groups of persons including workers and other relevant stakeholders , to gather information on as well as identify and assess actual or potential adverse impacts. trade unions and workers’ representatives shall be kept informed throughout the process.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall also carry out consultations with trade unions , workers and workers' representatives and with potentially affected groups and other relevant stakeholders to gather information on actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.


### 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 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. ### 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 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. the appropriate measures shall apply to a company’s own operations , subsidiaries as well as direct and indirect business relationships.


### 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 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. ### 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 , as well as environmental and climate adverse impacts that have been , or should have been , identified pursuant to article 6.


### 2. companies shall be required to take the following actions , where relevant: ### 2. companies shall at least be required to take the following actions:


### 2. companies shall be required to take the following actions , where relevant: ### 2. companies shall be required to take the following actions:


### 2. companies shall be required to take the following actions , where relevant: ### 2. companies shall be required to take appropriate measures , including but not limited to the following actions:


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed on the basis of:


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with trade union and workers’ representatives and other affected stakeholders;


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with trade unions , workers’ representatives and other affected stakeholders;


### make necessary investments , such as into management or production processes and infrastructures , to comply with paragraph 1; ### make necessary investments , capacity building , joint prevention and mitigation measures such as into management or production processes , infrastructures and product traceability;


### provide targeted and proportionate support for an sme with which the company has an established business relationship , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme; ### provide targeted and proportionate support for an sme with which the company has a business relationship , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme;


### provide targeted and proportionate support for an sme with which the company has an established business relationship , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme; ### provide targeted and proportionate support for an sme with which the company has a business relationship , including access to capacity-building , guidance , financial support or participation in collaborative initiatives , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme;


### in compliance with union law including competition law , collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective. ### in compliance with union law including competition law , collaborate with other entities , including to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective.


### 3. as regards potential adverse impacts that could not be prevented or adequately mitigated by the measures in paragraph 2 , the company may seek to conclude a contract with a partner with whom it has an indirect relationship , with a view to achieving compliance with the company’s code of conduct or a prevention action plan. when such a contract is concluded , paragraph 4 shall apply. ### deleted


### as regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , 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 regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , because mitigation is not possible or acceptable , or there is no reasonable prospect of change , companies shall 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. in such cases companies shall take the following actions:


### as regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , 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 regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , 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 , after having taken into consideration the importance of critical supplies , and where the law governing their relations so entitles them to , take the following exceptional actions:


### temporarily suspend commercial relations with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts will succeed in the short-term; ### temporarily suspend commercial relations with the partner in question , while pursuing prevention and mitigation efforts;


### terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. ### terminate the business relationship with respect to the activities concerned when mitigation and ceasing of the impact is made impossible , in particular by its systemic or state-imposed nature;


### member states shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. ### member states shall provide for the availability of an option to suspend or to terminate the business relationship in contracts governed by their laws.


### 6. by way of derogation from paragraph 5 , point (b) , when companies referred to in article 3 , point (a)(iv) , provide credit , loan or other financial services , they shall not be required to terminate the credit , loan or other financial service contract when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided. ### deleted


### 2. where the adverse impact cannot be brought to an end , member states shall ensure that companies minimise the extent of such an impact. ### 2. where the adverse impact cannot be brought to an end , member states shall ensure that companies mitigate the impact to the greatest extent possible , while continuing to pursue all efforts to bring the adverse impact to an end.


### 3. companies shall be required to take the following actions , where relevant: ### 3. companies shall at least be required to take the following actions:


### 3. companies shall be required to take the following actions , where relevant: ### 3. companies shall be required to take the following actions:


### 3. companies shall be required to take the following actions , where relevant: ### 3. companies shall be required to take appropriate measures , including but not limited to the following actions:


### neutralise the adverse impact or minimise its extent , including by the payment of damages to the affected persons and of financial compensation to the affected communities. the action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; ### neutralise the adverse impact or mitigate it , to the greatest extent possible by appropriate remedies , , including by the payment of damages to the affected persons and of financial compensation to affected persons , groups of persons or communities.


### neutralise the adverse impact or minimise its extent , including by the payment of damages to the affected persons and of financial compensation to the affected communities. the action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; ### fully neutralise and reverse the adverse impact without undue delay or , if reversal or neutralisation is not possible , minimise its extent and mitigate its impact as quickly as possible by appropriate remedies , including inter alia by the full payment of damages to the affected persons , groups of persons or entities and full financial compensation to the affected persons , groups of persons or entities;


### neutralise the adverse impact or minimise its extent , including by the payment of damages to the affected persons and of financial compensation to the affected communities. the action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; ### cease and mitigate the adverse impact and , where it identifies that it has caused or contributed to these impacts throughout its value chain , provide for or cooperate with full remediation of the damages caused to the affected persons or communities. the remedy may include financial or non-financial compensation , apologies , restitutions , restorations and rehabilitation. the obligation to provide for remedy shall be fairly shared between the company and the partner causing or contributing to the impact , while ensuring full remedy. the parameters of remedial actions shall be determined on the basis of:


### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. where relevant , the corrective action plan shall be developed in consultation with stakeholders; ### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly for action and qualitative and quantitative indicators for measuring improvement. the corrective action plan shall be developed with the meaningful engagement of stakeholders , including trade unions and workers’representatives , and shall be made publicly available;


### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. where relevant , the corrective action plan shall be developed in consultation with stakeholders; ### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the corrective action plan shall be developed in consultation with affected stakeholders , including trade unions and workers’ representatives , and shall be publicly available;


### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. where relevant , the corrective action plan shall be developed in consultation with stakeholders; ### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the corrective action plan shall be developed in consultation with stakeholders , including trade unions and workers representatives , and shall be publicly available;


### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. where relevant , the corrective action plan shall be developed in consultation with stakeholders; ### where necessary due to the fact that the adverse impact cannot be immediately brought to an end , develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the corrective action plan shall be developed in consultation with stakeholders , including trade unions and workers' representatives , and shall be made publicly available;


### seek contractual assurances from a direct partner with whom it has an established business relationship that it will ensure compliance with the code of conduct and , as necessary , a corrective action plan , including by seeking corresponding contractual assurances from its partners , to the extent that they are part of the value chain (contractual cascading). when such contractual assurances are obtained , paragraph 5 shall apply. ### obtain contractual assurances from a direct partner with whom it has a business relationship that it will ensure compliance with the code of conduct and , as necessary , a corrective action plan , including by seeking corresponding contractual assurances from its partners , to the extent that they are part of the value chain (contractual cascading). when such contractual assurances are obtained , paragraph 5 shall apply.


### make necessary investments , such as into management or production processes and infrastructures to comply with paragraphs 1 , 2 and 3; ### make necessary investments , such as into management or production processes , capacity building , joint prevention and mitigation measures and infrastructures , and product traceability to comply with paragraphs 1 , 2 and 3;


### provide targeted and proportionate support for an sme with which the company has an established business relationship , where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the sme; ### provide targeted and proportionate support for an sme with which the company has a business relationship , where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the sme;


### provide targeted and proportionate support for an sme with which the company has an established business relationship , where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the sme; ### provide targeted and proportionate support for an sme with which the company has a business relationship , including access to capacity-building guidance , financial support or participation in collaborative initiatives , where compliance with the code of conduct or the corrective action plan would jeopardise the viability of the sme;


### in compliance with union law including competition law , collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective. ### in compliance with union law including competition law , collaborate with other entities , including , to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective.


### in compliance with union law including competition law , collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective. ### in compliance with union law including competition law , collaborate with other entities , including to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective.


### 4. as regards actual adverse impacts that could not be brought to an end or adequately mitigated by the measures in paragraph 3 , the company may seek to conclude a contract with a partner with whom it has an indirect relationship , with a view to achieving compliance with the company’s code of conduct or a corrective action plan. when such a contract is concluded , paragraph 5 shall apply. ### deleted


### as regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3 , 4 and 5 , the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the value chain of which the impact has arisen and shall , where the law governing their relations so entitles them to , take one of the following actions: ### as regards actual adverse impacts within the meaning of paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures provided for in paragraphs 3 , 4 and 5 , the company shall refrain from entering into new or extending existing relations with the partner in connection to or in the value chain of which the impact has arisen and shall , , take one of the following actions:


### temporarily suspend commercial relationships with the partner in question , while pursuing efforts to bring to an end or minimise the extent of the adverse impact , or ### temporarily suspend commercial relationships with the partner in question , while pursuing efforts to bring to an end or mitigate the extent of the adverse impact , or


### terminate the business relationship with respect to the activities concerned , if the adverse impact is considered severe. ### terminate the business relationship with respect to the activities concerned where mitigation and ceasing of the impact is made impossible , in particular by its systemic or state-imposed nature


### terminate the business relationship with respect to the activities concerned , if the adverse impact is considered severe. ### suspend or terminate the business relationship with respect to the activities concerned , if the adverse impact is considered severe or if the adverse impact repeated over time.


### member states shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. ### member states shall provide for the availability of an option to suspend or to terminate the business relationship in contracts governed by their laws.


### member states shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. ### member states shall provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws.


### 7. by way of derogation from paragraph 6 , point (b) , when companies referred to in article 3 , point (a)(iv) , provide credit , loan or other financial services , they shall not be required to terminate the credit , loan or other financial service contract , when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided. ### deleted


### 7. by way of derogation from paragraph 6 , point (b) , when companies referred to in article 3 , point (a)(iv) , provide credit , loan or other financial services , they shall not be required to terminate the credit , loan or other financial service contract , when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided. ### 7. by way of derogation from paragraph 6 , point (b) , when companies referred to in article 3 , point (a)(iv) , provide credit , loan assurance , reinsurance or other financial services , including equity and investment , they shall not be required to terminate the credit , loan or other financial service contract , when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided.


### 9 complaints procedure ### 9 grievance mechanisms


### 1. member states shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations , the operations of their subsidiaries and their value chains. ### 1. member states shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit early warnings and complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts , actual or potential and adverse environmental impacts with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with which the company has a business relationship. .


### 1. member states shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations , the operations of their subsidiaries and their value chains. ### 1. member states shall ensure that companies provide the possibility for persons and organisations listed in paragraph 2 to submit complaints to them where they have legitimate concerns regarding actual or potential adverse human rights impacts and adverse environmental impacts with respect to their own operations , the operations of their subsidiaries and their value chains. companies shall ensure that their internal complaint-handling and redress systems are easy to access and child-friendly , and enable and facilitate the submission of sufficiently precise and adequately substantiated complaints;


### 2. member states shall ensure that the complaints may be submitted by: ### 2. member states shall ensure that the mechanisms referred to in paragraph 1 are legitimate , accessible , predictable , safe , equitable , transparent and human-rights compatible and complaints may be submitted by:


### persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact , ### individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships throughout the entire value chain ,


### persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact , ### persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact , in case the complainant is a child , a legal guardian may bring a complaint on behalf of the child.


### trade unions and other workers’ representatives representing individuals working in the value chain concerned , ### the company’s employees , the employees of its subsidiaries , workers; trade unions and other workers’representatives representing individuals working throughout all parts of the value chain concerned ,


### trade unions and other workers’ representatives representing individuals working in the value chain concerned , ### trade unions and other workers’ representatives , including those representing individuals working in the value chain concerned , or those otherwise affected ,


### trade unions and other workers’ representatives representing individuals working in the value chain concerned , ### trade unions and workers’ representatives representing individuals working in the value chain concerned ,


### civil society organisations active in the areas related to the value chain concerned. ### civil society organisations active in the areas related to the entire value chain concerned.


### 3. member states shall ensure that the companies establish a procedure for dealing with complaints referred to in paragraph 1 , including a procedure when the company considers the complaint to be unfounded , and inform the relevant workers and trade unions of those procedures. member states shall ensure that where the complaint is well-founded , the adverse impact that is the subject matter of the complaint is deemed to be identified within the meaning of article 6. ### 3. member states shall ensure that the companies establish a safe procedure for dealing with complaints referred to in paragraph 1 , by ensuring that complaints are anonymous and confidential; , and inform the relevant workers and trade unions of those procedures. member states shall ensure that where the complaint is well-founded , the adverse impact that is the subject matter of the complaint is deemed to be identified within the meaning of article 6.


### 3. member states shall ensure that the companies establish a procedure for dealing with complaints referred to in paragraph 1 , including a procedure when the company considers the complaint to be unfounded , and inform the relevant workers and trade unions of those procedures. member states shall ensure that where the complaint is well-founded , the adverse impact that is the subject matter of the complaint is deemed to be identified within the meaning of article 6. ### 3. member states shall ensure that the companies establish a procedure for dealing with complaints referred to in paragraph 1. the procedure shall be developed following negotiation and consultation with the trade union and workers’ representatives. other stakeholders can be informed of such procedures. the procedure shall be detailed in the code of conduct. the procedure shall be public , legitimate , accessible , predictable , equitable , transparent , rights-compatible , as well as a source of continuous learning and based on engagement and dialogue. the undertaking shall publicly report on how complaints are taken into account in identifying and responding to risks or violations , including inter alia statistics about the complaints received , the types of adverse impacts referred to in the complaints , their treatment by undertakings and the publication of processed and anonymized cases. undertakings shall provide a timely and appropriate answer with relevant evidence to any complaint submitted by persons and organisations listed in paragraph 2 , including inter alia a comprehensive description of the measures taken by the undertakings to investigate and bring the adverse impact to an end.


### to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. ### to meet with the company’s representatives at an appropriate level to discuss potential or actual adverse impacts that are the subject matter of the complaint.


### to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. ### to meet with the company’s representatives at an appropriate level to discuss potential or actual adverse impact as well as adequate remedy that are the subject matter of the complaint , and


### member states shall ensure that companies carry out periodic assessments of their own operations and measures , those of their subsidiaries and , where related to the value chains of the company , those of their established business relationships , to monitor the effectiveness of the identification , prevention , mitigation , bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. such assessments shall be based , where appropriate , on qualitative and quantitative indicators and be carried out at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. the due diligence policy shall be updated in accordance with the outcome of those assessments. ### member states shall ensure that companies carry out periodic assessments of their own operations and measures , those of their subsidiaries and those of the value chains of the company , those of their business relationships , to monitor the effectiveness of the identification , prevention , mitigation , bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. such assessments shall be based , on qualitative and quantitative indicators and be carried out with a meaningful engagement of stakeholders. they shall be conducted at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. the due diligence policy shall be updated and the operations and measures modified in accordance with the outcome of those assessments. the company shall provide a public report of the outcome of the assessments including copies of third-party verification audits and shall inform stakeholders , including trade unions and workers’ representatives.


### member states shall ensure that companies carry out periodic assessments of their own operations and measures , those of their subsidiaries and , where related to the value chains of the company , those of their established business relationships , to monitor the effectiveness of the identification , prevention , mitigation , bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. such assessments shall be based , where appropriate , on qualitative and quantitative indicators and be carried out at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. the due diligence policy shall be updated in accordance with the outcome of those assessments. ### member states shall ensure that companies carry out periodic assessments of their own operations and measures , those of their subsidiaries and , where related to the value chains of the company , those of their business relationships , to monitor the effectiveness of the identification , prevention , mitigation , bringing to an end and minimisation of the extent of human rights and environmental adverse impacts. such assessments shall be based , where appropriate , on qualitative and quantitative indicators and be carried out at least every 12 months and whenever there are reasonable grounds to believe that significant new risks of the occurrence of those adverse impacts may arise. the due diligence policy shall be updated in accordance with the outcome of those assessments.


### member states shall ensure that companies that are not subject to reporting requirements under articles 19a and 29a of directive 2013/34/eu report on the matters covered by this directive by publishing on their website an annual statement in a language customary in the sphere of international business. the statement shall be published by 30 april each year , covering the previous calendar year. ### notwithstanding the reporting requirements under articles 19a and 29a of directive 2013/34/e , member states shall ensure that companies report on the matters covered by this directive by publishing on their website , in an accessible and timely manner , their due diligence policies , procedures for dealing with grievances , reports on the outcome of the assessments as well as other relevant information. member states shall ensure that companies publish and update their due diligence policies promptly once they identify any new actual and potential adverse impacts and at least annually. the commission shall adopt delegated acts in accordance with article 28 concerning the content and criteria for such reporting under paragraph 1 , specifying information on the description of due diligence , potential and actual adverse impacts and actions taken on those , as well as related information in order to support companies , their subsidiaries and business partners operating in developing countries to identify , prevent and effectively address actual or potential adverse impacts on human rights and the environment.


### member states shall ensure that companies that are not subject to reporting requirements under articles 19a and 29a of directive 2013/34/eu report on the matters covered by this directive by publishing on their website an annual statement in a language customary in the sphere of international business. the statement shall be published by 30 april each year , covering the previous calendar year. ### member states shall ensure that companies that are not subject to reporting requirements under articles 19a , 29a and 40a of directive2013/34/eu report on the matters covered by this directive by publishing on their website an annual statement in a language customary in the sphere of international business that is audited or assured with an assurance in line with the requirements outlined in directive 2006/43/ec57a. the statement shall be published by 30 april each year , covering the previous calendar year and be drawn up in accordance with the due diligence reporting standards adopted pursuant to article 29b or where applicable with article 40b of directive 2013/34/eu providing those are without prejudice to any union requirement on those undertakings to conduct a due diligence process.


### member states shall ensure that companies that are not subject to reporting requirements under articles 19a and 29a of directive 2013/34/eu report on the matters covered by this directive by publishing on their website an annual statement in a language customary in the sphere of international business. the statement shall be published by 30 april each year , covering the previous calendar year. ### requirements on companies to report on their due diligence process established in directive 2013/34/eu shall be understood as a requirement for companies to describe how they conduct due diligence as provided for in article 4. when fulfilling the requirements of directive 2013/34/eu to report on actions taken to identify potential or actual adverse , companies shall disclose the mapping of their individual operations , subsidiaries and business relationships , and explain whether they prioritised the order in which they took appropriate measures , how that approach was applied , and why it was necessary to prioritise.