OECD Garment Forum

Sarah Dadush moderated a side session on Contracts and Human Rights and Environmental Due Diligence (HREDD) at this year’s OECD Garment Forum.

This side-session invited legal and business and human rights experts to address the following questions: How are contracts typically used in HREDD? Does contracting-as-usual support effective HREDD — why / why not? What do the new laws say about contracts and the role they should play in HREDD? Specifically, what do the new laws say about contracts and HREDD-related liability? Against this backdrop, what would you advise in-scope companies to include in their contracts to meet the new legal requirements? Article 12 of the EU’s proposed Corporate Sustainability Due Diligence Directive indicates that the European Commission will develop guidance on model contractual clauses that companies can use to inform their own contracting practices. What are some key principles of due diligence-aligned contracting that you would like to see reflected in this guidance? More generally, what improvements are needed for contracts to better support HREDD regimes that effectively prevent and remedy adverse impacts?