The use of modern-day slavery is an issue present in many corporations and has yet to be addressed through a comprehensive legal framework. Although most large corporations do not directly violate labor laws and human rights, many of their suppliers have been found to use forced labor, engage in human rights violations, and facilitate human trafficking.

Modern slavery is prolific along the supply chains of many large corporations, from the mining of cobalt for cell phones by minors to China’s production of cotton using Uyghur forced labor. The European Union Corporate Sustainability and Due Diligence Directive (CSDDD or CS3D) seeks to create a directive for companies that operate in the European Union to investigate and address their human rights and environmental impacts. It requires companies to adopt plans for mitigating their negative impacts on environmental and human rights. They must also publish reports to the EU detailing their efforts. These requirements apply to companies with more than 1,000 employees and a net worldwide turnover of 450 million Euros or more. The directive aims to create better human rights practices by forcing larger companies to ensure ethical practices within their subsidiaries and suppliers. EU member states are required to incorporate the CS3D’s objectives into their national law but are allowed and encouraged to expand the requirements and scope of the CS3D. It went into effect on July 25, 2024, and member states must incorporate it into their national laws by July 26, 2026. 

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Requirements of the CS3D 

The CS3D is broken into six steps for companies to follow to ensure sustainability and mitigate potential and actual harms: 

1. Integration: Companies should implement due diligence policies for practices that affect environmental and human rights. This means that companies will need a strict system of review to ensure that they and their suppliers are complying with current environmental and human rights laws.  
2. Identify, assess, and prioritize: Companies will have to conduct comprehensive assessments of their adverse impacts and the impacts of companies along their supply chain. These assessments should be conducted periodically to maximize impact mitigation. If and when companies find multiple sources of adverse impact, they should prioritize their response based on severity and actual harm.   
3. Prevent, mitigate, and remediate: After identifying and prioritizing impacts, companies should take measures to reduce or prevent negative impacts altogether. If these initiatives involve partner companies or suppliers who are not included in the CS3D, support should be provided to ensure compliance and mitigate risk.  
4. Accessible notification mechanisms: Companies should create a notification mechanism accessible to stakeholders or their representatives (including human and environmental rights defenders and organizations). This mechanism should be accompanied by a response system in which reasonable complaints can be addressed and remedied. 
5. Monitor: Companies should periodically assess the effect of their implemented policies and procedures on mitigating or ending adverse impacts. These assessments can be used to update current policies. 
6. Publicly communicate: Companies should issue annual statements detailing their new due diligence policies and efforts to mitigate impacts.  

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What Rights are Covered? 

The CS3D covers rights outlined in the international human rights and labor conventions. The most relevant of these are the right to life, the prohibition of inhuman or degrading treatment, the right to enjoy favorable conditions of work (which includes an adequate living wage), and the prohibition of all forms of slavery. Environmental rights include any significant environmental impacts, such as pollution, harmful emissions, and excessive deforestation. Businesses covered by the CS3D must investigate their impact on all of these rights and take measures to end, mitigate or remediate their harm.   

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Effect on Human Trafficking  

The CS3D is an important step forward in the prohibition of all forms of modern-day slavery within corporations. Corporations must now examine their business practices and sources of profit and ensure they comply with human rights and environmental conventions. This includes ending the use of any form of underpaid labor, child, and slave labor within the corporation or any of their suppliers and subsidiaries. The environmental aspect of the CS3D is important as well, as climate change has historically created more opportunities for human trafficking. Rising temperatures, sea levels, and loss of animal and plant life have forced vulnerable groups away from their homes and put them at higher risk of being trafficked while trying to find new housing and sources of income. The CS3D has a wide-ranging impact; it not only affects European-based corporations but also those corporations that generate 150 euros in net turnover from European consumers. Large American-based companies such as Apple, Microsoft, and Amazon will be required to comply with the CS3D and review their labor practices and the practices of their suppliers since they generate a large portion of their revenue from EU-based consumers.

The CS3D is the most extensive and proactive anti-slavery directive to date and will have a broad positive impact on both human and environmental rights around the world. After the adoption and implementation of the CS3D, corporations must ensure that there are no human or workers’ rights abuses at any point in their supply chain. This will force any suppliers using modern slavery to either stop supplying businesses covered by the CS3D or update their labor practices to comply with current EU human rights standards and provide safety protections for workers, maximum hours, and a living wage.