Contracts are integral to corporate practice and to regulating global business operations, and increasingly address environmental and human rights issues in supply chains. Contracts can be a powerful tool to improve these practices, but their history is fraught. This project is an effort to improve contractual governance in order to better uphold human rights and environmental standards in global supply chains. The approach seeks to build on the strength and reach of contracts whilst moving away from contractual practices that have so frequently proven ineffective (if not counter-productive) in practice.
Contracts can be considerably more effective in delivering better human rights and environmental outcomes than they have been, and moving toward this outcome is the goal of this project. To be effective, contractual clauses need to be carefully crafted and provide for:
- responsibilities of both buyers and suppliers
- more uniform content, avoiding multiple and differing standards.
- enforcement of the obligations so the environmental and human rights impact is remediated, with termination used only as a last resort.
- access to information, including information gathered in grievance mechanisms.
- dialogue and collaboration
- capacity building
- efficient and productive dispute resolution.
Therefore, a central goal of the EMC project is to move away from contracts that are ineffective and perhaps even counterproductive and to provide clauses that will integrate with Human Rights and Environmental Due Diligence standards, implement them, and support the goals of the proposed European Corporate Sustainability Due Diligence Directive and similar legislation.
The European Model Clauses drafting group now reaches out to external stakeholders to elicit their input on these clauses.
The full consultation draft of the model clauses can be found here.
The model clauses without supporting guidance can be accessed here.
If you would like to comment on these model clauses or have comments you would like to share, please fill out the form below.