New legislation presented by EU Parliament requires companies operating in the EU to “identify, address and remedy their impact on human rights and the environment throughout their global value chains”. Organisations are liable for the conduct of their partners. Lack of due diligence will get organisations into trouble.
Did you know that “In 2017, nearly 25 million people were categorised as victims of forced labour” (International Labour Organisation, 2017 report)?
Or that “From 2000-2012, nearly 25% of all tropical deforestation was due to illegal agro-conversion for export markets (2019 study)?”
Global economies have benefited greatly from an increase in cross-border and international business partnerships, which has led to a substantial expansion of the global value chain. Subsequently, more and more companies are being exposed to potential liability by unscrupulous third-party providers in their supply chain pipeline that have little respect for business ethics, human rights, or the environment.
There is a growing concern worldwide of the many supply chain businesses that are linked to serious abuses, including exploitative working conditions, modern slavery and child labour, toxic pollution, rampant destruction of rainforests, and a general disregard for corporate governance. For decades, companies have voluntarily monitored supply chain partners for bad behavior, but this self-policing has been limited.
But now the European Union Parliament has presented mandates for EU businesses – under penalties of law – to carry out due diligence to identify, prevent, mitigate and account for actual or potential human rights violations and negative environmental impacts in their operations and supply chain.
THE DIRECTIVE ON CORPORATE DUE DILIGENCE AND CORPORATE ACCOUNTABILITY
The EU parliament has published this directive for organisations to “identify, assess, prevent, cease, mitigate, monitor, communicate, account for, address and remediate potential and/or actual adverse impacts on human rights, the environment and good governance in their value chain”.
This directive would apply to all EU businesses as well as to non-EU organisations doing business in the EU (such as selling goods or services). Regardless of where the company is headquartered, if it does business in the EU and is of any substantial size, the directive would likely apply.
The legislation would require companies operating in the EU to conduct effective due diligence to identify, address and remedy their impact on human rights (including social, trade union, and labour rights), the environment (contributing to climate change or deforestation), and good governance (such as corruption and bribery) throughout their value chain.
This is akin to saying that if a company fails to conduct due diligence on a third-party partner that engages in slave labour, pollutes the environment, manipulates the price, or violates jurisdictional regulations, that company is essentially complicit in the partnering company’s illegal behavior and may be held liable in a court of law.
Aside from legal and monetary penalties, the company further risks a tarnished reputation in the market and a devaluation of its brand.
Identify Unethical Behavior & Protect Your Organisation with 3PRM™ Corporate Due Diligence & Risk Management
It’s crucial for businesses utilising global supply chain partners to conduct due diligence and assess the potential risks that a third party may pose to your organisation, particularly when addressing risks associated with environmental damage and human rights violations.
CRI Group’s highly specialised assessment solution for Corporate Due Diligence and Third-Party Risk Management was developed to assist organisations in accurately identifying, preventing, mitigating, and addressing actual and potential adverse impacts of affiliating with global partners, and complies with all EU mandates.
From enhanced due diligence to identify non-compliance of regulatory framework and negative environmental allegations, to investigating company (or stakeholder) human rights violations related to labour laws, child labour or human trafficking, CRI Group experts help determine the legal compliance, financial viability, and integrity levels of outside partners and suppliers affiliated with your company’s value chain.
MAKE THE IMPACT
“The global pandemic has demonstrated that resilient global supply chains that protect both the people and planet will be crucial to companies and economic recovery in the future”,Transparency International EU)
Recent studies have demonstrated a positive correlation between the extent to which companies implement environmental, social and good governance policies, and their overall economic performance, all while contributing to a more stable global marketplace. Such responsible business conduct:
• Enhances protection for workers
• Improves access to justice for victims
• Safeguards the environment
• Ensures fair products for consumers
Further, apart from general compliance with EU mandates, such organisations enjoy a wealth of intangible benefits, including:
• Reduced overall liability risks
• Improved stakeholder protection
• Lower costs resulting from conflicts
• Improved company transparency
• Deeper knowledge of the value chain
• Enhanced reputation in the market
• Improved social standards for workers
Are you prepared to conduct a due diligence assessment on your global partners and stay one step ahead of the pending EU mandates?
WHY CRI GROUP?
RISK MANAGEMENT MADE EASY
CRI Group’s corporate due diligence and accountability solutions can help your organisation comply with a growing list of global regulations and mandates related to human rights and the environment, while acting as an integral part of your business decision-making and risk management systems.
IT (Internet technology) and telecommunications industry providers are the engines that help power commerce on a global scale. This massive industry includes companies that provide the infrastructure for communication across multiple countries and continents, including...Read More
Fraud is of the utmost concern for finance and professional services organisations. These include banks & financial institutions, real estate lenders, business credit and finance companies, commercial investment corporations, asset-based lenders, debt financing firms, acquisition...Read More
Fraud involving pharmaceutical companies and healthcare providers constitutes a major source of economic waste affecting countries around the world. In spite of increased awareness of the problem and the application of sophisticated anti-fraud mechanisms, individual actors and...Read More
Mitigate employee risk during COVID-19 with BS 7858:2019 The far-reaching impact of the COVID-19 outbreak has affected virtually every business and economic sector worldwide. Depending on the global region, the far-reaching implications have hampered (on...Read More
Running worldwide businesses requires effectively recognising, analysing and managing risks and ensuring compliance. We have identified that many organisations having third-party relationships conduct inadequate due diligence that might posses significant risks. In this article, we...Read More
Whatever your reasons or motivations might be, if your organisation's objective is to have an effective risk management strategy in place, then ISO 31000 can provide the principles, framework and a process for managing risk....Read More
The recent update of the BS7858 standard, “Screening of Individuals Working in a Secure Environment – Code of Practice,” places emphasis on the risk assessment of secure environment workers. The code focuses on the need for tighter...Read More
CRI Group is launching a third-party compliance verification and certification program - 3PRM-Certified™ - across the Middle East, Europe and Asian region. This Third-Party Risk Management (TPRM) program can help organisations establish the legal compliance, financial viability,...Read More
SEC’s Office of Compliance Inspections and Examinations Issues COVID-19 Risk Alert Lexology reported that “On August 12, 2020, the SEC’s Office of Compliance Inspections and Examinations (OCIE), issued a risk alert highlighting COVID-19 compliance risks and...Read More
International Chamber of Commerce (ICC) has launched an Anti-corruption Third Party Due Diligence guide for small and medium size entities. SMEs are often on the receiving end of burdensome due diligence procedures of large multi-national companies....Read More
The Current Business Climate Requires a Review and Reassessment of Your Organisation's Third-Party Relationships.We won't soon forget the year 2020 and the myriad ways worldwide business was derailed over a microscopic virus that caused a...Read More
Middle east corruption is a threat to the world. The United Arab Emirates (UAE) is a land of complex extremes where fabulous wealth and supercars live right next to staggering poverty. This is generally a recipe for fraud and...Read More
On 30 January 2017, following a four-month trial, former HBOS employees Scourfield and Mark Dobson involved in HBOS scandal were convicted of fraud and corruption involving a scheme that cost the bank £245m. Scourfield pleaded guilty to...Read More
What does an embezzler spend their money on? In the case of a New York man’s alleged fraud, just about everything, apparently. According to IDentutyUSA identity theft is on the rise during COVID-19 pandemic. Experts predict...Read More
When to conduct third-party screening? The nature of business today is largely shaped by our connected world. Many organisations conduct business across international borders and/or overseas and as part of various strategic and beneficial partnerships. In...Read More
Fraud poses a major threat to the UK and the world. The slow progress in fighting fraud in 2019 was evident to all of us with the never-ending stream of news stories documenting bribery and corruption cases around the...Read More
The Fraud Advisory Panel have set up a COVID-19 fraud watch group. A cross-sector and cross-industry coalition of trusted partners (including the Cabinet Office and City of London Police) who meet weekly to share information...Read More
When you download an app and it asks to access your contacts, location, and other information, it seems harmless enough, right? Surely the app will only use your data for its stated purpose, and only...Read More
Fraud and corruption are always evolving. Changes in methods, technology and other factors make it critically important those trying to prevent and detect it to evolve, as well. Part of that process is to analyse...Read More
A business owner knows that one cannot produce a complete set of products and services to offer to their customers. Still, the need exists for having as many complementary products, or services, besides the main...Read More
Gender-based violence is constantly on the rise - research by the UN Women, “The economic costs of violence against women” suggests that the cost of violence against women is 2% of global GDP, equivalent to US$1.5 trillion - incorporating gender-based violence...Read More
In 2016, responding to the need for a global standard to help organisations prevent and detect bribery and corruption, the International Organization for Standardization (ISO) introduced ISO 37001: Anti-Bribery Management Systems. This certification provides the...Read More
Your company's security begins at the hiring process It's an exciting time for a company when business is growing and there is a need add more employees and start a hiring process. One organisation that was...Read More
CRI Group has been approved by the HRO Today Association as a Certified Provider to the human resources services industry. CRI Group completed a rigorous audit process and “demonstrated a high level of accountability of...Read More
In a time of crisis, we often see the best in people. Even before COVID-19 was officially classified by the World Health Organisation (WHO) as a global pandemic, citizens and government leaders alike were praising...Read More
Are you establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business? It's highly probable that, at some point, organisations that affiliate with outside...Read More
These are challenging and complex times. COVID-19 is forcing organisations to adapt quickly and change their business model in the process. In an era of compliance, with many regulations and regional "interpretations", leaders and organisations...Read More
According to the International Monetary Fund (IMF) public sector corruption siphons $1.5 trillion to $2 trillion annually from the global economy in bribes and costs far more in stunted economic growth, lost tax revenues and...Read More
It's a well-known World Bank statistic, but one that bears continual repeating: More than US$1.5 trillion – or 2% of world gross domestic product – is paid in bribes each and every year, contributing to...Read More
Continuous improvement is another significant concept to understand for ISO 31000. Without a company culture strongly aligned with principles of continuous improvement, organisations will struggle to implement, let alone maintain successful risk management programs. This can be...Read More
Procurement risks: your lack of due diligence can lead harm Procurement is one of the most critical areas of any organisation, large or small. Procurement officers secure the materials and goods that a business needs...Read More
Anti-bribery and anti-corruption efforts are a huge priority in the South Asia Region, with many governments trying to strengthen laws and enhance enforcement in both their private and public sectors. As recent high-profile corruption cases...Read More
In one case, an enforcement agent for a Malaysian government department pleaded guilty for receiving a bribe from a business owner. In another, a U.S. district attorney from Philadelphia was accused of taking cash in...Read More
It's highly probable that, at some point, organisations that affiliate with outside providers will eventually have to deal with an operational interruption resulting from a third-party related issue. The risks involved in partnering with outsiders...Read More
Bribery and corruption are serious concerns to businesses, government agencies and non-profit organisations. In fact, the risk of being associated with the negative impacts of this type of fraud extends to third party partners and...Read More
Economic crime (also known as financial crime) principal catalysts is monetary gain. However economic crime not only has a devasting effect on individuals and communities but when associated with organised crime and terrorist financing it...Read More
GET INDUSTRY NEWS DELIVERED TO YOUR INBOX
Sign up for risk management, compliance, corporate and background investigations, business intelligence and due diligence related news, solutions, events, and publications.