Perhaps the most striking aspect of the Act and the Directive is that, as part of the due diligence obligation, they have introduced the obligation to establish a complaint mechanism and to set out its procedure.
What the complaint procedure must make possible
The complaint procedure must make it possible to report human rights and environmental risks — as well as breaches of human rights and environmental obligations — that arise through a company’s economic activity in its own area of operations or at a direct or indirect supplier (Section 9(1)). The person filing the report must be informed that it has been received. The persons designated by the company to carry out the procedure must discuss the matter at hand with the person filing the report.
A consent-based settlement process may also be offered.
Joining an external complaint procedure: the criteria
Instead of setting up an internal complaint centre, companies may also participate in an external complaint procedure, provided that it meets the following criteria.
- For the complaint mechanism, the company must establish procedural rules that everyone can access.
- The impartiality of the persons assigned by the company to carry out the procedure must be guaranteed; in particular, these persons must be independent and must not be bound by the company’s instructions.
- These persons must be subject to confidentiality obligations.
- The company must make publicly available, in an appropriate manner, the clear and comprehensible information it has prepared regarding the accessibility, jurisdiction, and conduct of the complaint procedure.
- The complaint procedure must be accessible to potential participants, the confidentiality of identity must be protected, and it must provide effective protection against any discrimination or penalty that may arise as a result of a complaint.
Who may file a complaint?
The Directive expressly regulates who may file a complaint (Article 14(2)). Accordingly, it is clear that trade unions and pressure groups will play a significant role. As set out in the Directive, the following persons and organisations may exercise the right to file a complaint:
- Persons who have suffered, or are deemed likely to suffer, an adverse impact;
- Trade unions and other workers’ representatives representing the workers employed at the companies in the relevant value chain;
- Civil society organisations active and experienced in related areas, where the subject matter of the complaint is an adverse environmental impact (Article 14(2)(c)); human rights organisations may act as the legitimate representatives of affected persons on their behalf (Article 14(2)(a)).
Making it work in practice: accessibility, trust and records
Three things decide whether a complaint mechanism actually works: accessibility, trust and the record kept of it. It has to be offered in the language of the workers in the supply chain and through channels they can actually reach — a telephone line, an online form, a local contact point; there has to be an explicit undertaking that no one who reports will face retaliation; and every report has to be recorded together with the acknowledgement of receipt, the investigation steps and the outcome. A mechanism that receives no reports at all does not count as working: awareness has to be measured and the announcement made again.
Your own mechanism, or an external procedure?
For companies that would rather not build a mechanism in-house, joining an external procedure is a practical option, particularly for mid-sized suppliers — though the impartiality and confidentiality conditions set out above apply there too. In setting it up and drafting the procedural rules, the framework of our grievance mechanism and whistleblowing service can serve as a guide. Once the Directive is transposed into national law — transposition by 26 July 2028, application from 26 July 2029 — the scope should be widened to take account of the right of trade unions, and of civil society organisations in complaints about environmental impact, to bring a complaint.
