The European Model Clauses (EMCs)
The European Model Clauses (EMCs) are a set of contractual tools under development that aim to assist companies in aligning with the EU Corporate Sustainability Due Diligence Directive (CSDDD) and other international human rights and environmental due diligence (HREDD) standards, such as the United Nations Guiding Principles on Business and Human Rights (UNGPs), the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, and the OECD Due Diligence Guidance for Responsible Business Conduct.
Designed to promote shared responsibility for human rights and environmental due diligence (HREDD) and effective collaboration between contracting parties, the EMCs aim to improve the use of contracts as tools for preventing and addressing human rights and environmental impacts in global supply chains.
The EMCs are the product of the European Working Group (EWG), composed primarily of European legal experts from practice and academia. The first version, EMCs 1.0, is expected to be published in Fall 2025, following an extensive consultation process involving diverse stakeholders worldwide.
Consultations and Timeline
A preliminary version of the EMCs was first released for consultation in October 2023, and the "Zero Draft" was workshopped in late 2024 and early 2025 through an inclusive consultation process coordinated by RCP with the financial support of the Initiative for Global Solidarity (IGS), which is implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development. The feedback received is currently being integrated anonymously into the final set of clauses.
The EU CSDDD and Contracts
The EMCs aim to serve as a key reference for the European Commission as it prepares the guidance on model contractual clauses contemplated under Article 18 of the CSDDD. The guidance and the EMCs are distinct instruments that are being developed independently, but the European Working Group is cooperating with the Commission to ensure that the instruments are in alignment.
Article 18 of the CSDDD contemplates that the EU Commission will, within 30 months of the Directive’s entry into force, develop guidance on voluntary model contractual clauses that companies can use to meet the new requirements. While the EMCs were not developed at the EU Commission's request, the Working Group hopes that they will serve as a helpful resource for the Commission as it develops its guidance.
The EMCs include clauses that can support companies’ HREDD processes, including on cooperation, stakeholder engagement, information sharing, responsible purchasing practices, internal grievance mechanisms, human rights remediation, and the “exit as a last resort” principle reflected in the UNGPs, the OECD guidance, and the new mHREDD laws.
The EMCs seek to improve the effectiveness of contracts as tools for HREDD by moving away from a risk-shifting, one-sided, perfect compliance model of contracting toward a shared-responsibility model where the parties cooperate, on an on-going basis, to prevent and, when needed, remedy adverse human rights and environmental (HRE) impacts.
In this way, the EMCs track the new mHREDD laws, which identify contracts as important preventive and corrective measures that must be appropriate and effective for addressing adverse HRE impacts. The CSDDD specifies that contracts should not be used simply to transfer due diligence obligations to business partners, such as suppliers.*
More information
✔ For more information on the EMCs, you may refer to this video and accompanying slides.
✔ For analysis of the content of mandatory due diligence laws with respect to contracts, see the RCP Policy Brief: What the EU CSDDD Says About Contracts (July 2024) and Complying with Mandatory Human Rights Due Diligence Legislation through Shared-Responsibility Contracting: The Example of Germany’s Supply Chain Act (LkSG), (2023) (2023) (Ch. 14 in ABA Book available here).
* Article 18 on Model Contractual Clauses and the accompanying Recital 66 contemplate clarify that the forthcoming European Commission guidance on contracts "should aim to facilitate a clear allocation of tasks between contracting parties and ongoing cooperation, in a way that avoids the transfer of the obligations provided for in this Directive to a business partner and automatically rendering the contract void in case of a breach. The guidance should reflect the principle that the mere use of contractual assurances cannot, on its own, satisfy the due diligence standards provided for in this Directive.".
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To date, over 50 organizations and individuals have contributed feedback to the EMCs.
The EMCs seek to improve the effectiveness of contracts as tools for preventing and addressing adverse HRE impacts**, as required by the new mHREDD laws. As traditionally used, contracts tend to undermine the effectiveness of companies’ HREDD processes by transferring both the contractual and the financial responsibility for upholding HRE standards to other actors in the supply chain, namely their suppliers (e.g. manufacturers).
Traditional, one-sided contracts that place the entire responsibility for upholding HRE standards on suppliers and allow the buyer to exit the contract immediately in the event of--even small--deviations from the supplier code of conduct, are ineffective for avoiding adverse HRE impacts. By extension, traditional contracts are not fit for purpose when it comes to carrying out effective HREDD, as required by the new laws**.
The EMCs move away from the traditional, one-sided model of contracting towards a model of shared-responsibility contracting where both parties to the contract, the buyer (e.g. brands and retailers) and the supplier, contractually commit to carry out on-going and risk-based HREDD in cooperation with one another.
For a brief intro to the EMCs from several members of the European Working Group, including Martijn Scheltema, Co-Chair of the Working Group, Beata Faracik, Co-Founder, Polish Institute for Human Rights, and RCP Director, Sarah Dadush, check out this video and accompanying slides.
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** For analysis of the content of mandatory due diligence laws with respect to contracts, see the RCP Policy Brief: What the EU CSDDD Says About Contracts (July 2024) and Sarah Dadush, Daniel Schönfelder & Bettina Braun, Complying with Mandatory Human Rights Due Diligence Legislation through Shared-Responsibility Contracting: The Example of Germany’s Supply Chain Act (LkSG), Chapter 14, Contracts for Responsible and Sustainable Supply Chains: Model Contract Clauses, Legal Analysis, and Practical Perspectives, (Susan Maslow & David Snyder eds., ABA Business Law Section, 2023) (Book available here).
***Article 18 on Model Contractual Clauses and the accompanying Recital 66 contemplate the development of guidance on contracting by the European Commission and clarify that this guidance "should aim to facilitate a clear allocation of tasks between contracting parties and ongoing cooperation, in a way that avoids the transfer of the obligations provided for in this Directive to a business partner and automatically rendering the contract void in case of a breach. The guidance should reflect the principle that the mere use of contractual assurances cannot, on its own, satisfy the due diligence standards provided for in this Directive.".
The EMCs reflect the 3 "Rs" of responsible contracting:
1. Responsible allocation of risks and responsibilities: Set aside supplier-only guaranties of perfect compliance in favor of a joint commitment to cooperate in carrying out human rights and environmental due diligence (HREDD)
2. Responsible purchasing practices: Commit the buyer to engage in purchasing practices that can support effective HREDD
3. Remediation first and responsible exit: If an adverse impact happens, provide remedy to victims and take measures to ensure the harm stops and does not reoccur before turning to traditional contract remedies (e.g., suspending payment and canceling orders). Exit should only be pursued as a last resort, taking measures to mitigate the impact.
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