ESG Due Diligence Requirements - Corporate Criminal Responsibility And Litigation

European ex-territorial legislation like the EU Corporate Sustainability Due Diligence Directive (CSDDD), various national supply chain legislation, i.e. German Supply Chain Act on Human Rights and Environmental Due Diligence (HREDD) mandate due diligence requirements to be cascaded to national i.e. Serbian companies. They impose HREDD obligations on companies with the aim of improving the minimum standards in international supply chains. However, the actual implementation of those obligations involve significant difficulties.

In principle, those due diligence obligations of so called "companies in scope" cannot be passed on to suppliers in third countries, such as Serbia. This also applies, for example, to the obligations to report to the regulators and other more general disclosures to the public. Similarly, suppliers in Serbia cannot face search and inspection measures or penalties.