Lessons from the failures of voluntary due diligence: Continuing the case for stronger mandatory frameworks

The imminent passing of the Omnibus Directive prompts a sense of urgency to revisit the past failures of voluntary due diligence, with the end of determining the current added-value of more obligatory rules. As such, this research collates existing studies, presents an original mapping of NCP cases, and analyzes the behavior of courts, to buttress the failures of voluntary initiatives. It then evaluates research on the potential positive outcomes of mandatory due diligence, and concomitantly, analyzes pertinent CSDDD provisions and the revisions the Omnibus attempts to make to it. This research finds that despite the positive contributions of voluntary initiatives, it has, inter alia, insufficient (compulsory) mechanisms to induce corporations towards changing their behavior, predominantly with respect to its effects in the Global South where the optimal approach to regulation is still unknown. It likewise finds that the Omnibus, while promising to streamline the CSDDD, conversely works to water down its utility. It concludes by stating that the imposition of mandatory frameworks, particularly via pivotal mechanisms of the CSDDD such as its definition of “chain of activities” and civil liability provisions, could (albeit imperfectly), address the numerous and persistent issues faced by voluntary standards under the status quo.