Sharing Responsibility for Sustainable Supply Chains under the European Union Deforestation-free Regulation

The European Union Deforestation-free Regulation imposes on importers and traders exacting requirements to ensure that relevant commodities and products are deforestation-free and comply with local human rights legislation before they are made available in the EU market. These requirements are expected to create an onerous burden on small intermediate suppliers and producers, particularly if relatively well-resourced buyers and other downstream suppliers unfairly exploit their stronger bargaining position to shift responsibility and liability for compliance upstream. Such an approach is potentially counterproductive and may give rise to greenwashing risk. It may also run counter to emerging legislative requirements on supply chain due diligence, such as those found in the draft EU draft Corporate Sustainability Due Diligence Directive. This article proposes that buyers should therefore consider adopting a shared responsibility approach to sustainable supply chain contracting, drawing reference from the American Bar Association’s Model Contract Clauses to Protect Workers in International Supply Chains, Version 2.0