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The detailed EU Battery Regulation are awaited. What kind of human rights due diligence is required?

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EU Battery Regulation and the Importance of Human Rights Due Diligence

The EU Battery Regulation(also known as the EU Battery Regulation) is a new framework that requires environmental protection and respect for human rights in the Manufacturing and distribution of batteries as part of climate change measures. This regulation promotes sustainable management throughout the supply chain and strongly urges companies to appropriately manage the risk of human rights violations. The introduction of human rights due diligence is not only the basis for companies to comply with regulations, but also the key to improving their competitiveness in the global market.

The businesses affected by the regulations include a wide range of industries, from electric vehicle batteries to portable batteries, which requires companies to improve their risk management capabilities.

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What is human rights due diligence?

In order to identify, prevent and mitigate impacts on human rights, and explain how they are addressed, companies are required to assess adverse impacts on human rights, address the findings, monitor the response, and communicate information on how they are addressed. This series of processes is called "human rights due diligence (human rights DD)." By preventing the negative impacts of corporate activity on workers and local communities and taking necessary corrective measures, the following Issue are addressed:

Elimination of forced labor and child labor
For example, there have been reports of underage workers being exposed to hazardous working conditions at lithium and cobalt mining sites. It is the responsibility of companies to take measures against these issues.
Elimination of discrimination
Companies must provide a work environment free of discrimination on the basis of gender, race, or religion.
Respect for freedom of association and the right to collective bargaining <br>The right of workers to form unions and negotiate fair working conditions must be respected and these rights must not be infringed.

Addressing these Issue is not just about complying with regulations; it also improves a company's brand value. Supply chain transparency provides a competitive advantage, which ultimately leads to increased trust from investors and consumers.

Managing Human Rights Risks under EU Battery Regulation

The human rights risk management mandated by the EU Battery Regulation is not merely a superficial response; it calls for continuous improvement throughout the entire supply chain.

Identifying and assessing risks at the raw materials procurement stage
Critical minerals such as lithium, cobalt, and nickel are often sourced from areas where there are concerns about the risk of labor rights violations and environmental destruction. Companies need to conduct risk assessments across their entire supply chains and strengthen audits of their sources to ensure responsible trading.
Ensuring information disclosure and transparency
Companies must be transparent with consumers and investors about how they address human rights and environmental risks, which may include independent verification by a third party, and require the adoption of supply chain management systems and uniform auditing standards to ensure credibility.

Scope of application to target businesses

The EU Battery Regulation applies to businesses that handle all batteries (portable/EV/ Industry, etc.) distributed within the EU. The size standard (40 million euros) is the exemption line as of August 2025, and will be gradually expanded to all businesses from 2027 onwards. In addition, the regulation applies to all battery Manufacturing processes, including lithium-ion batteries and nickel-cadmium batteries, regardless of Manufacturing scale or product type.
This includes all life cycle stages, from sourcing raw materials to Manufacturing and recycling.

Why Human Rights Due Diligence?

Human rights due diligence (human rights DD) is not just a means of risk management, but is part of a company's sustainable growth strategy. If human rights violations are left unchecked, serious risks such as the following will arise:

Legal risks
This could lead to lawsuits from labor and NGOs. In particular, as legal frameworks such as the EU's CSRD(Corporate Sustainability Reporting Directive) and Germany's Supply Chain Due Diligence Act become stronger, there is a growing risk that legal costs due to lawsuits and penalties will put a strain on corporate management.
Damage to brand image <br />In today's world, where consumers are sensitive to social responsibility, reports of human rights violations deal a direct blow to a company's brand power. Furthermore, with the expansion of ESG investment, companies that do not fulfill their social responsibilities may lose the support of investors. Global companies in particular are required to respond quickly to such risks.
Low employee morale
An inappropriate working environment can severely demotivate employees, leading to talent loss and negatively impacting the overall corporate culture, which can have a long-term impact on an organization's competitiveness and ability to innovate.

Specific approaches

In order for companies to conduct effective human rights due diligence, it is necessary to develop a specific framework.

Formulation of policies regarding human rights protection
Human rights protection must be made a priority throughout the company, with management taking the lead in formulating a policy. Regular training and awareness-raising activity are required to ensure that this policy is thoroughly implemented in all departments.
Strengthening risk assessment and audit systems
We will establish standards for identifying and evaluating human rights risks throughout our supply chain, conduct regular risk assessments and audits, and for high-risk regions and suppliers, conduct special investigations and monitoring and develop improvement plans.
Corrective Actions and Follow-Up
If a human rights violation is discovered, we will take prompt corrective measures, identify the root cause of the problem, and implement measures to prevent recurrence. We will regularly monitor progress toward improvement and take additional action as necessary.
Stakeholder engagement <br />We will build cooperative relationships with all stakeholders, including suppliers, workers, NGOs, and local communities, and advance human rights risk management while obtaining feedback. It is particularly important to put in place a system for reflecting the voices of workers.

summary

The impact of the EU Battery Regulation goes beyond simply complying with regulations; it asks how companies will build sustainable business operations for the future. In particular, efforts to respect the human rights of workers play an important role in gaining the trust of society.

By ensuring environmental and human rights sustainability in battery Manufacturing, companies can continue to grow as responsible global businesses.

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<Source>
Democratic Republic of Congo: “This is what we die for”: Human rights abuses in the Democratic Republic of the Congo power the global trade in cobalt
https://www.amnesty.org/en/documents/afr62/3183/2016/en/

Amnesty International & Transport & Environment
The EU Battery Regulation Due Diligence Rules