BELGIUM Law and Practice Contributed by: Chris Engels and Julie Devos, Claeys & Engels
rights within their own operations and spheres of influence. The Belgian government has made efforts to ensure that the NAP is not merely a policy doc - ument but also a practical guide to improving corporate responsibility. 2.2.2 Corporate Human Rights Due Diligence Legislation Belgium has taken steps toward imposing legal obligations on corporations to conduct human rights-related due diligence, although the frame - work is still evolving, particularly in light of recent EU directives that must be transposed into national law. The EU Corporate Sustainability Due Diligence Directive (CSDDD) entered into force on 25 July 2024. This directive introduces a duty for com - panies to carry out appropriate human rights and environmental due diligence on their own opera - tions, those of their subsidiaries, and those of their business partners across the value chain. The CSDDD covers a narrower scope than the Corporate Sustainability Reporting Directive (CSRD), which addresses the broader ESG (Envi - ronmental, Social, and Governance) pillars. Due diligence under the CSDDD focuses on a core set of potential human rights violations rather than the full range of social issues addressed by the CSRD. The CSDDD applies to the following categories of companies: • EU companies with more than 1,000 employ - ees and net worldwide turnover exceeding EUR450 million; • EU parent companies of a group meeting the same thresholds;
• franchise or licensing networks in the EU with a net worldwide turnover exceeding EUR80 million, of which at least EUR22.5 million is generated through royalties; and • non-EU companies that meet the same turno - ver thresholds within the EU. The directive establishes a due diligence process aligned with the OECD Guidelines for Multina - tional Enterprises, requiring companies to iden - tify, prevent, mitigate, and account for adverse human rights and environmental impacts. Com - panies must implement a risk-based system to monitor and address these risks throughout their chain of activities. If a company fails to comply, it may be held civilly liable for damages caused by its own actions or omissions, provided the failure was intentional or negligent. Affected individuals or entities have the right to seek full compensation. However, a company is not liable if the harm was caused solely by its business partners, who remain liable under applicable national law. Under certain conditions, a parent company may fulfil the due diligence obligations on behalf of its subsidiaries, provided this ensures effective compliance. However, the subsidiaries remain independently liable under the directive. In addition to civil liability, companies may face administrative sanctions, including financial penalties, for non-compliance. Member states are required to establish proportionate, dissua - sive, and effective penalties. The CSDDD must be transposed into Belgian law by 26 July 2026, with a phased implementa - tion based on company size:
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