Alongside the 2023 OECD Forum on Due Diligence in the Garment and Footwear Sector, the MSI Working Group on Responsible Purchasing Practices and Sustainable Terms of Trade Initiative (STTI) organised a side session titled Responsible Purchasing Practices: How can companies integrate responsible purchasing practices in their businesses? The session shared learnings from the Common Framework for Responsible Purchasing Practices (CFRPP), the STTI White Paper and a community-based approach. The panel discussion focused on how brands can revise their purchasing practices and the importance of the supplier voice in making these changes. The session demonstrates how to overcome the barriers that brands are facing and highlights good practices in tackling these barriers based on our learnings within the Learning and Implementation Community (LIC).

In this session we are putting the spotlight on the tools that we have at our disposal now and in the future to make commercial compliance measurable at an industry level. This discussion encompasses therefore the definition of commercial compliance and its components as introduced by STTI, the infrastructure and collaboration needed in the industry to create a globally aligned and effective approach to measurement and, finally, how we can collaborate across the industry to share data and discuss the actions we need to take to drive progress. The session will also explore key learnings from the measurements that are already being carried out. To this end, the Better Buying Institute and STTI will share findings of their data collection. Based on the data they will share what purchasing practice improvements suppliers want brands to prioritize. They will explain how data can show real purchasing practice progress in the form of true partnerships. And they will put the collection of data on commercial compliance/purchasing practices in a legislative context, making the link with mandatory due diligence.

It is widely known that contracts are frequently used tools for carrying out human rights and environmental due diligence (HREDD). Frequency of use is not tantamount to effective use, however, and the two should not be confused. The new HREDD laws coming from Europe have raised concern precisely because they appear to rely on contracts as proxies for—not merely components of—HREDD. Otherwise put, the concern is that the new laws will establish a contract-based due diligence regime oriented toward compliance (“tick-box”), rather than an HREDD regime that is supported by due diligence-aligned contracts and oriented toward achieving better HRE outcomes in global supply chains.

This side-session will invite legal and business and human rights experts to address the following questions: How are contracts typically used in HREDD? Does contracting-as-usual support effective HREDD — why / why not? What do the new laws say about contracts and the role they should play in HREDD? Specifically, what do the new laws say about contracts and HREDD-related liability? Against this backdrop, what would you advise in-scope companies to include in their contracts to meet the new legal requirements? Article 12 of the EU’s proposed Corporate Sustainability Due Diligence Directive indicates that the European Commission will develop guidance on model contractual clauses that companies can use to inform their own contracting practices. What are some key principles of due diligence-aligned contracting that you would like to see reflected in this guidance? More generally, what improvements are needed for contracts to better support HREDD regimes that effectively prevent and remedy adverse impacts?

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Buyer-supplier collaboration on due diligence implementation based on distribution of costs and responsibilities along the supply chain can help support the development of effective due diligence processes and a more equal distribution of the burden of compliance. Within the context of increasing due diligence legislation, and the risk of unduly cascading RBC expectations to upstream parts of the supply chain, the panel will reflect on the benefits and limitations of buyer-supplier collaboration models and highlight current industry examples of successful approaches to shared implementation of due diligence.