Fairtrade has published a new position paper on mandatory Human Rights and Environmental Due Diligence (HREDD) calling on policymakers to ensure that emerging regulations deliver meaningful benefits for farmers, workers, and the environment across global supply chains. 

As more governments around the world introduce due diligence legislation, Fairtrade welcomes efforts to hold businesses accountable for human rights and environmental impacts. However, poorly designed rules could unintentionally increase pressure on the very people they aim to protect. 

“If laws impose demands on smallholder farmers without providing the financial and technical means to invest in implementation, these laws may exacerbate poverty and increase human rights and environmental harms,” Fairtrade states in its position paper.  

The new position paper builds on Fairtrade’s 2020 vision for mandatory human rights due diligence, and expands Fairtrade’s recommendations on shared responsibility, climate change and environmental protection, farmers data rights, fair purchasing practices, and use of voluntary sustainability schemes. Recommendations on living incomes and living wages, rightsholder engagement, and responsible disengagement were also strengthened. 

The paper highlights seven priority areas that should be reflected in due diligence legislation and accompanying measures:  

1. Living incomes and living wages  

Fairtrade asserts that HREDD regulation must recognise living incomes and living wages as fundamental human rights. 

Millions of farmers and workers still earn too little to support a decent standard of living. Companies should identify the real costs of sustainable production, including living incomes, living wages, regulatory compliance requirements, and ensure that prices paid throughout supply chains cover those costs. 

2. Environmental impacts and climate change 

Fairtrade stresses that climate change, environmental protection, and human rights cannot be addressed in isolation. 

Farmers are among those most impacted by the growing climate crisis. Biodiversity loss, and environmental degradation not only threaten livelihoods but also the future of agricultural production. 

To address this, HREDD regulations need to mandate companies to align their business models with international climate agreements and co-invest in climate adaptation, environmental protection, and remediation across their supply chains.  

3. Meaningful rightsholder engagement 

Fairtrade sees that farmers, workers, and other rightsholders must be meaningfully involved throughout the company’s due diligence process, from identifying risks to designing solutions, determining remediation measures, and decisions to suspend or disengage from business relationships. 

Special attention should be given to groups that face greater risks of marginalisation, including women, indigenous people, migrant workers, and persons with disabilities. The paper calls for two-way dialogue between companies and rightsholders so that both parties share equal influence over the goals, agenda, and engagement process.  

4. Responsible disengagement  

Sustainability regulations are pushing some companies to disengage from suppliers or sourcing regions considered high risk.         

Instead, due diligence laws should encourage businesses to focus on preventing, mitigating, and remediating harms. Fairtrade advocates a mandatory “improvement-before exit” approach requiring companies to work with their suppliers to resolve problems and only end business relationships if those efforts are unsuccessful.   

Long-term partnerships, technical support, capacity building, and shared investment are critical to tackling the root causes of human rights and environmental risks in supply chains. 

5. Farmers’ data rights 

The position paper highlights the need for fair purchasing practices and stronger protections for farmers’ data rights. 

As sustainability regulations increase demands for supply chain information, farmers need greater understanding and control over how their data is collected, shared, and used. At the same time, smallholder farmers must not lose market access due to administrative or digital reasons, such as the inability to share data. 

6. Fair purchasing practices and contracting 

Fairtrade calls for regulation, implementation guidance, and accompanying measures that require companies to assess, identify, and change purchasing practices and contract terms that contribute to human rights or environmental risks in their supply chains. 

Furthermore, a clear definition and benchmark for responsible purchasing practices must be established.  This needs to include paying prices that cover the costs of sustainable production, including living incomes, living wages, and ongoing due diligence. 

7. The use of voluntary sustainability standards as supporting tools 

Finally, Fairtrade highlights the role that credible voluntary sustainability standards can play in supporting due diligence efforts. While certification alone cannot replace a company’s own responsibilities, robust schemes such as Fairtrade can help businesses identify, prevent, and address risks more effectively. 

As HREDD legislation continues to develop globally, Fairtrade is calling for farmers’ and workers’ voices to remain at the centre of policy discussions. By combining strong legal requirements with practical support measures, governments have an opportunity to create due diligence systems that deliver lasting benefits for people, businesses and the planet. 

To read the full Fairtrade position paper on HREDD click here.