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Minimum Safeguards Implementation
Minimum Safeguards Implementation

This article helps you understand what steps you need to undertake to comply with the Minimum Safeguards of the EU Taxonomy.

Rutger avatar
Written by Rutger
Updated over a week ago

How to comply with Minimum Safeguards?

First, alignment with minimum safeguards must occur on the following 4 topics:

  1. Human Rights

  2. Bribery and Corruption

  3. Taxation

  4. Fair Competition

To ensure alignment on each of the four, there must be compliance with both the procedural and outcome element.

Procedural Element

The procedural element examines whether a company has adequate due diligence procedures in place by assessing company reports on its policies, processes and practices on each topic.

1. Human Rights

To determine that the due diligence procedures are adequate, companies are advised to:

  • Examine the existing due diligence process against the OECD Guidelines and UNGPs;

    • For EU companies: CSRD, CSDDD (if not yet applicable: use other data sources such as the World Benchmark Alliance);

    • For non-EU companies: WBA core UNGP indicators;

  • Put in place policies to identify adverse impacts;

  • Take action in respect of identified impacts (including remediation).

Companies are advised not to:

  • Avoid taking into account specific human rights risks inherent to your business model;

  • Operate in jurisdictions with systematic human rights violations but not addressing such risks; and

  • Not address known risks associated with your sector.

2. Bribery and Corruption

  • The company has developed adequate controls for preventing and
    detecting bribery.

3. Taxation

  • The company shall treat tax governance and compliance as
    important elements of oversight;

  • It should have adequate tax risk management strategies;

  • The assessments of tax compliance should extend to looking at tax
    avoidance through aggressive tax planning.

4. Fair Competition

  • The company promotes employee awareness of the importance of
    compliance with competition law;

  • The company provides training to senior management on
    competition issues.

Outcome Element

For the outcome element there must be checks on the outcome by no final conviction in court on relevant cases, no refusal to enter into a dialogue with an OECD NCP and no not-responding to concerns taken by the BHRRC.

1. Human Rights

  • No final court convictions;

  • No adverse findings by National Contact Points (NCP), which is the grievance mechanism built into the OECD Guidelines (until the company implements a due diligence system deeming the repetition of such breaches unlikely as evidenced by an external audit);

  • No lack of engagement with an NCP in relation to a complaint (until the company implements a due diligence system deeming the repetition of such breaches unlikely as evidenced by an external audit);

  • No lack of engagement with the Business and Human Rights Resource Centre (BHRC) on any allegations it seeks to raise with the company (if there is no response to BHRC for three months there is no alignment with minimum safeguards for two years).

2. Bribery and Corruption

  • No final court convictions

3. Taxation

  • No final court convictions

4. Fair Competition

  • No final court convictions

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