EU’s Flawed Reliance on Audits, Certifications for Raw Materials Rules

May 24, 2023 | Human Rights Watch
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The European Union’s effort to secure a sustainable and secure supply of minerals, including through the draft Critical Raw Materials Act, is increasingly relying on flawed voluntary audit and certification initiatives. Audits are an inherently unreliable indicator of whether a company truly respects human rights and the environment, and at best should be seen as one source of information about a company’s practices. Audits are typically conducted in just a few days, so they only provide a snapshot of performance over the period the audit covers, creating a risk that serious human rights and environmental abuses are overlooked.

Audits should only be one tool that companies and regulators use to assess a mine or other facility. They are not a replacement for a broader assessment of human rights and environmental performance. Human Rights Watch and other organizations have documented the limitations of third-party audits, including problems maintaining independence when auditors are paid by the company being audited; conflicts of interest in audit firms that also solicit work from the firms they are auditing; and a lack of human rights expertise among auditors.

The CRMA should not grant “recognition” to certification schemes and should not enable a Strategic Project to “attest compliance” with sustainability requirements through certification. Instead, the act should equip the European Commission with the necessary mandate and resources to conduct its own independent analysis of whether a potential Strategic Project meets the sustainability and human rights standards set out in the law.