Evaluating Corporate Accountability for Human Rights Violations: The (Uncertain) Efficacy of Administrative Sanctions under the EU Sustainability Due Diligence Directive

Human rights due diligence (HRDD) regimes have been criticized for suffering from an accountability gap caused by the lack of effective enforcement mechanisms. In this respect, the upcoming EU Directive on Corporate Sustainability Due Diligence can be argued to be a fundamental step forward, as an infringement under the proposed Directive may result in substantial administrative fines. This article critically analyses the effectiveness of administrative corporate sanctions in the context of HRDD violations and suggests that morally light administrative sanctioning is not, as such, an appropriate mechanism in motivating impactful HRDD. Drawing on existing behavioural evidence on intrinsic and extrinsic motivational factors, the article argues that any HRDD regime should rely, with the most severe breaches, on a corporate sanction system addressing the morality of the intended corporate behaviour in order to signal the societal significance of corporate human rights obligations and to support related value internalization in corporations. In terms of regulatory design, this means applying a liability system, whether criminal or adminisrative, which takes a clear stance towards corporate culpability, blame and the moral condemnation of severe HRDD violations.