Due diligence duty explained

The due diligence duty is a duty to run a documented system for identifying, preventing, and addressing social and environmental risks in the supply chain for cobalt, lithium, nickel, and natural graphite, and it is not a duty to publish a single statement. Chapter VII of Regulation (EU) 2023/1542 places the duty on economic operators who place batteries on the market, subject to the scope limits in Article 47 and the application date as amended. The record for the duty must show a policy, a management system, risk assessment and mitigation, independent verification, and reporting. A file that holds only a policy text does not meet that test.

Due diligence, in this record, means the ongoing process of identifying actual and potential adverse impacts, preventing and mitigating them, tracking the response, and communicating the result. The scope covers the raw materials named in Chapter VII and the upstream chain that supplies them, including extraction, processing, and trading stages that the operator can trace.

What is the legal frame for this record?

The due diligence duty for cobalt, lithium, nickel, and natural graphite sits inside that sequence, so a record that shows only one step leaves the chain of reasoning incomplete. A battery manufacturer placing packs on the EU market therefore needs a file that shows the policy, the owner of the policy, the date of adoption, and the review cycle. A manufacturer with cell production in one country and cathode precursor supply from a second country must show how risk was assessed at each stage, not only at the direct supplier.

How is the chain mapped?

The map should name each tier that handles the due diligence duty for cobalt, lithium, nickel, and natural graphite, record the function of each actor, and note where material changes form, such as refining, precursor production, cathode production, cell production, and pack assembly. The due diligence policy, the management system record, and the verification report should be tied to a named tier, a named site where that information is known, and a date. A battery manufacturer placing packs on the EU market should record gaps on the map itself, with the reason for each gap and the next step planned. The application date and the turnover scope limit in Article 47 must be checked in the current consolidated text, because amendment work has proposed changes to both points and a record built on an outdated date will misstate the duty.

How is evidence judged?

A supplier statement, a contract clause, a third party audit summary, a mass balance record, and a chain of custody document do not carry equal weight, and the record should say which type supports each claim about the due diligence duty for cobalt, lithium, nickel, and natural graphite. The due diligence policy, the management system record, and the verification report needs a source name, a collection date, a coverage period, and a statement of what was actually checked. A battery manufacturer placing packs on the EU market should separate facts received from conclusions drawn, so a later reviewer can test the conclusion. A manufacturer with cell production in one country and cathode precursor supply from a second country must show how risk was assessed at each stage, not only at the direct supplier.

How is risk identified and assessed?

A red flag can be a place of origin, a processing route, a supplier practice, a change of ownership, or a gap in records for the due diligence duty for cobalt, lithium, nickel, and natural graphite. The application date and the turnover scope limit in Article 47 must be checked in the current consolidated text, because amendment work has proposed changes to both points and a record built on an outdated date will misstate the duty. A battery manufacturer placing packs on the EU market should date each assessment and name the person or function responsible for the next review.

How is mitigation planned and followed up?

For the due diligence duty for cobalt, lithium, nickel, and natural graphite, the plan should state the risk addressed, the action chosen, the supplier or site involved, the support offered, and the evidence that will show whether the action worked. The due diligence policy, the management system record, and the verification report collected after the action should be compared with the position before the action, using the same measure where possible. A manufacturer with cell production in one country and cathode precursor supply from a second country must show how risk was assessed at each stage, not only at the direct supplier.

How is reporting checked?

The due diligence report should summarise the policy, the management system, the risks found, the actions taken, and the verification arranged for the due diligence duty for cobalt, lithium, nickel, and natural graphite, without disclosing confidential commercial detail that the Regulation does not require to be published. A battery manufacturer placing packs on the EU market should check that every public claim can be traced to an internal record, and that the report date, coverage period, and scope match the internal file. The application date and the turnover scope limit in Article 47 must be checked in the current consolidated text, because amendment work has proposed changes to both points and a record built on an outdated date will misstate the duty.

What does a complete due diligence file look like on one page?

A complete file opens with the policy and its adoption date, followed by a one line scope statement naming cobalt, lithium, nickel, and natural graphite and the battery models covered. The next lines name the policy owner, the management system, and the traceability method, then summarise the risks found in the period, the mitigation actions, and the verification scope. The final lines give the report date and the coverage period. A worked check helps: take one cobalt quantity, follow it from the policy to the refiner record, to the risk entry, to the mitigation action, and to the report sentence that describes it. If any link in that chain is missing, the file is incomplete for that quantity, even when the policy text itself is well written.

The duty remains open until each element can be traced from policy to report, and a missing verification or an undated policy keeps the file incomplete.