Undefined Audit Standards Create Financial Risk

This provision requires annual human rights due diligence audits but provides no standards for what constitutes adequate compliance, leaving companies unable to predict costs or assess compliance adequacy. The penalty structure—500 penalty units initially, then 100 per day of continued non-compliance—creates escalating financial exposure without clear guidance on how to satisfy the requirement. The Division has broad discretion to determine whether an audit meets the undefined "human rights due diligence" standard, making it impossible for businesses to plan compliance costs or assess their legal exposure. This lack of clarity particularly harms smaller entities that cannot afford extensive legal review or multiple audit iterations.