On Friday, EU member states voted in favour of a milestone new law mandating companies to review supply chains for dodgy environmental and labour practices. MEPs and government officials hit a tentative agreement on the corporate sustainability due diligence directive, or CSDDD, in December – but its fate was thrown into doubt after last-minute uncertainty from Germany and Italy.
Now the actions seem likely to pass into law after Italy agreed with a stripped-down version of the legislation at a standard meeting of diplomats in Brussels. Environmental and social activists such as Oxfam and Amnesty International state the rules will stop companies from making profits from human suffering.
The European Commission has also stated it will avoid businesses having to navigate multiple, potentially conflicting, national authorities within the bloc’s single market. Belgium, which chairs the EU Council that symbolises member states, has performed over recent weeks to satisfy national concerns over excessive red tape, tripling a verge so the rules would only involve to companies with over €450 million worldwide turnover in its most recent endeavour to overcome an impasse.
The latest draft released civil liability provisions that would permit trade unions to sue noncompliant firms, a contentious measure which countries such as Finland resisted.
The regulations still need to be voted on by MEPs, and April is the last opportunity for them to do so ahead of the June elections.
The Council approval is a “victory in the struggle to hold companies accountable for people and the environment,” parliament negotiator Lara Wolters (Netherlands, Socialists and Democrats) stated in a statement. “It is high time to make a big effort towards a fairer economy of the future.”
Anaïs Berthier, Head of ClientEarth’s Brussels office, stated: “After years of fierce negotiations and despite multiple tries to gut the law, Member States have finally approved the CSDDD. But this vote has come at a high price – last-minute horse-trading suggests the law will now only cover a small number of divisions, falling short of its initial purpose to tackle the full breadth of companies’ environmental footprint.
“The CSDDD can set a global precedent by changing voluntary international business and rights standards into crucial rules that foster fair competition and level the playing area for large companies across the EU. But corporate mobilisation and political games have killed this chance to revolutionise how we do business in the EU and beyond by excluding most characters from its scope.
“This rollback by the Council at the eleventh hour is particularly concerning as it flies in the face of the EU’s history of policymaking and goes against the democratic determination-making process of EU laws. This rudeness of the rule of law is an alarming trend that we are witnessing across several environmental regulations still being approved.
“It’s a worrying indication of things to come in the run-up to the EU elections. We must now create the most out of what we’ve got and concentrate on implementing and building on what has been approved. To do that, the European Parliament must swiftly vote to defend the law that they had backed in December so that the CSDDD can be approved and we can start spinning words into action. There’s no time to waste.”
