Oxfam logoEUROPEAN Union countries rubber-stamped a deal on the EU’s new supply chain rules on 15 March. This law – the Corporate Due Diligence Directive (CSDDD) – aims to make companies accountable for the damage they cause to people and the planet.

In response, Oxfam EU’s Economic Justice lead, Marc-Olivier Herman, said: “The good news is that Business Europe and their allies failed to scupper a landmark legislation. The bad news is that EU countries did it again: they slashed the rules to appease big business, dealing a blow to Europe’s self-claimed standing as a champion of democracy and human rights.

“As we speak, irresponsible companies are burning the planet’s future and profiting from human rights violations. Yet, EU countries chose to delay the entry of the rules into force for most companies until the end of the decade. What’s more, they have added thousands more businesses to the already long list of those escaping responsibility.

“As dire as it is, we cannot miss this opportunity to halt corporate abuse. All eyes turn now to EU parliamentarians. They cannot hold this law hostage and they must pass it as soon as possible. Delaying it more just invites more sabotage.”

Oxfam says proposals agreed in December have been weakened in various ways, including:

  • A drastic reduction of the number of companies that will have to comply. Only companies with over 1,000 employees and 450 million euros annual turnover will be covered, compared to the previously agreed 500 employees and 150 million euros. This means that less than 5,500 European companies will have to follow the law, down from an estimated 17,000 as per the December agreement.
  • If the law enters into force by the end of 2024, most companies (over 1,000 employees and 450 million euros turnover) will only have to comply with the rules starting in 2029.
  • Companies have fewer obligations to check on their impact on human rights and the planet as they do not need to monitor the impact of their downstream business (clients) in relation to the disposal of their products, including dismantling, recycling, composting and landfilling.
  • Companies no longer need to encourage their directors to follow through on climate transition plans with financial rewards.
  • Governments can limit the role of trade unions and NGOs in supporting survivors of corporate abuse to seek justice.

The European Parliament’s Legal Affairs Committee should vote to ratify the deal in the coming weeks. The full parliament should give its final approval through a plenary vote in April. EU countries will officially approve the legislation later this year. They will need to translate it into national law and implement it before it can be enforced.

* Source: Oxfam International