- Council position agreed on the Corporate Sustainability Due diligence directive but watered down in vote by EU Member States, leaving important sectors like the arms trade and financial institutions not effectively covered
- Catholic agencies criticise EU Member States as “not up to the task” of creating rules which will prevent human rights harms and environmental damage
Yesterday European industry ministers met in Brussels to adopt a Council general approach on the Commission’s Corporate Sustainability Due Diligence proposal. The new law is meant to prevent and redress the harms cause by corporate activities to human rights and the planet.
This vote marks the end of a first diplomatic discussion marked by twists and turns, resulting in a puzzle of half-measures and loopholes. CIDSE and its members welcome progress in the legislative process, but are worried by changes Member States introduced in their amendments to the Commission’s proposal.
“The Council position is written with the needs of business in mind” said Giuseppe Cioffo, Corporate Regulation Officer at CIDSE. “Member States have adopted loopholes to wipe away a company’s responsibility for the human rights and environmental harm they or their subsidiaries contributed to, and for the harms caused by their products. The introduction of vague legal concepts like “chain of activities” will further muddy the waters in already complex value chains”
The compromise will now become the Council’s position during the coming negotiations with the Commission and the EU Parliament.
“The text adopted today by the Council is clearly not up to the challenges and realities faced by communities and workers in the context of the climate crisis. The lack of liability for environmental harm and of climate due diligence show Member States need to step up their game and focus on the urgent issues: justice for those affected and our burning planet” according to Garry Walsh, Policy and Advocacy Advisor at Trócaire.
Important sectors, including the arms trade, will escape inclusion in the directive’s obligations. Considering the huge impact on human rights this sector has, resulting in massive violations and even international war crimes, this exclusion is very problematic. Importantly, it will be up to Member States to decide whether to apply the new rules to the financial sector.
“The freedom conferred to Member States to exclude the financial sector is really problematic. France’s position in recent weeks has succeeded in considerably undermining the text to exclude those who are financing human rights abuse, pollution and the destruction of crucial ecosystems” Clara Alibert, Advocacy Officer at CCFD-Terre Solidaire.
“The Council struck a serious blow to the proposal, it is now up to the Parliament to raise ambitions in view of the trialogue. The coming months will be crucial to ensure that MEPs in different parliamentary committees stand up for human rights over profit” said Wies Willems, from Belgian NGO Broederlijk Delen.
During the coming months, CIDSE and its members will continue to work across the aisle to strengthen the text, a unique opportunity to change the rules of the game in the field of business and human rights.
“Together with those affected, we will continue to work for a law that effectively prevents corporate abuse and offers credible avenues for remedy. European legislators should focus more on justice and the protection of human rights and the planet, and less on protecting businesses” said Herbert Wasserbauer, from DKA, Austria.
The position of the European Parliament on the directive is far from determined, and will be another crucial element in shaping the upcoming trialogue in the Spring of 2023.
Credit Cover Photo : Daniel Beilinson.
Media contacts :
Valentina Pavarotti, Communications Manager at CIDSE (pavarotti(at)cidse.org)
Giuseppe Cioffo, Corporate Regulation and Extractives Officer at CIDSE (cioffo(at)cidse.org)