Lawmakers’ last chance to approve EU-wide due diligence rules

           The Corporate Sustainability Due Diligence Directive (CSDDD) saga rumbles on and on, while the time for its adoption ticks down. The most recent attempt to get approval from the Council on 28 February, the Belgian presidency saw a further delay with voting postponed as the latest indications from Member States Permanent Representations showed increased scepticism as regard certain provisions in the text. Apart from Germany – who made an early call for revisions – Italy, France, Finland, Bulgaria, Slovakia, Hungary, Luxembourg, Estonia, Lithuania, Czechia, Malta and Austria joined the abstainers, while Sweden announced it would vote against.  The main concerns relate to Article 15 on transition plans for climate change mitigation and Article 22 on civil liability. 

          Countries like Germany, France, the Netherlands, Finland, Belgium, Austria, Sweden, and Luxembourg already have in place – or are about to implement – their own due diligence laws. Differences between these would require them to be amended to conform with the CSDDD, only adding to the opposition. The German Act on Corporate Due Diligence Obligation in Supply Chains does not create any obligation on companies for damage caused intentionally or negligently by any breach of due diligence. While, France, in a last attempt to benefit from the political turmoil, has suggested amending the initial scope (companies with more than 500 employees) to match the French Vigilance Law that only covers companies with more than 5,000 employees.

          The file now risks falling into limbo if passed to the next European Parliament (EP), taking into consideration its swerve to the right turn. In an attempt to avoid this, Belgium presented an amended text with which they sought the support from a qualifying majority of Member States in time. A new vote on 8 March, nevertheless, was yet again postponed. This, together with the ban on combustion engine cars, is the second time Member States have reneged on previously agreed legislation under electoral pressure.