Today, EU countries rubber-stamped the deal on the EU’s new supply chain rules. 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.”
Notes aux rédactions
Marc-Olivier Herman is available for comment and interview.
Today, EU countries made the following changes to the December agreement:
- 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. European companies with over 5,000 employees and an annual turnover of over 1.5 billion euros will have to comply with the rules from 2027. For companies with over 3,000 employees and an annual turnover of 900 million euros, the rules will apply from 2028. For non-European companies, only the annual turnover thresholds in the EU apply.
- 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.
What happens next?
- The European Parliament’s Legal Affairs Committee (JURI) 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.
How did we get here?
- In March 2021, Oxfam welcomed the European Parliament’s blueprint proposal for EU due diligence rules.
- In February 2022, the European Commission tabled its proposal. Oxfam labelled it a far cry from what is needed.
- In December 2022, EU countries agreed on their position for this new EU law. They watered down an already weak proposal from the Commission.
- In June 2023, EU Parliamentarians agreed on their position and sent a mixed message to survivors of corporate abuse.
- In December 2023, EU countries, the European Parliament and the European Commission reached a common agreement on the law, which was a significant milestone but spared fossil fuel financiers and sectors rife with labour exploitation.
- In February 2024, Germany withdrew its support to the deal. This caused other EU countries to rethink their position and blocked the ratification of the law by EU ambassadors.
Over 100,000 people signed a petition to support the EU Due Diligence rules.
Civil society organisations across Europe and the world as well as hundreds of companies, business associations and investors, expressed their support for the legislation.
Italian and German business organisations have also called on their governments to uphold the agreement and pass the legislation.
Contact
Julia Manresa at julia.manresa@oxfam.org | Work at +32 473 87 44 26 | WhatsApp only +32 479 56 18 12
Jade Tenwick at jade.tenwick@oxfam.org | Work +32 473 56 22 60 | WhatsApp only +32 484 81 22 94
For updates, please follow @OxfamEU. You can also find us on LinkedIn.
Marc-Olivier Herman is available for comment and interview.
Today, EU countries made the following changes to the December agreement:
- 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. European companies with over 5,000 employees and an annual turnover of over 1.5 billion euros will have to comply with the rules from 2027. For companies with over 3,000 employees and an annual turnover of 900 million euros, the rules will apply from 2028. For non-European companies, only the annual turnover thresholds in the EU apply.
- 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.
What happens next?
- The European Parliament’s Legal Affairs Committee (JURI) 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.
How did we get here?
- In March 2021, Oxfam welcomed the European Parliament’s blueprint proposal for EU due diligence rules.
- In February 2022, the European Commission tabled its proposal. Oxfam labelled it a far cry from what is needed.
- In December 2022, EU countries agreed on their position for this new EU law. They watered down an already weak proposal from the Commission.
- In June 2023, EU Parliamentarians agreed on their position and sent a mixed message to survivors of corporate abuse.
- In December 2023, EU countries, the European Parliament and the European Commission reached a common agreement on the law, which was a significant milestone but spared fossil fuel financiers and sectors rife with labour exploitation.
- In February 2024, Germany withdrew its support to the deal. This caused other EU countries to rethink their position and blocked the ratification of the law by EU ambassadors.
Over 100,000 people signed a petition to support the EU Due Diligence rules.
Civil society organisations across Europe and the world as well as hundreds of companies, business associations and investors, expressed their support for the legislation.
Italian and German business organisations have also called on their governments to uphold the agreement and pass the legislation.
Julia Manresa at julia.manresa@oxfam.org | Work at +32 473 87 44 26 | WhatsApp only +32 479 56 18 12
Jade Tenwick at jade.tenwick@oxfam.org | Work +32 473 56 22 60 | WhatsApp only +32 484 81 22 94
For updates, please follow @OxfamEU. You can also find us on LinkedIn.