Failed vote on EU due diligence law branded ‘an outrage’

MEPs blame lobbying and frustration at national laws for last-minute U-turn, as CS3D struggles to survive

Yesterday’s failed vote on the EU Corporate Sustainability Due Diligence Directive (CS3D) has been branded ‘an outrage’ as co-legislators scramble to salvage the floundering law.   

The directive, which has been under negotiation for more than two years, was provisionally agreed in December.

The law would oblige firms with large operations in the EU to undertake due diligence on companies within their supply chains. Where environmental or human rights breaches were identified, companies would have to demonstrate that they had used their leverage to reduce those harms, or that they had ended their business relationships with the suppliers.  

But in a shocking U-turn, a number of EU Member States have changed their minds about the proposal in recent weeks and have sought to stop it from getting through the final vote, which is normally seen simply as a legislative technicality.  

Germany announced earlier this year that it would abstain from the vote, and Italy and other small member states have rowed in behind it.

After a number of failed attempts, ambassadors were expected to cast their final vote yesterday, but the Belgian presidency confirmed the process did not take place because it was clear it would not secure the necessary majority.

In the final hours, France reportedly attempted to amend the proposal so that it only applied to companies with more than 5,000 employees – up from 500 in the text that was signed off in December.

Speaking at a press conference, Lara Wolters, Dutch MEP and rapporteur for the CS3D, described the failed vote as “an outrage” and “very concerning”, saying it “shows a flagrant disregard for the European Parliament as a co-legislator”.

“This law should be a global landmark to hold companies to account and incentivise responsible business conduct, and companies are already preparing to implement it,” she said, accusing member states of being influenced by a small number of “extreme business voices”.

German MEP and fellow CS3D rapporteur, Axel Voss, said the directive had been “poisoned” by Germany’s domestic supply chain law.

That law, introduced last year, is understood to have been very difficult to comply with, and raised uncertainty around the interpretation of its legal requirements. Speaking on social media, Voss described it as “over-bureaucratic”, saying it “probably does nothing for human rights at all, which has rightly annoyed German companies”.

However, he added, “the European law would have corrected some of those mistakes”.

Instead, he warned, if CS3D is not agreed, “we will likely get a patchwork of up to 27 different [national due diligence] rules”.

Wolters said she could not speculate on how much time was available to renegotiate CS3D, noting that “time is running out” because of the looming European elections. Some observers think a new position would need to be reached by European Council in the next fortnight in order to give Parliament time to approve it before the legislative window closes.