This week’s EU Omnibus developments
A rundown of who is saying what this week, and what more we know about plans to revise Europe’s sustainability rules
The European Ombudsman has announced an inquiry into the European Commission for its handling of the Omnibus process.
In a statement published on Wednesday, Teresa Anjinho a complaint filed by eight NGOs was the third her office had received in recent months relating to the Commission’s compliance with its own legal code.
The NGOs accused the Commission of taking an “undemocratic, untransparent and rushed” approach to the Omnibus.
The Ombudsman noted in the statement that the EU’s Better Regulation Guidelines must be followed unless there is valid justification.
“Otherwise, EU citizens may question the Commission’s commitment to a transparent, inclusive and evidence-based law-making process. This is even more so when the Commission does not comply with legal requirements, such as conducting a climate consistency assessment, when proposing legislation.”
Anjinho has given the Commission until June 6th to provide any documents associated with its decision not to consult with stakeholders or undertake an impact assessment for the Omnibus.
Negotiations
European Council met on Friday to debate the package, and a leaked document shows the presidency isn’t happy with the call to reduce the Corporate Sustainability Reporting Directive’s (CSRD) coverage further than the original proposal.
It said the Commission’s plan to cut the number of companies in scope of CSRD by around 80% was “a balanced approach”, and asked Member States to support it.
It also warned that the current proposal to revise the Corporate Sustainability Due Diligence Directive (CS3D) so it focuses on Tier-1, entity-level due diligence “might be in fact more burdensome for companies, and lead to a misallocation of their resources”.
“This is because these provisions require companies to focus their efforts on identifying and assessing actual and potential adverse impacts on all direct business partners, even if such impacts are unlikely to occur at that level,” the document explained.
The presidency wants CS3D to remain a risk-based due diligence law, and called for more guidance on how proactive companies should be expected to be in identifying risks, and how much information they should be able to request from businesses in their value chains.
Meanwhile, the French government published a ‘non-paper’ in which it argued that it is the only Member State that knows what it’s like to have long-standing national due diligence legislation.
Based on this experience, it said, it wants CS3D’s threshold raised so it applies only to companies with more than 5,000 employees and €1.5bn turnover.
“It is the only threshold for which it is possible to assess the impact over the value chains and the cost for companies when applying a due diligence legislation,” said the paper.
This week also saw Emmanuel Macron claim to support Germany’s position on CS3D.
“We are very aligned now with Chancellor Merz and some other colleagues to go much faster, and CS3D and some other regulations have not just to be postponed for one year, but put out of the table,” said the French president.
He appears to be referring to the German Chancellor’s comment that he wanted to “cancel” CS3D, but a spokesperson has since reportedly clarified that his ambition is to see the directive slimmed down, not abolished.
Quick fix
A leaked draft of the ‘quick fix’ proposal circulated this week, laying out the Commission’s thinking.
It confirms plans to postpone by two years the additional reporting requirements that Wave One companies are currently scheduled to undertake for financial years 2025 and 2026.