EU states back watered-down law on supply chain standards

by AFP Staff Writers Brussels, Belgium (AFP) Mar 15, 2024 AFP

EU member countries agreed Friday to a new law that would force companies to uphold environmental and human rights standards in their supply chains, Belgium, which holds the EU's rotating presidency, said.

The green light endorsing a duty for "due diligence" on those norms came only after compromises on the original text to win majority support.

The law's scope was slashed by having it apply only to companies with 1,000 employees or more -- double the initial threshold -- and with revenues of at least 450 million euros ($413 million), according to a diplomatic source.

The World Wide Fund for Nature said that EU states had reduced the rules to "a shadow of their former self".

"Today, the EU countries agreed to massively dilute the Corporate Sustainability Due Diligence Directive (CSDDD), removing roughly two-thirds of the companies from the law's scope and weakening the law's ability to combat climate change," WWF said in a statement.

"This agreement sends a horrendous signal to those suffering from corporate abuses and severely harms the EU's commitment to ensuring a level playing field, as well as its credibility as a legislative force."

EU lawmakers and negotiators representing member states had struck an agreement on the more ambitious early draft of the legislation in December.

But the 27 countries failed twice last month to find the majority needed to get it over the line amid objections led by Germany that it would hit small and medium-sized businesses in the EU unfairly.

The European Parliament will now have to give its approval to the changes to the legislation for it to become law.