The European Supply Chain Directive (CSDDD) Faces Major Changes

In a significant move aimed at easing company compliance, the European supply chain directive (CSDDD) is set to undergo substantial relaxing. The EU Council, in its latest draft, proposes deferring the implementation of the law, initially scheduled to come into force in 2027, to July 2028. This review comes at a time when businesses urge for more time to prepare, as per the European Commission’s recommendation.

Concerns from Civil Society Over the Relaxed Rules

Civil society organizations are up in arms. The directive aims at mandating companies to uphold commitments to human rights, environmental protections, and climate compliance. Currently falling under scrutiny, the proposal limits these obligations to larger companies – only those employing 5,000 workers and achieving a turnover of €1.5 billion or more.

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Initially, the scope of the CSDDD was applicable to companies with 1,000 employees and a turnover of 450 million euros. The proposed relaxation will significantly reduce the number of affected companies in Germany from around 5,500 to 276, pinching the core intent of the law.

Governmental Stances and Blatant Contradictions

High-level pressure on delaying the directive and potentially easing the rules is apparent as Friedrich Merz, the German chancellor, urged in favor of a liability regime. However, sources reveal differing stances; the Federal Government remains a vehement opponent of liability, a clear contradiction to Merz’s public stance.

Civil Responsibility: A Tough Battle

Misereor, a Catholic aid organization, strongly condemned this double standard, emphasizing the moral and legal responsibility of companies to uphold human rights. The EU Council is divided; an alliance of countries – France, Spain, Portugal, Belgium, Greece, Latvia, and Slovenia – supports upholding liability, while Germany leads the opponents.

“Reasonable Efforts” Fail the Climate Target

The directive requires only “reasonable efforts” rather than “best efforts,” weakening the ambition necessary to meet climate goals set by the Paris Agreement. This shift may significantly undermine the mission to limit global warming to 1.5°C.

Next Steps

The upcoming vote on Tuesday will set the position for negotiations with the EU Commission and European Parliament. The CSDDD’s comprehensiveness and enforceability hang in the balance, prompting civil society and experts to redouble their efforts to ensure accountability and sustainability in business practices.

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As the story unfolds, archyde.com will keep you informed on the latest developments surrounding the EU supply chain directive.