The European Parliament’s Committee on Legal Affairs (JURI) held a hearing on corporate due diligence on Wednesday 26 October. During the exchange with experts, MEPs were divided on the scope and contours of the text. Rapporteur Lara Wolters (S&D, Dutch) said she would probably present a first draft of her report next week.
MEPs from the EPP and ID groups expressed their concern that SMEs would be overburdened by the obligations of the directive. The text only targets companies with more than 500 employees and a turnover of more than €150 million, but SMEs present in their value chains may be indirectly affected by the obligations (see EUROPE 12897/7). In this sense, SMEs are concerned, warn some elected representatives.
The head of the Brussels office of the Confederation of Dutch Employers and the Association of Dutch SMEs, Winand Quadvlieg, also expressed concern. His organisation is not calling for a total exemption of SMEs in value chains, “but the question of proportionality and prioritisation is important”, he said.
Several experts suggested that the work should be prioritised so that SMEs are not overburdened and can make their contribution. For example, they could focus on some of the negative effects rather than all of them, suggested Rachel Davis, vice-president of the SHIFT centre of expertise.
MEPs also questioned other aspects of the Commission’s proposal, such as the fact that a company’s value chain, which is to be subject to the directive’s obligations, is limited to “established commercial relationships”. They pointed to the risk of missing many human rights and human rights abuses that are committed by suppliers in an “unestablished” relationship.
In the EU Council, Member States are also divided on this concept, as well as on other key points of the text (see EUROPE 13043/22). The Czech Presidency recently asked delegations to comment on the idea of deleting this reference from a document proposing “a direction for future work” dated 21 October.
It also invited Member States to comment on other issues, including the scope of the directive and the definition of value chain.
See the Czech Presidency document: https://aeur.eu/f/3sq (Original version in French by Léa Marchal)