No less than five parliamentary committees adopted their reports for opinion on the ‘corporate due diligence’ directive on Tuesday 24 January in the European Parliament. They broadly agreed with the proposals of the rapporteur on the text, Lara Wolters (S&D, Dutch), who advocates a more ambitious directive on human rights and respect for the environment (see EUROPE 13060/2).
In the Committee on International Trade (INTA), the EPP suffered a defeat on the report for opinion by Barry Andrews (Renew Europe, Irish). The group had joined forces with the European Conservatives and Reformists (ECR) to table compromise amendments, all of which were rejected. These aimed to restrict the scope of the text to the largest companies or to limit the obligations to the supply chain only, as opposed to the value chain, which includes downstream companies.
The INTA Committee members have instead opted for the same criteria as the rapporteur, Lara Wolters, regarding the companies covered by the text and the obligations that will affect them. This includes companies with more than 250 employees and a worldwide turnover of more than €40 million, which broadens the scope compared to the European Commission’s proposal (see EUROPE 12897/7).
“The vote in INTA today shows that Parliament is serious about creating a meaningful due diligence system along the entire value chain which helps to protect human rights, the environment and good governance rules”, said Polish Social Democrat Marek Belka.
The Committees on Economic and Monetary Affairs (ECON) and Foreign Affairs (AFET) voted for similar thresholds.
As for the scope of the due diligence, it should apply to the entire value chain, and not only to “established business relationships”, (the European Commission’s position). The scope is also broader than what the EU Council proposes, i.e. only the chain of activities, which does not include making the products available to final consumers (see EUROPE 13075/1).
In another important addition, the ECON, AFET and INTA parliamentary committees want to include financial services in the high risk sectors, which are subject to even lower turnover and employee number thresholds.
Against this progressive trend, German EPP member Axel Voss warned that the directive would be administratively burdensome and impossible for companies to implement. He also shared his doubts about the coverage of downstream trading partners.
His colleague Angelika Niebler (EPP, German) also warned against overly harsh rules: “We are a continent characterised by its regulations. This is a good thing, but let’s not go too far”, she suggested, referring to the competitiveness of European companies which could be put at risk. (Original version in French by Léa Marchal)