The ‘omnibus’ simplification of the CSDDD regarding due diligence would have very little impact on reducing costs, which are already very low, according to a study by the European Trade Union Confederation (ETUC) published on Monday 29 September. However, this simplification would considerably reduce the positive effects of the current ‘CSDDD’ (see EUROPE 13666/26).
In fact, while reducing the number of companies affected and the due diligence requirements may lead to a slight reduction in compliance costs, this must be weighed against the opportunity costs of not introducing the ‘CSDDD’ in its current form, according to the report. These opportunity costs are estimated to by far exceed any potential direct reduction in compliance costs in terms of lost economic welfare benefits.
If amended, the directive, which was designed to ensure respect for human rights and prevent disasters such as the Rana Plaza tragedy, would no longer cover such events. Deaths and injuries, as well as indirect negative impacts on the environment, represent additional external costs and, consequently, a considerable loss of economic well-being in the countries of the South.
As a result, the report concludes that the current ‘CSDDD’ should be maintained and even extended to more companies, and fine-tuned to fill its gaps in order to maximise welfare gains for Southern countries and the EU.
To read the study: https://aeur.eu/f/io2 (Original version in French by Anne Damiani)