EU Supply Chain Due Diligence Rules Needed for Ease of Compliance, Nonprofits Say
If the EU can’t agree to new corporate supply chain due diligence rules, European companies will instead face a growing, complex patchwork of national due diligence laws that will strain their compliance departments, leaders of two Dutch nonprofits said in an opinion piece this week for the Business and Human Rights Resource Center.
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EU member countries last week couldn’t secure the needed votes to move forward with its Corporate Sustainability Due Diligence Directive (CSDDD), which would require companies to conduct specific due diligence on their supply chains to address various environmental and social concerns, including forced labor risks (see 2402290013). That failed vote “leaves the future of this landmark corporate accountability legislation hanging in the balance,” wrote David Ollivier de Leth, a policy adviser at the MVO Platform, and Joseph Wilde-Ramsing, director of advocacy at the Centre for Research on Multinational Corporations.
“Without a unifying directive, companies will face varying standards and expectations as important domestic legislative processes will develop -- and resume -- across the economic bloc,” they said, leading to a “fragmentation of the EU internal market.”
They specifically pointed to the Netherlands’ Child Labour Due Diligence Act, which “imposes a duty of care” on companies to prevent child labor in their supply chains, but which the Netherlands put on hold as EU states negotiate the CSDDD. If the EU doesn’t pass the directive, “companies operating across the EU will have to contend with the Dutch law,” they said, adding to the “web of national due diligence laws in Europe, including those in France, Germany, and Norway.”
Wilde-Ramsing and de Leth said the coming days and weeks will be “crucial” for the future of the SCCC. EU leaders face “a clear choice: adopt the CSDDD without further delay -- or face the consequences for businesses, human rights, and the environment across the globe if they fail to do so.”