EU 'Committed' to Passing New Supply Chain Due Diligence Rules, Belgian Presidency Says

EU member countries last month 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). But Hadja Lahbib, the foreign affairs minister of Belgium, said the Belgian presidency of the European Council is hopeful it can still “obtain a positive result as soon as possible.”

“I really understand your disappointment, but everything is not over yet, even if the clock is ticking,” Lahbib said March 12 during a plenary session of Parliament. “I can promise you that the Belgian presidency is really committed to finding a solution that will allow the co-legislators to agree on this important directive before the end of the parliamentary term.”

Lahbib said member countries are working on a compromise text, but Lara Wolters of the Netherlands urged her to stick to the original language, saying that the proposed law “was negotiated at length with every word subject to intense scrutiny.”

Wolters and other members criticized the Belgian presidency’s handling of the CSDDD vote and reprimanded member countries that declined to support the legislation. She compared the saga to a groom who refuses to show up to his wedding unless the bride agrees to a series of last-second demands, like changing her dress and removing the flowers.

“If this were a fairy tale, the bride would walk away from the altar now because of gross violations of trust and respect,” Wolters said. “But this is not a fairy tale. We are still waiting, and worse, new demands are still being made. And if we haven't walked away, it's because this project is too important to let go of.”

Wolters said she’s “grateful” Lahbib came to address the parliament, but she also told Lahbib, “The institution that you represent has disgraced itself, it has disrespected us, and it has undermined European democracy in the process.”

A vote on the CSDDD hasn’t reached Parliament partly because Germany’s pro-business Free Democrats have reportedly led an effort to oppose the new requirements, arguing that they would burden German industry (see 2402120042). Parliament Member Barry Andrews of Ireland said the German Federal Ministry for Economic Cooperation and Development has “described its own government's position on this directive as an embarrassment.” He said the EU shouldn’t agree to more concessions because the supply chain rules aren't broad enough.

“Even what is proposed now by the Belgian presidency would bring just 40 Irish companies within its scope,” Barry said. “This is not corporate accountability.”

Several members disagreed, including Geert Bourgeois of Belgium. He said he supports eliminating forced labor and other human rights abuses from corporate supply chains, but “we don't want to make things overly difficult for companies either.” He said the CSDDD would add compliance costs and reporting obligations for companies that may not be able to afford them.

Angelika Niebler, a member of Parliament from Germany, made similar points, adding that she’s concerned the new rules could force European companies to stop doing business in developing countries with less supply chain transparency.

“This is not something that's just theoretical. We've already seen this in the German supply chains,” she said. “We have to be careful not to saw the branch that we're sitting on right now.”