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9 Feb 2024


German-Italian revolt delays EU’s due diligence law

The Corporate Sustainability Due Diligence Directive (CSDDD) has been taken off the agenda of today’s meeting of EU ambassadors, as it was not expected to reach a majority among EU countries. So far, no new date for the vote has been set.

The law, which aims to make companies liable for breaches of human rights in their value chain, has been contested for some time as critics fear it adds to companies’ bureaucratic burden.

After a last-minute intervention by the German liberal party FDP (Renew), the German government would have had to abstain, as internal coalition rules foresee in the case that coalition parties cannot agree on a joint position – despite both socialist Labour Minister Hubertus Heil and Chancellor Olaf Scholz having liked to see the law greenlighted.

In a letter to business associations, FDP chief Christian Lindner and Justice Minister Marco Buschmann wrote that the law “would place an additional burden on the companies concerned,” vis-a-vis with a similar German law, known as the supply chain act.

If the vote had been taken today, Italy would have abstained as well, according to a diplomatic source. In that case, the law would therefore likely have fallen short of the necessary “qualified” majority of 15 EU countries representing at least 65% of the population.

The decision to take it off the agenda was based on the “probability of reaching a qualified majority”, another diplomat said.

The next steps are unclear, as the upcoming European election means there will be a hard break to any legislative work very soon, as the last meeting of the European Parliament will be in April.

“The FDP has not only persuaded DE to abstain, but has also pressurised other countries,” Anna Cavazzini (Greens/EFA), head of the European Parliament’s Single Market Committee, posted on X, adding “it’s unbelievable how a single party is keeping Europe in suspense”.

“The postponement must now be used to convince wobbly candidate states,” she added. [...]