Opinion: 'How Berlin and Paris sold-out the EU corporate due diligence law'
A landmark draft EU law that could prevent and compensate victims for harms like land-grabbing, forced labour or oil spills in businesses' value chains has finally made its way to member states. They have just signed off their preliminary position on the Corporate Sustainability and Due Diligence Directive (CSDDD) — which will almost certainly make sure this law is dead on arrival.
There are three key elements to making this corporate sustainability due diligence law work, which EU governments have got very badly wrong.
Firstly, access to justice and remedy for victims, which should be at the heart of this kind of law, has become a sideshow...
Germany even tried to mobilise support to turn the due diligence process, designed to prevent human rights violations, into a shield to protect companies from being taken to court. Thankfully this did not gain much traction, but member states have, however, successfully included new hurdles to holding companies liable.
Secondly, even if it were possible to get remedy under the law, it might not matter, as governments pushed to exclude most business relationships from the scope of the law.
Most powerful member states were unified in wanting to cut out the 'downstream' part of the value chain (and have largely succeeded).
This means companies will not be held accountable for the harms their products and services cause. That includes pesticide harm to the environment and health, surveillance tech being used to spy on activists or journalists, and aviation fuel used in wars..
[T]he Elysée spent its political capital trying to limit the type of business relationships covered, and obtain exemptions for its companies producing arms.
They particularly pushed to let investors off the hook, i.e., those who finance and enable corporate activities that trample on human rights, or wreck the environment. The result is that there is no obligation for member states to regulate investors and finance sectors, they can pick and choose, threatening to create a patch work of regulations that undermines the very purpose of legislating at EU level...
And despite talking a big game at COP27, governments were totally unwilling to set enforceable rules to make companies reduce their greenhouse gas emissions in their global value chains and align with the Paris Agreement. It's little wonder that the latest round of climate talks tells us the 1.5 goal might be out of reach...