"The Council’s position on CSDDD betrays smallholder farmers and responsible businesses and risks harming supply chain resilience", 24 June 2025

The Council’s simplified approach risks weakening protections amid the Commission’s ‘Omnibus I’ simplification package. The Fair Trade Movement urges MEPs to stand with smallholders, workers, and responsible businesses and defend a truly risk-based, whole-supply-chain Corporate Sustainability Due Diligence Directive (CSDDD).

The Fair Trade Movement regrets yesterday’s political agreement by EU Member States on the Corporate Sustainability Due Diligence Directive (CSDDD), which risks dismantling key provisions essential to protecting smallholder farmers, artisans and workers, and stripping the Directive of its potential to foster fairer, more resilient global supply chains. 

While we support efforts to streamline processes, we are concerned about the specific changes that risk undermining the core principles of responsible business conduct, particularly the protection and inclusion of the 600 million smallholder farmers who are vital to Europe’s food supply chains, as well as millions of textile and garment workers, many of them women, who produce the clothes we wear under often exploitative and precarious conditions. The proposed employee and turnover thresholds could exclude 70% of EU companies, according to SOMO, undermining the Directive’s purpose and penalising those, like smallholder farmers and responsible companies, who have already invested in due diligence...

The Council has voted to limit due diligence to Tier 1 suppliers unless specific harms are proven further upstream, despite overwhelming support for a risk-based approach aligned with international standards from investors, businesses and industry voices such as BNW, FoodDrinkEurope, the international group of institutional investors behind the United Nations’ backed Principles for Responsible Investment (UNPRI), and countless others.  The Fair Trade Movement is concerned that the Council's narrow approach reflects a troubling misunderstanding of how risk-based due diligence works...

While the Council’s proposal includes a review clause, by which they keep open the option of a risk-based approach covering the entire supply chain, the immediate decision to limit due diligence to direct suppliers undermines not only the urgency of addressing human and environmental harms but also the credibility of the EU as a global standard-setter... 

Equally alarming is the Council’s failure to propose any changes to other key parts of the Directive that were modified by the European Commission’s initial proposal, such as the withdrawal of the duty to consult affected stakeholders before suspending business relationships. Especially smallholders and artisans, often considered “high-risk”, could therefore lose buyers overnight with no chance to flag unintended consequences or negotiate corrective action. 

The Council has taken a welcome step in addressing a major flaw in the Commission’s original proposal to limit information requests from suppliers. The Commission suggested restricting requests to data points in the “VSME standard,” which only covers a company’s own operations and is unfit for effective supply chain due diligence. The Council rightly clarified that companies should only request information that is genuinely necessary and should exercise restraint. This is a move toward more proportionate due diligence. The Fair Trade movement urges Parliament negotiators to build on this progress and ensure smarter, risk-based information flows across supply chains. 

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