AGREEMENT ON EU DUE DILIGENCE: STILL FAR FROM A WORKABLE SOLUTION

Reacting to today’s agreement on the EU Corporate Sustainability Due Diligence Directive, BusinessEurope Director General Markus J. Beyrer said:  

“The new due diligence rules will add unparalleled obligations, set harsh sanctions with potential existential implications for companies, and unilaterally expose them to litigation from all parts of the world. SMEs, even though they are theoretically out of the scope of the Directive, will be negatively affected as they make up the largest part of value chains. 

European companies with global operations, some with millions of indirect relationships, will be put at a disadvantage compared to their global competitors and might pull out of markets due to the risks of litigation and sanctions. 

We regret that many crucial issues remained unresolved. Industry was always ready to be a constructive partner and to work for workable harmonised EU rules on this important issue. Therefore, we called for meaningful harmonisation, clearer definitions, and more balanced enforcement and liability provisions, which are not there. The narrow margin of approval and the abstention of as many as 10 member states, representing more than 31% of the EU population, shows that this “compromise" is still far from a workable solution. We urge EU decision makers to still address the remaining concerns before the final adoption of the Directive.”