abusesaffiliationarrow-downarrow-leftarrow-rightarrow-upattack-typeburgerchevron-downchevron-leftchevron-rightchevron-upClock iconclosedeletedevelopment-povertydiscriminationdollardownloademailenvironmentexternal-linkfacebookfiltergenderglobegroupshealthC4067174-3DD9-4B9E-AD64-284FDAAE6338@1xinformation-outlineinformationinstagraminvestment-trade-globalisationissueslabourlanguagesShapeCombined Shapeline, chart, up, arrow, graphLinkedInlocationmap-pinminusnewsorganisationotheroverviewpluspreviewArtboard 185profilerefreshIconnewssearchsecurityPathStock downStock steadyStock uptagticktooltiptwitteruniversalityweb

18 Apr 2023

Siliva Ellena, Euractiv

EU: Negotiators from the European Parliament reach internal agreement on due diligence directive ahead of key vote; excludes ‘use’

"EU Parliament excludes ‘use’ from due diligence rules before committee vote", 18 April 2023

The leading legal affairs committee of the European Parliament is set to vote on its position on the proposed corporate accountability rules next week, following an agreement reached by negotiators on Tuesday (18 April).

On the night of 18 April, members of the European Parliament (MEPs) reached an internal agreement on the corporate sustainability due diligence directive, proposed by the Commission in February 2022 to hold large companies accountable for human rights abuses and environmental violations in their value chain.

The meeting allowed MEPs to resolve many contentious points that previously delayed the legal affairs committee’s vote on the file. The vote is now set to take place next week.

According to documents seen by EURACTIV, EU lawmakers finally agreed to exclude the downstream use of products or services from the directive’s scope.

The documents show MEPs agreed on the rules to be applied from the production to the sale, distribution and waste management of products or services provided by a company, leaving out due diligence and liability provisions regarding the use of products or services.

Civil society organisations already expressed concerns over such exclusion, seen as a limitation to corporate accountability, while business representatives argued that including it would excessively burden companies.

Compared to the original proposal, the European Parliament wants the rules to apply to a larger number of companies...

At the same time, EU lawmakers introduced a timeline for implementing the rules depending on the size of the companies...

The compromise text also introduces a harmonisation provision to ensure a level playing field for companies across the Single Market, with possible changes to the level of harmonisation six years after the directive’s entry into force.

The provision would prevent any member states from introducing more stringent due diligence rules than those provided under the EU directive.

According to Richard Gardiner, EU public policy lead at the World Benchmarking Alliance, this could lead to a “race to the bottom” instead of driving up sustainability performance...

As previously reported by EURACTIV, financial services, including asset managers and institutional investors, are included in the directive’s scope...

The legal affairs committee is expected to vote on the compromises and adopt its report on 25 April.

This will allow the Parliament to finalise its position on the file during the 31 May – 1 June plenary session before entering into negotiations with member state governments in the EU Council.