EU Member States Opt to Dilute Pivotal Supply Chain Accountability Legislation

According to a recent publication by Human Rights Watch, advocates for human rights are sounding teh alarm over a diluted version of the European Union’s ethical supply chain legislation that was greenlit in late June. They argue that this revision could dismantle vital protections for those affected by corporate misconduct and reverse notable strides made in human rights advocacy.

Hélène de Rengervé, a senior advocate at Human Rights Watch, expressed concern on July 1, stating, “EU member states seem intent on transforming the european supply chains law into something ineffective—essentially failing those who have suffered from abuses linked to European companies.” She emphasized that this move undermines the EU’s dedication to human rights and sustainability while doing little to curb environmental and social injustices within supply chains.

The Corporate Sustainability Due Diligence Directive (CSDDD), which was initially proposed back in 2022, mandates that large corporations within Europe actively oversee their supply chains for any signs of human rights violations. This includes addressing issues like forced labor and environmental degradation. However, after being formally adopted in july 2024, there has been a push from countries like Germany and France aimed at scrapping it entirely by early 2025.

Read More: EU Members Propose Reductions to Ethical Supply Chain Regulations

Following extensive discussions among member states, an agreement reached on June 23 resulted in a substantially weakened CSDDD. This new version drastically narrows down the number of companies impacted by these regulations,confines due diligence obligations solely to direct suppliers,and eliminates provisions allowing victims of abuse to take legal action against their employers. The UN’s Office of the High commissioner for Human Rights warned that this diluted directive would lessen its effectiveness while former leaders from both UN and EU circles described it as “a troubling regression.”

Supporters of this revised CSDDD argue it’s essential to streamline regulations and lessen burdens on smaller enterprises. Additionally, there has been external pressure from entities such as the Trump governance regarding how these rules would apply to American businesses operating within Europe.

With EU members now settled on these terms for the new CSDDD framework, negotiations will soon commence between the EU Parliament and Presidency before finalizing it into law.