TAKEAWAYS Event Confronting the Disinformation on the CSDDD: separating fact from fiction
February 15th, 2024

To counter the speculation about the collapse of Council support, and the false claims circulated by certain actors about the impacts of the CSDDD, the ECCJ in collaboration with ETUC and Frank Bold organised an expert Q&A session ahead of the EU Council meeting.

What our experts say

MEP Anna Cavazzini emphasised that while the FDP may have caused a stir, it doesn’t represent the entire German government’s stance.

“The FDP was always against the national due diligence law but in favour of a European. The German government always took on board FDP’s concerns – except the safe harbour solution for liability. But there was no majority for this point: no other EU capital nor the EU Parliament favoured it. However, it was not agreed within the German government that this party would convince other EU Member States to oppose the directive.”

The Vice President of Public Policy at Responsible Business Alliance, Bart Devos, voiced strong support for the CSDDD, emphasising its potential to create a level playing field across the EU.

“I can confirm that there is diversity of views on this file because of the huge impact it will have on the supply chain. We see the CSDDD as a directive that meets key industry priorities and that is why we want EU Member States to accept this law. The no adoption of the law will allow legal uncertainties for companies and not create a level playing field and that is why we call for the adoption of the CSDDD at the EU Council.”

Julia Otten, delved into the CSDDD’s impact on small and medium-sized enterprises (SMEs), clarifying that the directive primarily targets larger companies. Moreover, she highlighted measures within the CSDDD aimed at protecting SMEs from undue burdens.

“Very important point under the current debate: the CSDDD protects SMEs by rebalancing and clarifying the responsibility between large companies and SMEs in the value chain. The directive is very clear stating that large companies bear the cost of verification so that they cannot pass it down to SMEs. The CSDDD intends to get rid of unfair production deadlines, to get rid of constructures clauses that will force you to put our last-minute purchases putting more economic pressure on SMEs. In practice now, we see companies passing the responsibility or paperwork to SMEs, and we believe the CSDDD aim is to treat SMEs fairly and clarifies these responsibilities”.

The ETUC Deputy General Secretary, Isabelle Schömann, emphasised the importance of the CSDDD in combating exploitation and ensuring fair competition within the EU market. She underscored the risks of fragmentation and the need for a unified approach to corporate accountability.

“Let’s be clear: there is no sustainable business based on the exploitation of labour, not within EU borders or beyond. With the CSDDD, we are fighting against Human Rights being administrative burdens. France and Germany, the only EU countries with national due diligence legislation that gives them a competitive advantage are preventing other EU Member States to from getting this advantage. Not having a CSDDD will facilitate fragmentation, if the European Union does not deliver, other Member States will go on with national legislations, such as Belgium”.

Takeaways from the Expert Q&A event

  1. Widely demanded legislation: The CSDDD is strongly supported by workers and citizens in Europe and worldwide due to its focus on corporate accountability and sustainability. Polling from 9 EU countries has shown that over 85% of citizens are in favour of rules to hold corporations responsible for their adverse human rights and environmental impacts. During the EU legislative process over 100,000 EU citizens have signed a petition demanding a strong and ambitious EU CSDD Directive.
  2. Limited scope, limited impact on SMEs: While the CSDDD primarily targets large companies, its current text ensures that the potential negative effects on small and medium-sized enterprises (SMEs) are mitigated.
  3. Broad industry support: Despite opposition from a few large national trade associations, the CSDDD has garnered overwhelming backing from major industry alliances such as the Responsible Business Alliance, AMFORI, and European Brands Association (AIM). This demonstrates widespread recognition of the importance of immediate adoption for the legislation’s effectiveness in promoting corporate responsibility and ensuring fair competition. German and Nordic businesses respectively have come out calling for the passage of the trilogue deal.