Disastrous Omnibus proposal erodes EU’s corporate accountability commitments and slashes human rights and environmental protections.
The publication by the European Commission of its Omnibus proposal revising key corporate sustainability laws sends a clear political signal: President Ursula von der Leyen is deprioritising human rights, workers’ rights and environmental protections for the sake of dangerous deregulation.
When President Ursula von der Leyen announced late last year an Omnibus proposal to simplify reporting and sustainability requirements for companies, she committed to upholding in full the spirit and “content of the law,” and stated that the goal of the exercise was to reduce overlapping obligations. The proposal published on 26 February represents a stark departure from this promise and, if implemented, will wipe-out the core purpose of these laws.
The Omnibus proposal would axe many of the Corporate Sustainability Due Diligence Directive’s key provisions, making it virtually toothless.
If implemented, in practice this could result in:
- Civil liability will to a much larger extent be left to EU Member States’ discretion, with the
potential of drastically reducing access to justice for victims in front of EU courts. - Companies will only be required to assess harms attributable to direct business partners,
which reduces drastically the value chain. - There is no longer an obligation to “put […] into effect” Climate Transition Plans, which
would introduce a dangerous loophole, allowing companies to comply with the provision, in theory, by simply producing a plan on paper, rather than putting it into action. - EU Member States would no longer be able to establish more ambitious rules than the
directive. - Companies will no longer have to terminate contracts (even in cases where it is possible or likely that abuses continue).
- Stakeholder engagement will be reduced to those “directly” affected.
- The frequency of monitoring the effectiveness of due diligence measures is reduced from every year to every 5 years.
- Removal of the minimum cap on sanctions of 5% of the turnover.
- The Commission is no longer obliged to examine the necessity to apply due diligence rules.
“Despite warnings from trade unions and responsible businesses, the Commission moved forward with this proposal without proper transparency” said Livia Spera, General Secretary of the ETF. “Scaling back sustainability laws won’t solve structural problems; it risks undermining European values and workers’ rights”, she added.
