Last Friday, the Member States of the European Union finally reached an agreement on the proposed directive on corporate sustainability due diligence.
Inspired by the 2017 French Duty of Vigilance Law, this directive aims to require companies operating in Europe to implement measures to prevent human rights and environmental abuses along their supply chains. At the heart of Sherpa’s strategy and the result of 15 years of advocacy in France, we have pushed this ambition at the European level within our network the European Coalition for Corporate Justice (ECCJ).
A text weakened by Member States
Yet, the text voted on Friday – which still needs to be approved by the European Parliament – is not the one defended by civil society, nor the one proposed by the European Commission in February 2022, nor the position adopted by the Council itself in December 2022, nor even the compromise reached in December 2023 by the three institutions. Despite the massive mobilisation of civil society, NGOs and trade unions, each stage of the negotiations has led to a text weaker than the previous one. According to preliminary data, more than 65% of the companies concerned were at the last minute excluded from the scope to satisfy France and the Italian far right.
Ultimately, apart from certain points such as the progressive lowering of the thresholds or the application of the duty of vigilance to non-European companies operating on the European market, the European duty of vigilance could be less ambitious than the French one, adopted seven years earlier.
As Sherpa pointed out in its various analytic notes, the European legislator has made the choice to limit the human and environmental rights that would be protected; financial services have been excluded under pressure from France; the designation of a supervisory authority might be a good idea only at first sight ; and the detailed description of the vigilance measures that would be required to companies may in fact lead to cosmetic compliance.
Competitiveness as an excuse for violations
Yet, the first lawsuits brought on the basis of the French law – including those initiated by Sherpa and its partners against TotalEnergies, Casino and Yves Rocher – illustrate the many obstacles that victims still face in their access to justice and which the directive could have addressed.
Nevertheless, in its race to the bottom, the MEDEF (Movement of the French Companies) regretted the outcome of Friday’s vote, its alleged “harmful operational and financial consequences” and the worsening of the “administrative and regulatory burden already weighing on the competitiveness of our companies“.
This is probably one of the most disastrous consequences of the last few months: out of so-called pragmatism or cynicism, the debate has moved away from the real concerns onto the field of competitiveness. Instead of giving a voice to subcontractors’ workers of European companies or exposing the environmental damages those companies contribute to, the debate focused on corporate interests: is ‘sustainability’ a factor for growth? Are the more (or less) virtuous companies in favor of or against the directive? Doesn’t the directive ultimately serve their interests by harmonising legal constraints across Europe?
The agreement reached in the Council on Friday is therefore far from being a victory. At best, it is a relief after the numerous attempts to derail the process. At worst, it is another undermining of the original ambition, aimed at satisfying certain Member States and the economic interests they represent, in a way that is incompatible with the fundamentals of the European institutions on the eve of the June elections.
