The trilogue negotiations on the Omnibus I package were concluded by representatives of the European Parliament, the EU Commission and the EU Council with a compromise text that was published today, Tuesday.
An omnibus is a legal or legislative initiative that amends other legal acts – in this case, the EU Supply Chain Directive and the Corporate Sustainability Due Diligence Directive (CSDDD), among others. The latter requires large EU companies and those from outside with a significant presence in the EU market to carry out due diligence on their own operations and their entire value chains.
As part of the Circular Economy Action Plan adopted in March 2020 as part of the European Green Deal, a number of directives and regulations were launched – such as the Ecodesign Regulation for Sustainable Products (ESPR), the Green Claims Directive (GCD), the Textile Labeling Regulation (TLR), the Corporate Sustainability Reporting Directive (CSRD) and CSDDD. They are intended to counteract waste across the EU and accelerate Europe’s transition to a resource-efficient, low-waste and climate-neutral economy.
Simplification to ensure competitiveness, but at what cost?
However, the amount of new legislation and its level of detail has been criticized; There was a call for simplification, which was to be implemented through a series of buses. After more than a year on the drawing board, a compromise text has now been drawn up. It is intended to reduce bureaucracy and increase the competitiveness of companies in the EU – at the expense of climate protection, as some fear, because more than 80 percent of European companies will be exempt from their environmental reporting obligations.
The Supply Chain Act Initiative, for example, reports a “massive weakening of core elements of the EU Supply Chain Directive”. “With an area of application of 5,000 employees and an annual turnover of 1.5 billion euros, the complete cancellation of the climate transition plans and the abolition of the EU-wide harmonized liability rule, there is little left of the core elements that make the CSDDD an effective set of rules for the protection of human rights, the environment and the climate,” comments Sofie Kreusch, spokeswoman for the Supply Chain Act Initiative, in a press statement.
“Such an EU supply chain law deprives those affected of human rights violations of the opportunity to defend themselves against injustice – and relieves most companies of the legal obligation to seriously address human rights violations in their supply chains and climate protection in their business model,” she adds.
Right Alliance
The agreement is a significant victory for EU Commission President Ursula von der Leyen, whose efforts have focused on reducing bureaucracy for companies. However, it comes at a high price, as the issue brought the coalition that enabled von der Leyen’s re-election to the brink of collapse and caused her center-right EVP party to join forces with the far right.
“The agreed text was largely taken from the draft law presented by right-wing extremists together with the EPP. Agreeing to this proposal would be tantamount to legitimizing the newly forming right-wing alliance in Europe. We therefore call on the Federal Government to reject the proposal in the EU Council,” demands Kreusch on behalf of the Supply Chain Act initiative.
The alliance also caused a stir in Brussels, as the EPP broke the so-called Cordon sanitary – an unwritten rule that prohibits established parties from collaborating with the far right.
Influence of US fossil companies
But that’s not all. It is also worrying that, according to recent revelations, the recent simplifications of the EU supply chain directive are also due to the influence of US fossil fuel companies.
“The coordinated influence of US fossil fuel corporations no longer has anything to do with legitimate interest representation. The Omnibus I package threatens to create a dangerous precedent that paves the way for further deregulation initiatives and shifts the balance between public interest and corporate power to the detriment of citizens – and ultimately undermines beyond recognition any democratically adopted regulations to protect human rights and the environment,” concludes Kreusch.
Companies cannot be held accountable
The mitigation also abolished an EU-wide legal framework that allowed citizens to hold companies accountable for the impact of their supply chains on human rights or local ecosystems.
Even when drawing up the Omnibus I proposal, not everything went as it should: at the end of November, the EU Ombudsman confirmed misconduct by the EU Commission, as it had neither carried out an impact assessment nor a compliant consultation, triggered by too close proximity to business associations and the lack of involvement of NGOs and other interest groups.
Members of the European Parliament now have until December 16th to demand their say in the vote on the agreement, when the final vote will take place.