EU Parliament Rejects Further Weakening of Corporate Due Diligence Rules

The European Parliament has taken a significant stance on corporate accountability by rejecting a proposal from its Legal Affairs Committee that would have further weakened the EU's due diligence legislation. This decision marks a crucial moment in the ongoing debate about corporate responsibility for human rights and environmental impacts throughout global supply chains.

The Controversial Committee Proposal

The Legal Affairs Committee had proposed substantial changes to the Omnibus 1 directive that would have significantly narrowed the scope of corporate due diligence requirements. According to the committee's approach, the duty of vigilance would only apply to companies with more than 5,000 employees and an annual turnover of at least €1.5 billion. This represented a dramatic increase from the initial version's threshold of 1,000 employees and €450 million in turnover.

Additionally, the committee argued that companies violating these rules should not face civil liability at the EU level, effectively removing a key enforcement mechanism. These proposals came despite the legislation having already been substantially diluted in the April 2024 vote, which limited its application to very large companies compared to the original draft.

The Parliamentary Vote Outcome

In a closely contested decision on Wednesday, MEPs voted 318 against the committee's approach, with 309 in favor and 34 abstentions. This rejection of further simplification reflects growing concerns about maintaining meaningful corporate accountability standards. The vote sets the stage for a crucial decision on November 13, when Parliament will vote on the final simplification of sustainability and due diligence rules.

Following this parliamentary process, discussions will proceed with various European governments with the aim of finalizing the legislation by the end of 2025. The timeline underscores the urgency of establishing clear corporate responsibility frameworks across the European Union.

Current Due Diligence Requirements

The existing duty of vigilance framework, as established in the April 2024 vote, requires covered companies to prevent, identify, and remedy human and social rights violations throughout their global value chains. This includes addressing issues such as child labor, forced labor, safety concerns, and environmental damage including deforestation and pollution.

The requirements extend to companies' entire supply networks, including suppliers, subcontractors, and subsidiaries worldwide. Despite the already weakened version, this legislation represents one of the most comprehensive attempts to regulate corporate behavior across international operations.

Broader Political Context

The push to weaken due diligence legislation has been part of a broader trend within European politics. France, which frequently presents itself as a pioneer in corporate accountability with its national duty of vigilance law, had begun slowing progress on the European text earlier this year. In a surprising move, the French President himself called for scrapping the European duty of vigilance proposal in May.

This political dynamic highlights the complex balancing act between promoting business competitiveness and ensuring corporate responsibility. The Parliament's rejection of further weakening suggests that concerns about maintaining meaningful accountability standards are gaining traction among European lawmakers.

The European Parliament's decision to reject additional weakening of due diligence rules represents a significant moment in the ongoing development of corporate accountability standards. As the legislative process moves forward, the balance between business interests and human rights protections will continue to be a central point of debate. The final outcome of these negotiations will have profound implications for how European companies conduct business globally and their responsibility for impacts throughout their supply chains.