The landmark adoption of the Corporate Sustainability Due Diligence Directive (CSDDD) in July 2024 had the potential to improve the lives of millions of people in forced labour around the world. But today, the European Commission has formally proposed to drastically weaken the CSDDD. Anti-Slavery International is appalled by this proposal, which represents a significant blow to the CSDDD´s potential to drive better business practices and ultimately improve conditions for millions of workers.
The European Commission claims that the Omnibus Simplification Package aims to simplify existing legislation. However, today´s proposal goes well beyond this stated intent. If adopted, it would significantly undermine the purpose of CSDDD, as well as the European Union’s broader commitment to oppose forced labour.
Anti-Slavery International’s concerns about the Omnibus proposal
The Omnibus proposal envisions reopening some key provisions of the CSDDD. If adopted, these changes would render the CSDDD ineffective in preventing and removing forced labour from European supply chains.
Reduced duty to identify risks and impacts where they matter most
The proposal reduces the obligation to identify adverse impacts to direct suppliers only (or “tier one”) unless there is “plausible information” (e.g. a report from civil society) that shows risks deeper in the chain. However, limiting monitoring obligations to direct suppliers has proven more bureaucratic and less impactful than focusing on the areas of the value chain with higher forced labour risks. This risk-based approach is in the original text of the CSDDD, and many companies already work with it.
This is extremely troubling as documented cases of forced labour often take place at the lower end of the supply chain, beyond direct suppliers. The restriction of due diligence to direct suppliers would undermine the CSDDD´s potential to prevent companies profiting from Uyghur forced labour in the car sector, solar panels and tomatoes, state-imposed forced labour and child labour in the Turkmen cotton sector, or forced labour and child labour in the Indian garment, Brazilan cocoa and Congolese cobalt sectors. The EU itself is not free of examples of endemic forced labour at lower levels of the value chain, for example, in Spanish strawberry production.
Restricting stakeholder engagement
Forced labour is often hidden, due to worker intimidation or forced labour indicators not being immediately visible. Meaningful stakeholder engagement is, therefore, a fundamental part of due diligence to identify and address actual or potential risks. The Omnibus proposal includes a series of limitations on stakeholder engagement, in particular:
- Stakeholder engagement will be reduced to those “directly” affected, meaning that consumer groups, national human rights institutions and NGOs are excluded. There will be no requirement for companies to engage with civil society organisations and experts defending human rights or the environment who can provide credible insights into potential or actual adverse impacts.
- The actual duty to consult is further reduced to “relevant” stakeholders. However, the decision on what “relevant” means will be, in practice, left to companies to decide, increasing the risk that they will cherry-pick groups according to their interests.
- Stakeholder consultation is no longer required when deciding to suspend or terminate a relationship, or monitoring the effectiveness of measures adopted.
Removing responsible disengagement
The proposal also removes the obligation to terminate contracts with suppliers when there is no expectation that efforts to prevent or end serious human rights abuses will succeed. This is extremely troubling because in cases such as state-imposed forced labour (for example, the ongoing systematic forced labour against the Uyghur people), the only responsible course of action is immediate disengagement. In these circumstances, it is impossible to conduct credible due diligence on the ground, to use or increase leverage to improve practices or to secure remediation for affected individuals.
The obligation to suspend the business relationship remains available, but the requirement to consult with stakeholders before deciding on suspension has been removed. This is problematic because suspending a business relationship can have direct harmful impacts on different stakeholders. Therefore, their input is crucial to understand the potential consequences and mitigate harm before making a final decision.
Limited enforcement
For due diligence to be effective, it is imperative that companies are held accountable and that the people harmed have access to justice. However, the Omnibus proposal gives Member States the discretion to exclude civil liability even when companies fail to comply with their due diligence obligations and cause harm. Representative actions are removed, meaning NGOs and unions may be unable to represent people who have experienced forced labour unless specifically allowed for by individual Member States. Finally, the removal of the overriding mandatory provision means the courts may apply the laws of the country where the damage occurred instead of EU law, where there is a greater likelihood of weaker regulations. This would have the impact of rendering the CSDDD useless.
The Commission also proposes to undermine enforceability by removing the minimum cap on penalties for failing to comply with the CSDDD, which is currently 5% of a company’s net worldwide turnover. This may lead to lower, even symbolic, sanctions, which will differ in each Member State. As a result, companies are less likely to be held accountable for failing to respect human rights and the environment in their value chains.
The list goes on
The Omnibus proposal further expands the “maximum harmonisation” clause, effectively prohibiting states from establishing more ambitious rules when it comes to the identification, prevention and mitigation of forced labour. It also extends the intervals for monitoring the effectiveness of due diligence from 1 year to every 5 years, and removes the obligation to implement climate transition plans. It also inexplicably removes the current mandate for the European Commission to examine if the core activities of the financial sector should be included within the scope of the CSDDD. Equally worrying, the proposal severely cuts the reporting requirements, including the number of companies that need to report, and removes the sector-specific reporting standards that are relevant to value chain workers.
How this undermines democracy and due process
The Omnibus proposal seeks to reverse key elements of the CSDDD that are essential for protecting people in forced labour. This is being done without an evidence-based law-making process, and with no consultation with survivors, affected communities, and other stakeholders. This contrasts sharply with the original CSDDD, which was the fruit of a thorough impact assessment, consultation with various experts, and included feedback from over 174,000 people and civil society organisations from outside the EU. It’s still hard to say how long the process will take for the proposal to become law. However, Anti-Slavery International will continue to advocate at every level of the process and we will communicate on opportunities for action.
The Omnibus Proposal represents a serious setback in the fight against forced labour and lets down workers around the world. By dismantling key protections in the CSDDD, it sends a dangerous signal to the world—that corporate interests take precedence over human rights. Organisations, like Anti-Slavery International, including from the Global South, have already raised the alarm over a proposal that harms workers, communities, and the environment across the world. The European Parliament and Member States must reject this deregulation effort and uphold the EU’s commitment to ending forced labour.