THE BIG EU DEREGULATION : a joint CSO statement reacting to Omnibus publication

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. The Council and Parliament must urgently show leadership by blocking this damaging proposal, as it is jeopardising the very objectives of these laws and undermines not only the EU's commitment towards its green ambitions and protection of human rights but also its credibility as a reliable law maker.
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The Omnibus proposal affects landmark laws passed under the EU’s Green Deal, including the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the Taxonomy Regulation. These laws mandate responsible business practices, introduce accountability for corporations abusing human rights and damaging the environment, and provide access to justice for survivors. They also aim to improve transparency on sustainability reporting and help guide sustainable investment. These are all essential to the EU meeting its goal of being the first climate-neutral continent by 2050. 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.

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.

Please find here the full joint CSO statement reacting to Omnibus publication.