“If I sound angry, it is because I am angry”. Lara Wolters, the European Parliament’s lead for the European supply chain law, expressed her exasperation last week at both the political cynicism of key parties in Europe, and the apparent control of big business associations over the actions of European member states. Both appear set to scupper one of the Union’s flagship advances to generate shared prosperity and workers’ and community rights.

For the last four years, the EU Commission, Parliament, and Council of member states have carefully negotiated new ground-breaking legislation to ensure markets deliver broader wealth sharing, climate security, and respect for human rights in corporate value chains. The law also creates a ‘level playing field’ to protect responsible business. This is the ‘Corporate Sustainability Due Diligence Directive’ (CSDDD).

The Directive contributes to a new vision of an advanced European economy. Its clauses, crafted in consultation with business, investors, unions, and civil society, would redress some of the worst of inequality of power and wealth between business, and workers and communities. It would support responsible business – preventing them being undercut by ruthless low-cost competitors, outside and within the EU, willing to profit from the worst forms of exploitation of workers and communities in their supply chains. Of course, the latter represent a powerful vested interest in Europe, making a lot of money from ‘business as usual’. The Directive has now been imperilled at the last moment before full approval.

The backdrop to this – and the reason such legislation is so desperately needed – are untrammelled market forces which have helped generate unsustainable inequality and climate breakdown. In turn, these have fed into the uncertainty and insecurity experienced by rising numbers of workers and communities across Europe, weakening their faith in democracy to deliver for them. The only antidote is a positive vision for a society that addresses these fears: smart government action which re-directs markets to deliver greater shared prosperity, end abuse of workers and communities by irresponsible business, and insist on Climate Transition Plans from companies. This is exactly what the CSDDD is designed to catalyse and support as a central plank of Europe’s social and economic vision.

The better news is that all is not lost. The Belgian EU Presidency is doggedly holding open the debate, and seeking to rebuild the shattered consensus. They are backed by a plethora of support from more responsible businesses and business associations, large and small, who speak out forcefully in favour of the CSDDD. From ALDI SÜD to Bayer, to the Italian Confederation of Craft Trades and SMEs. Their support sharply contradicts the reactionary business associations who appear to have captured key EU members with unfounded claims that the Directive is too burdensome. In reality, feasibility for companies has always been a key aspect in the CSDDD process, and especially the risk-based approach in line with the international UN and OECD standards ensures the law is both practicable and effective. There are also considerable protections and in fact opportunities under the CSDDD for SMEs from the Global South and North.

Responsible business sees the Directive as essential to provide a platform for fair competition in Europe. The Directive insists that companies from Europe must address child labour, modern slavery, and the abuse of women workers in their value chains, and the same applies to brands from Asia, North America and elsewhere selling their products in Europe. Equally, the Directive helps good business by providing a common minimum standard of business behaviour across the whole economic bloc, bringing legal certainty. The feared alternative is a confusing patchwork of the important yet very differently designed national due diligence laws that we currently have in France, Germany, Netherlands, Norway and potentially forthcoming in many other European countries.

The CSDDD, according to Mary Robinson, ex-President of Ireland and former UN High Commissioner for Human Rights, represents a “seismic shift... Globally, this is the first attempt to enshrine the international standards set by the United Nations and the OECD in laws across a major economic bloc, and with legal liability and administrative penalties for companies that do not comply.” The positive views of Mary Robinson and responsible business are echoed by parliamentarians, United Nations leaders, trade unions and citizen’s groups in Europe and around the world.

The last-minute objections to the CSDDD suggest antipathy to both the patient, democratic consensus-building on which Europe’s inclusive democracy is based; and to the evolution of Europe’s vision of a social market model, delivered democratically.

2024 is the year of elections in Europe and around the world. With growing inequality, increasing public fear for the future, and mistrust in democratic institutions – alongside the ever-present threats from climate breakdown – it is vital democratic parties create and deliver policies that address the concerns of voters, and curb the worst of footloose global companies that no one European nation can control on its own. The CSDDD represents a giant leap forward in exactly this regard. It will temper the abuse of workers and communities by irresponsible European and international brands in their regional and global supply chains, contributing to greater human security and dignity, freedoms, and welfare.

As the President of the Confederation of Employers of Ukraine puts it in a recent statement welcoming the CSDDD: “It is precisely in times of political crisis and economic challenges that defending the universal rights and fundamental values that unite us can strengthen the foundation for a brighter future.” Let’s hope that unity and good sense prevail.

By Phil Bloomer, Executive Director, BHRRC