New EU supply chain rules hang by a thread after last-minute French wrecking ball

Published: 28th February 2024

Today, EU ambassadors failed to rubber-stamp the recently agreed deal on new EU supply chain rules. This law — the Corporate Due Diligence Directive (CSDDD) — aims to make companies accountable for the damage they cause to people and the planet. 

 In response, Oxfam EU’s Economic Justice lead, Marc-Olivier Herman, said: 

“By withdrawing their support to an already-made deal, Germany triggered the boycott of these landmark EU supply chain rules. Now, with France and Italy leveraging the chaos to further their own agendas, this vital legislation is hanging by a thread.

“Not content with letting 99 percent of companies off the hook, France, in a last-minute move akin to a wrecking ball, has asked to exempt another 14,000 companies. This is an assault on human rights and the planet. 

“Germany, Italy and France should be dealmakers, not deal-breakers. Instead of playing the game of big business, they must face up to their already-made commitments.  

“Their moves risk derailing the law altogether, especially with the upcoming elections. Time is running out. We have a once-in-a-generation opportunity to end corporate impunity. If missed, survivors of corporate abuse will pay the price”.

Notes to editors

Marc-Olivier Herman is available for comment and interview.  

How did we get here? 

  • The Belgian presidency of the EU repeatedly delayed the vote because Germany withdrew its support for the deal. This happened because the Free Democrats (FDP), a part of the coalition government, opposed it.  
  • After Germany withdrew its support, Italy and other EU countries, like Austria, Bulgaria, Finland and Hungary, did the same. France seized on the German abstention to make changes to rules about holding companies alienating other EU countries like Luxemburg and Cyprus. 
  • Yesterday, France tabled a new demand drastically narrowing the directive’s scope, excluding over 80 percent of companies - from approximately 16,400 to 2,340 - by applying the rules only to companies with a minimum of 5,000 employees rather than the 500 threshold agreed upon in December.

What happens next? 

  • The Belgian presidency will resume negotiations with EU countries and the European Parliament to find an agreement. The law will also be on the agenda of EU industry and internal market ministers (COMPET) in their next meeting on 7 March.
  • Both the European Parliament’s Legal Affairs Committee (JURI) and the full parliament need to approve the law, but only after the EU countries' ratification.

The EU supply chain rules timeline:  

Oxfam calls on the EU countries to deliver on December’s agreement of the Corporate Due Diligence rules. 

Companies, associations and investors expressed their support for the EU due diligence rules. Italian and German business organisations have also called on their governments to support the due diligence deal. 

Contact information

Julia Manresa at | Work at +32 473 87 44 26   | WhatsApp only +32 479 56 18 12 

Jade Tenwick at | Work: +32 473 56 22 60 | WhatsApp only +32 484 81 22 94 

For updates, please follow @OxfamEU. You can also find us on LinkedIn.