The bill, which was submitted to the European Parliament in February 2022, makes large companies liable for human rights violations. The bill is similar to the German law on due diligence of supply chains, which was adopted last year and is mandatory for German companies from January 1, 2023.
While EU governments already agreed on a common position on the case last December, the European Parliament has yet to agree on its own position before final “tripartite” negotiations can begin with the EU Commission to finalize the law.
However, the problem with the European bill comes down to the debate in what form the bill is adopted.
The amendment, introduced by German Conservative MEP Angelika Nibler, obliges the European Commission to convert the directive into a regulation six years after it enters into force. The difference between a directive and a regulation is that the directives must be incorporated into national law by member states, which gives them some leeway to adapt it to national conditions, while the regulation is applied directly.
Behind the amendment to change Regulation to Directive is a business that calls – to pul the emergency break – to slow down with the bill, since business opportunities are limited and will not be able to pull another burden.
Here on the scales: the regulatory norm and the costs of companies for its implementation. It is important not only to accept the norm, but also to ensure the effectiveness of its implementation (compliance).