An update on yesterday’s item. Today, there was the vote. 13 EU members abstained and one voted against. Therefore, the Directive did not meet the threshold for qualified majority voting. Looks like the legislative process will have to start again after the new Parliament is elected in June.
The proposed Directive imposes mandatory due diligence obligations relating to human rights, the environment and climate change, on large EU companies, and large non-EU companies that do a specified level of business in the EU. It contains provisions for administrative sanctions as well as for civil liability and applies not only in relation to subsidiary companies but their value chains. Financial services are excluded but the position is due for review after two years.
The ‘trilogue’ legislative procedure culminated in political agreement being reached in December 2023 with the final agreed text released on 30 January. All that remained was a final vote by the Member States which was scheduled for 9 February 2024. This was assumed to be a formality but following objections by parties in the German coalition, Germany indicated it would abstain and it then became clear that Italy planned to do likewise. It then became clear that there would not be sufficient votes to reach the threshold for a qualified majority vote. The vote was rescheduled for 14 February and then postponed again. An article yesterday by Forbes indicates that the vote will be tomorrow, 28 February.
If passed, the proposed Directive still needs to meet two imminent thresholds. It must receive approval of the Legal Affairs Committee by 7 March, and must be approved by the European Parliament by 15 March if it is to be adopted prior to the EU Parliament elections June.
Otherwise, it is back to the drawing board with a new legislative process commencing after those elections.