Nele Meyer
Director at the European Coalition for Corporate Justice
The rules of the game are changing
When, on 14th December last year, EU co-legislators struck a political deal on the Corporate Sustainability Due Diligence Directive (CSDDD) after a long night of difficult and frustrating trilogue negotiations, we assumed that this was the closure of the file. ‘Trilogue’ is the established, though informal, process through which the European Commission, Parliament and Council seek to find a compromise between their positions on a legislative file. Once an agreement is found, the official readings in Parliament and Council are usually considered a pure formality. As one of the many civil society organisations who had worked hard pushing for an ambitious CSDDD, we expected the file to now be simply waved through. Yet, we were mistaken.
The CSDDD will require businesses to put concrete measures in place to prevent human rights and environmental harm deriving from their operations and business relationships. It therefore carries the potential to trigger a fundamental shift in business conduct, away from the doctrine of maximisation of shareholder value being the main business purpose.
A few weeks before the meeting in which the Council was expected to confirm the adoption of the political deal, Germany withdrew its support for reasons of national politics, despite having had a major role in shaping the content of the compromise. Germany’s support alone was not essential to reach the required qualified majority in the Council. However, without Germany the file hinged on the support from France as well as Italy. Both Member States took advantage of their newfound role as kingmakers and, disregarding the trilogue agreement, strong-armed the Belgian presidency into last minute concessions behind closed doors. This resulted in additional – and painful – cuts to the directive’s reach. The European Parliament, the only EU institution directly elected by EU citizens, was excluded from the haggling, only to be presented with a ‘take it or leave it’ package at the end.
This was not the only moment within the CSDDD legislative process in which long standing democratic processes were circumvented for political gain, nor is the CSDDD the only EU legislative file in which democratic practice has been bent in recent months. Though the CSDDD is now firmly on its way towards final adoption, a bitter lesson has been learnt: the established decision-making processes in the EU are being challenged and the rules of the game seem to be changing before our very eyes.
What does this mean for civil society?
In the case of the CSDDD, many, sometimes even unlikely actors stepped up and advocated in support: above all, civil society shined at its best, acting cohesively towards the same objective in a decentralised, agile network of collaboration. It paid out. The CSDDD would look very different today if it hadn’t been for this extended coalition exerting coordinated pressure at national and EU level. Despite the losses, the law still carries the potential to shift business conduct.
As civil society, we will need to learn from this experience. If indeed the democratic decision-making process is being put into question, we must play to our strength and join forces to counter the political power play. As we had a clear and unifying objective to fight for with the CSDDD, we will need to find our common grounds in other critical areas so that we can act jointly and complement each other. All of this is not a given: we will need to listen and talk to each other, even bridge differences when it comes to it. And yet, something is already certain: our unitedness in all diversity will be our strength.