New EU Supply Chain Due Diligence Rules Stalled

EU members last week postponed a vote on new rules that could require companies to conduct specific due diligence on their supply chains to address various environmental and social concerns, including forced labor risks.

The bloc’s corporate sustainability due diligence directive -- which was recently negotiated by the European Council and Parliament -- stalled after EU member states couldn’t agree to send the rules to a vote before the European Parliament. The bloc needed a “qualified majority” of 15 EU countries representing 65% of the EU population in order to push the directive forward, but both Germany and Italy planned to abstain, which placed the rules at risk, Reuters reported.

Christian Lindner, Germany's finance minister, confirmed that Berlin would not support the directive. “It would put a massive burden on companies without secure progress for human rights and the environment,” he said Feb. 9 on social media platform X, according to an unofficial translation. “The (long known) requirements of the federal government were not met. And Germany is obviously anything but alone with its concerns.”

The European Parliament is expected to support the rules, Reuters reported.